Readers Predict How the Group Travel Industry Will Perform in 2010

on the record ❖

Readers Give Their Predictions on How the Group Travel Industry Will Perform in 2010 FOLLOWING ARE ANSWERS from Leisure Group Travel readers who responded to the questions: What predictions can you offer on how the group travel industry will perform in 2010?

How do things look for your business? Do you have strategies in place to improve your bottom line? tonY EtiEnnE

Predictions are tough to make, but I think that we can look at trends and what I see happening in the group marketplace is that it is slowly making positive steps forward. We are seeing a lot of research activity so we know the desire is still there for travelers. The average tour consumer seems to be prioritizing tour options right now, and we are definitely seeing great success with “bucket list”-type destinations….Egypt, Kenya, Israel, Antarctica, Galapagos and Australia…exotic places that people dream of seeing and that are best done in a group tour setting.

The market of the past was typically one large, longer tour and one smaller tour a year. This seems to have been replaced by one exotic tour only or maybe two value tours. Collette experienced this with Oberammergau. For many groups, it was to be the tour for the year. However, we are now starting to see many tour groups begin to add product for the second half of 2010 and into 2011. The assumption being that the market is on its way back and group leaders want to be pro-active by having tour selections in place ensuring they cater to all audiences.

Tony Etienne Director of Business Development Collette Vacations Pawtucket, RI 10 December 2009

PEtER StiLPhEn

It appears to us that group travel for 2010 is filled with both positive opportunities and negative realities, depending almost entirely upon which type of group travel activity and promotion are pursued.

If one promotes on price by getting caught up in the current misguided promotional activities of tour operators and cruise lines that concentrate primarily on selling at the lowest price, combined with misleading advertising that contains almost unworkable restrictions in the fine print, 2010 will be a downer for group travel. Even if significant numbers are generated, the per-passenger revenue will be substantially constrained.

On the other hand, if efforts are made to promote high-quality, highvalue group travel opportunities that feature all-inclusive pricing with roundtrip air transportation, travel protection insurance (not the cruise line or tour operator programs), and additional included sightseeing and local experiences, etc., profits will be up by virtue of increased revenues and satisfied travelers who have gravitated to the complete and forthright group travel experience. This type of group traveler is not attracted to the “lowest price” syndrome, desiring

John Stachnik

instead outstanding quality combined with outstanding value.

We never try to match or beat a competitor’s pricing. We build the experience to incorporate what makes the most memorable travel experience, something that will be positively talked about with peers upon the traveler’s return. Our continued goal will be that travelers are not “dollared to death” once they are on a group tour.

Our repeat factor exceeds 94%, some travelers having gone away with us more than 70 times as we have hosted groups on all seven continents. A number of our 2010 group departures are already guaranteed to operate with numbers presently reserved. We will continue to encourage early reservations with our 100% Reservation Deposit Refund Guarantee, allowing cancellations “for any reason” up to a date certain for each group departure.

After that date, travelers are protected by the included travel protection insurance, which allows cancellations for covered reasons.

It works.

Larry L. Kopke Please Go Away Vacations Great Bend, KS LeisureGroupTravel.com

About half of overseas trips have been cancelled. Short trips (2-4 days) are better received. Domestic trips and Canada are OK. One-day trips are the high demand in our group (average 2 buses per).

Bud Souza, Tour Manager/Host IBM Retirement Club San Jose/Santa Clara Valley, CA 2010 is shaping up to be the year of the consumer. As tour operators and other suppliers work hard to bring them back into the fold, the consumer will see offers and opportunities like never before.

World-class events, such as the Oberammergau Passion Play in Germany and the Winter Olympics in Vancouver, will move leisure travel more into the forefront with media. This will have an energizing effect for the tourism industry and encourage people to reconsider getting back on schedule with their travel plans.

One final point: People are getting tired of hanging back and doing nothing. There will be more of a sense that “‘I’ve worked hard, I deserve this vacation” in the consumer’s mindset.

Tourism will not return to record levels in 2010 because the first half of the year will still be down; the second half of the year, however, will set the stage for record growth in 2011 and beyond.

John Stachnik CTP, CTC President and Co-owner Mayflower Tours Downers Grove, IL We have gone to our smaller bus for trips and plan around special eating places. We have a lunch bunch that has tripled in size (they go for lunch locally).

We don’t do extended trips as our area is flooded with possibilities.

Joyce Pottinger, Director Glenview Senior Center Glenview, IL LeisureGroupTravel.com

I predict a great year in 2010 bouncing off a mediocre year in 2009. There will still be pockets of inactivity from travel agents due to the pockets of higher unemployment in different areas of the U.S. I believe travel from abroad to the U.S. will take a good jump due to the fall of

the dollar. Hotel occupancy will improve slightly but will not be back to 20082009 occupancies. Cruise ships will still be full, however, with continuing price cuts on many itineraries. I doubt that many of the business models within the host agency segment will survive from

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on the record ❖ 2009 and part of 2010, particularly a few of the smaller agencies and some of the multi-level models. A few more mergers and failures are on the horizon from the marginal tour operators.

Our host agency, Coral Sands Travel, continues to be profitable and able to attract a good number of new affiliates each month. We notice that a much higher percentage of home-based travel agents are booking more travel, compared to five years ago. This is attributed to better and more training by hosts, organizations and suppliers and a more serious home-based travel agent.

Our bottom line has been strong since we began six years ago. This is probably due to a consistent business model with little change over the years.

Keeping it simple works best.

Peter Stilphen, ECC CEO Coral Sands Travel America’s Host Agency Labelle, FL I hope to see a full bus more frequently.

We treated the few we saw this year like they were an endangered species, and they certainly were rare birds.

I believe the market will slowly expand this spring. Many of this past year’s missing travelers stayed home due to fear. As the economy rights itself, when swine flu becomes a past-demic and as the media begins spreading good news (well, it could happen), we’ll see happy days again. Many of those missing travelers still have money, they have just been afraid to spend it.

I do believe that the trend toward last-minute purchases will present our industry with new challenges. Hotels and attractions that want deposits at 60 days will be scratching their heads as they find groups planning inside that date, and needing two weeks grace in 12 December 2009

which to sell it. Tour planners will start treating suppliers with penalties like lepers. Purchasing and distribution is moving toward instantaneous.

Tour operators who print an annual catalog will also decrease in numbers.

Writing copy for next year’s Christmas trip before you operate this year’s will soon be talked of as the way we used to

and instead provide a prepaid debit card valued at the cost of the meals ($25 in most cases). This gives customers personal choice and they can dine as a group or as an individual. We can track the actual restaurants where our customers are eating and what they are spending. We then go to the restaurants most often used and show them the revenue our pa-

Writing copy for next year’s Christmas trip before you operate this year’s will soon be talked of as the way we used to do things.

— Bob Cline, U.S. Tours do things. In today’s world we can write a new trip this afternoon and put it in the hands of every customer tonight; there is simply no need to advertise an annual program.

I also predict that new technologies will give me a greater feeling of inadequacy than my ex-wife ever did. But I am embracing these technologies more than I did her, so maybe it will work out OK. Bob Cline, President U.S. Tours Parkersburg, WV At Tye’s Top Tour & Travel, 2010 looks to be a great year for us—as 2009 is turning out to be.

The age-old advice is still true—if you don’t change what you are doing, then the results will be the same. Our market is primarily 45-65. Ten years ago our market was primarily 65-plus.

Here are major changes that have allowed us to capture the boomer market: 1. We got rid of as much structure in the tour as we could.

2. We increased the amount of leisure time by 30%, allowing our customers to experience what they want.

3. We did away with group dinners

trons are bringing them. In exchange for a marketing fee, these restaurants now appear on our list of suggested restaurants. We also get paid as a reseller of prepaid debit cards. The nightmare of group dinners has now become an additional revenue source.

4. We have built into many of our programs a substantial discount for tours that are paid in full six months prior to departure. This has increased our cash flow tremendously.

5. We have expanded our Internet presence and the majority of our advertising goes to this medium.

6. We have formed strong bonds with our industry partners to create new marketing opportunities, new product and new channels of distribution. In one case we sat down with a partner and went from not knowing they existed in August to having 25 coaches booked for next year and 11 completely sold out already! We have introduced 20 new or redesigned tours for next year.

7. Our customers are demanding, and any hotel that does not offer a satisfaction guarantee program or has nonrefundable deposits is no longer used.

8. We have partnered with other LeisureGroupTravel.com

tour operators to sell each other’s product and reduce costs by negotiating volume discounts for all of us.

Mel Tye, CEO Tye’s Top Tour & Travel Merrimack, NH Looking at my 2010 file for motorcoach groups is exciting! I counted 42 groups from 16 states and a quilting group from the UK. With the new additions to our itinerary program, more groups are requesting and adding our behind-the-scenes guided tours of furniture manufacturers, Amish artisan and various cooking demonstrations along with many favorite attractions.

La Vonne De Bois Amish Heartland Tours Berlin, OH I think that cruising will be large next year as most costs are known beforehand and there are some amazing ships coming out. I also think international travel will increase as more people become adventurous and more reality TV shows (like The Great Race) reveal new and interesting places to visit.

Lori Leiman Lori’s Adventurers Queen Creek, AZ I predict that group travel will rebound 10-15% over 2009 based on the following reasons: • The President of the United States will not discourage group travel for corporations in 2010.

• Prices and offers are as attractive as you will ever see in popular destinations like Las Vegas and the Caribbean.

• The economy overall will improve (maybe only slightly) over 2009.

Our group travel scheduled for 2010 is up over 2009 by approximately 15% and includes cruises, Mexico, LeisureGroupTravel.com

Caribbean and Europe.

Our strategies to ensure the best bottom line include: • Extensive RFP for suppliers followed by thorough negotiations.

• Closely monitoring currency fluctuations.

• Creative use of human & financial resources.

Stephen C. McSwain Executive Vice President ARTA Travel Plano, TX Preliminary group bookings show that 2010 will be our best year ever.

We are seeing strong bookings for special events such as the Oberammergau Passion Play and Shroud of Turin exhibit, which travelers can see once in 10 years. So they are ready to travel in 2010, knowing the next opportunity will not be until 2020. Also, we are seeing strong interest in Egypt, South Africa and European countries where the dollar has power, such as Croatia, Montenegro, Romania and Bulgaria.

Special interest tours are also selling well, especially women-only tours and food and wine programs.

Our strategy is to offer innovative, well-priced programs and hub-and-spoke, such as “Croatian Explorer,” where clients stay 12 days and change hotels only twice. We are a smaller company that caters to the needs of our group clients and have very flexible programs.

Edita Krunic, President Select International Tours & Cruises Inc. Flemington, NJ

IN THE FEBRUARY ISSUE of Leisure Group Travel, our On the Record column will let you tell us about wacky things that have happened on the road. Please send us your response to this question: What’s the funniest or craziest incident that’s ever happened on one of your tours? What’s the most bizarre thing a tour member has said or done?

Along with your comments, please include your name, company name and location. Also for publication, send a high-resolution photo of yourself, if available. A selection of responses will be printed in the February issue and appear online. Thanks in advance for your valuable input.

Send to: Randy Mink randy@ptmgroups.com

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