Last updated: 01:03 AM ET, Mon November 14 2016

The Evolution Of Vacation Packagers

icon_vacationagent Companies are aggressively competing for your business in an increasingly diverse marketplace

Vacation Agent Travel Agent David Cogswell

The Evolution Of Vacation Packagers

PHOTO: Today’s travelers can enjoy stays at all-inclusive resorts in Cancun and add cultural components to their vacations by adding on guided tours of such archaeological sites as Chichen Itza, pictured.

Travelers around the world keep pushing for more individualized, intimate, culturally immersive experiences of destinations while vacation packagers compete more vigorously to meet the demands of an increasingly complex market.

“Travelers want more experiential and one-of-a-kind moments,” said Gianni Miradoli, CEO of Central Holidays. “They are willing to spend money for unique experiences and VIP access. They want more nights in each destination, more time to ‘live’ them. They want more active travels – and the new meaning of luxury is more in-depth adventures.”

In the age of the Internet, the power resides with the consumer. The transparency of price and value brought by the Internet has empowered and educated the consumer. It has raised the bar on what vacation packagers have to do to compete and to stay top of mind with travel agents and their clients.

For vacation packagers today it is all about satisfying the demands of the consumer in a diverse marketplace. Vacation packagers compete with each other to be the preferred choice of travel agents by creating new offerings and services to meet consumer demand and the result is a cornucopia of delights to tempt the consumer.

Though the wholesaler’s end user is the consumer, the travel agent is the wholesaler’s direct customer. Wholesalers must not only compete to please the end user, but also provide the best service to travel agents, and make themselves the easiest and most empowering to work with, the ones who will best help grow the retailer’s business.

Diversity of Demand

While interest in authentic experiences of a destination has risen dramatically, there is still a huge market for the standard independent beach vacation package. The range of the diversity of the evolving demand structure is widening.

“There is always a percentage of consumers who want authentic Mexico,” said Mike Going, executive vice president of travel agency distribution and development for The Mark Travel Corp., the operator of the vacation brands United Vacations, Funjet Vacations and Blue Sky Tours. “There are also people who want to ‘fly and flop.’ There are people who want high-end luxury.”

More than ever, vacation packagers must direct themselves to the individual desires of each individual client. Consumers want custom products, designed and targeted to their individual needs.

Today, clients can take a beach vacation at an all-inclusive beachfront hotel in Cancun, and while they are there go on a guided tour of Chichen Itza, where some of the most spectacular pyramids in the world can be seen within only a two hours’ drive from the beach resorts.

The boundaries between escorted tours and independent packages are blurring. Clients may add a guided excursion to an otherwise independent travel experience. Even the most bare-bones independent air-hotel package can be greatly enhanced by escorted transfers from the airport.

The New Luxury

The demand for luxury is increasing, but the meaning of “luxury” has evolved. Luxury travel is no longer just for affluent travelers, but has become the aspiration of travelers in general. For many people vacation time is a time when they can enjoy the greatest luxuries even if they are not rich.

Luxury today does not only mean enjoying expensive amenities and creature comforts, but also having things just the way you want them. It might be authentic experiences or VIP access. Ultimately luxury is about the highest level of service.

Apple Leisure Group is addressing the increasing demand for luxury by differentiating its Travel Impressions and Apple Vacations brands, designating Travel Impressions as its luxury wholesaler.

Tiers of Service

Wholesalers must provide the best service to clients, and separately must provide the best service to travel agents. That means not only providing a range of products, it also means providing efficient booking systems, good and timely information, product and destination education and marketing tools.

Delta Vacations recently released the 2.0 version of its marketing hub, a system that makes marketing material available to travel agents with ease and speed, and with the assurance that all branding meets the requirements of Delta. In effect putting its marketing department within reach of individual travel agents and agencies, the marketing hub is a service independent of the product itself that can empower travel agents and drive business.

A large part of Delta Vacations’ value proposition for travel agents is its educational component, the centerpiece of which is its annual Delta Vacations University, providing product and destination education.

Travel agents must consider the value of the secondary tier of service provided by the wholesaler to the retailer, when deciding which wholesaler to choose.

All wholesalers have to trim their profit margins to razor-thin dimensions to compete. Many of them have best-price match guarantees, too, so they can’t really compete on price. Since prices are competitive and roughly the same across the board, the value of education and marketing support can make a big difference in the value a wholesaler brings to a travel agent.

Widening Range of Destinations

Although there are plenty of great vacation destinations within a two-hour flight from the mainland U.S., there is also some demand for exploration farther afield, and so some wholesalers are also expanding their selection of destinations. Avanti Destinations, a specialist in creating custom independent packages in Europe and Latin America, has recently expanded its destination offerings to include Asia, and has broadened the range of possible inclusions, including an increasing selection of optional escorted tours that can be added to its independent packages.

Avanti is an example of why the differences between escorted touring and independent packaging are more difficult to discern. Avanti is primarily a provider of independent packages, but increasingly those packages contain an element of guided touring. At the same time, escorted tour operators are offering more independence and flexibility. Each wholesaler does it in its own way, with its own style.