Following a Troubled 2014, Tour Ops Look to the New Year

OUTLOOK 2015

Despite a year filled with political crises and medical emergencies, tour operators ended 2014 on an upbeat note.

At the start of the new year they tell Travel Market Report that a combination of factors should combine to make 2015 another good year.

Here’s what they’re saying about the promise of a strengthening economy, the growing baby boomer population, and the continued appeal of several powerful travel trends—along with their own focus on travel agents.

Travel agents are key to tour ops’ business
“Our members reported that travel agencies represented two-thirds (67%) of total packages sold in 2013, a number that has remained steady and strong since our first PwC economic study in 2011. That’s a significant number and reflects the continued importance of travel agents in the tour industry.” – Terry Dale, president and CEO, USTOA

“In 2015, I think the industry will see an ongoing demand from travel agents for better technology, more educational opportunities and enhanced service and support capabilities. For us this means continuing to respond to our customers’ demands with new programs and services. Notable examples from 2014 include the launch of MLT Vacations’ innovative Marketing Hub and the introduction of MLT University Online, our live and on-demand training series for travel agents.” – Tina Iglio, senior vice president of marketing, MLT Vacations

“The retail distribution channel continues to be invaluable to Travel Impressions and helped us to have another successful year in 2014. Suppliers are investing more and more to court travel agents who have proven themselves indispensible not only to their valued clients but to the industry as a whole. This is particularly good news for Travel Impressions as we sell exclusively through the travel agent community.

“We’re seeing a lot of interest from our supplier partners who have allocated major marketing dollars for 2015 on top of advantageous pricing, agent incentives and value-added amenities for agents’ clients.” – Jeff Clarke, president, Travel Impressions

Experiential travel: a major focus for tour ops
“Today’s traveler continues to crave culturally immersive experiences and these types of experiential tour packages remain in high demand. Nearly three fourths (71%) of USTOA membership provide travel and tour packages that offer art and culture, with 64% offering culinary and more than half (57%) providing adventure focused packages.” – Terry Dale, USTOA

“One of the trends from 2014 that has been very positive for us is the continuing interest in experiential travel. Increasingly, vacationers want to broaden their experiences while in destination. Of course, this creates tremendous opportunities for travel agents to add value to their clients’ vacations with commissionable activities, tours and excursions, as well as with their own unique destination knowledge and insights. – Tina Iglio, MLT Vacations

Groups are strong; trigger new products
“2015 brings the continued expansion into off-the-beaten-path travel experiences with the introduction of four smaller group Hidden Journeys to less-visited destinations which, like all of our trips, are embodied by our unique Insider Experiences. We also introduced Single Deals across 17 or our popular Europe itineraries, offering up to a 100% discount off the single supplement pricing on certain departures as a result of rising opportunity for solo travelers.” – Paul Wiseman, president, Trafalgar

“People really like the flexibility and are excited for immersion in the areas that they visit. They want to meet the locals and experience all that they can in a specific location. Our explorations line is offered for a smaller group (just 12 to 24 travelers) so that they can really immerse themselves with the locals.” – Dan Sullivan Jr., CEO and president, Collette

“Group bookings were very strong for us in 2014 with destination weddings leading the trend. This has been a major boon for our villa program as well as destination weddings served by our Dedicated Vacation Flights due to our ongoing ‘every sixth passenger flies free’ promotion.” – Jeff Clarke, Travel Impressions

Destinations: ‘Tried and true’ to emerging
“2014 was a very good year for the Globus family of brands (Globus, Cosmos, Monograms and Avalon Waterways). All brands showed growth, led by high demand for Europe. And river cruising remained hot, as demand was strong early and sustained through the year.

[For 2015] Tried and true destinations will be tried and true. High volume destinations including Italy, Britain and Ireland and France will do well, continuing a trend we’ve seen over the last year. These up-and-coming destinations will officially emerge:  Spain, Greece and South America top our list in terms of percentage growth.  All are out to double-digit leads in bookings over this time last year. – Steve Born, vice president of marketing, Globus Family of Brands

“In 2014 we saw the continued popularity of destinations like Italy and Britain for U.S. travelers, as well as the rising demand for more exotic destinations such as South America and Asia. South America remains the fastest-growing segment with Peru being of particular interest to travelers.” – Paul Wiseman, Trafalgar

“Cuba is now one of the hottest destinations for U.S. travelers and demand for this predominantly untouched destination was validated by our Active Members in a study conducted by PwC in fall 2014, who named Cuba the second top ‘emerging’ country in 2015. This is the first time Cuba appears on USTOA’s list – in the very impressive position of second – confirming the growing interest from American travelers. And given the recent news of the U.S. and Cuba restoring relations, the destination is very much on travelers’ radar with demand only anticipated to grow.” – Terry Dale, USTOA

Despite trouble spots, 2014 was a strong year and . . .
“There were quite a few issues in many of our destinations last year. Israel and Russia both posed threats in terms of security and decisions were made in reference to the well-being of our passengers. Ebola became a threat simply because the media created confusion about the medical issue.

“However, Collette experienced a record year in revenue because the economy was much stronger that it has been in the past. The U.S. dollar was stable and many travelers took advantage of the many domestic tours that we offer as an alternative to traveling abroad.” – Dan Sullivan Jr., Collette

“2014 was a record year for Tauck and a stand-out for the U.S. tour industry overall. The primary catalyst remains a favorable macro environment. Our core audience continues to grow with 10,000 baby boomers retiring a day in the U.S., many of whom have a deep desire to see the world.” – Jeremy Palmer, vice president of land-based product, Tauck

 . . . overall 2015 looks good
“2015 sees a continuation of 2014’s macro trends, but some headwinds are emerging that make us believe that 2015 will be a little more tempered. Instability is up with Ebola and news of conflict coming out of the Middle East, Ukraine and Asia. Also, there was a brief financial shock that hit the U.S. during prime booking months for 2015. This has given some travelers pause and may put them on the sidelines until 2016.

But there are also clear winners. River cruising continues to shine. We have seen no abatement in 2015. If anything, we’ve seen that product line outperform 2014 both in terms of absolute numbers and also in terms of how quickly that product is booking.” – Jeremy Palmer, Tauck