India - Powerhouse Economy for Growth

This is one of the World Travel Market breakout sessions on powerhouse economies, in this case, India.

The session was run by the European Tour Operators Association (ETOA) and this panel  discusses outbound tourism, more specifically the huge potential for outbound tourism and the problems facing Europe in trying to attract some of that business.   

And, of course, it's that old nutshell again...visas.

Olympic Winners and Losers

Sport has always played a large part in my life; whether it’s playing football in the park or watching Usain Bolt in the 100m final – the power of sport to engage and inspire is undeniable. (My personal favourite was the Brownlie Bros in the men’s triathalon..)

Following London 2012 there is now  a great debate on who won the marketing Olympics - which brands stood and out and which ones didn’t even make it off the starting blocks. But there is one thing that unites all brands involved - that they recognize the importance and power of sport and the passion it inspires in consumers.

So thanks to the BBC for raising the benchmark of sporting broadcasting. From their Olympic Trailer to their multi-channel coverage, the BBC where simply superb and their montages alone worthy of gold medals in editing and compilation.  And thanks also to the Royal Mail for reminding me to send a proper letter next time rather than an email.

It’s a shame then that it is unlikely Britain’s recession-hit economy will receive any boost from the Games that have been a triumph for the nation’s athletes. While Britain’s construction sector benefited hugely before the Olympics, experts have said the 17-day sporting spectacle had not delivered significant financial rewards and neither was it expected to in the months and years ahead.  Visitor numbers to London were estimated to be down 30%

In the run-up to the Olympics, commuters and tourists were warned to stay away amid fears that London’s transport system could not cope with millions of extra people descending on the capital. 

The London Olympic Games had long been heralded as a key boost to the British economy but in fact tourist numbers fell dramatically in the first few days of the Games. Hotels cut their prices and many shopping areas, restaurants, theatres, attractions and entertainment venues saw a significant reduction in business. Businesses complained of being sidelined as tourists headed only for the Games and avoided the capital’s other attractions and shopping destinations, while non-sports fans opted to stay at home or delay their trips.

Of course, we knew all of this already so why are officials now so surprised? 

http://www.fesmarketing.blogspot.co.uk/2011/03/london-2012-therell-be-trouble-ahead.html

Hopefully, the organisers of next Olympics in Rio will from the lessons in London….but why would they when London did not learn from the lessons of previous  Olympic cities and countries that went before them!

UK - Closed for Business?

With the Olympics in London, there has been much debate in Travel and Tourism circles about the tourism benefits of  hosting the Olympic games this year.  London can rightly be proudly of the fact that the Olympics will attract more visitors than any other previous Olympic host city. That's 60,000 international visitors coming purely to see the Olympic games (and twice as many that visited Athens for example)


Critics however argue that this increase in visitors to the Olympics is massively offset by the huge fall in international leisure visitors - or in other words, the huge number of visitors who will actively seek to travel elsewhere in order to avoid visiting London when the Olympics are on!


(For more on this see BlogPost - The Ups and Downs of London Tourism )


However, there is also one other major reason why tourists are choosing to travel elsewhere other than the UK - and it has nothing to do with the Olympics.  It's the difficult and obstructive process of obtaining a visa!  A process so difficult and absurd in its application that many people simply give up!


The European Tour Operators Association (ETOA) have been campaigning and lobbying for a revision of the visa application process for many years seeing a simplification of the visa application process as conducive to boosting to incoming tourist business, and (multiplier) spend.


Last week there was a Radio 4 'Face the Facts' programme dedicated to this very subject  - have a listen to the arguments.  Some will say relaxing visa controls will lead to increases in illegal immigration and terrorism -  other, more rational people will argue that a sensible visa application system will boost visitors to the UK and  generate millions of extra consumption into the UK economy.


(Tom Jenkins of the ETOA and visa-reform-evangelist features in the programme)

BBC 2012 Olympic Trail

For those that missed the amazing title sequence and marketing trail for the BBC 2012 Olympics - here it is!

The animation will be used for each Olympic event, as well as being used for marketing purposes. At just over a minute long, the sequence sees athletes running through terraced streets; cyclists tackling the Scottish highlands and gymnasts somersaulting along the London bridge.

The animation was created by design agency RKCR/Y&R, who describe themselves as 'the UK's most creative agency'. 

The production was handled by Passion Pictures and Red Bee Media, with Passion Pictures also taking care of the animation. Director Pete Candeland has also worked with the likes of Coca Cola and the Gorillaz. 

A full two-minute, forty second version will be aired on BBC One on July 3rd. Sixty, Forty, Thirty and Five second versions of the titles will be used throughout the games coverage.

I would love to know how much it cost!   Any ideas?

G20 recognises Travel & Tourism but must try harder

So, the G20 world leaders have finally recognized the importance of travel and tourism as a driver of jobs, growth, and economic recovery.  Considering the industry will contribute around US$2 trillion in GDP and 100 million jobs to the global economy in 2012, its about time. 

When the wider economic impacts of the industry are taken into account, travel and tourism is forecast to contribute some US$6.5 trillion to the global economy and generate 260 million jobs – or 1 in 12 of all jobs on the planet!

The G20 Declaration states: "we recognize the role of travel and tourism as a vehicle for job creation, economic growth, and development, and, while recognizing the sovereign right of States to control the entry of foreign nationals, we will work towards developing travel facilitation initiatives in support of job creation, quality work, poverty reduction, and global growth.”

Meaning what, exactly?

The G20 could boost  international tourist numbers by an additional 122 million, generate an extra US$206 billion in tourism exports and create over 5 million additional jobs by 2015 just by improving visa processes and entry formalities. 

Of the 656 million international tourists who visited G20 countries in 2011, an estimated 110 million needed a visa, many of whom were deterred from traveling by the cost, waiting time, and difficulty of obtaining a visa. Facilitating visas for these tourists, many from some of the world’s fastest-growing source markets such as the BRICs, could stimulate demand, spending, and ultimately create millions of new jobs in the G20 economies.

The issue of visas has been debated for many years, the European Tour Operators Association (ETOA) have conducted research that show that the Schengen area alone is missing out on close to €500m in tourism revenue due to inefficiency. In a case study 21 per cent of Indians applying for Schengen visas gave up because of delays, while the figure was even higher for the UK at 26 per cent.

On a day that the Government announces that it is scrapping GCSEs and re-introducing more 'rigorous' O-Levels back into schools - their report is 'must try harder'.

European Cities the Key to Economic Recovery

Just met with the Executive Director of the ETOA (European Tour Operators Association) who was telling me all about their new headline event, the forthcoming City Fair 2011.

The City Fair is held in London and will bring together, under one roof in one day, City destinations from across Europe, their suppliers and buyers from both long haul and European markets.

The City tourism sector is a core element of all European tourism, a driver for long-haul originating markets and a motor of European economic recovery in 2011.

All of the European touring programmes, promoted and marketed by long-haul originating markets (Asia, North America, Australasia, South America) are designed and fleshed around a 'skelton' of itineraries with key european cities as their fundamental building blocks. As an vital element in developing their tourism products and securing new visitor growth, it is important for cities to be recognised for inclusion into this 'touring skeleton'.

New and up-coming cities can see their visitor numbers transformed by the simple selling of their destinations while established cities must ensure their continued inclusion by steady marketing, promotion and control on their ARR (Average Room Rate).

CityFair gives these cities a tremendous opportunity to showcase their services while buyers can source new product and develop existing destinations

The event is organised by ETOA in conjunction with European Cities Marketing (ECM) and brings together their expertise in city tourism with ETOA’s long track record of running workshops.

Full details can be found at FESM/CityFair2011

London 2012 - There'll be trouble ahead...

......Another View of London 2012

As happens in nearly all Olympic destinations, demand is suppressed during the year of the event. Regular bookings are drying up and the volume of enquiries is down. According to a survey of BIM attendees, demand for 2012 is 20% on 2011.

Demand is reduced, but the industry is unable to meet even reduced levels of demand as there is a dramatic reduction in availability.

The London hotels remain confident that 2012 is going to be a bonanza. This is founded on high rate demand in 2009 and 2010, with solid demand in the summer months. For the Olympics in particular they see: 55,000 room reservations placed by LOCOG; additional requests for accommodation from foreign Olympic Operators; estimates of foreign visitor numbers of 200,000 per night and expectations of massive domestic demand.

In response to this, additional capacity is being added. There are new hotels, home-stay programmes and additional cruise capacity. As LOCOG have secured 40% of the rooms at below market rates, hotels are seeking to recoup their losses by increasing rates and tightening terms for the balance of the rooms. Nearly all non-Olympic business is being declined.

Outside the immediate Olympic period, there is an assumption that whatever demand that would have normally come during the first three weeks of August will be displaced into the surrounding weeks, making an already crowded time (Farnborough, the Paralympics) even more densely packed. This is reflected in higher prices throughout the summer.

Thus the main long-haul origin markets (US and Japan) are finding it impossible to secure hotel space at viable rates and terms during the Games period. Even outside the Games period, operators are facing inflated rates. As London is the gateway town for Britain and for Europe, clients need two slots to be accommodated: at the start and at the end of the trip. The closure of three weeks creates a “crater” of demand in the surrounding period. So the best product established operators can brochure is: nothing during three weeks of the peak season, reduced availability and increased prices for the balance.

This is not a sensible product to beguile flagging demand. Several operators are effectively dropping London as a tourism destination for the bulk of 2012. There is not much that can be done to reverse this. The solutions that have been canvassed (such as “the West Midlands: a viable alternative to London”) do not work. As London is removed from the product offer, the rest of the UK goes with it.

According to a survey of the attendees at the British and Ireland Marketplace, forward placements of business for London 2012 is currently running at 50% below 2011 levels.

This also means that London will cease to be a default gateway for Europe in 2012. For many markets this was happening anyway, as the UK’s position outside Schengen made it a marginal proposition. But it accentuates a trend: we have invited our regular clients to invest their business elsewhere. There is no guarantee that they will return quickly.

The irony of this situation is acute. The assumptions, both in the market and in the supplier community are wrong. The last two times the Olympic Games were held in Europe, they were accommodated in Barcelona (12,000 hotel rooms) and in Athens (15,000 hotel rooms). Neither cities burst. London has 125,000 hotel rooms, plus all the additional capacity added for August 2012.

Says Tom Jenkins, Executive Director of ETOA: “Much of this long-haul business is lost, amounting to over one million clients. That this loss has occurred because of a misperception is obviously regrettable. What matters now is to gain an understanding of exactly how the demand for the Games is manifesting itself. The people who can most help this process are the organisers who are selling tickets to the games. How many tickets are actually being sold to foreign visitors? If we have this figure then demand can be assessed. At present an industry stands in jeopardy through over-hyped fantasies of bonanza.”

Economic Impact of the Royal Wedding

With the announcement of the Royal wedding next year, the press had gone into hyperbole, with many newspapers claiming that the wedding will bring an estimated £1billion bonus to the British economy.

Hold on a minute. How much? There will, we are sure, be an economic surge, due to an increase in merchandising, media spend, advertising and increased hotel and tourism revenue but it is questionable whether that money will be a direct benefit to the UK economy

If such a major event raises revenue for the taxman then it should follow that that revenue should be spent on priority areas such as housing, welfare and health, not on subsidising a wedding of two 28 year old royals.

"But it is highly questionable that the event will boost the economy and we challenge those who say it will to show their evidence."

"We see no evidence that this event will generate any more revenue than a major football fixture - so subsidising the wedding would be no more tolerable than subsidising Wayne Rooney's salary."

"The figures being bandied about by the press this morning look like a lot of wishful thinking and make-believe."

"We would in particular challenge the comments of Sandie Dawe, chief executive of VisitBritain, who has said the wedding would “be an enormous boost for tourism”. We are asking her to retract her statement that the royals generated £500m in revenues for tourism each year as her
organisation's research makes no such claim."




NOTES

According to the FT Stefan Szymanski, economics professor at London’s Cass business school, said there was little evidence of public events lifting the economy, particularly when no new infrastructure is built.

The VisitBritain report published earlier this year said that heritage tourism, not the royal family, raised £500m a year. That is tourism to do with Britain's history, not the monarchy.

ETOA Successful Tourism Charter

Our friends at ETOA have just launched a Charter for Successful Tourism in conjunction with European Cities Marketing (ECM) and the International Road Transport Union (IRU) and warmly welcomed by the tourism industry and government alike. At a meeting in Brussels the ETOA brought together several industry groups and Brian Simpson, chairman of the European Parliament’s Committee on Transport and Tourism, for the first time.

The charter sets out a code of best practice for welcoming and managing tourist groups and covers issues such as coach access, capacity planning, changes to regulations and prices, creation of intelligent systems, and collaboration of the various interest groups. It was drawn up to address a number of issues that have been the cause of logistic challenges in cities and to encourage greater collaboration between government and industry on marketing and planning.

Tourism in Europe accounts for over EUR 320 billion in revenue. Seven to eight million jobs depend directly on tourism and 20 million jobs indirectly.
Group tourism accounts for many of the tourists from long-haul destinations, as well as many intra-European tourists. Around 13 percent of European tourism arrivals are from outside the EU, and in theory, this segment of the market represents substantial opportunities for valuable future export growth.
However, Europe’s tourism success is under threat. Its share of global tourism has declined, as measured by international arrivals, from 60 percent of the global total in 1990 to 53 percent in 2008 (source: UNWTO).

In this context, representatives of industry and government (on both local and European levels) were keen to endorse an initiative designed to stimulate closer collaboration to attract tourists and improve the experience of those visiting Europe.

Brian Simpson said that he was very pleased to welcome ETOA’s Charter because it provided a number of practical steps that would help underline the key goals of his committee, in particular promoting Europe as a destination, developing the competitiveness of the European tourism industry, and ensuring the sustainability of the sector.

Tom Jenkins, executive director, ETOA, added: “Groups represent all that is good about tourism. They are sustainable socially, economically, and environmentally, but they are not always well-regarded, and they are not always well-treated. That is caused by misperceptions, and this charter is the start of a dialogue that should dispel misunderstanding.”

Dieter Hardt-Stremayr, president, European Cities Marketing, said: “The charter represents a helpful step forward in the dialogue between the industry and local government. Cities will stay in the lead for group tourism, and we will deal with the group tourism sector as professionally as we do with all other sectors.”

Yves Mannaerts, vice-chairman, IRU, concluded: “Coach tourism is the cleanest travel option in all travel scenarios. Tourists traveling by coach spend 40 percent more at their destinations than other tourists.

"Promoting group tourism by coach is, therefore, a commendable goal from a public interest point of view. However, to realize the full potential of coach tourism, local authorities, coach operators, businesses, and tourist attractions must work in partnership and provide conditions in which coach travel can prosper. Adequate parking facilities, pick-up and drop-off points, together with suitable access to amenities, are essential if authorities want to make their localities even more welcoming to coach parties. Yet, something else is also urgently needed from the outset, and that is the creation of a pro-coach societal and political framework, in which bus and coach services can thrive.”

ETOA’s Charter for Successful Tourism can be viewed at:

http://theenvironment.vfolio.co.uk/etoa2010/2/