USTOA: Issues Changing Travel

USTOA Executive Committee and Board of Directors
The USTOA's 2018 Executive Committee, which was announced at the annual meeting.

Tour operators are at the front lines of travel and so when the top tour operators in the country say business is booming, you can take that as a sign that the travel industry is in a very good position.

The United Tour Operators Association (USTOA) recently hosted its annual meeting where it released a member sentiment survey.

According to the survey, 84 percent of responding members reported an increase in sales for 2017, half (53 percent) of which cited an increase of 10 percent or higher.

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“I can say in my seven years with USTOA, it's the first time that in talking with our members that virtually every single one has had strong single-digit growth or double-digit growth,” said Terry Dale, president and CEO of USTOA.

More than a third of the tour operators surveyed attributed the growth to an improving economy and consumer confidence; another third attributed increased sales to improved marketing efforts. The dollar is strong against several currencies and competition in the marketplace is keeping some pricing lower. All of these factors combined make it very attractive to go now for all consumer demographics in all price ranges.

It is surprising, however, that despite all these positive signs, consumers continued to travel this year despite concerns about terrorism, which USTOA members cited as the number-one challenge for 2018, followed by political instability and global financial instability.

“There's a general resiliency out there,” said Dana Santucci, chairman of USTOA and vice president of development at EF Education First.

“People are ready to go,” she added, noting that the companies within USTOA have also evolved their products to meet consumer demands. “They are listening to customer feedback and coming up with new programs that meet all those different needs, such as experiential travel and language emergence, as well as hands-on volunteering. “

Indeed, members in the survey cited arts and culture, adventure, family, and culinary were cited as the most popular travel categories for passengers.

New Destinations

It’s possible, however, that concerns about terrorism are pointing travelers in different directions these days. They may be foregoing traditional city center locations in international destinations for places that are more off the grid.

When asked for the five most popular or “hot” international destinations for travelers in 2018, tour operator members named Australia, Spain, Iceland and Italy (tied for third), France, and Japan. Most of these destinations moved upward from lower rankings last year.

Scott Wiseman, president of Travel Impressions, who also sits on the executive board of USTOA, said that Australia typically sits on the top of people’s wish lists, but they may not always go once they realize the length of the flight to get there.

“But I think people are considering an area that may be safer than some of the other areas and are willing to make that move this year and commit to it,” he said. Wiseman noted as well, however, that the Australia Tourism Board has done a great job of promoting the area and its territories over the past few years. “I think it's created more awareness in the marketplace, which helps,” he added.

In terms of resilience, the board noted they were pleased to see France reappear on the top destinations list in light of past terrorism incidences.

On the domestic front, USTOA members forecast California, Florida and Hawaii (tied for second), New York, Alaska and Nevada (tied for fourth) and Washington, DC, as the most popular U.S. destinations for clients in 2018.

Iceland was named top emerging or “off-the-beaten-path” destination for 2018, moving to the top spot from second in last year’s member survey. Colombia followed in second, with Vietnam named as third.

Cuba in past years has appeared on USTOA’s surveys as an emerging destination; this year, however, it appeared on the list of those places “at risk,” that travelers should see now.

Referring to Donald Trump’s recent executive order regarding travel to Cuba, USTOA’s Dale noted that tour operators running escorted programs in Cuba are not affected; however, those who want to do FIT, or independent travel, to the island are.

“That autonomy [to travel independently] is gone,” he said. “Those individuals have to go with the group operator or a group entity that follows the people-to-people [guidelines].”

Dale also cautioned that airlines that had previously added service to Cuba may drop it now that the ability to travel there has been diminished.

“If they can't fill their seats with individuals and groups, they may pull service. Alaska Airlines pulled their service as an example, and some service was cut back from other airlines, so there are implications to all actions that could affect Cuba, so it's kind of a double-edged sword,” he added.

Dale said USTOA has done some lobbying regarding Cuba travel; however, he admitted he’s not optimistic about the outcome, considering all of the other issues facing Washington, DC.

Senator Flake has been just an amazing champion of opening up Cuba for all types of travel. Representative Sanford has as well,” he said. “Representative Titus from Nevada has also been pretty outspoken, so we work with them a lot, but when you weigh what they are juggling and their priorities, I don't see this gaining a lot of traction.”

Dale said USTOA on its visits to “The Hill” will continue to press forward, but that it’s an “uphill battle.”

Travel agents will continue to be an important distribution channel for USTOA members.

For the year ahead, 90 percent of members anticipate the amount of business booked through travel agents to remain the same or increase in 2018. Eighty-four percent of USTOA members report the use of travel agents to sell their product. More than half (53 percent) of USTOA Active Member bookings in 2017 were through a travel agency.

A little more than half (57 percent) of members’ customer base are baby boomers at 51 years of age and older. The next largest age group is 35 to 50 years old, representing about a quarter (22 percent) of customers. In addition, a quarter (28 percent) of Active Members said families represented anywhere from 10-25 percent of their annual passengers. Roughly half (46 percent) reported a growth in solo travelers in 2017 over 2016.

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