FOXTROTS
Fox – sly. Trots – left-leaning (Trotsky) plus its more insalubrious meaning.
Foxtrots – leading the industry in a dance.
Euromonitor and World Travel Market; eh?
Some generous claims are made by Euromonitor (EM; a research company) and World Travel Market (WTM; the travel trade exhibition in London) concerning its Global Trends Report (GTR).
I am particularly severe on this topic because both EM and WTM have a good reputation, which will lead many users of the GTR to assume that EM/WTM know what they are talking about. Unfortunately, the indications are that EM knows little about the travel business, and WTM does not know that EM does not know (!).
The GTR 2014 report is due to be published early November. EM/WTM have published a teaser (literally, in this case; see below), which is so full of rubbish that I thought I should react before the main report is published.
EM/WTM make the claim the GTR “has accurately predicted global travel trends…for nine years”. In 2013, I demolished some of its specific claims for their GTR 2012, some of which were laughable. If EM/WTM still have the chutzpah to continue with their claim – and deceive their professional audience – they deserve little sympathy.
Read EM/WTM’s latest observations:
PANKs.
EM/WTM claims their GTR 2013 “identified a new travel industry segment: the PANKs or the ‘Professional Aunt, No Kids’”. I think EM/WTM are serious, so I request anyone to identify – or even harder, enumerate – this ‘demographic’ development. In passing, I also wonder if GTR 2014 will identify the male version – uncles, or PUNKs?
I have no record of GTR 2013 (my critique in late-2013 was for GTR 2012) but I suspect that the PANK reference is actually related to GTR 2014 not 2013.
To prove their PANK statement, EM/WTM reported that a New York hotel has created a package for childless women! Do I really need to note that one of one hotel’s accommodation packages does not automatically mean another ‘demographic’?
Cruise.
EM/WTM also report of a “Fight for cruise control in China”. However, there is nothing about a fight, or about control – just about cruises. Perhaps the authors wanted a snappy heading but forgot that it should also make sense?
EM/WTM say GTR 2013 predicted China will become a key market for cruise companies. I agree with that, and I guess 99% of those in the travel industry would also. And so hardly piercing new market insight.
The report says China’s cruise business grew 10% in 2013 to US$6.8mn – presented as a positive and to back its prediction. But the report does not say – and I now wonder if the authors know – that this is an underperformance. China’s total outbound business grew 19% in 2013, which indicates the cruise segment is not doing so well.
EM/WTM also do not note that that US$7mn is tiny. The cruise-industry trade body (CLIA) does not list revenue, but berths-filled – which it names as ‘passengers’. (And CLIA has an eccentric way of counting occupancy – but that is another story.)
I calculate that GTR’s dollar figure for the China market indicates at least 7000 berths sold. That would be 0.04% of the world market, and so hardly something to shout about.
That said, in 2013 the Travel Business Analyst newsletter forecast that China would be the top market within five years. And it also noted that China was already 40% of the still-small Asia market.
But note that many cruises for the China market are not quite the same as for other markets – as much likely to be a short 1/2-night cruise with gambling as a 10-day traditional cruise trip.
No-frills-airlines (NFAs).
EM/WTM reports that NFAs are going “…upmarket in the Middle East”. I am not sure if EM/WTM understand the irony in this. If an NFA ‘goes upmarket’ it is no longer an NFA. Do EM/WTM know why many NFAs are successful? It is because they offer low fares to attract the public, yet still make a profit for themselves because they keep their costs low.
Start to change that, and something has to go – either profits fall or disappear, or if fares are increased to cover the additional costs, then part of the ex-NFA’s passenger-appeal weakens.
This is basic business stuff. EM/WTM do not seem to have grasped it.
To support its commentary, EM notes that its own data shows “business arrivals in the Middle East grew 7% globally from 2011-2013”. I am stuck on this. ‘In the MidEast’ and ‘globally’ seem contradictory – or is this just a sub-editing error? Also, 7% over two years (or three?) is just 3.4% each year – which I would interpret as weak growth.
The GTR 2013 report notes in this MidEast section that Ryanair started business class this past August – although I question how that development can be in GTR 2013. EM/WTM also link this Ryanair event to the Middle East. I cannot see the link, but perhaps I’ve got it wrong, and EM/WTM are linking Ryanair to business travel, and not to the MidEast?
I should also add that Ryanair has not started business class. It has introduced a fare package targetted at the business traveller. The package includes certain service elements (seat selection, priority boarding, 20kg baggage, etc) that would normally be charged separately. So the customer is still paying for these – through a higher fare.
I accept that those outside the travel business might not understand this elementary difference. But if EM/WTM do not understand, I wonder about their other observations.
The Fox
Remember, I’ll be famous after I’m dead.