Summer Outlook: Sales Are Strong – Especially Europe, River Cruises
by Maria Lenhart and Dori SaltzmanSummer 2012 is shaping up to be a strong season for travel agents.
Most report that bookings are up, though consumers are as price-conscious as ever. Agents also say clients are booking trips further out than last year, perhaps in recognition of the need to lock in the best prices and availability.
When it comes to products and destinations, agents cite river cruises as among the hottest vacation trends. And, despite the high airfares, Europe is shaping up as the preferred destination.
Those are among top predictions from leisure travel agents contacted by Travel Market Report about the outlook for summer travel.
Positive sales trend
Despite economic uncertainty, 2012 is turning out to be surprisingly strong in terms of sales.
“I’ve seen it hold kind of steady, which to me is a positive,” said David Walsh, independent affiliate, Avoya Travel / American Express in Bradenton, Fla.
Walsh has been pleasantly surprised. “I was thinking 2012 would fall on its face – you have a lot of distractions, a lot of worldwide events, not just the price of oil.”
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For Stephanie Turner, CTC, president of Brentwood Travel Service, an Ensemble member in St. Louis, 2012 sales are more than holding steady. “We’re definitely having a better year this year. Our summer season is actually pretty good.”
Going over budget
While clients are coming in the door with budgets, they are quite willing to exceed them, noted Lois Howes, a travell seller at Superior Travel, a TRAVELSAVERS member in Freeport, N.Y.
“They’ve all gone way over what they gave me as their budget. Every single one said, ‘I don’t want to spend more than this.’ So I found them things in their budget. But then they were like, ‘Oh, I’d like a four-star hotel instead of a three-star hotel.’”
Per trip expenditures gaining
Overall, client expenditures per trip are up this year, despite the economy, Howes said. It may have to do with pent-up demand. “I think it’s that people didn’t go away last year or the year before and they’re like, ‘We haven’t done this for awhile.’
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“At the same time, they’re hoping for deals and asking for them.”
Turner noted that while expenditures are up and people are going for longer trips, “I’m not sure we’re back to where we were. It may be awhile until we get back to 2006 or 2007.”
Like Howes, she sees pent-up demand and clients who are value-conscious. “They want to know that they’re getting the most for their money.”
More discerning
Similarly, Walsh sees clients being more discerning with their dollars.
“They’re thinking a lot more about the particular itinerary – does it do what we want to do when we want to do it? The dollars are still being spent, but they’re spending them a little more on cruising than on more expensive forms of travel.”
Family matters
Tony Cardoza, president of Cardoza-Bungey Travel, a Virtuoso member in Palo Alto, Calif., said he’s seeing the most price sensitivity among families with children.
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“The focus seems to be on spending for schools, private and college, with a reduction in spending on vacation and luxury products.”
This is somewhat made up for by grandparents, he added. “A lot of big family trips are now being organized and paid for by the grandparents.”
Trends in booking windows
While booking windows vary greatly, clients seem to be more cognizant of the fact that they need to book early to get the best deals.
“As the traveling public gets more experienced and more educated, I’m seeing the booking window extend,” Walsh said. “You can’t plan a river cruise within a three- or four-month window. The ships are sold out.”
In Howes’ experience, bookings windows have increased this year, on average to about three months.
“Last year was all pretty quick, within a month or so. This year I actually have to schedule when to do their payments; last year I didn’t have to remember.”
More last-minute activity too
Cardoza said that while most of his clients are booking big international vacations nine to 12 months out, a growing number are veering sharply in the other direction – sometimes booking a major trip less than two weeks out.
“It is hard to say what is driving this – availability of hotels and cruises, last-minute offers from our suppliers, a residual economic uneasiness, or an Internet-driven do-it-now ethos.”
All-inclusives, cruises doing well
What are clients most likely to book this summer? Agents report strong interest in all-inclusive resorts, soft adventure and river cruises. (See sidebar). Despite the Concordia tragedy, ocean cruises are holding up well too.
“All-inclusive resorts are huge,” Turner said. “It’s stress-free for people; they can take the whole family. They know upfront what they’ve paid, so it’s a good deal.
“Cruising is always a good value for people out of the Midwest,” she added. “The Caribbean is doing well even though there’s a more limited product in the summer. We’re finding the two new big Royal Caribbean products are popular with families.”
Soft adventure and special-interest tours are on the rise, according to John Schmitt, Jr., vice president and director of sales and marketing for Superior & Frankenmuth Travel Service, a TRAVELSAERS agency in Grand Blanc, Mich.
Trending to upscale
Some agents noted that luxury travel is holding up best.
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“It’s trending more upscale than mainstream, where many people are still cautious with their discretionary income,” said Dan Ilves, CTC, MCC, vice president, sales and marketing at TravelStore, a Signature member in Los Angeles. “As a result, our luxury cruise sales are up, and our mainstream cruise product sales are holding their own.”
Europe is booming
Despite high airfares, agents report that interest in Europe remains high.
“What’s been hot for me is Europe and South America,” said Howe. “I’ve got a ton of Europe. Even with the crazy airfares, they’re still going.”
“Europe is big time,” echoed Barbara King, co-president of Great Getaways, a Virtuoso member. “We are doing wall-to-wall FITS to Europe, predominantly Italy. Increased business to Spain is showing up too.”
For Cardoza, interest in Europe is characterized by demand for luxury hotels in the major capitals. “This seems especially prevalent among people who are traveling less frequently after the recession and want that one trip to be a great one.
“We also see increased demand in South America – Argentina, Chile, Peru and Ecuador / Galapagos – where hotel products have really matured over the past few years and developed into world class experiences.”
Mexico is up
Despite the negative publicity, Turner sees rising interest in Mexico. The Dominican Republic is also big. “We have charters to those destinations. People don’t want to have to connect any more than they have to,” she said.
“Having a charter trumps any bad press in Mexico. I think Mexico’s back. We’re not having any trouble selling it.”
Unlike other agents, Turner sees declining interest in Europe due to high airfares.
