Pent-up demand, a strengthening economy and the growing popularity of experiential travel should make 2013 a year of opportunity in the tour sector, favoring tour firms, travel sellers and their clients.
Early indicators suggest that 2013 could bring a return to pre-recession levels.
“I’m seeing clients booking earlier for 2013 than over the last five years. As a result we have more guaranteed departures going into 2013 than we have had going into a new year since 2007,” Marc Kazlauskas, president of Insight Vacations. Kazlauskas said.
Still, the picture isn’t all rosy. Tour operators and travel agents face challenges ranging from global political and financial instability to continued high airfares.
Major tour operators shared their thoughts on the opportunities and challenges for next year with Travel Market Report.
Booming boomer market
“For 2013 we’re doing all we can to reach out to baby boomers. They are beginning to retire and there are enough that have the kind of income and free time to travel. On top of that, the economy is coming back. Because of the broad age span of the boomers, those born between 1946 and 1964, their interests vary from multigenerational travel to ultra-luxury trips whether in groups or FIT’s.” – Phil Otterson, president, Abercrombie & Kent USA
Airfares looking better?
“Airfares to Europe are high, although they look to be better in 2013 than they’ve been. This will help drive traffic to Europe.” – Scott Nisbet, CEO, Globus Family of Brands
Europe is hot
“2013 is on fire for Europe right now, specifically the U.K., which was off in 2012 due to the Olympics and the Queen’s Jubilee; [also] Ireland, and Spain and Italy, both soft in 2012 due to extremely high airfares. All of these destinations are up by double digits for us. A lot of Americans put off travel to Europe in 2012, and the demand is palatable right now.” – Marc Kazlauskas
New taxes squeeze tourism
“A disturbing trend is governments’ ever-increasing taxation of the tourism sector. At the moment when governments should be focusing on increasing tourism, they’re starting to see it as a quick way to raise taxes. It could be airport taxes or bed taxes; these don’t affect local constituents so they’re easy for governments to do. They see a short-term gain, but they’re missing a long-term opportunity. Tourism can assist at the lowest levels of an economy. You don’t need a masters degree to open a restaurant.” – Gavin Tollman, CEO, Trafalgar Tours
Experiential trend favors agents
“Travelers have a desire for authentic experiences. They face a lot of complexity in terms of finding these experiences, putting them together and finding value. Tour operators and agents are good at taking the complexity out of the equation, finding the value and pointing travelers in the right direction. So these are good opportunities for them.” – Scott Nisbet, Globus
The real thing
“Clients want immersion into the culture. They want to meet the locals even if they don’t speak English. They want to see the sights, but they also want to see the real destination. We’ve added flexibility in our itineraries that gives them this choice. It makes them more appreciative of what they have seen and of what they have.” – Dan Sullivan, president and CEO, Collette Vacations
Coping with bad news
“It used to be, ‘Oh God, I hope nothing happens.’ Now it’s, ‘Things will happen so what are we going to do?’ The media is our friend in many ways, but not in every way. Many times, once the media gets away from it [a global crisis], you uncover the truth of the matter. We have to temper the bad news.” – Phil Otterson, Abercrombie & Kent
“Egypt is off-line for us. We had two major programs there that had accounted for a lot of volume, but we stopped offering them after the Arab Spring. Israel too is a risk. There are some negatives in terms of the Fiscal Cliff, but people are getting used to this. And while the stock market is up and down, they’re used to this kind of volatility and comfortable that it’s not going to collapse. They’ve been through tough times in 2008 and 2009 and say they’re going to travel now.” – Dan Sullivan, Collette Vacations
“Anything you read in the newspapers seems to affect our business. Egypt hasn’t come back. Business to Israel is tough. Greece is an issue and has even had an effect on Italy. At the moment the Fiscal Cliff isn’t having a huge impact, but if it doesn’t get solved and lingers into January and February, the key booking months, it will have an impact.” – Scott Nisbet, Globus
“The smarter hotels are focusing on added value, offering a fourth or fifth night free, daily continental breakfast and features like a bottle of wine on arrival. There are so many specials in the marketplace to catch people’s attention. The Caribbean, for instance, is bouncing back. It had out-priced itself, but in 2012 it’s a better value, not necessarily more affordable, but a greater value with free night promotions.” – Greg Bernd, co-president, Classic Vacations
Travelers have a desire for authentic experiences. They face a lot of complexity in terms of finding these experiences, putting them together and finding value. Tour operators and agents are good at taking the complexity out of the equation.
Scott Nisbet, Globus