At this time last year, tour operators were flooding the market with deals and offers to incentivize people to travel, but times have changed. Sales are increasing and operators are not relying as much on discounting this year.
"Last year, we had to stimulate the market. This year, we’re just filling last-minute availability," said Marc Kazlauskas, president of Insight Vacations, which recently introduced a discount for October travel to Europe.
"There’s no doubt that the market has become stronger and stabilized over what it was last year," said Steve Tracas, president and CEO of Vacation.com. "I think everybody along the chain appreciates a more stable environment where there’s not a new fire sale daily or weekly."
Last year, agents were inundated with price-slashing that was coming at them "fast and furiously," said Tracas. Now, rather than spend their time sifting through all the deals, agents can focus on their core strength, aligning the right product with the right customer at the right price, he said.
Many of the offers operators are rolling out are airfare specials and John Galvin, CFO at Collette Vacations, said that is partly because "the business seats aren’t filling up," and airlines are "opening up more to leisure to try and fill the plane."
Contrary to a more standard airfare pattern, where prices get higher closer to departure, "you’re seeing some last-minute deals," said Galvin.
And while the promotions are still out there, it’s not the panic of 2009, according to operators.
"It’s day and night. We’re still kind of in shock and pinching ourselves," said Galvin, who added that Collette is up 60% in dollar volume based on names under deposit this year.
He added that Collette’s load factors are averaging 38.6 passengers based on motorcoaches that seat 46, a nice bump from last year’s average of 30.9.
After a year when operators found themselves canceling unbooked departures and discounting much of what was left, operators headed into 2010 with cautious optimism.
"Last year, we had the inventory. We had a lot of capacity going into 2009, but what we found is we didn’t operate a lot," said Galvin. This year, he said, rather than contract for lower capacity, Collette contracted based on demand growth over last year, and just watched carefully as it came up on contract release dates.
"Some tours and some destinations just took off," said Galvin, adding that when Collette went back to try to contract more space with vendors in certain destinations like Ireland, Italy and the U.S. national parks, there simply wasn’t any.
However, in markets that are recovering more slowly, such as the luxury and long-haul exotics markets, there is still a discount environment, although a less aggressive one than a year ago.
"We continue to use promotions on a limited basis as a tactical strategy to activate prospects, but there are far fewer this year than last," said Pamela Lassers, director of media relations at high-end tour operator Abercrombie & Kent. She said the company has seen sales increase as much as 45% for many destinations.
"The challenging economic environment has changed the way people plan international leisure travel," said Lassers. "In 2007, most made holiday plans at least six months in advance. Last year, it was five months. This year, it is four months or less."
Subsequently, the discounting environment has shifted from last year’s last-minute fire sales to early-booking discounts to try to get people back on a more normalized booking window.
Suzanne Hall, senior director of marketing and development for land programs at Ensemble Travel Group, said that while agents are "seeing plenty of deals. … There is less of the frenetic deal-throwing" tour operators were engaging in last year. Rather, she said "there are strategically placed deals to lock up the customer early."
