A need for change in Germany

Does the average independent German travel agency need to rethink its strategy and become more of a niche or destination specialist? That could be the answer (or part of it) following the recent news that as many as 773 travel agencies around the country closed down last year.

There are 11,866 full-time travel agencies in Germany compared to 15,000 eight years ago.

Most of the agencies shutting up shop blamed falling sales and lower commissions – while on-line travel sales went through the roof in 2006, with sales of the top 30 sites reaching close to AUD 4 billion equivalent (almost double that of 2005), according to survey carried out by leading German travel industry publication FVW.

The major on-line earners were Deutsche Bahn, ahead of Expedia and Opodo. As many Germans use the Internet to buy their train tickets (and rail is a popular form of travel in Germany) the on-line boom statistics are obviously not giving the whole picture.

According to research by Selling Down Under, none of the agencies who closed down last year were active Aussie Specialists – which is one argument for specialisation. Agencies that develop a reputation for niche marketing, or quality destinational knowledge are more likely to survive the changing trends in travel.

According to the FVW survey German travel agents combined revenues increased by only 0.7 per cent to AUD 33 billion equivalent in 2006 with an average profit margin of less than 1 per cent (yes, 1 per cent!).

German travel agents are targeting sales growth of up to 3 per cent this year, the same target figure as 2006.

Rewe Touristik, with its agency chains Atlas, DER and Derpart, remained the largest German travel distribution conglamerate last year with a turnover of AUD 6.8 billion equivalent.

In second place was the QTA consortium with sales of AUD 5.8 billion equivalent, ahead of rival consortium TMCV (turnover: AUD 3.9 billion equivalent). TUI Leisure Travel came fourth in the charts with a turnover of AUD 3.8 billion equivalent.

TUI Germany recently redesigned its tui.com website to win new customers, but they have stepped back from operating it as a full-service online travel agency. Instead, travel agents can link directly to the website and earn commission on resulting sales.

Back to the travel agent in the US

After several years of upbeat stories on online travel websites, the US consumer press (along with the American public) seem to be taking a fresh look at the country’s travel agents and the value they provide.

A recent article in the New York Times concurs that the level of personal service travel agents offer can’t be matched on line by a ‘disembodied voice in a call centre’.

The article claimed travellers say they don’t have the time or energy to search the Internet for the best deals. And many said they wanted help booking more complicated, more expensive trips, particularly those involving international travel.

Another article in the Chicago Tribune started by stating: “Contrary to what you might have heard, travel agents aren’t obsolete. Although an agent charges a few dollars, professional assistance in travel is often well worth the cost.”

The article argued that the number one reason most consumers use travel agents is to take advantage of their specialized knowledge on destinations; local travel supplier deals; airline cost-cutting tricks; time-saving services; and help when something goes wrong.

The writer of the article advised others to find a good agent: “The same way you find a good accountant, stockbroker or auto mechanic — word of mouth. A travel agent is a professional, just as those others are professionals, and the best way to find one is through other satisfied clients.”

Still another article in the Philadelphia Inquirer, spotlighted a media consultant who travels 200,000 miles a year on business. He thought the most efficient way to book trips was on a computer — until he tried to arrange an unusual honeymoon abroad.

The article pointed out that despite a projected increase in Internet bookings, research indicates that overall online activity in the United States has declined over the past few years.

The online travel publication Selling Down Under, which focusses on Australia as a travel destination says while US consumers are looking again at their travel agents for expertise, the on-line readership of the publication by the US and Canadian industry is constantly increasing.

More Australia for young Italians

CTS Viaggi, Italy’s major youth tour operator, is to re-launch a dedicated Australia brochure in late September. It will be supported with a series of training workshops for CTS agents in northern Italy.

CTS Viaggi has more than 183 retail outlets throughout Italy, including strategically placed campus locations.

The brochure comes at a time when there is a general change in the pattern of Italian holiday-making.

With a welcome move away from Italians being forced to take holidays in the traditional August period, more travellers are now taking long-haul holidays in June and September.

Italian tour operators say there is continued strong interest in Australia, with some reporting a growth in forward bookings of up to 20 per cent over the same period last year

There were 16,000 Italian visitors to Australia for the first five months of 2007, an increase of 9 per cent for the same period last year; and 53,200 Italian visitors to Australia for the year ending May 2007, an increase of 4 per cent on the previous year.

You can reach the key players in the Italian travel industry through Selling Down Under, the international on-line trade publication that focuses on promoting Australia.

The Irish are coming

What are you doing in the Irish market? It’s a question Australian operators should be asking themselves.

In the first four months of the year, 15,200 Irish visitors arrived in Australia – up 11 per cent on the same period last year.

Australia welcomed just under 60,000 Irish visitors to its shores in 2006, and 61 per cent of these were holidaymakers

It has been estimated that there has been a 100 per cent increase in the number of Irish holidaymakers heading for Australia and New Zealand over the space of just eight years.

The Irish are spending the equivalent of close to AUD 8 billion on overseas holidays each year as the result of high levels of disposable income – placing Ireland into the world's Top 10 countries for per capita travel spending.

Irish visitor expenditure in Australia last year came to AUD 0.3 billion (excluding package tours and prepaid international airfares). This represents an average spend of AUD 5,065 per visit and AUD 82 per night

The travel boom is largely focused on two age groups - 18 to 30-year-olds and 60 to 70-year-olds -- both of which have shown a huge increase in the frequency of foreign travel over the past decade, with the younger bracket more inclined to travel Down Under.

Irish visitors spent around 35 million visitor nights in Australia during the year ending December 2006 and the average duration of stay per visitor was 62 nights. Twenty-six of these nights were spent outside the major destinations and traditional gateways

Visitor arrivals from Ireland are expected to increase by 6 per cent per annum through to 2016.

One sure way of reaching the Irish market is through Selling Down Under, the on-line travel industry publication, which includes all the top producers in Ireland

Travel domain loses its founder

What is the future looking like for .travel? That’s a question that must be asked following the departure of its founder, just eighteen months after the much-flaunted official launch of the domain -- aimed at helping consumers do a better and easier job of searching and finding relevant travel and travel-related information on the Internet

Seven years after pursuing the idea of a travel specific Internet domain and a year and a half after the official launch of .travel, Ron Andruff, founder and President of the Tralliance Corporation, the registry for .travel, is leaving the company to pursue new opportunities and interests.

Utah und Egypt are the only destinations to push the .travel domain, though management says it has "several pending initiatives aimed at helping consumers do a better and easier job of searching and finding relevant travel and travel-related information on the Internet."

Ron Andruff’s departure was anticipated. The company continues to be led by Michael Egan, chairman and Ed Cespedes, CEO, who took steps to expand and reorganize the company last year.

Laying the groundwork for its new initiatives .travel will be launching a consumer advertising and promotional campaign later this year to coincide with enhancements made to search .travel These will include an improved focus on destinations with the addition of greater destination content and information, including virtual maps.

Travelbag take over completed

The Australian Stella Group has taken over the UK-based long-haul travel retailer Travelbag for AUD 17 million. (See earlier posting)

The acquisition will further strengthen Stella's distribution capabilities in the UK, where it now has more than 90 retail outlets consisting of 83 Harvey World Travel shops and eight Travelbag outlets.

Stella has also purchased Travel 2 Travel 4 in the UK from Travelport, with extensive similarities between the businesses expected to aid integration.

The businesses will also be integrated with the Harvey World Travel network under Stella Travel Services umbrella.

Travelbag Managing Director Rick Weber and the senior management team will remain in the business.

Stella Group's existing Australian and New Zealand portfolio counts some 15,000 rooms under the Mantra, Peppers, BreakFree and Saville brands.

New structure for Kuoni gets under way

Following the announcement last month of a new group structure for Kuoni Travel Holding Ltd, Nick Hughes is replacing Sue Biggs, who has been with the company for 25 years, as managing director of Kuoni UK, effective from August 15.

Kuoni, which is a key producer for travel to Australia, intends to align itself even more strongly to market needs, strengthen its brands and further refine its various customer segments, says Group CEO Armin Meier on the latest development.

“With customer behaviour becoming ever more short-term and difficult to predict, customer focus and service alignment are coming to play an increasingly prominent role at any tour operator,” he says.

The new Kuoni structure is centred on three new Strategic Business Divisions – SBD Style (for brand and service-driven products), SBD Smart (for vacations that primarily offer outstanding value for money) and SBD Destinations (for local land arrangements).

SBD Style is aimed at accommodating all those Kuoni Group activities where the focus is on top-class customer service and the closest possible alignment to specific customer needs. The division is home to the core Kuoni brand and to all the Kuoni Group’s further specialist brands that are a byword for tailored customer focus. In overall charge of SBD Style is Reto Wilhelm.

SBD Smart, which is headed by Stefan Leser, embraces all those Kuoni Group products that primarily offer outstanding value for money. SBD Smart is thus home to the Apollo, Helvetic Tours and Reisen Netto brands and to the group’s two airlines, Edelweiss Air and Novair. The products of SBD Smart will be distributed via trade channels but also (and increasingly) via the Internet and direct sales.

SBD Destinations, of which Rolf Schafroth is in overall charge, accommodates all the Kuoni Group’s destination management products and activities, including organising and advising on land arrangements for groups and individual travellers, M.I.C.E. (meetings, incentives, conferences and events), special tours and sports events. These services will be offered to international tour operators, retailers and congress and conference organisers, and also to Kuoni’s own tour operating units.

The new Kuoni Group organisation also includes a further new entity: Business Unit Spirit, which is home to innovative business models such as Shoestring International and (above all) to businesses and activities that show strong growth potential and use product innovations to achieve and enhance their competitive edge. Business Unit Spirit is headed by Fons Brusselmans, who reports to Stefan Leser.

Takeover for Travelbag?

Stella Travel Services is said to be on the verge of tying up a deal for UK long haul specialist Travelbag in a move that would further expand its distribution in the British market.

Stella Travel Services is the largest integrated travel network in Australasia. Operating under four main ‘umbrella’ brands, its network includes retail travel agencies, wholesale air consolidators, wholesale packages and emerging online retailers

Observers say the UK deal could be completed before the end of the month following several weeks of discussion with Travelbag owner and Galileo parent company, Travelport

Travelbag, a leading direct-seller brand in the UK, owns seven large retail sites, including locations in London and Manchester.

It has been operating for around 30 years and is regarded as having particular expertise in tailor-made travel to Australia and New Zealand.

Observers said the deal would make sense for Stella, which is looking for maximum distribution for its Australian accommodation.

Stella has not commented on the deal, but a statement released to the Australian Stock Exchange late last month revealed that AUD 30 million had been set aside for two projects, including the “acquisition of a UK travel services business”.

More status for Tour Down Under

South Australia’s state government is likely to increase its investment in the annual Tour Down Under cycle race if it gains Pro Tour status from the Union Cycliste Internationale (UCI), the cycling world’s Swiss-based governing body.

The Pro Tour's governing body will decide in September if the South Australian event, which celebrates its tenth year in 2008, is given the increased status.

If given the Pro Tour status, the event will become of even greater interest to professional cycling fans around the world.

In 2005, the Tour Down Under was promoted by the Union Cycliste Internationale to the international rating of Hors Classe 2, making it the largest and highest ranking cycling event outside of Europe.

South Australia’s Tourism Minister Jane Lomax-Smith met with UCI board members in London at the start of this year’s Tour De France.

She told Adelaide Now, the on-line version of the city’s main daily newspaper that her four-day visit to London gave her an invaluable opportunity to present South Australia's case for gaining Pro Tour status for the race.

She said that if South Australia were successful in its bid, more money would have to be spent on the race here as costs would increase.

"We have made this bid, we have made this commitment, and we will follow through," she said, adding: "There will be costs, but this is an important positioning for South Australia in that it certainly helps our tourism marketing, because people see us around the world."

Catholic youth event offers opportunities

Organised by the Catholic Church, World Youth Day (WYD) is set to be the biggest youth event in the world when it takes place in Sydney from July 15-20 next year.

Up to 500,000 people are expected to attend, including 125,000 international visitors from more than 200 countries.

The Australian government has announced special pilgrim vouchers for WYD08: free of government charges, no quotas and minimum three months stay. This will enable participants from overseas to either travel to Australia early or stay on after the event.

Harvest Youth Tours is the official Australian operator for World Youth Day, and has 50 pre and post tours on offer around Australia.

Qantas is the official WYD08 airline partner and will be offering special rates.

Free research publications

Tourism Research Australia now has more than a hundred research publications that are freely available

They include International Visitor Profiles on 21 countries, Quarterly Results for the International Visitor Survey (IVS) and National Visitor Survey (NVS)

Snapshots on specific market sectors are also available such as Bed and Breakfast, Food and Wine, Culture and Heritage and Backpacker Accommodation.

To access the free publications visit www.tra.australia.com.

Roadshow heads for Germany

Tourism Australia has teamed up with one of Germany’s biggest wholesalers, DERTOUR, to reach up to 700 travel agents throughout Germany on a new road-show.

The DERTOUR Ferne Länder Roadshow will tour Germany from August 5-16. Qantas, Avis and APT will join seven workshops to deliver a total of 50 hours of presentation on Australia.

The road-show, which will visit Cologne, Hannover, Berlin, Leipzig and Frankfurt, follows on from the success of the recently-held Discover Australia, for which DERTOUR sent 198 Aussie Specialists from Germany, Austria and Switzerland to Australia for two-weeks of famils and workshops.

Discover Australia was organised by the Destination Australia Partnership, with the main partner being Tourism Northern Territory, which hosted workshops in Alice Springs for four days.

The event also offered 100 Australian product partners the opportunity to introduce their products to the visiting travel agents.

Aboriginal product to get a Broome boost

The annual Australian Indigenous Tourism Conference is to be held in Broome from October 20-23.

Situated on the Indian Ocean, a two and a half hour flight north of Perth, Broome, a gateway to the popular Kimberley region of Western Australia, is expecting more than 400 indigenous tourism operators to attend the event.

With indigenous culture being a growing attraction for international tourists (more than a quarter of overseas visitors currently look for an authentic Indigenous experience while in Australia), the conference is also expecting a substantial interest in the event from the international market.

According to the organisers, interest has already been received from delegates in several key international markets, including New Zealand, Germany and Asia. There has also been interest from other markets, such as South Africa, Sweden, Belgium and France.

The conference, now in its fourth year, has achieved recognition as the primary Australian forum for those with a common interest in Indigenous tourism to meet and form new partnerships.

Amongst other topics, this year’s Australian Indigenous Tourism Conference will highlight the opportunities that exist for culturally authentic Indigenous tourism product. It will also address key issues and needs that impact on Indigenous tourism in Australia.