CENTRAL EUROPEAN OFFICE

Transcription

1 CENTRAL EUROPEAN OFFICE MAY 2006 Prepared by: Barbara Schuch-Beckers Director Central Europe MARKET TREND/MARKET INFORMATION International visitation to the US continues growth into 2006 The U.S. Department of Commerce announced that 2.9 million international visitors traveled to the United States in January 2006, an increase of 11 percent over January As we approach National Tourism Week, it is encouraging to see a continuing trend of increased visitation to the United States, said Assistant Secretary for Manufacturing and Services Al Frink. In 2005, we recorded the second-highest number of visitors in U.S. history, and those visitors spent record dollars during their stays. Highlights of January 2006 International Arrivals to the United States Canadian visitation grew 11 percent over January of Arrivals from Mexico (traveling to interior U.S. points) were up 43 percent when compared to the same month in Overseas arrivals (excluding Canada and Mexico) increased 6 percent over January of Arrivals from the overseas have posted 28 consecutive months of growth. Visitation from Western Europe was down almost 2 percent compared to January Arrivals from Eastern Europe continued its double-digit growth when compared to 2005, up 13 percent in January. Eastern Europe has also posted 29 consecutive months in arrivals growth. Arrivals from the United Kingdom were down nearly 6 percent in January. Visitors from the U.K. accounted for 42 percent of all Western European arrivals. 1

2 German arrivals were up 9 percent for the month. Visitation from Asia increased 10 percent in January. Japanese arrivals increased 6 percent for the month and accounted for 59 percent of all Asian visitors. Arrivals from South Korea, the People s Republic of China/Hong Kong, Taiwan and India grew by double-digits in January. Arrivals from South America were up 18 percent in January. Double-digit growth in visitation from Argentina, Brazil and Colombia were noted for the month. Brazil is the top arrivals market for South America, accounting for 37 percent of arrivals from the region. Travel from Oceania increased 9 percent in January with Australia registering a 7 percent increase. Australia accounted for 82 percent of all arrivals from Oceania in January Both Australia and Oceania have posted 27 consecutive months of arrivals growth. Arrivals in January from the Middle East increased by double-digits. Visitation from Africa, Central America and the Caribbean also reflected growth for the month. Strong online travel sales growth in Germany Online travel sales in Germany grew by 38% to 9.5 billion in 2005, and now represent about one quarter of the overall 38.1 billion travel market, according to a new survey. The online sales figure, however, also includes revenues generated by an online booking request but completed offline. The Web Tourism 2006 study by market research firm Ulysses Web- Tourismus found that airline ticket sales remained the dominant online travel sales segment last year. IATA airlines generated just over 50% of online travel revenues while low-cost carriers accounted for a further 26.9% of the total. Online package holiday sales, in contrast, grew only moderately last year. The ten leading German tour operators only increased their online market share by 1% to 6.6%, with more sales via external portals and fewer via in-house websites. Travel portals now generated more than 40% of tour operator online package sales compared to 30% in Ulysses Web-Tourismus, which interviewed 343 travel industry decision-makers for the survey, forecast that German online travel sales will grow further to 12.2 billion this year, rising to 14.1 billion in In contrast, offline sales, mostly via travel agencies, would decline from 28.7 billion last year to 25.7 billion in The overall German travel market would grow moderately from revenues of 38.1 billion in 2005 to 39.8 billion in 2007, it predicted. 2

3 LTU re-positions as scheduled long-haul airline LTU has unveiled a new strategy focusing on long-haul scheduled flights following its recent sale and cooperation with DBA. The Düsseldorf-based airline will increase flight frequencies on its short-haul and long-haul routes, but with a clear focus on the long-haul routes. It will develop its seat-only sales business, introduce a transparent pricing system and target business travel more intensively with a two-class in-flight product. LTU said its flights would be concentrated more on the Düsseldorf and Munich hubs, with partner carrier DBA providing domestic feeder flights from winter 2006/07 onwards. The close cooperation with our sister company DBA will enable this re-positioning, declared managing director Jürgen Marbach. LTU s growth opportunities lay in year-round long-haul flights and in seat-only sales, particularly to business travelers, but tour operator sales would not be neglected. The long-haul fleet would be increased by one A a year, alongside the 15 medium-range A320/321s. Joint managing director Peter Oncken said that LTU needed to cut costs and improve its results by 45 million this year. This would be achieved by temporary pay cuts, higher revenues and synergies with DBA. Meanwhile, Marbach has acquired a 24% stake in LTU from the 60% holding acquired by Hans Rudolf Wöhrl earlier this year. This surprise deal leaves him as the third-largest shareholder behind Rewe (40%) and Wöhrl s investment company Intro (36%). Slow sales for TUI in Q1, 2006 TUI has seen slow tourism sales in the first three months of 2006 with low demand in Germany, rising sales in the UK and a downturn in France. Customer numbers dropped to 3.7 million from 3.9 million, while turnover stagnated at 2.5 billion. The tourism division s seasonal first-quarter loss was reduced to 83 million from 178 million, however, due to proceeds from the sale of business travel subsidiary TQ3. Central Europe, covering Germany, Austria and Switzerland along with Hapagfly and Hapag-Lloyd Express, suffered slight decreases to 1.7 million customers and revenues of 905 million (-3.7%), while the operating result worsened to a loss of 102 million from 84 million last year. The main reason, according to TUI, was fewer charter passengers due to the late Easter holidays. Northern Europe, covering the UK and Nordics, overtook Central Europe with turnover of 915 million and a 2.2% rise to 1.2 million customers. The seasonal loss was reduced by 5.2% to 92 million due to higher demand in the UK. Western Europe dropped to revenues of 526 million (-1%) and 810,000 customers (-6.9%), mostly due to lower demand in France. TUI said that bookings for summer 2006 are showing low growth at present but there is a continual improvement. Booked revenues are currently up by 0.9% and client numbers by 3

4 1.6%. For the winter 2005/06 season that finished at the end of April, tourism revenues rose 3.1% and client numbers increased 6.6%. TUI Germany s results are weaker, however. In the winter season, its revenues grew just 2%, although client numbers rose 8.1% due to the consolidation of HLX passenger volumes. Summer 2006 bookings were 2% below last year s level as of the end of April, with a 2.2% rise in client numbers. TUI now expects a clear increase after this summer s World Cup in Germany, which runs from mid-june to mid-july. Meanwhile, TUI chairman Michael Frenzel reiterated the aim of doubling tourism profits to about 700 million in 2008 compared to 2004 levels at last week s annual shareholder meeting. This improvement would be achieved through 180 million worth of cost savings and 30 million of efficiency improvements, with Germany now the main focus following restructuring in the UK. A further 150 million worth of cost savings and revenue increases should be contributed by the airlines Hapagfly, HLX and Thomsonfly as well as through new products, he added. TUI will also step up investment in the hotels sector with 25,000 new beds by 2008, which would contribute an additional 40 million in profits. Rewe Touristik considers tourism umbrella brand Rewe is considering the introduction of an umbrella brand for its tourism businesses, the group s head, Achim Egner, told the Financial Times Deutschland newspaper in an interview. Rewe is currently conducting a major strategic review of its tourism activities, and the first results are due in June. Up to now, the group has operated through the individual brands such as Dertour, ITS, Jahn, Meier s Weltreisen, Tjaereborg, DER Reisebüro, Avigo and Atlas. Egner said he wanted to retain these names, but that does not exclude an umbrella brand. Rewe Touristik has always been against the introduction of a leading brand since the individual operators cover diverse market segments and none of the existing brands has any kind of recognition level approaching that of TUI or Neckermann. Another factor is that the package holiday operators officially form LTU Touristik for tax reasons. This could change if Rewe disposes of its 40% holding in the LTU airline. German holiday sales slump in April due to Easter break This year s late Easter hit holiday and general travel sales in Germany hard in April, the latest monthly travel agency survey by the TATS organisation shows. But the general expiry of early booking discounts at the end of March may also have impacted on bookings last month. Total agency sales dropped 9.6% on a year-on-year basis, leaving the first four months of 2006 showing a 3.9% increase. Leisure sales slumped by 12.8%, meaning there is a small 2.1% growth rate for the first four months of Overall tourism revenues, including advance sales, for the full November 2005-October 2006 period are up by just 1.3%. Sales of airline tickets were down 4

5 6.3%, leaving a 7.3% rise over the first four months while service fee revenues declined by 3.8% in April but are still up by 10% over the January-April period. The monthly survey covers 2,750 German travel agencies, making it highly representative of overall market trends. Uneven trends in European outbound markets in 2006 The major European outbound holiday markets are showing diverse trends this year in terms of market growth, according to this year s annual FVW survey and ranking of Europe s top 50 tour operators. But the rising importance of the internet for bookings and growth for Spain as a destination at the cost of Turkey are common factors throughout the key markets. In the UK, tour operators are expecting growth of about 3-5% this year after reducing capacity and holding prices stable for the summer 2006 season. Spain is selling well after declining in recent years, while Turkey has now recovered from its slump early in the year. Meanwhile, operators are increasingly steering sales through in-house channels, whether travel agencies or websites. TUI UK now sells 75% of its holidays through controlled distribution channels, while for First Choice the figure is 57%. At the same time, operators have cut commissions for independent travel agents from 13% to 7%. In response, agents are turning to DIY products and specialist operators. In the Nordic outbound markets, there is strong growth this year in Sweden and Denmark in particular, driven by the strong local economies. Traditional destinations such as Greece, Spain and Cyprus are selling well while Turkey is in lower demand. A significant trend is that operators are winning back customers who have had bad experiences with booking their own holidays. But 40% of sales are now via the internet and only 20% through travel agencies. In the Benelux states, web sales are booming in the Netherlands and now have an estimated 10% market share. Online operator Gogo/Sunweb has grown to the fourth-largest Dutch operator behind TUI, Thomas Cook and OAD. In response, operators are focusing on core brands and multi-channel strategies. TUI, for example, has sold its city trips and winter sports businesses. The more conservative Belgian market is growing 6% this year with relatively stable Turkey bookings. The French market is still suffering from a slump in sales for the French island of La Reunion, and TUI admits to a drop in bookings this year. North Africa is selling well but Turkey and Egypt face demand problems. In contrast, the Swiss market is growing strongly this year. Market leader Kuoni has an 11% rise in bookings, Hotelplan was up 15% in the first quarter and TUI has 8% growth. Bookings for Spain have risen about 20% but Turkey is down by 40-50%. 5

6 Neighbouring Austria is suffering particularly from lower demand for the main destination, Turkey, but sales for Greece and Spain are rising. The annual FVW ranking of Europe s top 50 tour operators is led by TUI with tourism revenues of over 14 billion in 2005 ahead of Thomas Cook with 7.7 billion. Rewe ( 4.6 billion) has overtaken Britain s My Travel ( 4.3 billion) as number three while First Choice ( 3.8 billion) is the clear number five. Places 6-10 are occupied by Iberostar, Kuoni, Club Méditerranée, Alltours and Alpitour. SALES ACTIVITIES From May 6 to 10 we attended the 38 th International Pow Wow in Orlando. Again it was a very productive show for the Central European market. The following appointments were of special importance: 1. Martin Massueger Chairman and Werner Wiedmer Vice Chairman VUSA Committee Switzerland A Visit USA Seminar will be held in Zurich, Switzerland on February 7, This is the most important annual USA- event on the Swiss market which is attended by several hundred travel agents from all over the country. We will not only sign up as an exhibiting partner but will also request to hold a joint seminar together with Orlando, Anheuser Busch and Walt Disney World. 2. Marcel Meek Senior Product Manager USA Sky Tours Switzerland Sky Tours is one of the major Swiss tour operators for the U.S. market. St.Petersburg/Clearwater just recently has conducted a mailing to the operator s selected customers. The mailing piece (flyer) has also been posted on Skytours website and will remain there for a full year. Skytours came up with a catalogue of marketing activities planned for 2006/2007 and we will make suggestions to head office. 3. Karel Werdler Board Member of the See America Committee The Netherlands introduced the See America Box on the Dutch Travelecademy website. According to the Committee, this website reaches up to travel agents per year. We are offered to be part for a reasonable price and could use the website for a profile of our destination including photo gallery, an online course, placing of news items with daily updates by their editors. This is an interesting offer and we shall ask for more details before suggesting our participation. 4. Eric Engelhardt Sales Manager Aeroplan Reise GmbH. Cologne the company is one of Germany s largest independent tour operators with 60% of its business destined to 6

7 the U.S. and Canada. We have discussed a possible joint trade mailing plus an newsletter to German travel agencies. 5. Miranda van Dam Product Manager Kuoni Travel Nederland is looking for Superior Small Lodgings beach properties. 6. Kenny Prevost Product Director Knecht Reisen Switzerland a large operator who has jut launched a new USA program also requests proposals from interested hotels and Small Lodgings. 7. Attila Salamon General Manager Air Partner Hungary is looking for 3 and 4 star hotels for incentive tours to be conducted between November 2006 and March Heike Pleuter Product Manager North America Meier s Weltreisen Germany is very interested in the Clearwater Beach developments and has received all available information including the Beach Walk CD. We have also confirmed to Meier s Weltreisen, that our successful beach bag program will be continued further. 9. Helene Pouvesie - Area Manager Jet Tours France informed us that the company is part of Club Med and sends passengers to the USA per year. Their receptive operator is Allied-TPro. Of special interest to Helene is the Superior Small Lodging Program for their a la carte and week-ends program. 10. Tilo Krause-Duenow- Owner of Canusa Touristik Germany confirms that his product manager who just recently took a trip of our area and looked at various hotels and B&B was very impressed by our offers. We expect the operator to include some more properties in our area in their next catalogue. 11. Maic Haverstreng Product Manager Dertour Germany claims that especially the Westcoast of Florida is presently loosing market share of up to 20% with the operators summer bookings. The explanation seems to be the fear of hurricanes. Jean-Marie Douau, Managing Director of tour operator Jetset-Voyages in France visited Florida together with his family before Pow Wow. He asked us for our assistance in securing tickets for the Dali Museum. Our colleagues were so kind and sponsored three comp tickets and Mr. Douau has now expressed his appreciation for our assistance. Mr. and Mrs. Hackenbuchner, owners of travel agency HG-Reisen in Wertlingen, Bavaria were the winners of our first prize drawn at our Munich Sales Mission event in October They stayed at the Sheraton Sand Key Resort from May 16 to 23 and have now reported, how wonderful their vacation was and how much they enjoyed St.Petersburg/Clearwater. They will from now on definitely do all possible to sell our area as a preferred destination to their customers. 7

8 St.Petersburg/Clearwater was represented at a travel agent roundtable seminar which took place in the city of Braunschweig on May 23. Braunschweig is one of the cities not so often visited by destination representations and we therefore did meet a very interested group of 41 travel agents there. Our partners in this event were Orlando, Anheuser Busch and Martinair. Each partners hat approx. 20 minutes for a power point presentation with questions and answers following. Our brochures were distributed to every agent. A raffle concluded the evening for which TRS Travel Resort Services granted a 5 day stay in one of their beautiful condominiums. We attended the German Visit USA Committee Meeting in Frankfurt and discussed the following subjects: 1. As of January , we shall initiate a combined VUSA membership for all three German speaking countries, i.e. Germany, Austria and Switzerland. This will enable us to work closer together and coordinate joint promotions such as travel agent training seminars, consumer shows etc. 2. We have agreed with TIA that the local Pow Wow selection committees are the only institutions sending out Pow Wow invitations to the tour operators. TIA will no longer mail out their own invitations which caused some confusion in the past. 3. Our Online Training Program for travel agents ended as of May 2. St:Petersburg/Clearewater participated in the program. A total of German agents took advantage and have become USA specialists. We intend to continue with that program in The German consumer fairs 2006/2007 are open for sale and we have already indicated our interest in having our brochures distributed at each one (provided approval of our budget plan) 5. A total of 15 breakfast seminars for travel agents in all three countries are planned for the remainder of this year and in As soon as the schedules are available, we shall try to sign up for several of them. 6. A presentation was made and information material handed out by Phillip T. Slattery, newly appointed Visa Branch Chief, U.C. Consulate General in Germany on the present immigration and Visa regulations. According to Neckermann/Thomas Cook our joint mailing promotion which we conducted together with Orlando, Anheuser Busch, Condor Airlines and Alamo in April was a huge success. Included in the mailing piece was a sweepstake and Neckermann reports that they have received hundreds of replies. An exact number will be advised shortly. The mailing had been sent to a total of Neckermann customers. 8

9 During the month of May we received the following number of inquiries: Trade: 9 Consumer: 14 TRAINING TRIPS TUI Germany has reconfirmed the flight reservations made for our joint training trip. A total of 13 agents plus tour guide will travel on LTU from Duesseldorf to Orlando and return October 9 to 16, They will spend half of the time in Orlando and half in St.Petersburg/Clearwater. This is the first training trip ever conducted with TUI and we are looking forward to a good group. Russian company Vista International Travel Agency approached us during Pow Wow regarding a joint training trip for 10 to 15 of their travel agents. This journey is planned for the end of September 2006, should last 10 days and include besides our area Miami and Orlando. We have indicated our interest to host the agents from Russia and offered our assistance. With the largest tour operator in Switzerland, Kuoni, we discussed a training trip for approximately 15 travel agents to be conducted in It would be a self-drive program to give the agents the opportunity to experience as much as possible by themselves. A meeting was held at the Delta Air Lines office in Frankfurt to discuss a joint Super Training trip for Delta s preferred travel agents. Four to five agents from the following cities which are served by the carrier are to be invited: Berlin, Duesseldorf, Frankfurt, Munich, Stuttgart, Zurich and Budapest. Our partner will be Orlando and we plan to conduct this trip for 28 to 35 agents plus two guides early November. The duration will be one week to be divided by Orlando and St.Petersburg/Clearwater. We are now awaiting Delta s approval. Our head office has already submitted a great suggestion for the itinerary in our area. The Scharnow Donation has reconfirmed their travel dates for our annual group of agents. The group is to travel on United Airlines and will stay in our area from November 1 to 7. We expect 18 to 20 agents on this trip plus tour guides. 9

10 PUBLIC RELATIONS We worked on the advertisements/advertorials/winning games in the following publications: Trade paper Travel One created the advertorial Trade paper Touristik Aktuell created the advertorial Expedia.de proofread and altered the German adevertisement Trade/Consumer magazine Urlaub Perfekt created advertisement and arranged the winning game, found airline partner to join. Our full page advertorial in the Austrian trade paper T.I.P. was very well received by the industry. Copies were also distributed during Pow Wow. Monthly Sales Activity Report Attach lists of calls, leads # Sales Calls # Sales Leads # TA Educ Workshop # Press Contacts # Trade Mailed # Vis Inq Mailed # Trade Shows October November December January February March April May June July August September 10