Travel Industry Data News, August 12-16

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Travel Industry Data News, August 12-16

From http://www.travelbusinessanalyst.com

 

North America travel business updates

16 August 2019

[] At end June, Canada’s hotel construction pipeline was 273 +14% hotels with 35,787 +20% rooms, according to Lodging Econometrics.

This comprises (no growth given for following) under construction 92/11,118 hotels/rooms, due to start construction in the next 12 months 95/11,097, ‘early planning stage’ 86/13,572.

In H1, 28/3213 were opened, in H2 23/2579 are expected to open, in 2020 64/6758, in 2021 67/7428.

The latest data we have from rival STR shows 8011 -8.7% rooms under construction.

[] ARC (the Airlines Reporting Corporation, handling financial settlements between US-based travel agencies and airlines), reports for July (any rounding by ARC): air tickets sold US$8.0bn +4.3%; average US roundtrip ticket US$498  +3%; passenger trips 25.1mn +3.5% (domestic – +3.2%, international +4.1%); EMD (electronic miscellaneous document) sales US$6.9mn +7.3%; EMD transactions +2%.

[] STR (nee Smith Travel Research) reports on US hotels 4-10 August: occupancy -1.4% to 74.1%, average room rate +0.4% to US$133.36.

[] STR (nee Smith Travel Research) with Tourism Economics, part of Oxford Economics (unrelated to the university) – together here, ST – have lowered their forecast for this year for US hotels. The data:

-What ST call overall performance – measured as revpar (revenue per available room) – for 2019 has been lowered from the +2.3% forecast this February to +2.0% in June, and now +1.6%.

-2019 occupancy +0.2% (ST were forecasting +0.1% in June), average room rate +1.4% (+1.9%).

-2020 occupancy -0.3% (-0.2%), average room rate +1.4% (+2.2%).

 

Our outlook for travel

15 August 2019

The following is extracted from our input for an external report.

[] Assessment of travel business in the past four months compared to what we would expect for that period:

-Much worse.

  Our outlook for this period was not positive, and this was the outcome. The main reasons:

-Negative trade/economic/finance figures/comment.

-Plus anti-‘others’ comment (Italy v EU, UK v EU, US v World, Japan v Korea, China v Hong Kong/others).

-Plus populist anti-flying activity – to which the travel business is not responding

[] Assessment of travel business in the next four months compared to what we would expect for that period:

-Much worse.

  Same reasoning. Outlook is not positive, and this seems unlikely to change in the next 12 months. Again, there are too many negative factors, and too many circumstances that may get worse.

  If there were only one or two negatives, that might not be a problem, but if there are more (we could count 10), there is a high mathematical chance that at least one will ‘explode’.

 

Travel business updates

14 August 2019

[] According to Flight Right:

-Travellers from France (FR wrongly defines these as ‘French’) in July represent a 12.2% share of the annual total, August 11.9%.

-10.2% of those (presumed for both months) travel by air.

[] Research & Markets* (RM), a company, forecasts that what it describes as the ‘India outbound tourism market to GCC countries’ will be US$24bn ‘by 2025’ – meaning in 2024. Without further data, and for other reasons, this is a meaningless forecast.

*Notes: We have run many critical reviews on RM reports, and we advise users to treat its findings with caution – apparently mostly due to imprecision in its editorial commentary. At press time, RM had not answered our request for clarifications.

[] Global Data*, a data and analytics company, forecasts that AAGR (annual average growth rate) of Mexico visitors will be +8.9% over 2016-19 and +7.1% 2020-23. It blames this slight fall on closing its overseas promotional offices under the country’s new populist/cut-costs new government.

GD shows (our estimates from GD data) 38mn visitors in 2016, 49mn 2019, 53mn 2020, 65mn 2023. Our database (based on data from World Tourism Organization) shows 35mn +9.3% in 2016, 39mn +12.0% 2017, 41mn +5.5% 2018, +4.8% YTD 2019.

This other-source data seems to contradict GD commentary. It shows that Mexico visitor growth slowed in 2018, and again this year. We believe this is related more to verbal-aggression by the US government against Mexico, which would probably slow travel into Mexico from its main source, the US.

*Notes:

-We have found in other reports that Global Data sometimes misreads/misinterprets/misreports core travel data – apparently mostly due to imprecision in its editorial commentary.

 

TBA Tracking: Indices, Travel Stocks

13 August 2019

The Baird/STR Hotel Stock Index in July for US hotel companies was 4883 -1.0% (over previous month). YTD, their stock index was +20.0%.

The worldwide ‘TBA-100 Hotel Stocks Index’ for July, from the current editions of WYSK:What-You-Should-Know, published by Travel Business Analyst, was at 200.

The worldwide ‘TBA-100 Airline Stocks Index’ for July, from the current editions of WYSK:What-You-Should-Know, published by Travel Business Analyst, was at 202.

The ‘TBA Travel Stocks Index’ for July, from the current editions of WYSK:What-You-Should-Know, published by Travel Business Analyst, shows: World 225, Asia Pacific 81, Europe 198, US 395.

The worldwide ‘Net-Value Travel-Tech Index’ for travel stocks of OTAs (+Amadeus) in July, from the current edition of our monthly Net Value report, was at 150.

The ‘China Travel Stock Index’ of China stock prices (from China companies quoted in Hong Kong and New York, as well as Shanghai), in July from the current editions of WYSK:What-You-Should-Know, published by Travel Business Analyst, was at 104.

Notes: The Baird/STR hotel index is based on 1000 at February 2000. The TBA Hotel and Airline stocks indices are based on 100 at December 2000, the ‘TBA All-Travel Index’ 100 at December 2006, the ‘Net-Value Travel-Tech Index’ 100 at December 2014, the ‘China Travel Stock Index’ 100 at December 2018. Or when first listed if later.

 

TBA Tracking: Travel Traffic Indices – Europe, US

12 August 2019

Europe

Our Europe ‘TBA Travel Industry Index’ from the current Europe edition of WYSK:What-You-Should-Know, published by Travel Business Analyst, shows monthly traffic growth* of: 2019: Jun +4%E; May +3.5%P. (Percentage change over previous year.

US

Our US ‘TBA Travel Industry Index’ from the current editions of WYSK:What-You-Should-Know, published by Travel Business Analyst, shows monthly traffic growth* of: 2019: Jun +4%E; May +4.3%P.

*Notes:

-Airline seats sold & RPKs, airport passengers, hotel occupancies, resident departures, travel agency $ sales, visitor arrivals.

-Percentage change over previous year; E=estimate, P=provisional.

 

 

 

 

The Fox. Remember, I’m an industry expert in the parallel world.

*Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance.

 

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Travel Industry Data News, August 5-9

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Travel Industry Data News, August 5-9

From http://www.travelbusinessanalyst.com

 

TBA Tracking: Travel Stock Indices: airlines, China, hotels

9 August 2019

[] Airline stocks worldwide

The July ‘TBA-100 Index’ of airline stock prices worldwide, from the current editions of WYSK:What-You-Should-Know, published by Travel Business Analyst, shows 202. Previous month 201. (Base 100: December 2004 or when first listed.)

[] China travel stocks

The July ‘China Travel Stock Index’ of China stock prices (from China companies quoted in Hong Kong and New York, as well as Shanghai), from the current editions of WYSK:What-You-Should-Know, published by Travel Business Analyst, shows 104. Previous month 117. (Base 100: December 2018.)

[] Hotel stocks worldwide

The July ‘TBA-100 Index’ of hotel stock prices worldwide, from the current editions of WYSK:What-You-Should-Know, published by Travel Business Analyst, shows 200. Previous month 195. (Base 100: December 2000 or when first listed.)

 

TBA Tracking: Travel Traffic Indices – Asia Pacific, world

8 August 2019

[] Asia Pacific

Our Asia Pacific ‘TBA Travel Industry Index’ from the current Asia Pacific edition of WYSK:What-You-Should-Know, published by Travel Business Analyst, shows monthly traffic growth* of: 2019: Jun +4%E; May +4.3%P.

[] World

Our world ‘TBA Travel Industry Index’ from the current editions of WYSK:What-You-Should-Know, published by Travel Business Analyst, shows monthly traffic growth* of: 2019: Jun +5%E; May +4.4%P.

*Notes:

-Airline seats sold & RPKs, airport passengers, hotel occupancies, resident departures, travel agency $ sales, visitor arrivals.

-Percentage change over previous year; E=estimate, P=provisional.

 

Travel business updates

7 August 2019

[] Travel Mole reports that France-based Accor Hotels has added 15 hotels in Singapore by signing a franchise with Global Premium Hotels. All will be refurbished and rebranded – one Mercure, one Ibis Styles, 13 Ibis Budget. Accor now has 30/7625 hotels/rooms in Singapore.

[] After a fast start to the year, visitor arrivals by air into Bali fell -0.5% in H1.

[] IATA (International Air Transport Association) reports June RPKs +5.0%, ASKs +3.3%, load factor 84.4% +1.4pt. RPKs by region – Asia Pacific +4.7%, Europe +5.7%, Middle East +7.8%, North America +3.1%.

International RPKs +5.4% – Asia Pacific +4.0%, Europe +5.6%, Middle East +8.1%, North America +3.5%.

Domestic RPKs +4.4% – Australia -1.2%, Brazil -5.7%, China +8.3%, India +7.9%, Japan +2.4%, Russia +10.3%, US +3.1%.

[] STR (nee Smith Travel Research) reports on US hotels 28 July through 3 August: occupancy -0.8% to 74.8%, average room rate -0.3% to US$133.03.

 

Air Asia H1

6 August 2019

Analysis on Air Asia (including AAX) results from our database:

-Seat sales 45.4mn +11.2% – slowest growth since 2015 when both AA Indonesia and AAX reported big falls – -22% and -18%.

-AA Japan still slow – despite +79% growth that might seem to indicate strength. At the same stage of its development, AA India was 3x bigger than AAJ is now.

-Group seat factor 85%, same as 2018. OK, but should be closer to 90%.

-AAX in trouble. Seat sales of the main Malaysia operation -6%, although +1% when Thai AAX included. Indonesia AAX remains shutdown. But AA does not publish all operating data for Thai AAX, and so not possible to make fuller analysis.

 

Net-Value Travel-Tech stock prices and index

5 August 2019

Our NVTT* stock index, which measures stock prices of OTAs, platforms, and Amadeus, was at 150 in July. Previous month 144.

Comments:

-After a few bad months, this one was better. Only one stock (Expedia) fell, but fractionally (-0.2%), although another (Travelport) was flat.

-Trivago, the company we identified earlier as being in trouble, was actually the fastest growing. But it is still below its end-2018 price, and only half its launch price.

-The three slowest – Booking, Expedia, Travelport – are all US companies. Is that indicative? Their stockmarkets were also slow, but in each case the companies performed worse than their stockmarkets.

-All except Trivago are now above their end-2018 prices.

-The two Spain-based companies, Amadeus and eDreams, lead our Index.

-China’s cTrip (US quoted), given its widespread good publicity, does not seem to impress investors so much. Although above its end-2018 price, it is still below its baseline price end-2015.

*Notes: NVTT=Net-Value Travel-Tech. The Index includes three companies quoted in Europe, and five in the US – one of which, cTrip, is China-based, and another, Trivago, is Germany-based. Base-100 end-2014 for all except end-2015 for cTrip, end-2016 for Trivago.

 

 

 

The Fox. Remember, I’m an industry expert in the parallel world.

*Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance.

Travel Industry Data News, July 29-August 2.

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Travel Industry Data News, July 29-August 2.

From http://www.travelbusinessanalyst.com

 

Travel business updates

2 August 2019

[] Flightright, a platform for air passenger rights, estimates that 4500 flights from France were delayed or cancelled in H1, which would mean about 732,000 passengers. That compares with 1.4mn in 2018, so -48%. Potential compensation this year would be US$206mn (€183mn).

[] Ryanair profits fell 21% in Q1. It forecasts they will be down by 6% in H1.

[] STR (nee Smith Travel Research) reports on US hotels 21-27 July: occupancy -1.0% to 77.5%, average room rate -0.5% to US$136.00.

 

TBA Tracking: July travel stocks’ ups-and-downs, shocks up-and-down

1 August 2019

Travel stock prices (Asia Pacific, Europe, US) in July. Airlines: biggest growth, Norwegian +12%; biggest fall, Air Asia -28%. Hotels: InterContinental +11%, Jinjiang -12%. Tech: Trivago +22%, Expedia -0.2%. China travel stocks (new): CITS +2%, China United -8%. Others: TUI (UK quote) +6%, Thomas Cook -58% (sic).

Previous month: Airlines: biggest growth, American +20%; biggest fall, Lufthansa -12%. Hotels: Wynn +16%, Peninsula -8%. Tech: eDreams +24%, Travelport 0.0%. China travel stocks (new): Air China (China quote) +13%, Jinjiang (China quote) -0.2%. Others: Avis +24%, Thomas Cook -24%.

TBA Travel Stocks Index: World 225, Asia Pacific 81, Europe 198, US 395. Index previous month: World 224, Asia Pacific 88, Europe 193, US 391.

TBA China Travel Stocks Index (new; quotes from China, Hong Kong, US): 104; previous month 108.

NVTT (Net Value Travel Tech) Stocks Index: 150; previous month 144.

Stockmarkets. Biggest growth, Istanbul +6%; biggest fall Korea -5%. Previous month: biggest growth New York-Nasdaq +7%; biggest fall India -1%.

Comments:

-Norwegian top!? In the month when it lost its longtime leader, Bjorn Kjos (see our September PinT, People-in-Travel), and the chairman said things must change, surely this is a vote of faith?

-Among airlines, longtime loser Air France-KLM nearly made the top spot, also with +12% but a fraction below Norwegian.

-Actually, India’s Jet was at the bottom, but Jet is a non-operating airline, and so this is a financial bet on the sale of its assets, and perhaps a weak hope that the airline will relaunch.

-The market also did not like ICAG, where its price on the Madrid stockmarket was down -12%.

-For travel-tech companies, Trivago needs the positive push it got in July. Unfortunately, its price is still a little below its end-2018 price, and way below its launch price.

-For Others, the market seems to think this is near the end for Thomas Cook. Yet is this also a vote against travel agencies? Not enough people are buying from travel agencies. And if that is hurting an agency with excellent name-recognition as generally-good reputation, what chance for the others?

-(Er, fastest-growing Others was another travel-agency group, TUI, so what does that do to the analysis above?)

-At Boeing, in the news negatively in recent months due to the grounding of its B737max aircraft, its share price was down -6%. That might not seem too bad, but it is for such a blue-chip stock.

-For our China travel stocks, the results are hard to analyse – highest and lowest were both travel agency groups. Best was CITS, worst China United.

-Among stockmarkets, a surprising number fell; half – 13 out of the 25 we track.

-With the US market in the headlines, its stockmarkets look weak. Growth averaged +1% for the five US indices that we track.

-Yet it was another fall in Asia Pacific that pushed the world average to a 1-point fall. Although so many commentators forecast that it would be Asia that pulled the world into growth, there seem to be fewer that are remarking that Asia is holding growth back.

Info from Travel Business Analyst. Details in next month’s editions of WYSK:What-You-Should-Know, published by Travel Business Analyst.

 

France’s summer

31 July 2019

France visitor-nights in July* were +3%. Other details:

-Mediterranean coast -2% to -8%, Atlantic coast +3-6%, Mountains +3-6%. (Also reported in the same study as +4%.)

-French* domestic leisure* travellers July and August 31.5mn +4.3%.

-Fastest growth (presumed in bookings), +7%, was in private accommodation (AirBnB, Abritel, etc). For the year-to-date (not specified) growth was +8%.

-In the PACA region of the Cote d’Azur private accommodation represented 66% capacity share, and 40% of nights.

-Upmarket camping (yes, there are such groups) +4%.

-Hotels +2%. (Also reported in the same study as +3%.)

*Notes:

-Source: Protourisme (PT).

-Issued before end-July, so we presume these are estimates for that month, and forecasts for the two months, but PT does not clarify.

-Noted as ‘French’ but may be all-residents travelling within France.

-Note clear how PT can categorise arrivals in, say, the Mediterranean coast are leisure travellers. (It actually reports ‘vacation’, but this also is a fluid measure.)

 

TBA Tracking; China outbound – monthly

30 July 2019

We estimate that outbound travel from China, including travel to Hong Kong and Macau, grew +10.1% in the latest month. The earlier month was +19.5%, then +7.5% 24.3%, +21.6%, +20.7%. Details in the current editions of WYSK:What-You-Should-Know, published by Travel Business Analyst.

 

IATA’s annual stats report

29 July 2019

IATA (International Air Transport Association) has published its WATS (World Air Transport Statistics), on 2018 data. Information includes* (all rounded percentage figures are IATA-rounded):

-Airlines seats sold 4.4bn +6.9% (in 2017 4.1bn +7.3%, 2016 3.8bn +7%).

-Asia Pacific sold the most seats, 1.6bn +9.2%, a 37.1% share (1.5bn +10.6% 36.3%, 1.3bn +11.3% 35%); Europe 1.1bn +6.6% 26.2% (1.1bn +8.2% 26.3%, 992.4mn +6.1% 26%); North America 989.4mn +4.8% 22.6% (941.8mn +3.2% 23% 911.5mn +3% 24%); Middle East 224.2mn +4.0% 5.1% (216.1mn +4.6% 5.3% 206.1mn +9.1% 5%).

-Top-5 airlines (same as in 2017) by total RPKs – American 330.6bn +2.0%, Delta 330bn +4.3%, United 329.6bn +6.0%, Emirates 302.3bn +4.6%, Southwest 214.6bn +3.3%.

-Top-5 international city-pairs, by seats sold: Hong Kong-Taipei 5.4mn -0.4%, Bangkok Suvarnabhumi-Hong Kong 3.4mn +8.8%, Jakarta-Singapore 3.2mn -3.3%, Seoul Incheon-Osaka Kansai 2.9mn +16.5%, Kuala Lumpur–Singapore 2.8mn +2.1%. For 2017: HKG-TPE 5.4mn +1.8%, JKT-SIN 3.3mn +0.8%, BKK-HKG 3.1mn +3.5%, KUL–SIN 2.8mn -0.3%, HKG-SEL 2.7mn -2.2%. For 2016, top-3: HKG-TPE 5.2mn +2.1%; JKT-SIN 3.4mn +0.9%; BKK-HKG 3mn -3.1%.

-Top-5 domestic city-pairs: Jeju-Seoul Gimpo 14.5mn +7.6%, Fukuoka – Tokyo Haneda 7.6mn +0.9%, Melbourne Tullamarine-Sydney 7.6mn -2.1%, Sapporo-Tokyo Haneda 7.3mn -1.5%, Beijing-Shanghai Hongqiao 6.4mn +0.4%. For 2017: Jeju-Seoul Gimpo 13.5mn +14.8%, Melbourne Tullamarine-Sydney 7.8mn +0.4%, Fukuoka-Tokyo Haneda 7.6mn +6.1%, Sapporo-Tokyo Haneda 7.4mn +4.6%, Beijing-Shanghai Hongqiao 6.4mn +1.9%. For 2016, top-3: Jeju-Seoul Gimpo 11.6mn +4.6%; Sapporo-Tokyo Haneda 7.7mn -1.2%; Fukuoka-Tokyo Haneda 7.3mn -4% (probably 4.0).

-Nationality*. Change of system (earlier was systemwide – although we noted that measuring would be difficult because usually no passport is required on domestic flights). As a result, there are no direct comparisons with earlier data, although we also show earlier data.

In 2018, seats sold on international routes: UK 126.2mn 8.6% share; US 111.5mn 7.6%; China 97mn 6.6%; Germany 94.3mn 6.4%; France 59.8mn 4.1%.

In 2017 systemwide US 632mn 18.6% share (2016 810mn 21%), China 555mn 16.3% (no 2016 data), India 161.5mn 4.7% (ditto), UK 147mn 4.3% (ditto), Germany 114.4mn 3.4% (ditto).

-Alliances. Shown this year as share of total traffic (the three have 56.1%); we have recalculated to show, as for 2017, share of RPKs of each: Star 39.0% (39% in 2017, 38% in 2016), Sky Team 33.5% (33%, NA), One World 27.5% (28%, NA).

-New Model Airlines, a definition that IATA used in 2017, seems to have been replaced this year by the more-common LCC (low cost carrier). Not unfortunately our definition, NFA (no-frills-airlines), see Notes. IATA’s NMAs appeared to combine our NFAs, low-cost-airlines, charter airlines, and perhaps others.

Partly because of this, IATA does not show comparative data. For 2018 for what it now names LCCs, their capacity (ASKs) grew +13.4%, almost double total growth +6.9%. LCC capacity (ASKs) share 21%, which it compares with 11% in 2004. LCC capacity by seats 29% (16% in 2004).

In 2016, NMAs had a 28.3% share of all seats sold, up from 27.1%; no data for 2017.

-Other data: 81.9% seat factor (no comparison with 2017); 22,000 +6.3% city pairs(double the 10,250 in 1998); the cost of air transport (US$0.78 per RTK, revenue tonne-kilometre), more than half the figure 20 years ago.

*Notes:

-Some comparative data is from our database.

-High positions of the UK and US are partly explained by a large number of nationals living in other countries. For instance, Americans in Hong Kong, Japan, Singapore, UK. And British in Australia, Canada, New Zealand, Singapore, US. All these would be counted under their nationality, UK or US. We estimate about 10% should be deducted from IATA’s totals.
NFA=no-frills-airline. We believe that among the many essential elements that make a successful NFA are: shorthaul point-to-point routes; market freedom in terms of fares, routes; single aircraft type; where relevant, competition against parent airline allowed; extremely-low fares when bought at least three months in advance, say US$25; one fare at one time (no wholesale rates, travel agency commissions, etc); no refunds; no (free) service frills; single economy-class cabin; no (free) seat selection; two toilets for 150-seat aircraft; 25-minute turnaround time; cabin crew do daytime cabin cleaning; name and flight change charged at least US$25 each; no trade shows; plenty of consumer advertising and promotion; and much more. Developments in technology are making some of these ‘requirements’ less important.

 

 

 

The Fox. Remember, I’m an industry expert in the parallel world.

*Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance.

 

TBA Tracking: July travel stocks’ ups-and-downs, shocks up-and-down

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TBA Tracking: July travel stocks’ ups-and-downs, shocks up-and-down

 

Travel stock prices (Asia Pacific, Europe, US) in July.

 

Airlines: biggest growth, Norwegian +12%; biggest fall, Air Asia -28%.

Hotels: InterContinental +11%, Jinjiang -12%.

Tech: Trivago +22%, Expedia -0.2%.

China travel stocks (new): CITS +2%, China United -8%.

Others: TUI (UK quote) +6%, Thomas Cook -58% (sic).

 

Previous month:

Airlines: biggest growth, American +20%; biggest fall, Lufthansa -12%.

Hotels: Wynn +16%, Peninsula -8%.

Tech: eDreams +24%, Travelport 0.0%.

China travel stocks (new): Air China (China quote) +13%, Jinjiang (China quote) -0.2%.

Others: Avis +24%, Thomas Cook -24%.

 

TBA Travel Stocks Index: World 225, Asia Pacific 81, Europe 198, US 395. Index previous month: World 224, Asia Pacific 88, Europe 193, US 391.

 

TBA China Travel Stocks Index (new; quotes from China, Hong Kong, US): 104; previous month 108.

 

NVTT (Net Value Travel Tech) Stocks Index: 150; previous month 144.

 

Stockmarkets. Biggest growth, Istanbul +6%; biggest fall Korea -5%. Previous month: biggest growth New York-Nasdaq +7%; biggest fall India -1%.

 

Comments:

 

-Norwegian top!? In the month when it lost its longtime leader, Bjorn Kjos (see our September PinT, People-in-Travel), and the chairman said things must change, surely this is a vote of faith?

 

-Among airlines, longtime loser Air France-KLM nearly made the top spot, also with +12% but a fraction below Norwegian.

 

-Actually, India’s Jet was at the bottom, but Jet is a non-operating airline, and so this is a financial bet on the sale of its assets, and perhaps a weak hope that the airline will relaunch.

 

-The market also did not like ICAG, where its price on the Madrid stockmarket was down -12%.

 

-For travel-tech companies, Trivago needs the positive push it got in July. Unfortunately, its price is still a little below its end-2018 price, and way below its launch price.

 

-For Others, the market seems to think this is near the end for Thomas Cook. Yet is this also a vote against travel agencies? Not enough people are buying from travel agencies. And if that is hurting an agency with excellent name-recognition as generally-good reputation, what chance for the others?

 

-(Er, fastest-growing Others was another travel-agency group, TUI, so what does that do to the analysis above?)

 

-At Boeing, in the news negatively in recent months due to the grounding of its B737max aircraft, its share price was down -6%. That might not seem too bad, but it is for such a blue-chip stock.

 

-For our China travel stocks, the results are hard to analyse – highest and lowest were both travel agency groups. Best was CITS, worst China United.

 

-Among stockmarkets, a surprising number fell; half – 13 out of the 25 we track.

 

-With the US market in the headlines, its stockmarkets look weak. Growth averaged +1% for the five US indices that we track.

 

-Yet it was another fall in Asia Pacific that pushed the world average to a 1-point fall. Although so many commentators forecast that it would be Asia that pulled the world into growth, there seem to be fewer that are remarking that Asia is holding growth back.

 

Info from Travel Business Analyst. Details in next month’s editions of WYSK:What-You-Should-Know, published by Travel Business Analyst.

 

 

The Fox. Remember, I’m an industry expert in the parallel world.

*Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance.

 

Travel Industry Data News, July 22-26.

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Travel Industry Data News, July 22-26.

From http://www.travelbusinessanalyst.com

 

Russia outbound

26 July 2019

Some findings on the Russia outbound market, by RMAA (Russian Marketing and Advertising Agency):

[] 69% of respondents buy air tickets online. Almost as widespread as the US, where it is 77%.

[] If a traveller watches a video about their trip before travelling, 65% watch YouTube, 24% an airline video, 20% Facebook, 12% OTA, and then others.

[] Among those who flew domestically, 43% did not use offline at all, 28% used offline and online.

[] Digital travellers made up their mind faster: 31% of them decided to buy a ticket within several hours.

[] 60% use PC or laptop, 8% smartphones.

[] 53% travel on vacation in couples, 28% travel alone, 8% in a group.

[] 51% decide on a trip within several days of travel (not enumerated, NE). 15% book tickets for travel after a few hours (NE) after booking a flight. 8% buy tickets several months (NE) before a departure.

[] For 70%, the cost of the ticket is a priority.

[] 30% are members of loyalty programs.

[] 40% go on vacation in Europe, 31% domestic.

[] 38% take a 2-week vacation, 36% one week.

[] 33% of travellers change their mind on which airline during the booking process, 56% book tickets of the company that they considered from the beginning, 39% choose different offers at the end of the process.

[] 32% buy tickets of only one airline.

[] 72% rely on their experience, 2% on advertising, 9% word-of-mouth, 10% online search.

[] Of those that are loyalty program members, 45% always fly one airline, 12% would look only at offers from one airline, 43% considered offers from other airlines but eventually booked the original one.

[] For those who are not members of a loyalty program, the shares were 25% 30% 44%.

 

Hotel business updates

25 July 2019

[] STR (nee Smith Travel Research) reports:

-on Middle East hotels in Q2: occupancy +2.6% to 61.7%, average room rate -7.2% to US$147.44.

-on US hotels 14-20 July: occupancy -0.5% to 77.9%, average room rate +0.5% to US$136.49.

-on US hotels in Q2: occupancy -0.1% to 70.0%, average room rate +1.2% to US$133.01.

 

MasterCard surveys outbound

24 July 2019

MasterCard reports:

[] China moved from #7 in outbound travellers to ‘overseas destinations’* in 2009 to #2 this year, after the US. MC does not count travel from what it calls ‘Mainland China’ to contiguous Hong Kong and Macau (but it does count travel to overseas Taiwan, technically also part of one China), but it does count US travel to contiguous Canada and Mexico.

[] MC does not add numbers to its lists.

[] After the US and China, MC’s top-5 includes Germany, UK, France.

[] It notes Korea’s growth, but actually, Korea overtook Japan in 2015 to become No2 from Asia Pacific.

[] Top-3 countries from top-5 sources: US – Mexico Canada Italy, China – Thailand Japan US, Germany – Italy Spain Austria, UK – Spain US India, France – Spain US UK.

[] Top-3 cities from top-5 sources: US – Cancun Toronto London, China – Bangkok Seoul Tokyo, Germany – Mallorca Bolzano* Tiroler Unterland*, UK – Mallorca Paris Dublin, France – London Marrakech Barcelona.

*Notes:

-All destinations shown are not ‘overseas’, but international.

-Two of Germany’s top-3 are adjacent to one another, in northern Italy and southern Austria (and which is not a city but an area; its capital is Innsbruck).

 

TBA Tracking: Index, travel stocks

23 July 2019

The June ‘TBA-100 Index’ of travel stock prices, from the current editions of WYSK:What-You-Should-Know, published by Travel Business Analyst, shows: World 224, Asia Pacific 88, Europe 193, US 391. (Base: December 2006.)

 

TBA Tracking: Net-Value Travel-Tech stock prices and index

22 July 2019

Our NVTT* stock index, which measures stock prices of OTAs, platforms, and Amadeus, was at 144 in June. Previous month 130.

Comments:

-eDreams growing fastest at +24%, and Travelport slowest at -18%.

-Three companies are still below their base listing price – cTrip, Travelport, Trivago.

-And those three are also below their end-2018 price.

-One, eDreams, joins Amadeus in doubling its 100 base price end-2014. It passed Amadeus and is now the leader in our Index.

-The company still in serious trouble is Trivago. If you invested US$100 in the company at end-2016, just after it listed, you could now cash in US$36.

*Notes: NVTT=Net-Value Travel-Tech. The Index includes three companies quoted in Europe, and five in the US – one of which, cTrip, is China-based, and another, Trivago, is Germany-based. Base-100 end-2014 for all except end-2015 for cTrip, end-2016 for Trivago.

Data from the current edition of our monthly Net Value report, published by Travel Business Analyst. Full-review of these and other stocks, including all-year comparisons, in the next edition of our Net Value report.

 

 

 

The Fox. Remember, I’m an industry expert in the parallel world.

*Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance.

 

Travel Industry Data News, July 15-19.

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FOXTROTS*

 

Travel Industry Data News, July 15-19.

From http://www.travelbusinessanalyst.com

 

Figures from France

19 July 2019

[] Summer* travel 1. Forecasts, reported by France’s DMO:

-For July, 1/3 of destinations forecast a visitor increase, 3/5 no change. That totals 93%.

-For August 4/5 forecast no change.

-The ‘gilets jaunes’ demonstrations/rioting affected 5% of travellers. The DMO regards this as ‘insignificant’. We think 5% is very big – 1.5mn travellers in the two summer months, for instance.

-2/3 of areas in France are ‘concerned about Brexit, but the DMO did not ask what this concern was expected to do to results.

*July, August.

[] Summer* travel 2. Forecasts by France-based research company Protourisme:

-31.5mn +4.3% planned to take a trip – 47% +2pt share.

-22.3mn +4.2% plan to stay in paying accommodation.

-A smaller share of those aged 18-24 will take a trip – 49% against 55% in 2018. Biggest share growth was those aged 35-50 – 57% against 50%.

-Growth for Paris – 62% against 59%.

-Average trip length for domestic travel 10.5 days, which we calculate is +5.0%.

-Accommodation; no change given. 42% rentals (such as apartments, AirBnB), 29% camping, 16% hotel, 12% clubs and holiday villages, 1% others (such as cruise).

-Holidaymakers in France +1.5mn trips, foreign -200k trips; no change given.

-Average family (4 people) budget US$1964 (at US$1 to €0.89) +7.3% – so US$437 per-person.

-Average budget for overseas trips US$3209, which we calculate is +4.2%.

*July, August.

[] Cote d’Azur. Following start of direct Beijing-Nice flights by Air China, due next month, the DMO of CDA* plans to develop ‘We Chat Cote d’Azur France Experience’ digital app.

Some measures for the all-France app, ‘We Chat France Experience’:

-33% of FITs from China (we presume into France) visit the site.

-5% conversion on coupons.

-50,000 sessions in high season.

-Average 150 seconds per visit.

Some measures on the China market into CDA (no change given for these):

-115,000 stays average 4 nights, of which 85,000 in hotels and residences, 30,000 air arrivals at Nice.

-Spend US$128 (at US$1 to €0.89) per day, US$843 per stay.

-Winter (usually considered Nov-Apr) 22% share; Jun-Sep 51%, Jul-Aug 30%.

-Air visitors: 41% leave on flights for Paris, 10% for London, 9% Geneva/Zurich, 6% Amsterdam, 5% Barcelona, 5% Dubai, 4% Frankfurt, 4% Rome.

*Cote d’Azur (CDA) in France – a ‘brandname’ also known as the South of France, the French Riviera, or sometimes by the names of some of its main cities, Cannes, Monaco/Monte Carlo, Nice, St Tropez. The problem is that – brand identity.

 

Travel business updates

19 July 2019

[] ARC (the Airlines Reporting Corporation, handling financial settlements between US-based travel agencies and airlines), reports for the first half: air tickets sold US$52.4bn +3.38%; average US roundtrip ticket US$512  +$10; passenger trips 161.9mn +2.4%; EMD (electronic miscellaneous document) sales US $44mn +2% (IATA rounded); EMD transactions -3% (IATA rounded).

[] MKG* (a France-based hotel consultancy; name origin unknown) reports for the first half for France hotels, occupancy +0.2pt to 67% (MKG rounded), average room rate US$116.18 +2.8% (€103.4, MKG rounded).

*Notes: MKG focuses on hotel revpar (revenue per available room), which has little marketing value to those outside the hotel business. As a result, we reduce our report to measures other than revpar.

[] Scheduled air seats into Greece this year will have been 16.6mn -4.9%, according to the DMO.

[] STR (nee Smith Travel Research) reports on US hotels:

-7-13 July occupancy -2.4% to 74.2%, average room rate -0.6% to US$132.24.

-June occupancy -1.3% at 73.5%, average room rate +0.9% to US$134.52.

-May occupancy +0.9% at 68.7%, average room rate +1.6% to US$132.43.

 

Mexico outbound

17 July 2019

Global Data*, a data and analytics company, forecasts Mexico’s outbound travel spend will be US$16.9bn in 2018, +4.43% annual average growth rate 2018-23. Other findings:

-Additional data shows 2014 $14.1mn*, 2018 $13.6mn, 2019 $14.2mn, 2023 $16.9mn.

-Domestic travel 267mn trips in 2018. Compared with 20.3mn, but year not given.

-2018 Domestic transport spend US$32.9bn, international US$5.1bn. No other amplification given.

-Canada data given to support negative sentiment concerning travel to the US, but no US data given*. GD reports +35% for Canada in 2017, then +20% in 2018 to 342,000.

*Notes:

-GD reports other years as millions, but some sections show the correct numbers as billions.

-Our database indicates arrivals in the US from Mexico +3.9% in 2018, but the total is 18mn, so growth alone was 700k, twice Canada’s overall total.

-We have found in other reports that GD sometimes misreads/misinterprets/misreports core travel data – apparently mostly due to imprecision in its editorial commentary.

-At press time, GD had not answered our request for clarifications.

 

Reports on India hotels, Scandinavia outbound

16 July 2019

Research & Markets* (RM), a company, reports:

[] India’s hotel industry will reach a ‘value’ of US$17.8bn (Rs1210.87bn) by end-2023, growing at an AAGR of +13% from 2018. We do not know what RM means by ‘value’; we assume it is all revenue, including room, F&B, and other.

In 2017 (no later data), 53.6% of revenue of Indian hotels came from rooms.

RM also uses another irregular measure, although it names this ‘occupancy rate’. It reports this as a ‘percentage of days for which rooms are booked in a given period’. It reports this grew +65% in 2018. We cannot estimate the value of this measure.

RM reports visitor arrivals in India in January-August 2018 at +7.5%. Our database shows +4.3% for all 2018, and +1.8% for Jan-May 2019.

[] Scandinavia’s outbound travel market:

-Trips 50.5mn; neither change nor year given.

-2018 spend US$63.4bn +10.3%.

*Notes: We have run many critical reviews on RM reports, and we advise users to treat its findings with caution – apparently mostly due to imprecision in its editorial commentary. At press time, RM had not answered our request for clarifications.

 

UK outbound

15 July 2019

Global Data*, a data and analytics company, forecasts UK departures to ‘Europe’ (we presume GD excludes the UK itself) will be 64.4mn in 2023, +2.9% annual average growth rate 2018-23.

  Our database indicates that Q1 2019 to Europe was +2.8% compared with an overall total +1.0%. This may indicate that travellers are finding their currency buys less, and so choosing closer destinations.

Other data:

-UK 2018 outbound 70.7mn, domestic 121.5mn. GD gives no more data. Our database, based on UK government data, indicates that GD’s ‘outbound’ is total outbound, not just to the rest of Europe. We have 71.7mn -1.4% in 2018, and to the rest of Europe just 57.3mn -1.5%.

-Spend* in 2018. Visitors US$34.2bn, outbound travel US$105.1bn, domestic US$137.6bn. No change given.

-Domestic travellers aged 35-49 took 56mn international and domestic trips in 2018. No change given.

-GD notes ‘visitor numbers’ from the UK to Ireland fell from 6.8% in 2018 to 1.7% this year. As GD provides no further amplification, we do not know: 1, if ‘visitor numbers’ means ‘visitor arrivals’ (and thus Ireland’s data and not the UK’s) or ‘trips’; 2, if GD’s figures are positive or negative (we believe positive); if ‘this year’ is a whole-year forecast, or YTD.

-GD notes that because Czech, Hungary, Romania currencies (GD’s selection) have not switched to Euros, that is better for UK travellers with their falling-value currency. The fact, of course, is not whether they are national currencies or Euros, but their moves against the UK currency. If those currencies have grown in value, then the cost of travel to those destinations will have grown in terms of UK currency – possibly higher than to Euro destinations. We are surprised GD does not appear to understand this basic economic reality.

*Notes:

-GD reports in US$ without exchange rate – a potentially misleading practice at the time the UK currency is falling – -6.3% over the past 12 months.

-We have found in other reports that GD sometimes misreads/misinterprets/misreports core travel data – apparently mostly due to imprecision in its editorial commentary.

-At press time, GD had not answered our request for clarifications.

 

 

The Fox. Remember, I’m an industry expert in the parallel world.

*Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance.

TROTTINGS*. How to run an airline

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TROTTINGS*. How to run an airline

Following two recent developments, my comments on running an airline and how many airline managers seem not to know. I have a section entitled PAGPFT (pronounced pag-puffed. People Are Getting Paid For This), and many would qualify for an entry.

 

Two recent developments are Air Belgium’s decision to stop its (only) scheduled route Brussels-Hong Kong, and Cathay Pacific’s purchase of HK Express.

 

My comments need to be read in conjunction with our description of broad airline types, see Notes*.

 

Air Belgium

Quick trip: In 2016 AB announced plan to fly Brussels-Hong Kong and mainland China points in 2017. The first, to Hong Kong, started June 2018, but was stopped September. None other started.

 

Our contemporary (April 2018) comments:

 

We expect AB’s new businessplan, from new owners in 2016, to fail before year-end. Some of the reasons:

-Frequency/routes. 4/week is not enough for its target market – upmarket. At least daily is needed.

-Routes. AB’s potential customers will fly other to other places as well of course, thus use other airlines. As most upmarket travellers are likely to be members in loyalty programs, they may prefer to stay with those other airlines when they fly to Hong Kong. If AB cannot start other routes itself, it should sign deals with other airlines on selected routes.

-Aircraft. The 4-engine A340 is a good aircraft, but costly for fuel, particularly for a start-up airline. Many would try to operate a 2-engine A350 or B787 on this route if traffic is not enough for B777s A380s etc.

-It has two A340s at present. That is enough for schedule reliability for Hong Kong flights, but at least four more will be needed to operate those other planned routes and to offer schedule reliability.

-Airport. AB plans to use Brussels Charleroi, not good for connections.

-China. AB considers Hong Kong a ‘China’ destination. Although correct in theory, it is not ‘China’ in terms of politics or in airline route-rights. Six by summer is not impossible of course, but looks over-ambitious.

-Sales via internet, but also GDS and travel agencies. GDS and agencies are usually too costly for a start-up because of fees.

-AB plans to employ 100 in Hong Kong this year. That is a foolishly-costly decision. We would think one staff member (Hong Kong Manager), with a handling agent for operations, and a GSA for sales – at least until it is established and/or the first 2/3 years.

-AB’s A340s will have economy, premium, business classes. That is at least one too many, and will also cause confusion, eg is ‘premium’ above ‘business’?

 

The interesting thing is that there is a market for Brussels-Hong Kong. It is just that AB management does not know how to run an airline to suit a particular market. What should have been done is partly obvious from our report in 2018 on what was wrong with the AB businessplan. Just a few things to add/amplify:

 

-It is very hard (if not impossible) to start an FSA* with a single route, and anything less than once daily. What business traveller would fly AB knowing the miles earned could not be burned on any other route? And there are other elements, such as schedule reliability, that most FSA managers know.

 

-Fares should be low (at least as low as the lowest in the market – Aeroflot via Moscow?), and simple. No travel agencies, no GDSs. Direct booking only.

 

-Invite travel writers with ticket-only offers (plus deals with 4/5 local hotels, in exchange for editorial. Freelancers are good because they try to sell their reports to many outlets. Create some marketing buzz.

 

 

 

Cathay Pacific

The Cathay group’s purchase of HK Express (main owner is China’s deeply-troubled HNA group) is a smart move. It was a long time coming, and did not seem to be coming – although may not be coming, as there has been a legal challenge by an HKE shareholder.

 

But if it happens, there is one cover-all proviso – HKE must be left to run itself separate of Cathay’s two other airlines – Dragon and Pacific.

 

We are not sure that Cathay management is capable of that – because many have a superiority complex, and there are no indications that it knows how to run a NFA*. After all, it could have converted what is now Cathay Dragon into a NFA long ago. (Now, it would make sense to make Dragon an LCA*.)

 

However, and in an awkward twist, Cathay itself has to find someone to run HKE – because HKE has not been managed well until now. Thus Cathay must find a manager who does not think like Cathay managers. Although not categorical, an indication will be if Cathay makes an internal move from someone in the group, or looks for someone outside. Strangely, the media loves NFA CEOs with an Irish passport – because Europe’s highly-successful NFA is Irish!

 

*Notes: Following are our airline-type definitions:

 Airline groups selling at least 75mn seats/year should have these three types of airline.

 

FSA = full-service-airline. Offering first/business/economy, travel agency bookings, meals/bookings/baggage/cancellations included, etc. As its name indicates – full service.

 

LCA = low-cost-airline. (Not a no-frills-airline; see next.) An FSA but with lower operating costs – cheaper longer-hours flight-deck crew, younger/new longer-hours cabin crew, tighter cost control (twinned 3-star hotel rooms, for example), fewer fare types, may have first and business cabins as well as economy, and which allows bookings through travel agencies etc. If relevant, usually similar to the parent airline, but a different name, and competition against parent airline allowed.

 

NFA = no-frills-airline. We believe that among the many essential elements that make a successful NFA are: shorthaul point-to-point routes; market freedom in terms of fares, routes; single aircraft type; where relevant, competition against parent airline allowed; extremely-low fares when bought at least three months in advance, say US$25; one fare at one time (no wholesale rates, travel agency commissions, etc); no refunds; no (free) service frills; single economy-class cabin; no (free) seat selection; two toilets for 150-seat aircraft; 25-minute turnaround time; cabin crew do daytime cabin cleaning; name and flight change charged at least US$25 each; no trade shows; plenty of consumer advertising and promotion; and much more. Developments in technology are making some of these ‘requirements’ less important.

 

 

 

 

*Trottings = Trip Jottings

*The Fox Trots: Travel Stories from The Fox.

 

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