FVW Tourism Sales Climate Index September: Reliance in travel agencies is decreasing – Travel agencies cannot complain about the current booking situation. However, concerning future there are some retentions, according latest FVW Sales Climate Index of September. Summer vacation is drawing to a close, and travel agencies can make a positive assessment. According to GfK, summer season registers 12 percent plus, even three percent more bookings in August in relation to the previous year. Almost 55 percent of the respondents consider the current situation for travel sales as good, 40 percent at least for satisfactory. However, there are not as many optimists as in the previous month. Only 28 percent, compared to 34 percent a month ago, believes that demand will rise in the coming months. After all: Almost two-thirds assume that travel demand remains stable. This is important because the organizers have already made large parts of their offer bookable for the coming winter and also for summer 2019. And it works: Especially in the stationary offices, the early bookings are outstanding. According to GfK, 40 percent of sales in this channel in August already account for the coming winter, 16 percent even to the next summer. Anyway, sales sentiment has recovered after a few months of decline and is now at an index value of 113.4. That’s extremely high. The mood has not been that positive since March 2014.
Ryanair builds up diversified airline group / O’Leary stays unchallenged Ryanair head– Ryanair is hoping for a pay deal with its German pilots by Christmas and is creating an ‘airline group’ with three carriers offering different products, marketing chief Kenny Jacobs said at the fvw Kongress on Tuesday. The Irish low-cost carrier, hit by several strikes in the last few weeks, aims to achieve an agreement with both its pilots and cabin staff in Germany by the end of this year, Jacobs told a packed conference. He emphasised that the airline’s pilots are already well-paid compared to rivals such as Eurowings, Wizz Air and Norwegian, and all would move on to German contracts under a new agreement. But even with higher pilot wages, Ryanair’s unit cost per passenger (currently €27) would still remain well below the nearest competitor, Wizz Air (€40 per passenger). Discussing Ryanair’s strategy for Germany, Jacobs made clear that the airline, like rivals Easyjet and Wizz Air, sees the country as a top growth market. Ryanair has increased its market share from just 2% four years ago to 9% at present and expects to carry about 20 million passengers on German routes this year, he said. However, low-cost carriers still only have a combined 25% of the market compared to Lufthansa’s 56%, he pointed out. Outlining the overall strategy, Jacobs explained that following the acquisition of a 75% majority stake in Austrian carrier Laudamotion, the Irish carrier is now developing ‘the Ryanair Group’ with three different airlines that will offer different products for different markets: Ryanair, Laudamotion and Ryanair Sun in Poland. Laudamotion and Ryanair Sun, for example, will have a stronger focus on leisure routes and will work more closely with the travel industry while Ryanair itself will maintain its core business model of selling cheap tickets directly to passengers through its website, according latest FVW report.
Meanwhile Michael O’Leary celebrates success within his company: The shareholders voted 70.5 percent for the re-election of Bondermans to the Board, as the company said after the shareholders’ meeting. Other members, however, posted much higher results: Thus, CEO Michael O’Leary came to the election to the panel on an approval of 98.5 percent.
Eurowings promises better flight performance next year – Delays and flight cancellations: The flight operations of Eurowings in summer were partly chaotic. Meanwhile the flight situation stabilized. “That will not happen any more in the future”, promises Oliver Wagner, managing director of Eurowings. Eurowings hit the headlines repeatedly this year for countless flight delays and cancellations as it tried to integrate former Air Berlin planes into its fleet and capture market share. The airline’s punctuality plummeted to just 60 percent between May and August. One key measure will be to split the fleet between planes operating domestic routes and international routes in order to improve punctuality. Planes flying domestic routes in the morning and evening “will stay in Germany” during the day instead of being used for Mediterranean routes that might lead to delays, he said. In addition, the airline is planning longer turnaround times at airports. Moreover, Eurowings now has sufficient reserve planes should one of its aircraft suffer a technical problem. The airline has an overall fleet of 185 planes at 13 bases serving over 200 destinations. On other topics, Wagner said Eurowings would review its pricing and tariffs for business and leisure passengers over the coming year. It will launch a new booking tool for tour operators and will broaden its website into a ‘travel platform’ with a range of ancillary offers to cover ‘the whole customer journey’. In an initial step, the airline yesterday announced an exclusive partnership with German accommodation portal HRS. From December onwards, Eurowings passengers will be able to book hotels from the HRS portfolio directly on the airline’s website at special rates and with additional services. Members of Eurowings’ loyalty scheme will get points for HRS bookings.
Tour operators head for consolidation – The German tour operator market is set for the next round of consolidation due to increasing financial pressures. Markus Heller, managing director of market researchers Dr. Fried + Partner, explained that technology-driven price transparency is putting extreme pressure on the package holiday margins of traditional tour operators. In addition, tour operators – in particular the top three (TUI, Thomas Cook and DER Touristik) – are growing less than the overall tourism market, which is being driven by online sales, he pointed out in a presentation of an exclusive study based on interviews with 20 German travel industry executives. The consequence is clear, according to the experienced market researcher. “In the coming months we will see strategic investments by large tour operators who take over smaller ones,” he predicted. In contrast, the travel agency market is unlikely to see major changes in the coming years as long as the sector retains its legal status as sales agents, Heller told an audience of top managers from the German travel industry. However, tour operators will try to steer travel agency sales more than in the past, he forecast. The biggest structural change, however, will come from consolidation of the online travel market, according to Heller. Google, for example, will start to play a more prominent role by placing itself more and more at the front of the booking process for flights and hotels, he predicted. At the same time, Booking.com could create a ‘travel ecosystem’ by linking its various acquisitions, including flight metasearcher Kayak and restaurant portal OpenTable to its core accommodation booking portal, Heller said. This could turn the group into ‘the Amazon of travel’ in future, according latest FVW report.
Thomas Cook opens more Cook’s-Club-Hotels – There will be eight new hotels of this Thomas Cook brand in 2019. Moreover the negations for two other more resorts advanced well. The new accommodations will open in Egypt, Bulgaria, Gambia, Greece, Italy, Spain and Turkey. The first of the new hotels is due to receive its first guests in May 2019. Three of the planned ten new Cook’s Club are former Smartline brand hotels. The others are new to Thomas Cook. A Cook’s Club has been in Crete since June 2018.
TUI: Strategic expansion – According to latest FVW report, TUI Group has acquired Italian technology start-up Musement to power a new digital marketplace offering customers a highly diverse range of destination activities. Europe’s largest tourism group explained that with worldwide revenues of €150 billion and annual growth of 7%, the ‘destination experiences’ market is one of the most attractive tourism segments. TUI Group is already one of the leading providers in this market through its Spanish subsidiary TUI Destination Experiences, which offers excursions, tours and activities in all major holiday regions in 49 countries around the world. Now TUI wants to take the next strategic step. Founded five years ago, Musement has become one of the leading online platforms for activities, tours and excursions, TUI said. The Milan-based start-up, with 130 employees and one million users, currently offers travellers around 35,000 products in 1,100 cities around the world. Its portfolio ranges from admission tickets for museums, events and attractions via guided tours all the way to boat and bicycle tours. TUI plans to use the Italian firm’s technology for much more. The German-based group aims to create a new digital marketplace for customised destination activities, both for its own 20 million customers and all other potential customers. Customers will be offered the opportunity to create their own individual experiences from a range of products designed to be as diverse as possible. TUI is planning to offer its customers destination experiences and activities from the time of booking the holiday all the way to their departure. To this end, the Group will use the strength and trust in the TUI brand as well as digitalisation. TUI claimed that its single customer platform and Musement’s cutting-edge technology will enable the group to offer its customers relevant, personalised offerings before the start of and during their holiday. The expected earnings growth will be delivered through a broader product range and stronger digitalisation of the business. The tours and activities market of suppliers is still highly fragmented, TUI pointed out. More than 90% of the around 350,000 companies are small providers generating annual revenues of less than €1 million, almost exclusively depending on one-off customers. “Musement’s online platform serves precisely these small companies by providing them with a digital marketplace to allow fast and simple presentation of their products – reaching out to 20 million TUI guests and as well as third party customers in future,” the German group concluded.