MARKETING - INTERIM REPORT
U.K. & EUROPE
April 2008
Presented by Julia Hendry
Director of Marketing UK & Europe
UK & EUROPE
INTRODUCTION
The London office, co-ordinates and facilitates marketing activities throughout Europe, oversees the
work of the Dutch Chapter; works in conjunction with the German Caribbean Trade Association, AGK;
oversees the newly appointed representative office in France and co-ordinates the PR activities of the
UK and German PR companies. The office liaises with the NTO offices in the UK, Spain, Italy,
Scandinavia and France, all the key European source markets for the region, and additionally maintains
contact with the industry in the emerging markets in Eastern Europe, particularly Russia.
The office also maintains close relationships with other industry bodies including the Federation of Tour
Operators (FTO), The Passenger Shipping Association (PSA), Association of British Travel Agents
(ABTA), Association of Independent Tour Operators (AITO) and acts as a central point of reference for
the media, industry and NGOs. The office fulfils the role of a regional umbrella organisation, bringing
together public and private sector in order to support the Organisation’s strategic plan.
The purpose of this interim report is to provide an update on industry trends in the European source
markets and report on the activities undertaken and planned, by the CTO (London) to meet the
challenges presented in 2008 and build upon opportunities in the market place.
THE MARKET - EUROPEAN VISITOR ARRIVALS BY SOURCE MARKETS
Figure 1 shows the spread of visitor arrivals from each of the UK and European key source markets. The
United Kingdom remains one of the most important markets for visitor arrivals to the Caribbean
representing around 30% of all European visitors to the region.
Figure 1:
European Arrivals by Source Markets 2007
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
UK
France
Spain
Germany
Holland
Italy
Sweden
Other
Source: CTO Statistics available as at April 2008 and the Bahamas Tourist Office April 2008. Figures exclude
arrivals to the British Virgin Islands, Cuba, French West Indies, Haiti, St.Eustatius, St. Kitts & Nevis, Turks &
Caicos Islands, US Virgin Islands and Venezuela.
EUROPEAN VISITOR ARRIVALS BY DESTINATIONS
Figure 2 shows the spread of visitor arrivals from Europe by destination. The Dominican Republic
represents approximately 33% of the total European outbound market to the Caribbean. Unfortunately
figures for Cuba for 2007 were not available at the time this report was submitted, however based on
2006 figures, Cuba accounted for around 21% of market share, therefore, combined, both destinations
account for approximately half the visitor arrivals to the Caribbean from Europe.
Figure 2
European Arrivals by Destination 2007
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
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Do
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ado raca arbud aarte Luc hama Arub renad
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Source: CTO Statistics April 2008 and the Bahamas Tourist Office April 2008. Figures exclude arrivals to the
British Virgin Islands, Cuba, French West Indies, Haiti, St. Eustatius, St. Kitts & Nevis, Turks & Caicos Islands,
US Virgin Islands and Venezuela.
EUROPEAN MARKET OVERVIEW
The Economy:
Despite the concern of the American recession having a knock on affect on the UK, and a deteriorating
economic picture, the industry remains positive. In response to a recent Mintel report1which suggested
one out of every five adults have chosen to delay spending plans because of concern about their personal
finance situation, the Association of British Travel Agents (ABTA) spokesman Sean Tipton, hit back at
media scare mongering. In a recent interview, he commented: “We have not seen much evidence of the
credit crunch in terms of foreign travel. Thirty or forty years ago travel was regarded as a luxury; it's
now regarded by a pretty significant proportion as an essential. Flights have got much cheaper and we
are more affluent. Things would have to get pretty disastrous for people to start giving up on their
foreign holidays.” In the first quarter of 2008, the amount of money Britons spent abroad was up by 8
per cent to £9.8 billion according to the Office for National Statistics.
1
British Lifestyles – Winners and Losers in changing Economic Times
However, in contrast to a rather optimistic UK industry, the Economist raises caution over the Euro as it
approaches its tenth birthday. In a recent article2 two major concerns emerged, the strength of the Euro
and its effects on the Euro area exports, and secondly the housing market. According to the Economist,
if Europe follows America into recession, then the effects felt in the Mediterranean countries, of France,
Italy and Spain will be greater than in Northern Europe, where Germany and the Netherlands, have
adapted better to the discipline of the Euro.
However on a plus, with the pound reaching a new low against the Euro, thus raising the cost of
holidays in the Euro zone, a recent survey according to the Annual Post Office Holiday Costs
Barometer3 indicated an increase in long haul holidays. The report highlighted booming sales of
Egyptian, Thai and South African currency, indicating that holiday makers were seeking out trips where
they could take advantage of favourable currency exchange rates. Out of 20 destinations surveyed the
report identified six long haul destinations where the pound had gained ground – South Africa, Hong
Kong, Jamaica, St.Lucia, and the US, whilst the exchange rate in with Dubai had remained constant.
In Continental Europe, for 2008, market leader, TUI (now the largest tour operator in the world) reports
that Northern Europe turnover is up by 7% for winter 2007/8 and 9% for summer, Central Europe
showing a growth of 4% and7% respectively and Western Europe around 4% growth. TUI also has
announced plans to develop the Russian outbound markets, which is reported to have grown by around
18% last year. Thomas Cook also reports strong sales from Northern Europe, and strong summer
trading for its main markets.
The Cruising Boom:
Over 1.3 million Briton took a cruise in 2007, and the PSA predicts that this figure will rise to 1.55
million this year. More than 32 new cruise ships, offering 80,000 new berths will be available by 2011,
which suggests that the cruising boom is expected to continue. The cruise lines are continually
diversifying their product to attract a new generation of cruisers, and according to Royal Caribbean,
these ships are no longer simply cruise liners, but floating resorts packed with activities that designed to
compete with land based holidays. In addition P&O are promoting value for money, and the fact that
people can cruise for under £100 per day.
Open skies:
The Open Skies agreement which came into force on the 30th March this year, allows any EU carrier to
serve any EU-US route, and any US carrier to serve any EU-US route. The agreement has been met
with mixed response. Whilst the Civil Aviation Authority expects to see an increase in competition
leading to a reduction in transatlantic fares and an increase in the range of services offered, and the
European Commission predicts up to 26 million additional travellers between the US and Europe in the
five years following liberalization, both British Airways and Virgin Atlantic4 say there is little chance of
fares falling as a result of the open skies agreement.
2
Danger ahead for the mighty Euro, The Economist, April 10 th, 2008
The Post Office is the UK’s largest bureau de change provider
4
Travel Weekly, March 14th 2008
3
Responsible Tourism:
The promotion of Responsible Travel continues to grow, and whilst the issues of climate change and
“carbon conscience” does not appear to have an impact on the travel habits of the public. Tour
operators, airlines and an increase in the number of responsible travel online sites are all seeking to gain
competitive advantage through the promotion of products and services which promote responsible
tourism practices. Recent TUI research suggested that 77% of customers said that holidays with a fair
deal for locals would influence their choice of trip, whilst according to a YouGov survey for Eurostar,
57% of the UK public have environmental impact on their mind when planning a journey of over 300400 miles.
Online Versus Offline
The EU online travel market was forecast to reach approximately, €46.8 billion according to the 2007
eye for travel research, as a result of increasing acceptance and trust in Internet channels, expanding
broadband penetration, comfort with e-payments, and of course by word of mouth. The growth in
online airline bookings has been the main driver, and maintains the overall market share in the European
online marketplace, the trend for online packages and car rental is following the trend of airlines, fuelled
by the range of ad hoc components bookable on the airlines own sites. Additionally the prominence of
online intermediaries is playing an active role, particularly for tour operators and hotels, not always for
purchasing but often for price comparison. Despite these trends, the role of the tour operator (and the
relationship with them and good travel agents) is still vitally important in Europe, and still accounts for
a high proportion of the long haul traditionally and dynamically packaged holiday.
5.
EUROPEAN ACTIVITIES FOR 2008
DATE
EVENT
VENUE
1ST QUARTER
January 8–13
Vakantiebeuers, Trade & Consumer Exhibition
Utrecht, Holland
January 9
CTO Media Workshop
Holland
January 11 – 13
The Holiday & Travel Show
Manchester, UK
January 12 – 20
CMT Stuttgart
Germany
January 24
AGK Chapter members meeting
Germany
January 24 – 27
Holiday World, Trade & Consumer Exhibition
Dublin, Ireland
January 26
Caribbean Travel Magazine – ‘What’s on in the Caribbean’
UK
Distributed in the Saturday edition of the Daily Mail Weekend
January 31-3 Feb
Destinations, The Times Travel Show, Consumer Exhibition
London, UK
January 31-3 Feb
FESPO Fair
Zürich,Switzerland
Caribbean Travel Magazine – ‘What’s on in the Caribbean’
February 2
UK
distributed in the Saturday edition of The Telegraph
February 6
Workshop – REISEN Hamburg Fair
Hamburg, Germany
February 13
Travel Agents newsletter Issue 30
UK
February 26
CTO UK Chapter Members Chin Wag Meeting
London, UK
February 14
C.B.R. Fair
München, Germany
March 5 – 9
ITB Berlin, Trade & Consumer Exhibition
Berlin, Germany
March 8 - 9
London International Dive Show, Consumer Exhibition
London, UK
March 10
Unite Caribbean 2008, B2B Workshop
London, UK
March 13-16
TUR, Trade & Consumer Exhibition
Göteborg, Sweden
April
E - campaign, in conjunction with web promotion
UK
April 01
Dutch Chapter Think Tank at Schiphol Airport
Holland
April 14
CTO European Roadshow
Milan, Italy
April 15
CTO European Roadshow
Paris, France
April 17
CTO European Roadshow
Moscow, Russia
April 17
Travel Agents newsletter Issue 31
UK
April 24
CTO UK Chapter Members AGM & Think Tank
London, UK
May TBA
E campaign for late sales
UK
May 15
Dutch Chapter Networking Event
Holland
May 15
Press Workshop
Holland
May 20
Trade Networking Event in Chester
UK
June TBA
Launch of multilingual websites
Europe
June 10
Meet the Media
UK
June 12
Travel Agents Newsletter Issue 32
UK
June 19
CTO Caribbean Ball
London, UK
June TBA
AGK Roadshow and Caribbean Party
Frankfurt, Germany
June TBA
AGK Roadshow and Caribbean Party
Munich, Germany
2ND QUARTER
3RD QUARTER
July 9
CTO Golf Open Tournament
Surrey, UK
August
SalsaXtra, Trade Magazine/Reisrevue
Holland
August 8-10
AGK Latin American and Caribbean Consumer Event
Baden Baden, Germany
August 19
Travel Agents Newsletter Issue 33
UK
August 21
CTO Trade Networking Event
UK
September TBA
E-campaign for winter sales
UK
September 1 - 30
Caribbean Month – UK & Europe
Europe
September
Guide to the Caribbean – CTO UK Publication
UK
September TBA
CTO UK Chapter Conference for Travel agents
UK
-‘Courses for the Caribbean’
September TBA
Scandinavian B2B workshop
Sweden
September 16-19
Top Resa, Paris
France
September 25
Caribbean Press and Tour Operators Workshop
Holland
& Caribbean Travel Writers Award
September 26-28
The National Wedding Show, Consumer Exibition
UK
October 15
Travel Agents Newsletter Issue 34
UK
October 24-26
TTG Italia
Italy
October TBA
AGK Roadshow and Caribbean Party
Vienna, Austria
October TBA
AGK Roadshow and Caribbean Party
Zurich, Switzerland
November 1-2
Dive 2008, Consumer Exhibition
Birmingham, UK
November 9
Pre- WTM European Marketing Forum
London, UK
November 10
Host & Reward the Media
London, UK
November 10 – 13
World Travel Market, Trade Exhibition
London, UK
November 27
Dutch Chapter Networking Event
Holland
December 2 - 4
EIBTM, Trade Exhibition
Barcelona, Spain
December 8 - 11
ILTM, Trade Exhibition
Cannes, France
December 9
CTO UK Chapter Members Christmas Event
London, UK
December 10
Travel Agents Newsletter Issue 35
UK
December TBA
AGK Members meeting and Christmas Dinner
Germany
4th QUARTER
6. PROGRESS REPORT ON 2008 ACTIVITIES (JANUARY – APRIL, CTO EUROPE)
The activities carried out by the London office and European Chapters can be summarised into four
main categories; Trade & Consumer Promotions, Research, PR and IT. The calendar of events
organised throughout the year, whether targeting, trade, consumer, online activity or traditional PR,
affords us the opportunity to leverage our marketing spend through joint promotions, whilst gaining a
greater level of return on investment, a pre-requisite for any organisation competing in today’s global
marketplace. The competitive advantage of our shared resources is unique, who else has 34 separate
destinations under the one brand?
6.1)
TRADE AND CONSUMER PROMOTIONS
EXHIBITIONS:
Whilst traditional buying and distribution patterns are changing, promotional activity in the first quarter
of the year is still dominated by trade and consumer exhibitions throughout Europe. Between January
and April, the CTO and its European Chapters maintained a presence at the key European trade and
consumer exhibitions: including a large Caribbean Village at Vakantiebeurs, Holland; attendance at
Fitur, Madrid and BIT, Milan; co-ordinated Caribbean Villages at Destinations in London, Holiday
World Dublin Ireland and Manchester, and had a strong presence at the London Dive show. A
Caribbean branded pavilion at TUR in Sweden provided stronger and more cost effective branding for
the Caribbean region. At ITB in Berlin, strong Caribbean branding dominated the Caribbean Village
which is co-ordinated by CTO London.
B2B WORKSHOPS IN EUROPE:
CTO London, in collaboration with their newly appointed French Representatives, Interface Tourism,
organised three major European B2B workshops during April in Italy and Paris, and in conjunction with
their associate organisation in Russia, a first ever Caribbean B2B in Moscow. Each work shop attracted
over 100 industry buyers. Each Caribbean supplier present received a market update, a full list of
contacts, and in the case of Russia a personal interpreter. The interest from the trade visitors was
increased because of the range of Caribbean product on display, which afforded good use of their time
out of the office, made the networking more varied, and the learning experience much greater.
Working together in this way, not only do we hope to grow new markets, but benefit from economies of
scale, by reducing administrative costs and sharing expenses associated with the actual cost of the event.
The events (self-financed by the participants) were deemed by the suppliers to have provided a good
return on investment.
ADVERTISING:
Consumer - A full colour dedicated Caribbean travel magazine jointly financed by private/public sector
advertising was distributed in the National Press to over 1.25 million UK consumers, throughout
January. The supplement generated a good cost per response for advertisers, increased visitor arrivals to
www.caribbean.co.uk and boosted the UK Chapter Consumer database. Additional copies were
distributed at all the above consumer exhibitions and to the entire network of UK travel agents.
Trade – E- newsletters and training programmes, by both the Dutch and UK Chapters continue to inform
and educate the trade, and attract an increasing number of agents.
NETWORKING:
Relationship building - Providing a forum for all sectors of the industry forms an important part of
closer collaboration and fostering good working relationships. A programme of events both business
and social is organised by the London office, the highlight being the annual Caribbean Ball, a key
industry event, (and profit centre) attended by over 400 key industry players.
6.2)
RESEARCH
The role of the CTO to provide a two way flow of information, both to the region about the marketplace,
and to the marketplace about the region, continues to play an important role in the services offered by
CTO, London. The European Marketing Forum, at WTM, and the recent B2B roadshows in Paris,
Milan, and Moscow, not only communicated information on the region out to the press and trade, but
also provided extremely valuable research and contact lists on the markets back to the exhibitors. The
validity and depth of this research was judged to add considerable value to the promotion, both in terms
of preparation and follow up. Copies are available for any CTO member country, on request.
6.3)
PR – EUROPE, INCLUDING NEW REPRESENTATION IN THE LATIN MARKETS FOR SPAIN, ITALY
AND FRANCE
The CTO maintains full Public Relation Services in both the UK and Germany. In Holland, the GSA,
Brouwer Betist, provides PR services and secretariat functions for the Dutch Chapter. Both BGB (UK)
and INEX Communications (Germany) provide a full range of PR services, proactive and reactive,
organise partnership activity, media events and they integrate closely with the CTO office and Chapters.
Monthly reports on their media activities and press cuttings are received into the CTO, London office.
From January 1st, the CTO retained the services of Interface Tourism, based in Paris to represent them in
the French, Italian and Spanish markets. Interface will conduct a range of marketing and PR functions,
in accordance with the marketing plan and already have organised three successful B2B work shops in
Italy and France and jointly with associates in the emerging Russian market. They will support the
foreign local content management of the foreign language websites in France, Italy and Spain, and play
an important role in relationship building with the trade and media, through both online and offline
activity.
6.4) INFORMATION TECHNOLOGY
The new UK website www.caribbean.co.uk, went live in January 2008. The addition of a Caribbean
Image Library set up in conjunction with Fotoseeker, has already attracted hundreds of journalists.
Additionally the Caribbean image library is replicated on the fotoseeker site , with an audience of 1500
journalists worldwide. The site is currently being translated into five multilingual sites which will reach
a target audience of over 150 million internet users in German, French, Italian , Dutch and Spanish.
According to the eye for travel research, the Western European countries, led by Germany and the UK,
have the largest internet user populations in the world. The local content for the foreign language sites
will be managed by CTO London and representative offices in each source market, ensuring that these
massive target audiences are kept updated and informed.
OUTLOOK AND ACTIVITES FOR THE REMAINDER OF 2008
Overall indications for the first quarter of 2008 appear to be positive, however as we move into the
traditionally slack periods of May and June, and towards forward bookings in September and October,
there is concern that attracting business during these periods will be particularly difficult this year. A
recent UK Chapter industry think tank highlighted the following challenges:
•
•
•
•
•
•
•
•
•
•
•
Strong competition from other destinations
Economic slowdown
Seasonality
Shorter lead in times
Dollar budgets and the impact on resources
Airlift, both regional and international
Green lobby
Rising oil prices
Cruise boom, competing against land based options
Changing demographics and the need to address different audiences and different purchasing
habits
Lack of experience in developing e-marketing strategies
However despite these challenges, there are a number of opportunities in the European marketplace:
•
•
•
•
•
•
•
•
•
continuation of favourable dollar sterling exchange rates
a weak pound against the Euro, making Euro zone destinations less attractive
an increase in affordable luxury travel
a high propensity to travel
no restrictions on travel
generous holiday leave entitlements
average 12 night stays
new emerging European markets
increase in niche markets, including Diaspora tourism
Budget Implications:
The budget to sustain these activities in Europe, submitted last year, totals £200K sterling (UK market)
and €300K (Europe). Through careful leverage of funds (subject to receiving this amount), it is
anticipated that this will result in activities to the values of over €1 million. For the first quarter of
2008, only the PR costs of the UK, Germany and France, have been committed, together with a small
amount for the construction of the ITB Caribbean Village and branding (space for the CTO area is
negotiated FOC) all other activities have been self-financing, thorough private/public sector
contribution. To work more closely with the European markets, the addition of a GSA for the French,
Italian and Spanish markets will enable us to reach a much wider audience through web based activity
and to build on the positive PR generated to date this year by the introduction of the European B2B
events. The activities in the German market and the relationship with the trade association AGK
remains under review, and activities in Scandinavia are co coordinated by the CTO London office.
Relationship building in the new emerging markets of Eastern Europe, specifically Russia, commenced
with the first ever Caribbean B2B workshops and it is intended to build upon this later in the year with a
media event.