Agents Generate Dynamic Growth in Group Market
by Nick VerrastroSmall group travel is hot. That’s the word from tour operators who report steady growth in group travel in recent years – much of it driven by travel agents.
In response, operators are stepping up efforts to help agents tap a sector that is both potentially lucrative and less vulnerable to economic downturn than others.
‘Through the roof’
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Group business is “through the roof” at Insight Vacations, said president Marc Kazlauskas.
Travel agents are driving much of that growth, Kazlauskas said. Agents “realize they can make a lot of money with groups.”
Globus also reported significant growth in group bookings. “We have seen the groups business steadily increasing over the past five years to represent 15% of our tour and river cruise product,” Globus vice president of sales Paula Hayes told Travel Market Report.
Hayes noted that groups are not only profitable for agents – but that it is a business that sticks, even in the worst of times.
“It’s a good way to sustain profitability in slow periods,” she said of group business. “In 2009, agents with groups in the pipeline didn’t get hurt.”
Globus has decided to make a concerted effort to develop group tour business under vice president Mike Shields, who has spearheaded the company’s growth in the religious tours.
At Travel Impressions, executive John Hanratty called the opportunities for group business “limitless” for both agents and operators.
“Our passenger growth percentage for groups last year approached triple digits,” said Hanratty, who is senior vice president and chief marketing officer. That growth is particularly remarkable, given that Travel Impressions is better known for its individual packages.
Groups are even a growing business for FIT specialist Travel Bound. President Richie Karaburun said agents’ group bookings now account for one-third of Travel Bound’s revenue.
Why are groups a growing segment?
Groups are a profitable product for travel sellers. They also provide tour companies with a solid base of business, industry members said.
The growth of group travel is also fueled by key consumer and demographic trends. These include the heavy influence of baby boomers and burgeoning interest in family and multigenerational travel and destination weddings.
Small family groups
“Boomers want to invest in spending more time with their families,” said Globus’ Hayes.
Unlike their parents in the Greatest Generation, the boomers have a “why take it with you?” attitude toward money. Many are choosing to spend it on traveling with their families.
Travel Bound is also seeing growing bookings of small groups and family groups from travel agents, said Travel Bound director of business development Tom Buchberger, CTIE.
Most don’t want to book into a tour departure, Buchberger said. “They want very customized itineraries.”
The small and family group market is sizable enough for Brendan Vacations, that it is adding smaller 24-seat coaches in Ireland, its most popular group destination, said president Nico Zenner.
Weddings & friends
Wedding groups and social get-togethers for friends also are growing in popularity. At Travel Impressions, destination weddings are leading the way, Hanratty said.
“The percentages for each of these groups have increased dramatically, but the interest in destination weddings far outpaces other group requests.”
Hanratty said that agents are using promotional materials from Travel Impressions’ resort and hotel partners to drum up destination wedding groups at local bridal shows.
Popular destinations
Besides Ireland, Italy has been popular with groups. Now Trafalgar Tours is seeing a resurgence in group requests for Spain and Greece, president Paul Wiseman told Travel Market Report.
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U.S. national parks and Europe river cruises are popular with family groups, operators reported.
Hayes and Kazlauskas noted that groups are looking for new destinations, such as Israel and, until the recent unrest, Egypt. (Insight is taking a wait-and-see attitude about whether to operate future Egypt trips, Kazlauskas said.)
South America is growing in its appeal with the group market, Brendan Vacations and Travel Bound both reported.
Travel Bound’s Karaburun said that travelers’ destination choices are influenced by where a particular tour company is promoting business.
Tour operators to China, for example, are getting into customized tours with driver-guides. That appeals to the family group market, said Marta Visu, Pacific Holidays’ vice president of marketing and product developing.
Booking patterns
One change in group travel is that bookings are closer to date of departure than in years past.
“It used to be that groups would book a year or more ahead, but now they are booking fairly close to the departure date,” said Zenner.
Groups also are asking agents for more complicated itineraries with more inclusions, Zenner said.
