Canada’s Vacation Packagers See Positive Trends Amid Keen Competition
by Judy Jacobs /Canadian wholesalers see a good year ahead for vacation package sales, with price increases, earlier bookings and more destinations. With luck, a bit of a departure from the intense price-driven competition and overcapacity of the recent past may even be in the cards for 2013.
For an overview of what’s ahead, Travel Market Report spoke with Canada’s top vacation packagers. Here’s what they said.
Positive pricing news
“Pricing will continue to increase, and overall pricing this year [2012] is quite strong. It’s higher than last year,” said Deana Murphy, executive director of sales for Sunwing Vacations and Signature Vacations.
“The winter is doing exceptionally well,” Murphy said. “Generally in the market, prices are up between $50 and $70 per person on packages through the winter months.”
Differentiating the product
An optimistic pricing outlook is one factor allowing wholesalers to go beyond price in promoting their product.
“While we will always maintain price competitiveness, we are shifting our focus to offering differentiated product, aggressive early booking/value-added promotions and an enhanced client experience,” said Denise Heffron, vice president, national sales and commercial, for Transat Tours Canada.
Booking patterns shift
Yet another positive indicator is a lengthening booking window. Chris Avery, vice president and general manager of WestJet Vacations, said that the average booking window for his company’s product is now about 45 days.
“People are booking us well in advance, and we’re seeing that trend more and more this year. Our prices are extremely competitive when you book ahead,” he said. “We don’t do much last-minute selloffs, where we aggressively discount at the last minute, because we don’t need to,” he added.
Tempering the growth
Positive trends also support more product growth from Canada’s leisure travel suppliers. But one big player, Sunwing Group, plans to slow its pace a bit in 2013.
“We will continue to expand more moderately, because we’ve had huge expansion,” said Murphy. “This year we added two new Canadian gateways – Fort McMurray (Alberta) and Grand Prairie (also in Alberta). We now operate out of 33 Canadian gateways and are looking to expand in that way.”
The further expansion of its hotel ventures – Sunwing Group launched Blue Diamond Hotels and Resorts with its Memories and Royalton brands in late 2011 – will bring new properties in Jamaica and the Bahamas in 2013. The company also has five hotels in Cuba, as well as a hotel in the Dominican Republic.
Sunwing’s hotel brands give it an advantage in the market, Murphy said. “What it has done is given us opportunity and destinations where hotel rooms can be at a shortage several times of the year. It gives us more inventory, but other than that we’re not doing anything different,” said Murphy.
Adding destinations
Transat Tours was still mapping out its plans for the year ahead, Heffron told Travel Market Report. “We are currently analyzing destinations and market trends and are in the midst of finalizing programs for 2013. No firm decisions have been made at this time.”
However, the firm already has added packages to Haiti from Montreal for the current winter season. The packages launch this month, according to Heffron.
For this current winter, Transat also has introduced packages to Grenada, from Toronto, and to Roatan, from Toronto and Montreal.
From the west it added San Jose and Huatulco. It also increased capacity into Samana, Dominican Republic, and will continue that capacity throughout the summer from both Montreal and Toronto.
WestJet extends its reach
WestJet has added five new destinations to its route network – Antiqua and Barbuda, Curacao, Costa Rica, Manzanillo and Port of Spain – allowing WestJet Vacations to expand to those destinations as well.
WestJet also expanded its winter service. “We’ve added about 10% to 12% capacity overall to southern sun destinations like Cancun, Dominican Republic, Hawaii and Las Vegas. This will continue through April,” said Avery.
Tapping new markets
In mid 2013, WestJet will dramatically expand its offering with the launch of Encore, its new regional airline.
“Right now we sell vacation packages from all the major cities and some of the secondary cities across Canada, but that means we’ll be able to sell packages from places like St. John and Sudbury,” Avery said.
The route expansions allow the vacation packager to reach new demographic markets as well. “It will bring guests that we don’t normally see into our secondary hubs. In the past, a family would look at the fare from a small city to Toronto or Vancouver, and that airfare would be more than their entire vacation,” he said.