Outlook 2016: Suppliers Still Betting on Europe

Despite the terrorist attack in Paris, the lockdown in Brussels, the steady trail of migrants, and a global travel alert from the U.S. State Department, industry suppliers insist they are still bullish on leisure travel to Europe in 2016.

While clients may be temporarily holding back on booking trips to the continent, they insist there has been no major fall-out from the recent events and no red flags to prompt tour operators and cruise lines to second-guess their Europe programs.

“A change in destination is really contingent on the current landscape worsening,” says Collette executive vice president Paula Twidale. “We have not seen interest in Europe wane and Americans are far more resilient than in past years.”

“The pace at which people commit to new bookings may slow down, as they ‘wait and see,’ but we have not experienced a higher than normal cancelation rate,” she adds.

Lower oil prices and a stronger dollar are great incentives for travel, too, says Twidale. “Numbers are still strong and barring no additional acts of violence to instill fear, I am confident that Americans will not deprive themselves of the freedom to travel and enjoy life. At Collette we are cautious and risk averse, but will not succumb to fear, as that is the intention of those who invoke violence.”

Collette, she says, is encouraging its customers to continue with their travel plans to all destinations. “We remain proactive, monitor government advice and will always act in the best interest of the safety and security of our guests and employees,” Twidale says.

‘Italy on top’
The Globus brands – Globus, Cosmos, Avalon Waterways, and Monograms – are “still betting on Europe for 2016, with Italy on top,” declares spokeswoman Vanessa Parrish.

“Not just because it’s Italy – a destination offering a wide range of experiences from north to south and heel to toe – but because it’s also a Papal ‘Year of Mercy. With the Pope’s recent visit [to the U.S.], we’re seeing even more interest to an already big destination,” Parrish says.

The Globus brands also are expecting growth in Spain and Portugal. According to Parrish, “Past Italy travelers are helping drive the popularity of Spain and Portugal, along with increased interest in the sights and culture. Cruise stopovers in Barcelona and the great value proposition in these countries are also helping this region soar. They have become our No. 1 ‘where to go next’ destination for travelers.”

The Globus brands also have set their sights on other international destinations in 2016.

“South America has witnessed double-digit growth for both Globus and Monograms. Australia has also been a big destination for us in 2015, and it’s one we think will continue to grow in 2016,” says Parrish. “Driving growth is a combination of great prices and a growing demand by Boomers to get off-the-beaten path. Given the growth in South America, we have added Colombia to our destination list for Monograms,” she says.

On the water
At Avalon Waterways, says Parrish, the Rhine and Danube river cruises are leading the way. “River cruises will continue to be very popular for us in Europe,” she predicts. But Asia is another hot spot for Avalon.

“Cambodia and Vietnam, featuring the Mekong River, is off to a big start for 2016 at Avalon Waterways. We also just launched a new ship on the Irrawaddy River, sailing to off-the-beaten-path destinations throughout Myanmar. These are next-generation destinations for river cruises,” Parrish says.

Blue water lines are banking on Europe as well. All of the major lines will have a presence there in 2016, from the northernmost routes through Scandinavia and the Baltics to the far Eastern Mediterranean and the jewels of the French Riviera. In fact, Carnival Cruise Line will have its first Europe deployment in three years with the launch of Carnival Vista, the 3,954-guest mega-ship that will debut in May and sail the Eastern and Western Mediterranean through mid-fall.

But Carnival always remains largely focused on North American, Caribbean and Mexico destinations and that will be the case next year, too. “Close-to-home cruising has always been an important part of our marketing strategy as we operate from 17 North American homeports, including 12 year-round departure points on he East and West Coasts as well as the Gulf of Mexico,” notes Terry Thornton, senior vice president-international.

“Consumers appreciate the value and convenience of being able to drive to their cruise and it’s estimated that roughly half of the U.S. population is within a day’s drive of a Carnival homeport,” he adds.

The high end
In the luxury segment of the market, operator Tauck foresees a great year ahead and continues to look at the “larger picture.”

“Our market is American travelers, retired, and looking for a premium product. Our outlook was extremely positive before Paris and we’re still bullish,” says Jeremy Palmer, senior vice president of Tauck Land Journeys, Worldwide Operations and Tauck Ventures.

“Look at our core clientele: Ten-thousand Boomers are retiring every day, the market is coming our way. These travelers want authentic experiences and the wealth effect is still strong. It’s been a bull market since 2009 for IRAs so we have more people with money to spend,” he says.

And despite moments of insecurity in the world, “it’s been relatively stable,” adds Palmer. “This is the new normal.” He says Tauck is expecting a record year for river cruising in 2016: “Our growth rates have been outstanding.”

Concerning Paris, he says, “It’s too early to say that the fundamentals I pointed to have changed. We have had a little bit of ‘wait and see’ but that has been limited to people traveling to France and to a lesser degree elsewhere in Europe.”

Closer to home
Undoubtedly, there will be some number of American travelers who will opt to vacation domestically next year. For those folks, tour operators point to the national parks. The National Park Service will mark its centennial in 2016, and companies are offering special tours tied to the occasion.

Tauck has several national park tours and an exclusive partnership with filmmaker Ken Burns, who helped design some of them. Burns also provides filmed narratives on some tours, and three itineraries are part of the Crafted by Tauck & Ken Burns collection. These trips visit the Southwest, along with Yosemite and Yellowstone, among other areas.

“There’s a heightened sense of national pride and awareness, and our national park tours will out perform in 2016. There are a lot of external factors to make it more attractive to visit them,” adds Palmer.

Collette’s Twidale agrees.

“Domestic trips have been doing well as there is genuine interest in historical sites within the U.S.,” she says, adding, “We are featuring many tour packages and it is exciting to celebrate the national park centennial in 2016. There are more listed national parks than one would realize and Collette offers a great variety, central locations and many included features.”

Collette has joined with Tourism Cares to support the parks, “as they are severely underfunded,” says Twidale.   “Our corporate pledge represents our commitment to sustainable tourism and our donations are based on the number of guests that we will send to [the parks] in 2016.”