Tour Operators Prepare for Banner Year in 2018

While 2017 may have felt tumultuous, tour operators say not only has it been a record year for business, but it is only going to get better in 2018.

During the annual United States Tour Operator Association (USTOA) Annual Conference and Marketplace in Hollywood, Florida, the group shared the results of its Travel Forecast trend report, which 89 percent of its members participated in.

Nearly all (95 percent) members polled anticipate growth in the coming year, with two-thirds (64 percent) predicting a boom year with growth between seven to ten percent. Terry Dale, USTOA president and CEO, said it was the first time in his seven-year tenure he has talked with members and virtually everyone reported strong single- or double-digit growth.

Factors contributing to double-digit growth
Driving this optimism is the robust economy, Avanti President and Vice Chair Harry Dalgaard said, making people feel comfortable and willing to spend. “The proof is in the pudding. Our advance numbers are up over 39 percent for the same time last year, and that’s Europe, Asia, and Latin America. I haven’t seen anything like it.”

Paula Twidale, executive vice president of Collette and immediate past chair, added, “there are a number of factors that have aligned themselves” making it an ideal time for people to travel, including a strong dollar and healthy competition keeping prices low.

Dana Santucci, vice president of development at EF Education First and newly appointed chairman, credited the resiliency of travelers and the diverse array of options tour operators are now providing.

“It seems like it’s broad strength too, whether it’s student travel or FIT or cruise sector, the forwards just look good across the board,” said Charlie Ball, executive vice president and treasurer of Princess Cruises & Tours.

Also contributing to the growth is travelers’ penchant for smaller, more intimate experiences. Dalgaard said Avanti is seeing a huge uptick in personal service, across the spectrum from Millennials to Baby Boomers, getting away from a group tour to a semi-private to private tour.

Ball agreed, adding that in Alaska, people are willing to pay for high-end experiences such as dog-sledding and helicopter rides, which “is now available sometimes at $799 a person — and you’re seeing families of six and eight going.”

The report also revealed the significant contribution travel agents make to USTOA members business, with 84 percent of respondents reporting the use of travel agents to sell their product. For next year, 90 percent of members expect business booked through the travel agent community to remain the same or increase.

However, the year was not without its challenges. Members said the top threats to consumer confidence were terrorism, political instability, the travel ban, Hurricanes Irma and Maria, and other natural disasters.

Top destinations named
It is those factors that may have contributed to Australia jumping from number seven to number one on the list of most popular destinations for travelers in 2018.

“Australia is on the top of peoples’ wish list traditionally, but then they realize how far and the flight and everything. But I think people considered it an area that may be safer than other areas, and I think people are willing to make that move this year and commit,” Scott Wiseman, president and secretary of Travel Impressions.

Rounding out the top five destinations were: Spain, Italy and Iceland (tied for third), France, and Japan (for the first time). Continuing to grow in popularity, Iceland was named the top emerging destination for 2018, followed by Colombia and Vietnam.

What about Cuba?
One destination that was notably off the lists was Cuba, which just last year was considered a hot destination. Part of this can be credited to consumer confusion regarding the Trump administration’s policy toward the country. While the new policy will not affect escorted/guided members, it will impact FIT operators, Dale said.

“It’s good in the sense we still operate our group people-to-people travel itineraries, but prior to the executive order coming out, you were allowed to go as an individual and you had the autonomy to do that. That autonomy is gone, and you have to now go with a group, so those individuals now have to go with a group operator in that sense,” Twidale noted.

While the USTOA did lobby on the behalf of opening up Cuba to all types of travel, Dale conceded, “I don’t see this gaining a lot of traction. We will continue to press forward but it’s an uphill climb.”

New for 2018
USTOA announced it will continue its partnership with USA Today, promoting the experiences offered by its active tour operator members, as well as raising awareness of tour operators in the eye of the traveling public. The successful native-content campaign included a series of articles, videos, and photos showcasing four destinations partners and four tour operator partners. The eight suppliers for 2018 have not yet been chosen. 

It will also continue its partnership with Afar magazine, working with ambassadors and bloggers to produce content after viewing members’ itineraries.

Adding to its portfolio of offerings for active and associate members, USTOA will also launch its digital marketing academy this January, covering topics like managing social media managers, determining social media ROI, and Google Analytics.

Highlighting benefits for travel advisors, Dale said USTOA’s agent training program now has more than 2,000 graduates; as well as a quarterly newsletter and incentives like Travel Together Month, a promotion which offers agents booking bonuses, higher commission and exclusive savings.