Rocky Mountain International
Below you can find a breakdown of market trends for France, Benelux, Germany, UK, Italy, Australia, New Zealand and the Nordic Region. This information is updated every autumn.
- NEW ZEALAND
- NORDIC REGION
French Market Trends 2012
Economics is the big subject of the beginning of the Summer. With the new (Socialist) President and (Socialist) parliament that were elected this spring, “thanks” to their many promises, this is time now to speak about reality - which is much less attractive as the French Government needs to find money. Like always in this country, the good way to find money is by raising taxes. We’ll see the result on the French economy. At this point, this situation generates a certain tension.
Regardless of this, and this is the good news, the French are respecting their tradition: If you feel stress, go on vacation. The meetings we have with the trade are confirming this trend; USA and the Real America Region are very successful this summer! In fact, we have seen this trend for several years now.Since 2008 the economic crisis is impacting the world. But the increase of French visitors to the US and to our region is confirmed every year. The OTTI is stating that France is Europe’s 3rd largest market in terms of visitation to the US with 1.5 million tourists in 2011. It is also the fastest growing market among key European markets (+12.1% vs. 2010) and the one with the largest potential for increase within the next four years.
Despite the current financial and economic turmoil in Europe, French citizens keep on traveling and consider their vacation trip as a crucial budget – not to be sacrificed. The US is seen as a safe destination and the Euro vs. US$ exchange rate is still favorable to the French. America is also a “patchwork” of many different states that can match traveler’s expectations. The French enjoy a minimum of five weeks paid vacation per year. They don’t use all their vacation time in July and August as they used to do in the past 30 years. They would rather take several shorter vacations throughout the year. Therefore, the French tend to make 2 - 3 trips per year. French people are more and more attracted to sustainable and eco-friendly destinations and products. Sustainability and respect for the environment are increasingly important to French travelers who are attracted to nature destinations. No doubt the Real America Region has it all.
It is important also to consider the “Baby Boomer Generation.” These people are new retirees who form a massive proportion of potential travelers with money (French citizens are among the people who have the biggest savings in the world) and they can travel any time during the year.
The work that was launched since 12 years by the RMI States, Gateway Cities and Partners is benefitting by a return on investment that confirms how smart it is to play the long-term action with this market. Thanks to this program we have now a solid relationship with the trade and media that contributes to putting our region on the top of destinations that are requested by French travelers.
This is an honor to be your French Representative and I look forward to whip and spur to developing more business to our fantastic region!
Benelux Market Trends 2012
2011 has been a year without many highlights and with an ongoing sense of recession. The expected recovery of the economic crisis never happened although the total amount of arrivals from the Benelux to the US increased by 4% to 878,359, which makes the Benelux market the 5th European Market.
For 2012 not many huge changes in figures are foreseen, except for a possible slow increase of about 4%. More interesting is taking a closer look at what is happening within these total figures: To begin with we see an increase, or actually a recovery, of business travel which was the main source of the increase over 2011. A continuous slow growth is expected here in 2012.
In US bound leisure travel we see some other interesting shifts in 2012. TUI Netherlands launched their own flights to the west coast with ARKE Fly, in addition to their Florida flights. They service SFO, LAX and LAS three times a week and we believe that this product is attracting many 'first timers' to the US. These 'first time' visitors caused an increase of approximately 25,000 passengers, where the established specialized tour operators are still suffering and showing a small decrease in numbers. However, these 'first timers' are expected to return to other destinations in due course and that is where we believe the RMI region has huge potential.
In addition we notice a serious increase in web-based business. This trend has been going on for a few years and is expected to continue even stronger in our market. The Dutch, and now also Belgium travelers, are finding the internet a great tool to compose their own US-bound vacation. This might be bad news for the traditional wholesalers (of which Kuoni seems to be the largest loser) but it is good news for the RMI region as this is where many opportunities are developing. Consumers that are searching this way in many cases end up with the smaller specialized tour operators, who are able to tailor-make itineraries to the customers needs.
The Benelux traveler in general is 'on the go,' travels for 3 to 4 weeks and might not want to stay in one place for more than 2 or 3 nights. By understanding the needs of the Benelux (and European) market, the RMI region’s suppliers can offer a suitable product range to suit those travel needs. This way the region can profit from the opportunities that tailor-made and self composed itineraries offer. The already existing huge potential for this region in the near future will only develop more.
German Market Trends 2012
Covering the Germany, Switzerland and Austria markets.
Forecast 2012 – Germany Better than All Other EU States
The Commerzbank forecast for 2012 is not too optimistic. Gross domestic product in Europe will diminish by 0.5%. The German and Swiss economies expect stagnation. BUT the German economy is expected to handle the coming difficult times better than all other EU member states. The official forecast of the German government from January 2012 anticipates an economic growth of only 0.7% for 2012 but of 1.6% for the year 2013. The German government also forecasts an unemployment rate of 6.8% (-0.3%) for 2012.
All researchers agree that public opinion plays a key role in consumer confidence in 2012. FUR (Forschungsgemeinschaft Urlaub und Reisen e.V.), the German Research Association for Travel and Vacation, concedes that 2012 is expected to be a year with economic difficulties but emphasizes the importance vacation trips have for Germans. 80% of Germans already planned trips for 2012 – the same percentage as in 2011. Since few Germans expect financial problems in 2012, the number of German travelers is very likely to remain at a high level. A quarter of German travelers even plan more trips (16% less) and almost a third (29%) will spend more for their vacation than in 2011 (only 18% less). The rather stable economic conditions will result in “another excellent year for travel from Germany,” says Martin Lohmann from FUR.
The number one overseas travel destination for Germans continues to be the USA. With around 13%, the US also ranks as the most popular destination for more costly vacation trips with a budget of more than 2,500 Euro per person per trip, followed by Southeast-Asia (11%), Spain (9%) and the Caribbean (6%).
The WTO expects a lower growth rate in international tourism. Nevertheless the German travel expenditure abroad is expected to rise by 2% to 62 billion Euro in 2012. Researchers, however, are expecting shorter trips and a shorter booking period. The German neighbors and the domestic travel in Germany might profit from this trend – if the summer weather in Central Europe is less rainy than 2011.
Tour Operators and Travel Agencies
According to the Travel Trade Barometer for Germany sponsored by the U.S. Department of Commerce, German tour operators stated that in the first quarter 2012 bookings to the United States were up by four to nine percent compared to 2011. Promotional activities by U.S. destinations and businesses were identified as the major reason for Germans choosing the US as their holiday destination. The exchange rate, despite the U.S. Dollar getting stronger, was also listed as a bonus. Over the next six months, the major challenge for travel from Germany to the United States was the level of promotion by other long-haul destinations. The global economy was rated as the second biggest challenge, followed by the costly airfare and the rather extensive border controls (http://tinet.ita.doc.gov).
Travel agencies in Germany have successfully been defending their dominant position as the top tourism distribution channel against internet-based competitors, according to fvw’s (fvw.com) 2011 dossier on the German tour operator market. Despite fast growing online travel retailers, traditional ‘high street’ travel agents remain by far the most important sales channel for tour operators in Germany, the dossier showed. Online sales are estimated to have grown about 10% last year, driven by the largest portals, while agencies increased revenues by 9.5% (and by 7% excluding business travel sales). The largest German tour operators, for example, sell about 80-90% of their holidays through travel agencies and about 10-20% through the internet.
For many years, the United States has become more and more popular for Austrian tourists. In 2011, 179,482 Austrians traveled to the U.S., which is an increase of 6.6% compared to 2010. The 2012 forecast looks even better, an increase of 4% compared to 2011 is expected to plan a vacation in the United States.
After having topped 476,000 arrivals in 2011, Swiss travel to the U.S. keeps growing at a pace of 9.3%. Despite the turbulences in Europe, the economy is expected to grow by 1.4% in 2012, about double of the initial forecasts. Unemployment is dropping toward 3% and, as a result, consumer confidence remains high.
UK Market Trends 2012
I apologise now to anybody who has read this report over the last few years because, unfortunately, this year is very much a case of more of the same. In fact it is even more of the same! We previously reported how UK business and consumer confidence has been flat, at best, ever since the banking crisis of 2008 and subsequent recession. Now we have another financial crisis and a second so-called double-dip recession. This situation was very much born out of the first.
The Euro crisis is a result of the original indebtedness of some European economies that was exacerbated to almost uncontrollable levels by the original recession and some unique circumstances of their own. All along, the Euro has been driven by political will rather than economic prudence, with many of the weaker European economies struggling to keep up with the stronger ones to make the common currency work and the subsequent pressures are threatening the complete collapse of the currency.
In the UK, while we are not in the Euro itself, we are in the European Community and would surely be damaged as much as any of the other members if that happened. In addition, we have our own issues in that we were hit harder in the original downturn than any other European country which led the previous government to borrow excessively in an attempt to mitigate its effects until after the then-imminent election. They failed, but the determination of the current government to reduce that debt as quickly as possible has led to severe cutbacks that have, in turn, stymied growth and had much to do with the second “dip.” Even the good news about 2012 being the year that London hosts the Olympics and the Queen’s Diamond Jubilee might have cheered the nation, but it has done little to improve things economically, and according to some, might even make things worse.
Undoubtedly, all of this has had a bad effect on the UK travel industry generally. With much economic and political uncertainty both at home and abroad bookings have been far lower than hoped. Also, people are reluctant to make long-term commitments. They are therefore booking late, which means at a discount, so hitting operator’s profits and making forward planning impossible. The only glimmer of hope is the unreliable British weather. This year, we had an official drought by April, which combined with the Olympics and the Jubilee, led many people to decide to holiday in the UK. Then the heavens opened! It virtually hasn’t stopped raining since with severe flooding in many parts of the country. This has led to a rash of late overseas bookings, but unfortunately of the discounted type.
However, despite all of this, I can report (again as in the previous few years) that the USA is seen as a safe destination and also affordable, both in terms of the exchange rate and with regard to the overall cost of items in the US anyway. The RMI region is one that is proving more and more popular which is, in turn, attracting increasing media attention and the whole thing is on an upward spiral with regard to Britain. This has, of course, been enthusiastically taken up by the tour operators who not only recognise a good thing when they see one but have also been desperately searching around for one! This would explain why we are increasingly seeing not only existing operators adding more destinations and itineraries within the region, but also many other companies moving in for the first time.
Also, the whole “Real America” attraction of the region in getting back to nature and offering unique activities and experiences is in keeping with the demands of increasing numbers of UK tourists. Probably the most encouraging feedback of all from the tour operators is that the region generates more repeat bookings than almost any other. So once again, our four states are bucking the trend-long may it continue!
Italian Market Trends 2012
In 2011 the economic crisis prompted intense and sustained action by the EU's national governments, the European Central Bank and the Commission. All have been working closely together to support growth and employment, ensure financial stability, and put in place a better governance system for the future.
Amid a marked economic slowdown in recent years, Italy’s 58 million people enjoy one of the world’s highest standards of living, and the nation remains a gold standard for fashion, high-end cars and motorcycles, furniture, tourism, design and food.
Vacations and travel are always central in the Italians’ agenda, but require to be economically sustainable. Long vacations seem to decrease; the trend is shorter breaks. 10 days or 2 weeks in winter seem now too long. Many families are “austerity” oriented, a strong cautious spending habit too, and the last minute is very much caused not by the monitoring of the special offers, but about the real availability of vacation budgets, and purchasing/spending power. Extreme personalized travels also with regards to the length of the trip, and solid contents.
High spending travellers continue to plan in advance, while medium target clients become more careful with the priority of “concentrate” budget, length of the trip and distances.
The travel trend shows a major concentration of polar factors: low cost and upper scale, an increase of short trips and airline connections point-to-point. Emerging the new transportation for continental trip, by train. Also: less very popular cities and destinations versus less known places, and a slow and environmental oriented tourism. Sustainability is becoming more and more a sensible theme.
Italians accessing the web continue to refer to Google when it comes to making a decision on what to purchase. 92% of Italians use Google as their main searching engine. Actually the second most used search engine in Italy is YouTube (still owned by Google, but for videos).
The Italian market has shown an important increase to the destination USA, reaching 900,000 passengers in 2011, while the forecast indicated 830,000 passengers in 2010.
The medium sized Tour Operator is emerging in a much clearer way. In some cases the results for these TOs have been just excellent in 2011, recording double digit revenues and increases, up to 25% compared to the previous year. The real battle in the travel industry is the pricing with airline carriers, showing dynamics depending from airline revenue managers rather than commercial departments.
We record a great presence of TOs featuring motor biking tours in the RMI Region: we have recorded 10 such travel professionals, and among them three are totally new in 2011. This proves to be an improving travel trend. National Parks, Monuments and Memorials as well as Western Heritage and Native American Culture are also preferred travel themes for self drive tours on the FIT and group basis.
Australian Market Trends 2012
The Australian economy is in a strong position, with above-trend GDP growth forecast over the next two years. Employment has grown strongly with over 300,000 jobs created in 2011, with unemployment falling to around five per cent. Beyond the short-term impact of the natural disasters such as Queensland floods in early 2011, Australia's GDP growth is forecast to strengthen to 4% in 2011/12, and 3.75% in 2012/13, led by record levels of investment in the resources sector.
Interest in travel to the US remains very strong. Australia surpassed the one million arrivals mark for the first time in 2011, setting a new record for arrivals to the US. Spending by Australian visitors to and within the country totaled nearly $5 billion, also a record (provided by the US Department of Commerce).
Australia has set record arrival levels to the US for the last seven years. Few if any other international market has this strong record of growth. Australians travel to the US throughout the year but the most popular months are April-September and December-January. Their average stay is 26 days and they visit on average 2.5 states per visit (this represents the highest average for ALL countries visiting US). This is proving to be an amazingly strong market for us. Australian travelers have a very high rate of repeat visits to the US and, as in our more traditional markets, by trip number three or four they are looking to see more of the “Real America.” They actively participate in local events, attractions and activities and appreciate the opportunity to “party with the locals.” They are attracted to “active vacations” as Australians have one of the most active lifestyles in the world. Hiking, white-water rafting, bike-riding, horseback riding and water sports of any kind are very popular with Australian of all ages. Camping and RV travel are one of the fastest growing travel segments in Australia and our region is becoming particularly popular for that type of travel.
Developing awareness of our region has been an ongoing challenge. Although over a million Australians travel to the US each year (over 880,000 Australians are flying to the West Coast which offers great gateways locations for travel to our area) the majority of Aussies still know little or nothing about US destinations outside of CA, NY, FL and NV (specifically Las Vegas). This is a real challenge for our region, which has limited promotional dollars. Strong media support has been key to our success in Australia. In FY12 we generated over $4.6 million dollars in ad equivalency media exposure thanks to an unprecedented number of Australian travel media participating in fams to our region in 2011. In FY13 requests for media and trade fams from Australia and New Zealand is running 42% over FY12, which should insure continuity of our message.
We continue to work closely with the “niche” tour operators in Australia. In FY12 we focused special attention on tour operator Adventure World. Adventure World is one of the largest travel wholesalers/tour operators in Australia and recognized as a leader in “non mainstream’ travel. They added several fly drives to our region in their 2012 catalog offerings and have committed to adding more in FY13. With the help of Qantas they will be sponsoring group trade fams to our region to strengthen the regional knowledge base lacking in the travel trade. Thanks to excellent media exposure and trade industry support interest in our region is exploding and we are doing everything possible to continue developing this exciting market.
New Zealand Market Trends 2012
In FY12 we launched our promotional efforts in New Zealand. The Discover America Committee New Zealand chose to align their annual events with the Discover America Committee Australia so we were able to add two major trade events (Auckland and Tauranga) to our yearly efforts in Oceania.
The population of New Zealand is approximately 4.4 million. New Zealand is predominantly an urban country with 72% of the population living in urban areas and approximately 53 percent living in the four largest cities of Auckland, Christchurch, Wellington and Hamilton. The Governments of New Zealand and the US have a very strong relationship, which includes several bilateral trade and military pacts. The citizens of New Zealand look on the US favorably and American television continues to peak their curiosity.
Throughout the 90s New Zealand enjoyed a very strong economy driven by healthy agricultural, fishing and tourism sectors. In the early part of the 21st century New Zealand’s economy began to weaken and a series of devastating events (most specifically the earthquakes in Christchurch in 2010) as well as the economic recession in Europe has caused 3 years of economic recession in New Zealand. The massive rebuilding of Christchurch has helped keep unemployment below 6% and economic projections for 2012-13 (barring any additional catastrophes) are looking very strong.
New Zealanders are voracious travelers although long-haul travel has become popular only in the last two decades. Australia (#1) and Bali (#2) have been the major holiday destinations for New Zealand travelers, with the USA ranking #3 for the last several years. Thanks to a very aggressive effort by the Discover America Committee in New Zealand, additional flights from Air New Zealand and Tasmanian Air to the West Coast, and a weak US dollar travelers to the US are expected to reach 200,000 in 2012 which would make the US the #2 travel destination. A trip to the US ranks high on most New Zealanders list of a dream vacation.
New Zealanders enjoy a very active lifestyle and are looking for adventure when they travel. As with their neighbors in Australia they are looking for hiking, white-water rafting, bike-riding, horseback riding and water sports of any kind. We have what they are looking for and we will make every effort to educate them on what we have to offer. We will be attending the NZ Expo in February of 2013 and will continue to develop contacts with both trade and media.
Nordic Region Market Trends 2012
Covering the Norway, Sweden, Denmark and Finland markets.
The Nordic markets met their goal of 1 million travelers to the US in 2011. After a very aggressive, joint effort by the Discover America Committees of Norway, Sweden, Finland and Denmark, Scandinavians booked a total of 1,083,618 trips to the US in 2011. The Nordic countries continue to be among the leaders in holiday long haul travel to the US. With a total population of over 25 million and consistently strong economies, Scandinavians have the highest quality of life in all of the free world and continue to be among the world’s most avid travelers. In 2010 BBC World Media and International Economist Magazine again ranked Norway #1 and Sweden #2 in overall quality of life in the world. With a minimum 6 weeks paid vacation most Scandinavians plan at least one long haul vacation every year. In 2011 travel to the US reached #1 status in Denmark. In the last 3 years the US has ranked either 2nd or 3rd in this market behind #1Thailand. Interest in travel to the US appears to be just as strong in Sweden and Norway.
The RMI States are firmly positioned in Scandinavia. We are featured in the every key Scandinavian Tour Operators’ printed catalogs and/or websites. We continue to host unprecedented numbers of media and trade fams to our region. Our popularity as a holiday destination continues to grow as we utilize both traditional and non-traditional methods to promote the “Real America” to the Scandinavians.
Norway: The Norwegian Travel industry continues to lead the world in innovative use of the internet. Norwegians are among the savviest users of the internet in the free world. The travel industry is seeing a real shift in the way Norwegian travel customers book their travel. An unprecedented number of Norwegian travelers are booking air, rental car and accommodations directly over the internet. In response, several Norwegian based tour operators/wholesalers have moved to solely internet based business models. We are working closely with several of these businesses to insure that packages to our region are offered through their websites. We also work closely with traditional tour operators Nordmann-Reisen and America Specialisten (two of the largest US product specialists in Norway) to insure that product from our region offered in their catalogs and on their websites continues to increase.
Sweden: The Swedish Discover America Committee continues to be one of the most efficient and effective committees in Europe. They hosted nine travel agent seminars throughout Sweden in 2011. Their website is first rate and we are very well presented. Although their internet based “training program” for travel agents (which encourages travel agents to become certified “experts” on US travel product) had a slow start it is now up and being heavily promoted. The board has officially recognized our efforts in Sweden and their support continues to grow as our region gains popularity as a USA travel destination. Tommy Swanson (Swanson’s Travel) continues to give us his full support and he has acknowledged healthy growth in the “Real America” packages he is currently offering. Tommy Swanson is the major US product specialist in Sweden (over 90% of ALL tours from Sweden to the US are booked through Swanson’s). We are also working closely with TEMA travel (a specialty travel agent/tour operator/wholesaler based in Stockholm) to develop packages for their clients. Lars Bjorkmann, USA Sales Director, developed two group tours to our region in 2011 and both were deemed successful. They continue to expand our product in their catalogs and on their website.
Denmark: This market produced substantial new growth for us in FY2012. Two of the most popular US travel product companies (FIT, Group Tours and wholesalers) Marco Polo/My Planet and Team Benns both added new group tours and FITs to their catalog and websites. Team Benns introduced a unique tour product in Southwest USA in 2009 which included RV travel for participants. They added a “Real America” version in 2011, which was well received and they will continue to offer in 2012. Having realized that most of their traditional travel clients are purchasing air, rental car and accommodations over the internet, they feel that a shift in product mix and business models is essential to sustain viability. We continue to work with them on new products and programs which feature our region. At their request we participated in several staff trainings and clients events in 2011. Their clients are particularly interested in non-traditional vacation packages that include “active activities” (rafting, hiking, biking, horseback riding, etc.) as well as non-traditional travel opportunities (RV and motorcycle travel in particular). Both Team Benns and Marco Polo/My Planet have identified our region as a very strong area of growth for their businesses and are committing substantial dollars to develop it.
Finland: In FY12 we continued to explore opportunities in the Finnish market. We once again had our materials distributed at MATKA, the major Finnish travel Fair held each year in Helsinki. The Discover America Committee in Finland is still in the process of developing a training program through their website. We have provided photos and copy as they develop the site and hope they will have their program up and running by early 2013. It is our intent to begin to focus a bit more aggressively on this market and the States will attend MATKA in January as part of the Scandinavian Mission for FY13.
Iceland: In May of 2012 Icelandair began flying non-stop from Reykjavik to Denver. With the support of our Gateway City partner Denver, we were able to participate in meetings with many of the Senior Management of Icelandair while they were in Denver in January. We were also able to meet with Icelandair Senior Management in Oslo, Copenhagen and Stockholm while we were in those cities in February. Icelandair has been very supportive of our fam efforts providing tickets for several journalists to tour our region in May and June. We will continue to work with the travel market staff in Iceland (and throughout Scandinavia) to insure they have the information and materials needed to include the Real America in their extensive promotional efforts.
- NORDIC REGION
French Market Trends 2011
Working in the tourism industry is definitively an interesting job! This keeps our eyes wide open on what’s going on in the world as every event, small or major, is impacting the travel industry.
On the French Market, the many events that impacted our planet these last years are profoundly changing the way the French are traveling and, therefore, the Tourism Industry in general. Several years ago most travelers were looking for the bargain that would be the trigger to choose one destination over another. Those looking for a good package for less money made the choice of Morocco or Punta Cana, or the like. This mass tourism has decreased significantly.
Today people who have the wealth to travel internationally are mostly experienced travelers. They will travel to destinations that can easily be booked online (such as NYC or the theme parks in Orlando). A lot of them also make the choice to discover different and unique destinations. Many of them like to book with a specialized tour operator as the trip may be more complex to set up.
This trend negatively impacts the huge companies that were selling mass tourism products. Many of these companies are now reducing their staff and have moved to “out of Paris” offices. At the same time, middle sized and niche operators are showing growing success because they are providing genuine products added to real service. The product managers made a significant job to select the products and the sales persons are educated to pass on good programs to clients who want to travel to find “something special” and unique.
We see more and more niche tour operators developing significant good business. Who could imagine, even a few years ago, that we could have a tour operator in Paris who would offer only winter products? No one would have bet a dime on this project! We have this kind of company that is very successful as they provide a unique experience. And this is exactly what most potential travelers want: unique and genuine experiences! We see this trend for other niches like golf, motorcycle rides and horseback rides. In France we now have several successful tour operators that sell very well our ranch products. One of the (many) beauties of the Rocky Mountain International program is that we anticipated this trend.
Having offices in Europe that help the actors of the Tourism Industry to discover our region for more than 20 years is just brilliant! Our fantastic region is packed with unique experiences that match perfectly the trendy motivation to travel: to discover genuine and off the beaten path destinations.
And this is now a reality. Thanks to our states’ long-term investment in this market our region is very successful in France! As a matter of fact, when we started to represent the Real America region in the French Market, only a few tour operators were selling our products. Since then we have had increasing numbers of new companies that sell the beauties of Idaho, Montana, South Dakota and Wyoming. We are noticing as well growing interest for our gateway cities and partners that are benefiting from the increasing visibility of the RMI region.
Thank you for your continuous interest in the French market. We look forward to keeping on whipping and spurring for the Real America!
Benelux Market Trends 2011
Covering the Belgium, Luxembourg and Netherlands markets.
The year 2010 will be remembered by the European tourism industry as the year of the Eyjafjallajökull volcano outburst in Iceland and the year of the World Cup soccer in South Africa. Also as a year in which the worldwide economical crisis slowly started to recover and in which both the Netherlands and Belgium held elections for a new government. At the beginning of 2011 the world was shocked by major natural calamities like the earthquake in Japan, the flooding in Australia and the tornados in the Midwest of the USA. In addition to this the world is also faced with political uproars in the Middle East. The financial position of Greece, Spain, Portugal, Ireland and even Italy is uncertain and puts an enormous pressure on the Euro. This might even be the start of a new financial crisis.
Although the economic situation seems uncertain, the Benelux market continues to be a solid and high quality source market for the US. Travel from the Benelux countries to the USA recovered in 2010 with a 4% increase. With 842,819 Benelux visitors arriving in the USA, the Benelux retains its status as the fourth European market for the US.
The residents of the Netherlands receive on average 25 paid vacation days, plus national (bank) holidays. The Dutch have the highest travel participation in the world, with over 81% of the people taking at least one traveling holiday every year. The vacation frequency increased significantly from 1.84 in 1980 to 2.84 in 2010. Also, the percentage of vacations abroad increased faster than the percentage of domestic holidays over the past 30 years. Domestic holidays increased by 55%, European holidays by 136% and holidays outside Europe increased by 460% since 1990. The average budget of the Dutch grew from € 2,270 in 2009 to € 2,375 in 2010. The Belgians receive on average 20 paid vacation days, plus bank holidays. Research shows that 63% of all Belgians took at least one traveling holiday in 2010, the same percentage as 2009. Their average budget however grew from € 2,066 in 2009 to € 2,083 in 2010.
Over the years, long haul travel has become more common, not only for individual travelers or couples, but also for families with children. USA, the Caribbean and Asia are the most popular far destinations. 25% of all Dutch indicated taking an intercontinental vacation in the past 5 years, 31% indicate planning on taking one in the next 5 years. Packaged tours are losing ground in favor of separate bookings for air transportation, car and accommodations. In 2010 only 15% of USA travelers booked a packaged tour.
The influence of internet and more specifically review websites, blogs and social media is still gaining importance. Approximately 60% use the internet as the main inspiration to decide on their travel plans, against 33% that use tour operator brochures as an inspiration.
These trends reflect on the Benelux travel market; the large tour operators that specialize in package tours are struggling; the demand for tailor made travel exceeds the demand for packaged tours. The tour operators specialized in long haul travel focus on “experience” by printing life style magazines instead of brochures or even opening travel shops.
The specialized web-based direct sellers, that gained market share over the last couple of years, still rely on their expertise but have improved their websites with more destination information and better booking engines.
Despite ongoing negativity in the economy and many natural and political disturbances, the people of the Benelux will continue to travel. The main question will be what destination they will choose. No one in the travel industry dares to predict the way the market will develop. The one thing everyone agrees on is that the “battle” will be fought on the internet and “inspiration” and “experience” are keywords for 2012.
German Market Trends 2011
Covering the Germany, Switzerland and Austria markets.
Germany lists the strongest recovery among the big Euro countries after the recession year of 2009. The strength of the German economy is a big plus for the business activities in the whole of Europe, as Germany could have a positive influence, says the EU commission. After the 3.7% increase in GDP this year in Germany, the EU commission holds onto a 2.2% plus for 2011 and a predicted 2.0% plus for 2012.
The Swiss market, for example, kept growing throughout 2010 by nearly 10%. Based upon all indications we are confident that 2011 Swiss arrivals in the U.S. will be crossing the “magic line“ of 400,000. The rate of exchange of now 0.87 Swiss Francs to the USD (down from 1.05 a year ago) makes the destination USA a “temptation“ which is hard to resist. For the year 2010 we can report a total of approximately 1.8 million arrivals to the US from Germany, which is a stable result.
Short-distance travel in Europe stagnated, whereas long-haul trips undertaken by Germans grew by 5%. The cruise market continued to boom. Both sea and river cruises grew by 10%, while air travel increased by only 2%. Car travel fell by 2%.
We registered many new tours into our region in 2011. A trend can be seen in topics such as authenticity, natural experience, etc. and RMI is an ideal destination for such themes. For example German Tour Operator Canusa invents “Taste of Travel” – special Fly Drive routings and typical accommodations combined with activities that are supposed to provide a deeper and authentic experience. Often these specials are additionally promoted online. Smaller and specialized operators tend to publish their product only online or use alternative sales and marketing tools such as direct mailings, consumer shows, flyers and online marketing. Big wholesalers such as Dertour, Meier’s and FTI, however, hold on to the classical brochure. For the 2011 summer season, FTI increased the number of catalogues offered from 20 to 28. New in all catalogues is a section ‘Urlaub Plus’, a product line for exacting clients with customized offers. Another example: In their 2011 catalogue, Thomas Cook expanded their North America program by 148 hotels, four tours, and one cruise.
The outlook for 2011-12 is generally positive, with a stable economy, a profitable Euro-USD exchange rate and people from the German speaking countries looking for authentic experiences.
With our German RMI Website we cater to a growing percentage of people, those who inform themselves online about their travel destination. We registered a huge increase in visitation especially during the winter and spring months when vacation planning traditionally is done. We hope to continue expanding our RMI website even more by adding more photos, more route suggestions and insider tips. In combination with the German Real America Guide and a strong presence at the German consumer shows we look forward to a bright and promising future - increasing the popularity of the RMI states even further.
UK Market Trends 2011
The last year has been a rather muddled one economically and politically in the United Kingdom. The country is still feeling the pains of the 2008/9 Recession. Britain felt the effects of that downturn, caused by the banking crisis of 2008, more than any of the other major western European economies because of her close links to the US economy and her dependence upon the financial services sector. In order to mitigate the worst effects of recession, the government of the day incurred enormous financial debts unprecedented in peacetime. When elected in May 2010, the current government set out to wipe-out those debts as quickly as possible, predominantly through massive across the board cuts to public expenditure of the order of a third or more in many instances. Although announced in 2010, many of these cuts did not come into effect until 2011, and it is only now that their full force is truly being felt.
The result at street level is that, although the recession officially ended in the fourth quarter of 2009, there has been no real recovery. Although the heavy borrowing of the last government did protect many people from what might have been some of its more damaging aspects, such debt levels were unsustainable. Banks have been reluctant to lend to businesses that might otherwise have been able to speed the recovery, while the public sector (which employs 25% or so of the working population) is mired in uncertainty as to exactly how the cutbacks will be translated into job losses. The result has been that although the recession itself was not quite as bad as feared, its effects have been much longer lasting than was hoped, with no end yet in sight and a very real fear amongst the public at large of the “double-dip” recession that the media has been noisily speculating on since almost before the first “dip”.
In terms of consumer confidence, this time last year there was some brief guarded optimism - it had turned out to be a better than expected summer season and forward bookings were looking reasonably healthy. Even January performed well, but then a dawning realization that we were “not out of the woods yet” took hold in the marketplace and booking levels quickly fell away. Even non-economic events conspired against travel abroad, with record-breaking unseasonably good weather in March, April and May combined with a total of 5 public holidays (1 extra for the Royal Wedding) to lead many people to actively consider a “staycation” in the UK. In the event, many people changed their minds owing to the very wet summer that followed, but by then the damage was done. Summer holidays sold in March are usually sold at profit. Those sold in July are heavily discounted and usually make a loss. As a result, it is estimated that many travel agents and tour operators are only breaking even at best, particularly those (the majority) who depend upon the Mediterranean package market. Certainly, Thomas Cook, the largest and oldest UK travel group, has suffered badly leading to the recent resignation of its Chief Executive (who joined as a trainee aged 18) and other long serving members of its board. This company’s woes, it is probably safe to say, fairly reflect the state of the UK travel industry generally.
What of our own position within the UK market, therefore? Here, at last, we are able to inject some optimism into our report. One of the effects of the UK economic situation is that society has become significantly polarized. Not good news for Britain, perhaps, but it does mean that there is a significant segment of the population that has been cushioned from the worst effects of the downturn and remains reasonably affluent. In the main, UK travelers to our region are drawn from this sector of the population. Also, there continues to be high levels of interest in our region amongst discriminating UK travelers. This is currently on an upward spiral whereby that interest inspires media coverage which generates further interest, then additional coverage, etc. Certainly, the specialist operators that our region relies on heavily are reporting good business in bookings to our four states and are eagerly adding new itineraries. It is a moot point whether it is a good thing that this increase in interest has happened now to insulate us against the general downturn in UK travel bookings, or whether it would have been better coinciding with the boom times and generating even more business. It is what it is and when it is and it is a lot better than what is happening to UK bookings to just about any other part of the world. Hopefully, it will continue to grow and last into the good times whenever they may come along. Certainly we will do all in our power to ensure that that is precisely what happens!
Italian Market Trends 2011
The termination of business of some tour operators due to the spring 2011 Middle East and North African troubles, along with the crisis of the two main tour operator players Hotelplan Italia and Kuoni Worldwide, has re-shaped the tour operator segment outlook, allowing smaller-sized operators to emerge in a much clearer way and more aggressively, including a good number of web-based operators.
In 2011 there are still signs of the ongoing economic crisis, presenting a confused customer/consumer not knowing exactly how to behave during uncertain times. Obviously the medium high social / economic classes have suffered less and they are becoming the main target for the majority of the travel partners, as they get out of this demographic the most rewarding results.
The still strong Euro effect is very much helping Italians to afford travel to the USA, which continues to be the preferred long-haul destination among several international ones, especially in 2011. The purchasing capacity for vacations in Italy puts the country in 6th position in international rankings. Consumers/travelers in Italy still perceive a vacation as one of the most “durable” and valuable experiences in life.
The overall tourism offer is now focused on extra values, the so-called added values, the “plus” that local services in a destination are able to offer. Lodging quality is fundamental for Italians always looking for high standard levels; the same applies for gastronomy.
Honeymoon Travel is in a constant positive growing trend in 2011, and the US is in the lead of preferred destinations by Italians. 78% of Italian retailers sell honeymoon travel with prices from 5,000 to 10,000 Euro, and only 18% of agencies sell for lower budgets. For those agencies – actually 45% of them – the honeymoon travels affect their income between 20 and 40%, while for 49% of agencies honeymoon business accounts for at least 20% of their total revenue. The remaining 6% count on a share far higher than 40% in honeymoon travels.
The entire RMI region is perceived as a genuine, wild and uniquely different US destination able to offer unconventional “once in a lifetime” vacations. Touring on self drive itineraries by car or motorbike is the preferred way, followed by the escorted in-country language guidance for those who do not feel comfortable with the English language. Overall there is a good range of itineraries promoted by travel professionals in the market place: National Parks are leading the product range, followed by western heritage (rodeos are highly requested) and Native American experiences. Ranches are considered the most “exotic” ingredient during an RMI holiday. Among the outdoor activities for the region, horse riding remains the main attraction, followed by hiking, and winter season is peaking up nicely with snowmobiling on top, followed by dog sledding and all skiing challenges, including eli-ski.
The internet remains very important for consumers and trade partners as the first source of information and inspiration to plan vacations. The Italian websites are visited the most, while the still huge quantity of English ones are pretty much disregarded. Tour itineraries are the most beloved, giving practical and geographical examples of available itineraries.
Australian Market Trends 2011
Australia enjoys one of the highest standards of living in the G7. Australia's economic standing in the world is a result of a commitment to best-practice macroeconomic policy settings, including the delegation of the conduct of monetary policy to the independent Reserve Bank of Australia, and a broad acceptance of prudent fiscal policy where the government aims for fiscal balance over the economic cycle. Economic recovery is strengthening, with GDP forecast to grow by 3.25% in 2010‑2011 and 4% in 2011-2012, leading to further reductions in the unemployment rate. The success of monetary and fiscal stimulus will help the budget return to surplus in 2012-2013, 3 years ahead of schedule. Net debt is expected to peak at 6.1% of GDP in 2011-2012, considerably below the previous forecast of 9.6% of GDP. The unemployment rate is expected to fall from its early-2010 level of 5.3%, down to 5% in late 2010-2011, and 4.75% in late 2011-2012, around levels consistent with full employment.
Travel to the US is at its highest level ever. In 2010 904,240 Australians traveled to the US and in 2011 numbers are expected to increase to over 1 million. The US has always been a dream vacation for the average Australian. With Australia’s strong economy and the US dollar currently trading at 90 cents to the Australian dollar, many feel that there will never be a better time to travel to the US. Australians have one of the most active lifestyles in the world and are looking for active vacation experiences. Hiking, white water rafting, bike-riding, horseback riding and water sports of any kind are very popular with Australian of all ages. Camping and RV travel are one of the fastest growing travel segments in Australia and our region is becoming popular for that type of travel.
Developing awareness of our region has been ongoing. Although Australians travel to the US each year (over 800,000 flying to the West Coast which offers great gateway locations for travel to our area) the majority of Aussies still know little or nothing about US destinations outside of CA, NY, FL and NV (specifically Las Vegas). This is a real challenge for our region, which has limited promotional dollars. Strong media support has been key to our success in Australia. The recent announcement by Qantas that they will be opening new non-stop flights from Melbourne to Dallas/Ft Worth and Sydney to Dallas/Ft Worth will bode well if Cheyenne continues its daily service to that airport. We have been working very aggressively with the “niche” tour operators in Australia. John Cruwys from Elite Travel Event Tours has added two tours to our region since attending the Roundup in Rapid City in 2011. Adventure World is one of the largest travel wholesalers/tour operators in Australia and is recognized as a leader in “non mainstream’ travel. In Australia they are the leading supplier of niche travel product to Canada and US. We were very surprised to learn that the only US product they were offering was in Alaska. Adventure World has decided to expand their product offering to our region. We have worked very closely with Heidi Bullough, US product manager for Adventure World, and we will be featured in the Canada/US Catalog for 2012 as well as on their website.
Interest in our region is exploding and we have been inundated with requests for both media and trade fams. We hosted 5 media/trade fams in FY 2011 and expect to more than double that number for FY12.
Nordic Region Market Trends 2011
Covering the Norway, Sweden, Denmark and Finland markets.
2010 was a very good year for the Nordic Countries. The Scandinavian countries of Norway, Sweden, Denmark and Finland are among the leaders in holiday long haul travel to the US. Posting over 950,000 visitors to the US in 2010, the market is on track to exceed 1 million in 2011. With a total population of over 25 million and consistently strong economies, Scandinavia has the highest quality of life in all of the free world and these are avid travelers. In 2009 BBC World Media and the International Economist Magazine ranked Norway #1 and Sweden #2 in overall quality of life in the world. With a minimum 6 weeks paid vacation most Scandinavians plan at least one long haul vacation every year.
We continue to make real progress in Scandinavia. We are featured in all of the key Scandinavian Tour Operators’ printed catalogs and/or websites. We are hosting more and more media and trade fams to our region. Our popularity as a holiday destination continues to grow as we utilize both traditional and non-traditional methods to promote the Real America to the Scandinavians.
Norway: Norwegians are among the savviest users of the internet in the world. The travel industry is seeing a real shift in the way Norwegian travel customers book their travel. More and more travelers are booking air, rental car and accommodations directly over the internet. Two new tour operators/wholesalers entered the market in 2009 and both are solely internet based (American Holidays and American Tours). We are working closely with them to insure that packages to our region are offered through their websites. We are also working closely with Nordmann-Reisen and America Specialisten (two of the biggest US product specialists in Norway) to insure that product from our region offered in their catalogs and on their websites continues to increase.
Sweden: The Discover America Committee has become one of the most aggressive in Europe. They hosted over a dozen travel agent seminars throughout Sweden in 20010, their website is first rate and we are very well presented. They are currently working on a “training program” for travel agents that will be internet based and allow agents to become certified “experts” on US travel product. The board has officially recognized our efforts in Sweden and their support continues to grow as our region gains popularity as a USA travel destination. Tommy Swanson (Swanson’s Travel) continues to give us his full support and we are seeing healthy growth in the packages he is currently offering. Tommy Swanson is the major US product specialist in Sweden (90% of ALL tours from Sweden to the US are booked through Swanson’s). Swanson’s recently finalized an agreement with ETickets (the largest internet based air discounter in Norway) to start offering their huge inventory of travel packages. Swanson’s will use their marketing and promotion expertise (and dollars) to stimulate interest in their products in Norway and ETicket will be the internet-based booking agent. This should be very successful and subsequently good for us.
We are working closely with TEMA travel (a specialty travel agent/tour operator/wholesaler based in Stockholm) to develop packages for their clients. Pamela Clark, their Senior Product Manager for USA (and the President of Discover America Sweden), and Lars Bjorkmann, USA Sales Director, have both been on fams to our region and continue to expand our product in their catalog and website.
Denmark: This market showed the most potential new growth for us in FY2011. Two of the most popular US travel product companies (FIT, group tours and wholesalers) Marco Polo/My Planet and Team Benns announced that they are taking a new approach to travel products in 2010. Realizing that most of their traditional travel clients are purchasing air, rental car and accommodations over the internet, they feel that a shift in product mix and business models is essential to sustain viability. We are working with them on new products and programs that feature our region and have committed to participating in Staff trainings and clients events in October of 2011. They are particularly interested in non-traditional vacation packages that include “active activities” (rafting, hiking, biking, horseback riding, etc.) as well as non-traditional travel opportunities (RV and motorcycle travel in particular). They have both identified our region as a very strong area of growth for their businesses and are committing substantial dollars to develop it.
Finland: Our plans for Finland will continue to include distribution of our materials at MATKA. This year the “Real America” has been asked to be the feature region in the USA Pavilion and we have agreed to provide a framed print to be featured and raffled on the final day of the show. The Discover America Committee in Finland is working on developing a training program through their website. We have provided photos and copy as they develop the site and hope they will have their program up and running by later this year.