Tour operators are cautiously optimistic heading into 2011. While there are some positive indicators, like the resilience of the family travel market, there are also some worrisome challenges ahead, like skyrocketing international airfares.
Here are a few of the issues that are likely to define the tour operator business in 2011:
Airfare hikes
Tour operators have been trying to encourage agents to book early to avoid airfare sticker shock that could become a hurdle in booking international vacations in 2011.
“When the airfare exceeds the price of the tour, you have a real issue,” Paul Wiseman, president of Trafalgar Tours, said earlier this year.
Last year, airfare worked in operators’ favor. Many operators worked with carrier partners to create low-fare deals to help stimulate the market.
Next year, airfare might have the opposite effect. If air prices soar, spurred by a return in business travel and improved yields, it could hurt leisure bookings.
“Late booking going into next year for us is going to be extremely problematic,” Wiseman cautioned.
Family travel remains strong
That Collette Vacations launched Collette Family Vacations for 2011 is just another sign of the resilience of the family travel market heading into the new year.
“The number of families and children we’ve seen travel has more than doubled over the last three years,” Melissa Snape, vice president of product development at Collette, told Travel Weekly when the announcement was made in November.
“We are seeing continued increase in demand. Through the recession there’s just been an increased focus on family. … It’s a newfound old tradition.”
Collette is introducing nine itineraries for 2011, ranging from a U.S. national parks tour to a safari in Kenya, from a tour of Washington to a trip to the Galapagos, all aimed at adults traveling with children.
Josh D’Amaro, who was tapped as vice president of Adventures by Disney in November, also expressed enthusiasm for the family travel category. He told Travel Weekly at the U.S. Tour Operators Association’s annual confab in New Orleans in December that he wouldn’t have taken the position at Adventures by Disney if he didn’t believe there was room for growth in the family travel market. D’Amaro was previously vice president of finance, North America, for Disney Consumer Products.
Earlier in 2010, Sharon Siskie, vice president of national accounts and travel agency sales for Disney worldwide sales and travel operations, said of Disney’s tour operation, “The escorted tour market, in general, has huge growth potential.”
Tour operators across the spectrum are investing in the return to family travel that many say took hold during the recession as Americans realigned their priorities, putting a greater emphasis on more meaningful personal and travel experiences.
In 2010, 11% of Abercrombie & Kent’s bookings were for families with children under age 18. The most popular destinations this year have been the Galapagos, Egypt and Kenya. For 2011, A&K is seeing more families book Costa Rica and Alaska in addition to more far-flung destinations such as Israel and Turkey.
The FIT revolution
The trend toward giving travelers more free time continues into 2011, with Trafalgar Tours’ introduction of At Leisure, a new product that incorporates more freedom and flexibility into its tours.
A departure from Trafalgar’s fully escorted model of touring, At Leisure tours incorporate “substantial free time” in each destination, according to the brochure. The itineraries are also made up of minimum two-night stays in each destination, with up to six nights in certain cities.
The brochure also promises departures no earlier than 9 a.m. on traveling days. In at least one major city on each At Leisure itinerary, Trafalgar will give guests a ticket for hop-on/hop-off sightseeing buses rather than provide a fully guided tour for the day. Even so, a tour director will accompany the group through the entire trip.
Trafalgar’s At Leisure product joins FIT products already in the market, such as the Globus Family of Brands’ Monograms brand, which Globus has said is growing at a much faster rate than its escorted touring product.
The real-time inventory race
Watch as wholesalers continue to try to beat each other out in competing supplier inventory updating capabilities to get the fastest and most accurate hotel rates and availability to agents.
Wholesalers and dynamic packagers are seeking better ways to connect directly with supplier inventory. Richie Karaburun, recently appointed president of GTA North America and Travel Bound, said it’s about giving agents the tools to compete with online travel sites through direct connectivity and improved supplier payment systems.
Karaburun has made it a goal to get as many of the 35,000 hotels in the company’s reservations system to have direct-connect or dynamic inventory capabilities.
John Hanratty, senior vice president and chief marketing officer at Travel Impressions, predicts that HBSI, the company that provides hotel booking solutions to suppliers and wholesalers, is going to gain market share in the direct connectivity marketplace as it increases the number of major hotel chains with which it works.
To keep up with changing rates and the online travel giants’ flexibility, one enhancement to Gogo Worldwide Vacations’ recently relaunched booking site is direct-connect functionality, for which Gogo is already working with Sandals, Beaches and several properties in Las Vegas, including MGM Grand, Wynn, Encore and Harrah’s, to provide live inventory and pricing.