Finally! Tour sales top '07-'08 record

By Michelle Baran
A couple in Italy.It has taken longer than they had hoped or even imagined, but tour operators report that in 2014 they are finally on track to break the record passenger loads of 2007 and 2008, the benchmark years before the recession hijacked growth.

"We're [more than] 15% up over this time last year across all brands and destinations," said Steve Born, vice president of marketing for the Globus Family of Brands. "That mark will officially trump our 2007 year. ... We're officially back. I would have probably predicted in 2008 it would have happened more quickly."

In fact, no one would have forecasted that it would take six or seven years just to get back to prerecession passenger numbers. But rather than wallow in past misery, operators are expressing relief that they survived and excitement about being back on a growth path. They are now shifting their attention to capturing market share.

"It's been kind of crazy," said Phil Otterson, president of Abercrombie & Kent USA. "Luxury travel is back. Every indication we have is that luxury travel is really something that people are looking for. It's now really zooming ahead. We're very pleased with what's happening with our business. The economy is in place, and people have a lot more confidence."

If tour operators were economists, one might think we're heading toward boom times, with their enthusiasm and positive numbers. While anyone who follows economic indicators knows that we're not out of the woods yet on a macro level, as far as the travel industry is concerned, tour operators are seeing a massive shift in the right direction.

"Usually there's a trade-off," said Trafalgar President Paul Wiseman. "When the economy is going well, there's a movement toward our first-class touring styles, and the less-expensive budget class goes down ... because there's one group of customers moving up. When the economy is tough, people trade down."

Not so this year.

"What we're seeing for 2014, for the first time, all the programs are performing," Wiseman said. "There's a new customer appearing, moving from not being a traveler to being a cost-saver traveler. There are simply more people with money."

A young girl at the Colosseum.For Trafalgar, too, he said, 2014 will be an exemplary year, surpassing the 2007 benchmark at the current trajectory. After 2007, 2008 was down, 2009 was down a long way and 2010 was a big reset year, he said. Then the industry started to dig itself out of that hole with steady growth in 2012 and 2013. Now, at long last, 2014 will shoot past 2007.

What makes surpassing 2007 even sweeter, Wiseman said, is "that Egypt was a massive destination that is currently not selling. If we didn't have that the massive loss of business in the Middle East holding us back, Lord knows where we would be."

He and others noted that the factors that hold the travel industry back are economic distress, global bad-news stories and airfares and air capacity, none of which are an issue yet in 2014.

"We're in good shape," Wiseman said. But he also noted before operators can definitively call 2014 a comeback year, "we need to hold this pattern to the end of March or April as far as bookings."

Europe driving the rebound

Tour operators report that they're seeing growth across almost all global and domestic destinations with the exception of the Middle East. But the primary driver behind 2014's robust booking numbers is clear.

"Europe has really been the engine of growth," said Jeremy Palmer, vice president of Tauck, which is on track to see record performance this year across several different metrics.

"Europe is outperforming, and part of that is river, which goes without saying is outperforming. But the land business in Europe is up 30-odd-percent," he said.

Within Europe, operators report that Italy and Spain are top sellers, as is France, especially with all the hype surrounding the 70th anniversary of the D-Day landings.

Collette reported that France is up nearly 90% in 2014, which the company attributes to its Memorials of War: Normandy and Paris tour, which it debuted exclusively for the D-Day anniversary.

Globus' Born said that after several years of hotels hiking prices in Italy and making that destination difficult to sell, that country has finally become competitive again, fueling a resurgence in interest and bookings. Consequently, Globus' Italy bookings are up 56% this year.

A&K, too, reported that Europe plays a strong role in its most popular destinations for 2014, which include Australia, Cuba, Spain, Russia and Croatia.

And while operators have worked hard to create product and to market the evolution of the escorted tour away from the "If It's Tuesday, This Must Be Belgium" stereotype, some of the longer, multicountry itineraries continue to do well.

"We thought that the first-time-traveler trips where you do lot of countries would go away, and that's completely incorrect," Wiseman said. "The definition of that kind of trip is our European Whirl, so just by the name you know it's a fast-moving European introduction trip. Sales on that are up 80% over last year."

Follow Michelle Baran on Twitter @mbtravelweekly. 
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