Tour Operators Gaze into their Crystal Balls
Photo courtesy of Thinkstock
Tour operators have to plan their tours years in advance, with everything set to go off at its appointed moment. But no one knows better than these professionals how confounding and hard it can be to predict the future even one day ahead.
Many unexpected happenings can have dire consequences. Tour operators are always on the alert. They have to be. Their reputations — their most valued business asset — can be wrecked by an error at a high-stakes moment.
Handling problems that emerge suddenly is one of the most important skills required to be a tour operator.
But if you want to get a bead on where things are going in the travel industry, tour operators are good ones to approach as they are nestled in its core.
Every tour operator is at the center of a network of travel industry partners and business associates that includes everything required to operate tours: lodging, destinations, transportation, activities and events.
Though the future of the travel industry cannot be prognosticated with fine detail, some general tendencies and trends have established themselves and will likely hold true. And given their position at the center of it all, tour operators can come the closest to providing an accurate picture of the tour industry's next decade.
TravelPulse approached some leading tour operators to ask about the industry's future:
Jennifer Tombaugh, president of Tauck
I think we’ll just have to see how people evolve. But I think that while technology in many ways has allowed us more freedom to make personal choices, it also has made us a little crazy, now that you can get everything on your wrist.
To have pause, to break away and be with the people you love and you care about in a community where you can discover and be present and be awed by the world around us, that will continue to be very important to people.
It could be space. There could be a lot of different ways that we’re doing that. I don’t know what it’s going to look like. But I think the fundamentals will hold true. I know four things to be true. People will travel, they will travel in groups, they will always want to see something special as an insider and they will want to be pampered.
So it’s our job to figure out how to serve those needs as other parts of our world evolve and create different needs and opportunities.
John Stachnik, president of Mayflower Tours
Changes we see happening now, or will be seeing in the next ten years:
Great destinations will not change — the way we make reservations, whom we travel with and how we travel is what will change.
Experienced travel professionals will be in greater demand than ever. People's leisure time will be more limited and these travelers will be willing to pay for travel professionals to deliver the travel experience with ease. The respect that travelers have for travel agents will grow over the coming years.
Private jets will become more of a lure for leisure travelers. Traveler service from the existing, traditional airlines will continue to decrease, therefore encouraging those travelers to spend more for private jets to get them from place to place. And they are finding out that a private jet for three or four couples isn't that much more expensive than first class air tickets.
Family travel as part of a group experience will become more commonplace. Families are moving to the hosted experience rather than navigating a vacation by themselves.
Loyalty programs will continue to increase. Once a traveler finds a brand that matches his or her travel personality, they will use that brand exclusively. The brand will cater to that traveler's needs more and more.
Use of Airbnb, Uber and the like will only increase. Demand for staying in centrally-located places will help this phenomenon greatly. Also, car rental companies will need to reinvent themselves.
OTAs (online travel agencies) will diminish in terms of their importance in the industry. If you live by discounting, your days are numbered.
"Value" is slowly outdistancing "Price" as the main motivator to select one product over another.
Jeff Clarke, president of Travel Impressions
It doesn’t take a crystal ball to predict that all-inclusives will remain dominant in terms of wholesale vacation packages, but I think we’re going to continue to see an evolution in terms of the variety of culinary experiences offered.
A number of megaresort complexes have already opened in key destinations throughout Mexico and the Caribbean, battling to one-up one another to great benefit to our travelers. They’re all coming to the table with more and more in dining options as well as experiential on-property activities. We’re definitely going to see more competition in this arena over the next 5-10 years, which should keep rates competitive for travel agents and their clients.
As for Travel Impressions in particular, we’ve recently placed an increased focus on groups, which is paying off in a big way. This reinforces my belief that there is significant growth potential in destination weddings, family reunions, “friendcations” and special interest groups. We’re leveraging the success of our Groups Department to negotiate even more advantageous rates, value-adds and incentives that will help our agent partners maximize their piece of this lucrative business over the next several years.
Gianni Miradoli, CEO of Central Holidays
We do indeed need a couple of crystal balls to foretell what will be happening ... ten years from now in our industry...
There is absolutely no doubt that our industry — as viewed from the travel agency/tour operator side — will go through very hard and difficult challenges.
The outlook is complicated and somewhat “dark” shaded.
The ever-increasing presence of travel products via the Internet, the globalization of offerings (today you see offerings coming from operators located all over the world into our market), the competition that you must face even with your own suppliers like hotel, cruise lines, airlines and other service providers that are tending to go directly to the general public, undercutting our agreements.
And the new generation of travelers being more computer and Internet savvy (and using mobile devices too) — will certainly not facilitate the work of the travel agencies and consequently also our task as wholesalers for the travel industry.
Politically and safety-wise, the worldwide situation is a major factor influencing the decisions of travelers. The world is unfortunately not at peace. This is the biggest challenge that our industry has to face.
What to do to survive? From the tour operator side:
1. First of all, get out from the single item sale (hotel only, car only cruise only...) where the margins will be reduced practically to zero but specialize in the “packaging” where expertise, perfect knowledge of the destination and know-how are key factors in offering to travelers the necessary help to build their ideal itinerary and deliver the experiences they want to accomplish. These packaging capabilities are practically impossible to be performed by a typical traveler — not to mention ultra-time intensive.
2. More and more, specialize in “family and friends” types of offerings. Today we are seeing more and more developments on this kind of travel request … in particular small-group travel.
3. Niche market: Develop offers to many different group travel interests (and) affinity groups. Alumni associations, the religious market, schools, and any other type of associations and similar travel interest groups that do not have the possibility or the expertise to “do-it-yourself.” (For example) groups interested in such things as cycling, running, trekking, food and wine.
4. Continuously enlarge your range of travel products with new destinations and new features. The cookie-cutter type of itineraries (e.g. mass market “Rome-Florence-Venice”) will little-by-little disappear and be replaced by other interests and destinations in each specific country. Our industry has to become an “industry in movement,” not a static and repetitive one.
5. Diversification of offerings: Do not place all your eggs in one basket. Diversify your product types and destinations. As I said, the safety of the travelers is the main concern and offering only one destination or only one region of the world can be really very critical and dangerous. We had a lot of examples in the recent months and years where reduction of travelers has been seen. In some cases destinations bounce back quickly, for others it can take years, so having a range of specialty destinations is also an invaluable key to success in the tour operation arena.
Steve Born, vice president of marketing for the Globus family of brands
Consulting my crystal ball, here’s what the tour category will be looking back at in 2025:
“I can’t believe I did that!” inclusions:
Tour operators are specialists at creating unique local experiences that just can’t be replicated traveling on your own. These will continue to evolve and accent itineraries to the world’s best-loved destinations. For Globus, these are Local Favorites, and we’ll see local suppliers become even better at delivering these “ ow" moments.
Options will continue to grow, putting even more control in the hands of the traveler. This includes longer stays in destinations and increased options to match the traveler’s style.
Touring travelers will be able to easily personalize their experience with pre-booked excursions and a host of on-, pre-, and post-tour choices. For the Globus family of brands, the future is here, with MyGlobus options and the ability to combine a tour with a Monograms city stay or even an Avalon cruise.
Crowding of the “regular” (non-tour) tourist load will limit access to attractions—but not for touring. Pre-arranged VIP group entry will provide travelers with access to popular sights and attractions that will be limited to “on your own” travelers.
Themed and specialty tours will continue to grow, as travelers seek out like-minded travelers who also enjoy their chosen pastimes. Think food & wine, active trips and religious tours.
Growth of a "tour" that’s not a “ tour”:
We will see Monograms expand—a hybrid product that combines the best of touring (great hotels, VIP sightseeing, transportation), with the freedom of independent travel. All with the services of a professional Local Host. This travel style will soon become it’s own segment of the category.
More by David Cogswell
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