Europe Airfares Dampen Healthy Tour Outlook

This is the first of a two-part series about trends in tours.

Fuel surcharges and high airfares, particularly to Europe, are tempering tour operators’ otherwise strong business outlook for summer 2012.

Although transatlantic airfare sticker shock is hurting Europe bookings, tour sales to other destinations remain robust, tour firm executives said during a panel discussion at OSSN’s Home-Based Travel Agent Forum in Las Vegas last week.

Bad news, good news
At Trafalgar Tours, sales to Europe are suffering, but the trend is counterbalanced by a significant increase in interest in U.S. destinations, said Peter Worthing, director of sales. In response, the company has doubled its number of domestic itineraries this year.

“The fare situation to Europe is difficult, plus the Summer Olympics are hurting us there. There’s a month where you really can’t get in and out of London,” he said.

“Of course, in the long run, the Olympics will generate tremendous publicity for Britain,” he added.

25% increase
Bob Faucett, director of Religious Tours and a co-owner of Unitours, noted the impact of the cost of transatlantic travel. “Fuel surcharges are serious – we’ve had to raise our prices by 25%, which means that the $2,899 tour is now $3,600,” Faucett said.

At Sceptre Tours, sales of escorted tours to Europe are flat this year, although FIT sales are projected to rise by 15%, according to Marc Kavanagh, president.

“Airfares are a challenge, especially to Italy,” he said. “The taxes and fuel surcharges are creating sticker shock.”

Sales to Europe are down for Vared HaSharon Travel & Tours, but are up for Israel, Jordan and Africa, according to president Ari Marom.

Protection against unrest
The executives noted that while political unrest is a concern for some travelers this year, particularly in Europe and the Middle East, tours are an especially safe travel option.

“People have gotten more used to unrest. More are realizing that there is danger everywhere, even at home,” Marom said. “So there’s no reason not to travel. Besides that, a good tour will protect you.”

Travel agents should counsel their clients that a reputable tour company provides protection in volatile situations, Worthing said.

“We had people in Egypt during the upheaval, but they were taken care of,” he said. “We leased a jet and got 280 people evacuated.”

Next time: Dynamic product changes expand tours’ appeal to broader markets.