TTG Worldwide: Travel trade news from around the world

News from TTG’s sister publications in UK, Italy, Middle East, Czech Republic, Russia
TTG UK & Ireland
In the same week that TTG Media announced a new initiative that will recognize 30 of the best high street stores in the UK and Ireland (TTG’s Top 50 Travel Agencies List), we also broke the exclusive news story that Caribbean hotelier Sandals Resorts is to open its first store in the world, here in the UK.
That Sandals sees the potential of a high street presence, where it can sell holidays through its own tour operating arm, is testament to the enduring power of high street retailing in travel. And yet third-party travel agents have always felt threatened when operators like Kuoni and Virgin Holidays have launched their own outlets. Virgin Holidays grew to an incredible 111 stores – before announcing recently that it is no longer to sell through travel agents. Kuoni now has 35 of its own stores and insists its retail network does not detract from agent business, but some agents are still suspicious.
A single, standalone Sandals store seems more likely to enhance brand awareness and act as an educational tool than to steal agents’ business. But if Sandals’ first retail outlet proves so successful that it opens more, I’m sure agents will have something to say.
Pippa Jacks, Editor, TTG UK & Ireland
TTG Russia
According to industry analysts, the current difficult situation in Russia’s outbound travel market will reduce by another 30% in 2016 compared to the stats of the current year – if Turkey and Egypt stay banned. While domestic tourism has growth potential of about 20%.
Russia’s travel industry has faced several negative impacts throughout the year, namely the stagnation of economic growth, plans to abolish agency fees by almost all Russian airlines, the bankruptcy of Transaero, the closure of key tourist destinations (Turkey and Egypt), the volatility of exchange rates and prolonged economic sanctions. As a consequence of all this negativity, the decrease in outbound tourism in 2015 equalled 40% (some destinations recorded a fall of nearly 70-80%). There was a plunge in revenues at travel agencies (losses only in terms of the closure of Egypt are considered to be 1.7 billion roubles), a 10 million decrease in traffic flow and 69% drop in the number of Russian tour operators engaged in outbound tourism (from 2050 in 2014 to 650 at end 2015). Forecasts say that in the near future the number of operators will decline further to just 300 (pessimistic scenario) or 500 (more positive).
As for the aviation industry, the first 10 months of this year saw an almost 14% decline in passenger traffic in international flights but a 15.5% rise on domestic routes. Next year about 5 million passengers will need to shift to other destinations if Turkey and Egypt remain closed. Half a million of them could opt for Crimea and Krasnodar, but another 2 million will be looking for alternatives. To avoid financial losses, Russia’s leading airlines (Aeroflot, Ural Airlines, S7 and others) have taken the step of completely cancelling agent commission, which will lead to major changes in the online sales market. Agencies involved in the sale of tickets via the Internet will have to seek out and integrate new services and products for which travellers are willing to pay and airlines cannot provide. Additionally, after New Year, airlines likely to raise the cost of tickets by 10-15% – just to survive.
Maria Shankina, Editor, TTG Russia
Major news in the hospitality industry of late has been the signing of a deal between AccorHotels and the Qatar Investment Authority, Kingdom Holding Company of Saudi Arabia and Oxford Properties for the acquisition of FRHI Holdings, the parent of Fairmont, Raffles and Swissôtel. According to Qatar Investment Authority CEO, HE Sheikh Abdulla Bin Mohammed Bin Saud Al-Thani, the deal generates the scale needed to drive the next phase of growth in their real estate and hospitality investments.
Meanwhile, home-grown Rotana is expanding its portfolio of hotels with 14 properties, due to open before the end of 2016.
Looking to the aviation sector of the MENA region, the fifth Arab Aviation and Media Summit concluded with speakers in agreement about the optimistic outlook of the Middle East’s aviation and tourism industry, despite the potential impact of a number of existing and emerging challenges.
Over 200 industry leaders, government officials and journalists attended the 2015 conference, which was held this year in Manama in partnership with Bahrain’s Ministry of Transportation & Telecommunications and the Bahrain Airport Company.
Natalie Hami, Editor, TTG MENA
TTG Italia
From tourism players to recent events, last month’s news in the Italian tourism industry was dominated not only by companies but also by current events. The weight that the Paris attacks on November 13 placed on the travel industry is undeniable. Linked to the terrorist acts that shook the world are the new security procedures adopted by the EU, with the start of the Pnr and the partial revision of Schengen, actually leading to new border controls.
The consequences are being felt also overseas, since the US has decided to make some changes to the procedures for obtaining visas, with new arrangements for the Visa Waiver Program – news that has definitely affected our readers.
Turning to the market in the strictest sense, an initiative launched by some travel agencies in Brescia, now followed by the region of Liguria, to request a state of crisis in the tourism sector has caused a stir.
And always the retail trade has been at the centre of the news of the new recruiting campaign of Uvet for the project Personal Travel Specialist.
Among tour operators, however, the market was surprised by the entrance of an Alpitour Group stake in Swan Tour, of which the bigger player acquired 49%, while in the cruise sector Costa Cruises decided to revolutionise rates and commissions to agencies.
In Europe, finally, the new directives on package tours are still creating attention, as well as the new EU blacklist of carriers on which it is better not to fly customers.
TTG Italia, Editor, Rita Pucci
TTG Czech Republic
Czech Airlines, the country’s national airline, reported operating profit of 362 million koruna for the first nine months of 2015, its first operating profit in more than a decade. The airline also changed the menu concept on board its planes from December 1, providing complimentary refreshments on short-haul flights to Business Class passengers only, while Economy Class passengers can enjoy free refreshment only on the long-haul routes to Almaty and Seoul.
In early December, Moody’s upgraded the rating of Český Aeroholding to A2 from A3, citing the fact that Český is the owner of the Václav Havel Airport, the sole airport serving the city of Prague and the main international gateway to the Czech Republic among the reasons. Stable cash flows and a very strong financial profile expected to be resilient to the impact of the construction of a new runway also contributed to the upgrade.
Czech tour operators say that Christmas vacations in exotic destinations were almost sold out in early December, with Egypt, Cape Verde and the UAE being the only destinations still available. The Caribbean is increasingly popular among Czech travellers, who consider the region very safe. While in the past Czechs preferred to stay at home at Christmas and spent New Year abroad, now more and more are opting to spend their holidays abroad, returning home for New Year’s Eve.
Nada Rybarova, Editor, TTG Czech Republic