EMEA - Market Update– Q3

Leisure Travel

Africa

  • The number of international air travel to East Africa increased by 11.2% during the first eight months of this year compared to last year. Countries like Algeria, Egypt, Morocco and Tunisia saw little growth or even a decline. There is a high growth for Kenya (14.9%), Mauritius (11.6%), Tanzania (10.6 %) and Ethiopia (9.6%). International bookings for travel to East African countries, up to the end of December were 17.3 % ahead of last year. The main origin markets - UK is 13.2 %, Germany 21%,US 21%, France 16.1%, Netherlands 16.6%, South Africa 9.4% and India 34 % ahead of last year. An analysis of airport capacity, defined by the total number of seats shows that Nairobi in Kenya, Kigali in Rwanda and Kilimanjaro in Tanzania are the stars in terms of growth.
  • South Africa ranks fourth on Condé Nast's list of the Top 20 countries in the world to visit. This is ahead of destinations like France, Spain, Thailand, Morocco and Australia. South Africa also featured several times in the Condé Nast list for "The Ultimate Travel Top 60", which identifies the best of the best tourism attractions and facilities around the world. The Readers' Travel Awards named South Africa as a fantastic destination when it comes to value for money, putting it among the most affordable destinations in the world. The Awards focused individually on Franschhoek, Johannesburg, the Kruger National Park, and Londolozi private game reserve, Plettenberg Bay, the Garden Route and the Great Karoo as key attractions.
  • South Africa saw the highest increase in tourist arrivals from China by 64%.This came after South Africa relaxed visa regulations, allowing tour operators to apply for visas for Chinese tourists. When comparing to last year, the increase in tourist arrivals for the following regions are: Asia increased by 47.7 %, followed by Middle East by 35 %, North America by 26% , Central and South America by 24%, Europe by 17.5%, Australia by 16.4 %.
  • The United Kingdom’s recent vote to leave the European have had a major impact on the pound. This could encourage tourists to travel to South Africa in order to take advantage of a weak rand. However, this could also result in a decline in the number of tourists from the UK, as they would most likely spend less money.
  • The weak rand has caused local travel a more viable option than travelling internationally.
  • The deprecation for the South African Rand has significantly reduced South African’s spending and has caused local travel a more viable option that travelling internationally.
  • Thailand is no longer simply a popular destination for young budget travellers looking to get the most for their money. Tour operators have report that there has been and increase in interest from the more mature luxury South African travellers looking for Four & Five star packages. They have also seen an increase in honeymoon and wedding travel. The value of the Thai Batch to the South African Rand results that Thailand remains a popular destination for the South African traveller.
  • Visitors to Zanzibar currently pays 18% VAT on a number of tourism services levied by the Tanzanian Government such as tour guiding, water safaris, game safaris park fees and ground transfers. This should have minor impact on travel and package rates as Zanzibar still remains good value from money for leisure and MICE travellers.
  • South African airfares expects to increase by 4.4% compared to the global increase of 2.5%. Other African counties expects to see a decrease in airline prices. Kenya expects to see a 5.8% drop and Nigeria a 6% decrease. This will have an impact on business and leisure travel.
  • Air Madagascar has added four weekly flights between Seychelles and Antananarivo in Madagascar and Air Seychelles added four weekly flights between Seychelles and Abu Dhabi to encourage more business and leisure travellers to Madagascar and Seychelles.
  • Cruise Sales are growing rapidly each year for the South African market. Cruising is gaining popularity because it is affordable, all-inclusive and travellers can see multiple destinations and it caters for all lifestyles and budgets.
  • South African Airline plans to launch flights from Johannesburg to London and New York via Accra in Ghana. This will increase business travel to West Africa.
  • BMW announced that they would use BMW South Africa’s subsidiary for sales growth across Sub-Sahara Africa. BMW South Africa would be responsible for key markets including Nigeria, Ghana, Kenya and Angola. Other markets includes Cote d’ Lvoire, Togo and Senegal. This will increase business travel into West and East Africa.
  • The current low price for crude oil has let to a decrease in the number of corporate travel bookings into Africa. One of South Africa’s leading TMC’s confirmed that their corporate travel into Africa have declined by more than 30%. The slowdown relates to both the oil crisis as well as South African companies that had expansion plans in Africa. The oil crisis has had a big impact on Nigeria, Angola and Mozambique. There are concerns that if the oil price remains at its current level that it would have a long-term negative impact on corporate travel into Africa.

Contact for this market based in South Africa
Angela van Staden

Central Europe

  • TOP FIVE GERMAN TOUR OPERATOR
  1. TUI DEUTSCHLAND (including airtours for high end) / 2. Thomas Cook / 3. DER Touristik (including DERTOUR DELUXE and KUONI) / 4. FTI Group / 5. Altours
  • Top short-haul destinations: Germany (31%), Spain (13.5 %), Italy (7.8%), Austria (4.9%), France (3.4%), Croatia (3.3%), Greece (2.9%), Netherlands (2.3%), Poland (1.9%)
  • Most popular cities are (outside of Germany): London (1.5%), Paris (1.1%), Amsterdam (0.9 %), Vienna (0.8%), Barcelona (0.7%), Prague (0.7%)
  • Top long-haul destinations:

North America (USA, Canada), Asia Far East, Latin America & Caribbean, Asia-Mid East, Rest of Africa, Oceania, South America

  • Most trendy & newcomer destinations 2015 outbound Central Europe:

Singapore / Namibia / Lithuania / Nicaragua / Ireland / Philippines / St. Lucia

  • Cities with the highest growth (outside of Germany): Amsterdam, Madrid, Rome, Lisbon, Dublin

Contact for this market all based in Munich, Germany
Stephan Brauer (Leisure | Corporate)
Koray Sormagec (Corporate | Consortia)
Stefan Schoewel (Groups Business)

Eastern Europe

  • The leisure agents from Russia & CIS are very prone to prices and rate parity due to the clients who constantly shop rates and compare different channels including OTAs. The agents are also very demanding in terms of the response time. They ask a lot of clarifying questions (view from the room, floor plans, floor, proximity to the certain sights etc). Therefore, the more VIP booking is, the more complicated and time-consuming, the booking process gets.
  • The VIP agents in Russia and CIS and best producers in terms of rmns booked and the hotel revenue generated, look forward to value-added benefits. These agents take for granted special attitude and privileges offered by hotels. Many are proud to be members of the different loyalty programs of the best hotel chains (Four Seasons, Mandarin Oriental’s Fan Club etc). Traveller Made association is also gaining in popularity.
  • Italy, Greece, Cyprus (the last destination more for middle–income clients) seemed to be the most popular destinations in summer and early autumn holidays. Greece has overbeaten Turkey in terms of travel volume. However, since the charter flights from Russia to Turkey have been resumed the volume of travel to Turkey has been increased by 45% according to ATOR (association of tour operators). Cote d’Azur has become far less popular among affluent Russians and clients from CIS countries as the result of recent terrorist attacks.
  • Meanwhile the Black Sea coast remains number one destination in terms of summer travel, and branded and chain-affiliated hotels located in Sochi, Krasnodar, Gelendzhik are doing extremely well ( Hyatt, Hilton, Swissotel, Marriott etc). According to JLL Hotels & Hospitality Group, Russia & CIS, “this summer quality hotels in Sochi continued benefitting from the interest of travellers from Russia to the domestic destinations. Both the sea cluster and the mountain hotels showed unprecedented levels of occupancy and room rates. In the valley, the occupancy has averaged 68% from June to August (summer 2015 saw just 54%). In August, in fact, it reached 74% - highest number ever in the 3-year history of observation.”
  • On July 7th, 2016, the European Parliament Foreign Affairs Committee voted the recommendation that Schengen travel visas for Ukranian citizens must be abolished as soon as possible. The European Commission officially proposed visa liberalisation for Ukraine on April 20. Kyiv has complied with the requirementsfor visa-free travel for Ukrainians across Europe. Should the liberalisation happen it will immediately have a positive impact on the outbound travel for affluent clients to Europe from Ukraine by approximately 40%.
  • The Russian agents will start booking winter holidays in the end of October, with a swell of interest closer to November. The booking pace is rather slow, and there will be quite many last-minute requests before the long winter break in Russia starts (first week of January). Switzerland, France, Lapland (Finland), Austria will be among the most frequently booked destinations for the upcoming winter apart from exotic islands and UAE

Hotel Development

  • MICE players and travel agents are in constant search of new luxury hotels and residences located in former post-Soviet space such as Georgia, Uzbekistan, Azerbaidjan, Armenia. Luxury boutique hotels (100 rooms) with small conference facilities and such USPs as spa center, panoramic views, proximity to points of interest, gastronomic restaurant are the right hotel format many travelers and small, incentive groups are in need of.

Contact for this market based in Moscow, Russia
Elvira Tarasenko

France

  • Since the beginning of 2016, the number of departures has been decreasing by 5.3% vs. 2015, and the revenue by 3.3%
  • Medium-haul destinations:

The top 10 destinations since the beginning of 2016 have been Spain (+8% in number of departures vs. 2015), Italy (-5%), Greece (-4%), Portugal (+20%), Great Britain (-3%), Morocco (-21%), Tunisia (-57%), Germany (-7%), Croatia (-8%) and Turkey (-61%).

  • Long-haul destinations:

The top 10 destinations since the beginning of 2016 have been the USA (-5% in number of departures vs. 2015), Thailand (+9%), Dominican Republic (-21%), Mauritius (-7%), Canada (+6%), Cuba (+38%), China (-1%), Mexico (-8%), Vietnam (-6%) and Indonesia (+8%).

Contact for this market is based Paris, France

Stephane

Iberian Peninsula

Spanish economy

  • Second election held in June, gives more votes to the former PM but still has no majority, today there is still government uncertainty but pressure from Europe to establish it ASAP, next election most probably will be held in December, if no agreements. If this happens it will be 1 year since Spain has had an actual government.
  • GDP growth till June 2016 was 0,7% and continued in Q3. Tourism is now the 1st motor of Spain’s economy, number of visitors into Spain has grown 10.1% reaching 60.3 million of arrivals on the 30st September. Being UK, France and Nordic Countries the most growth percentage with a 10% increase.
  • Spanish as an outgoing market continues its growth vs 2015, although we have symptoms of deceleration due to the situation with elections, and external factors like Brexit, Europe’s overall’s economy, Q4 will have to be looked at carefully.

Leisure Travel

  • Overall Main Travel Agencies are positive about Spanish outgoing in 2016.
  • 30% of Spanish travelers choose to travel abroad, 74% of these stay in Europe, 26% goes long haul.
  • Long haul countries Q3 winners are Japan, Vietnam and Sri Lanka, this last with an increasing demand.
  • Air China increases direct flights from Barcelona.
  • Zica awareness is affecting Leisure into Caribbean and South America.
  • Emirates keeps increasing capacity from both Madrid and Barcelona in 2016 towards Asia.
  • Norwegian Air growing fast, Scandinavia t’s growing as a destination for Spanish.
  • Increase on short-weekend vacation within Europe. (growth on secondary cities) according to Transavia and Vueling. Norway (Oslo) is a fast growing destination receiving Spanish leisure travelers.

Contact for this market based in Barcelona
Eva

Italy

  • Italian destinations are experiencing a very positive moment registering a +24% vs the previous year
  • Also, Spain and Spanish islands, Greece with its Islands together with Croatia and Slovenia have been the favourite destination for vacation on short- middle haul.
  • North Europe is increasing, England represents the 70% of outbound tourism towards this area
  • On long haul, United States are very strong and also Japan and Thailand
  • American Airlins will open a new flight connecting Rome – Dallas that will help to increase both business travel and leisure travels for the connection to West coast, Caribbean and Mexico

Contact for this market is based out of Milan, Italy

Silvia Lavazza

Middle East

  • Etihad Airways announced that its Airbus A380 service, which features the only commercially available three-room suite in the sky, 'The Residence by Etihad', will begin flying between Abu Dhabi (AUH) and New York’s John F. Kennedy (JFK) International Airport on November 23, 2015.
    The updated arrival date and additional capacity for A380 service comes in response to strong demand from Etihad Airways guests who are traveling during the U.S.’s busy Thanksgiving holiday, as well as to attend the 2015 Formula 1 Abu Dhabi Grand Prix taking place November 27-29. The new service was originally scheduled to begin on December 1, 2015 and will replace one of the existing Boeing 777 services. Etihad Aviation Group and TUI AG today confirmed they are in discussions to create a European leisure airline group, focused on point-to-point flying to connect key tourist markets. It is proposed to contribute the touristic operations of the airberlin group and the German TUIfly company, including the aircraft currently operated by TUIfly for airberlin under a wet-lease agreement, into a new airline group established by TUI AG and Etihad Aviation Group. This new airline group would serve a broad network of destinations from Germany, Austria and Switzerland. The new comes as airberlinstrugglesto reorganize its operations as losses mount. The leisure airline group will be supported by the expertise of Etihad Aviation Group, the fastest-growing aviation group in the world, and utilize TUI’s state-of-the-art distribution capacity. TUI AG, Etihad Aviation Group and Air Berlin PLC intend to finalize an in-principle agreement in due course.
    Any agreement entered into will be subject to all necessary corporate and regulatory approvals. TUIfly is part of TUI Group, the world’s number one tourism business, with around 75,000 employees serving 30 million customers a year, across the globe. TUI Group has a portfolio of more than 300 hotels, 14 cruise liners, six European airlines with around 140 aircraft and a wide-reaching distribution network, covering more than 1,800 travel agencies and online portals. Etihad Aviation Group is a fast-growing diversified aviation and travel group, with more than 26,000 employees.It comprises four business divisions – Etihad Airways, the national airline of the United Arab Emirates, Etihad Airways Engineering, the Hala Group, its destination management company, and the Airline Equity Partners. Etihad Aviation Group holds minority stakes in Air Berlin PLC, Air Serbia, Air Seychelles, Alitalia, Etihad Regional, Jet Airways and Virgin Australia. Airberlin is the second largest airline in Germany and carried more than 30.2 million passengers in 2015. Airberlin offers a global route network through its strategic partnership with Etihad Airways, which has a 29.21 per cent shareholding in airberlin, and through membership of the one world airline alliance.
  • Qatar Airways launches new services to Helsinki, Finland The Finnish capital of Helsinki welcomed the first Qatar Airways flight from Doha, inaugurating the new daily service that will connect Helsinki to more than 150 destinations worldwide. Qatar Airways’ Airbus A320, which will operate the route, has a two-class configuration with 12 seats in Business Class and 120 seats in Economy Class. The launch of the new route to Helsinki completes Qatar Airways’ network strategy of serving Nordic capitals, which currently includes Stockholm, Copenhagen and Oslo, and reinforces its commitment to serving the people of Northern Europe. To support the new destination launch, the airline also announced a new code-share partnership with Finnair, which is effective from today, expanding Qatar Airways’ presence in the Baltic States and Nordic countries while strengthening Finnair’s network in the Middle East and beyond. Qatar Airways Group chief executive Akbar Al Baker said: “Launching our new route to Helsinki is a proud moment for the airline, completing our strategy of serving the needs of Europe’s Nordic capitals and facilitating connections for businesses, cultures and families between Finns and people throughout the world. With this new service, the people of Helsinki have convenient and world-class air service to more destinations, and we look forward to welcoming our new customers on board.”
  • Emirates Palace to welcome Indian travel agents annual jamboree. Abu Dhabi will later this month host the 63rd annual convention of The Travel Agents Association of India – the ‘voice’ of the country’s rapidly expanding travel and tourism sector. Around 600 TAAI delegates, and 40 Indian journalists, are due in the UAE capital for the meeting, and an associated exhibition, which will be held at the signature Emirates Palace hotel from October 14th-16th.The emirate was selected as host venue due to TAAI’s belief in Abu Dhabi’s MICE and leisure destination potential and as a dynamic global business events leader in the region. The convention gives us an unparalleled opportunity to directly speak to these industry influencers who can impact a market which is now the emirate’s largest overseas hotel guest source market,” said Sultan Al Dhaheri, acting executive director tourism, TCA Abu Dhabi. We will be looking to impress upon delegates while they are here the emirate’s outstanding leisure traveler potential and its mounting credentials within the meetings, exhibitions, conventions and exhibitions sector. In the first half of this year some 152,423 Indians checked into Abu Dhabi’s hotel – a 20 per cent year-on-year uplift and accounting for seven per cent of all the emirate’s hotel guest stays. Indian guests currently stay in the emirate’s hotels for an average of 3.4 nights. We see enormous potential in building inbound traffic from India with five airlines, including our own national carrier Etihad, flying to destinations within the republic from Abu Dhabi International. There are currently over 300 flights a week from 15 Indian destinations to Abu Dhabi giving thousands of travelers easy access to our destination within a four-hour flight time,” added Al Dhaheri. The TAAI delegation will be officially welcomed to Abu Dhabi at a special reception hosted by TCA Abu Dhabi at Emirates Palace. Once the delegates have conducted their daily business, they will be hosted on city tours and will tour Yas Island, the emirate’s entertainment destination including a visit to Ferrari World Abu Dhabi – the world’s only Ferrari theme park. The TAAI Convention is the second major overseas summit being hosted in Abu Dhabi this month. From October 10th-12th, the emirate will host 2016 convention of the Association of British Travel Agents (ABTA), which features the decision-makers of the UK travel and tourism industry including influential media representatives.

Contact for this market based in Middle East
Nabil Hassanieh