European Leisure Travel Industry - September 2013

Introduction

• Key findings

Data Sources

Abbreviations

Issues in the Market

• Financial distress and bankruptcy
• Political unrest in the Islamic world
• Who’s innovating?
• Distribution
• The continually growing market for cruising

Global Summary

• Demographic trends
  • Figure 1: Percentage distribution of the population, by age groups in selected countries & regions, 2013 & 2050
• Economy
  • Figure 2: WEO forecasts (% change unless noted otherwise), July 2013
• Exchange rates
  • Figure 3: Outlook for exchange rates, 26/07/2013
• International tourism flows and receipts in Europe
  • Figure 4: International tourism arrivals in Europe, 2011-12
  • Figure 5: International tourism receipts in Europe, 2012
• Outlook for spending on travel and tourism in Europe
  • Figure 5: Projected growth in spending* on travel & tourism in Europe, 2012-20
  • Figure 6: Projected growth in spending* on leisure travel in selected European countries, 2012-20

Financial Distress and Bankruptcy

• 53 agents and operators insolvent in 2012
• UK travel firms compared to failed video-rental groups
• Air Travel Organisers’ Licence
• An improving trend of ATOL registered failures
  • Figure 7: Trend in ATOL failures, 2000/01-2012/13
• UK luxury operator closes
• Major German operator GTI insolvent
• Most GTI customers flew to Antalya
• Bookings shifted to an unknown operator
• Unpaid bills to travel agents and hoteliers
• Insurers to be more careful in future
• Polish tour operators vulnerable
• R’Tur travel agency ceases its activity
• The new requirements
• Russia sets up an ATOL-like fund

Political Unrest in the Islamic World

• Egypt
• Coup d’état destabilises the country once again
• Tunisia
• UK the second inbound market
• Assassination rocks the boat again
• Turkey

Who’s Innovating?

• The sharing economy
• Mintel Inspire trends
• Rent it instead
• Key action items
• Longing for the authentic
• P2P accommodation sharing Web platforms
• Airbnb
• Booking
• Travel
• Social-networking feature
• Competitive commissions for owners
• HomeAway
  • Figure 8: HomeAway’s revenue breakdown, by country/region, 2010-12
• The HomeAway portfolio
• Toprural acquisition
• Current trend in European business
• Renewal rate down
• HouseTrip
• HouseTrip competes with hotels
• Financial backing
• Competition
• Business model
• onefinestay
• Bespoke travel agents
• Cancellation terms
• Homeowners are also clients
• Hotel services included
• An asset-light business model with sustainable credentials
• A leisure client base
• P2P car-sharing Web platforms
• User profile
  • Figure 9: Age breakdown of Carpooling.com customers, 2012
• Carpooling in Germany
  • Figure 10: The most popular carpooling routes in Germany, 2012
• Carpooling in France
  • Figure 11: The most popular carpooling routes in France, 2012
• Carpooling in Italy
• BlaBlaCar
• Social-networking feature
• Founders’ profile
• Financing
• Expansion
• Carpooling.com
• Cheaper and sustainable
• Commuting
• Daimler and Carpooling.com form a strategic partnership

Innovation in Travel Distribution

• ‘Big data’ analysis
• Mintel Inspire trends
• Access All Areas, What We’ve Seen
• Amadeus helps customers target their advertising
• Travel Audience acquisition completed
• Big data – the way forward
• Benefits for the travel industry
• Distribution
• Case study: KAYAK
• Case study: Amadeus
• Case study: British Airways

Distribution

• Growth in OTA bookings outpacing the market
• Growth to slow
• Major online players
• KAYAK moves into packages
• Intelligent Travel Object Admin
• Most big operators are included
• The ATOL question
• A mobile app
• Google’s Flight Search rolled out in the UK
• NDC could change the landscape
• Lowcostbeds in bid to compete in top five
• lowcostbeds enters the opaque market

Cruising Still a Pocket of Growth

• • Figure 12: Trend in cruise passenger numbers by region, 2006-11
• • Figure 13: Cruise passengers, by source market in Europe, 2012
• UK cruising market
  • Figure 14: Trend in UK & Ireland cruise passengers, 2007-12
• German cruising market
  • Figure 15: Trend in German cruise passengers, 2007-12
• Spanish cruising market
  • Figure 16: Trend in Spanish cruise passengers, 2007-12
• Italian cruising market
  • Figure 17: Trend in Italian cruise passengers, 2007-12
• French cruising market
  • Figure 18: Trend in French cruise passengers, 2007-12
• Cruising market in the rest of Western Europe
  • Figure 19: Trend in cruise passengers in the rest of Western Europe, 2011-12

Major Players in the European Leisure Travel Industry

• • Figure 20: Top 10 European travel groups, fiscal years 2011 & 2012

TUI Travel/TUI AG

• TUI Travel
• TUI AG
• SWOT analysis (TUI Travel & TUI AG)
• Recent developments
• Latest annual results
  • Figure 21: Fiscal results for TUI AG, 2012
• Change in top management
• Joussen sets new priorities
• TUI invests in 60 new planes
• TUI gets £300 million of financing
• Structure
• TUI Travel
  • Figure 22: Underlying operating profit mix by sector before central costs & emerging markets, FY 2012
• Mainstream sector
• Accommodation & destinations sector
• Emerging markets sector
• TUI’s new structure
  • Figure 23: TUI’s new reporting structure, 2013
• Two types of business activity
• TUI AG
• TUI Hotels & Resorts
  • Figure 24: Factors affecting customer satisfaction on package tours, 2012
  • Figure 25: TUI Hotels & Resorts’ portfolio, by brand, September 2012
• TUI’s hotel brands
  • Figure 26: RIU’s locations, by country & continent, 2012
• Viverde a hotel brand for ‘green’ holidaymakers
• TUI cruises: Hapag-Lloyd Kreuzfahrten and TUI Cruises
• Brands
• airtours
• Arke
• Crystal
• Crystal Ski Plus packages
• Fritidsresor
• Hotelbeds
• Intercruises Shoreside & Port Services
• TMS Gateway acquisition
• Jetair
• Winter season 2013/14 brochure
• UAE – a new destination
• LateRooms.com
• Quark Expeditions
• Polar adventure ships and icebreakers
• The Moorings
• Thomson
• TUI

Thomas Cook

• SWOT analysis
• Recent developments
  • Figure 27: Group results for FY 2011-12
  • Figure 28: Revenue, by business unit for FY 2011-12
• • Figure 29: Gross profit, by business unit for FY 2011-12
• Cost cuts of £100 million over three years
• 364 shops closed in the last year
• Thomas Cook brand underexploited
• Emphasis on flexibility
• Shedding assets
• Hoteles Y Clubs De Vacaciones sold
• Indian unit sold
• French activities pared back
• Jet tours restructured
• Major new financing acquired
• Half-year results mildly encouraging
• Structure
• UK & Ireland
  • Figure 30: Key facts for Thomas Cook’s UK & Ireland division, 2012
• Continental Europe
  • Figure 31: Key facts for Thomas Cook’s Continental Europe division, 2012
• Northern Europe
  • Figure 32: Key facts for Thomas Cook’s Northern Europe division, 2012
• Group Airlines
  • Figure 33: Key facts for Thomas Cook’s airline division, 2012
• Airline integration plans
• Aircraft financing secured
• Brands
• Airtours
• Condor
• Gold Medal
• Hotels4u.com
• Club 18-30
• happy events
• Intourist
• Neckermann
• Neilson
• Öger Tours
• SENTIDO Hotels & Resorts
• Thomas Cook
• Ving

Kuoni

• SWOT analysis
• Recent developments
  • Figure 34: Results for the year ended 21 March 2013
• Refocusing on core activities
• Kuoni sells stake in Megapolus Tours
• Kuoni quits Italy and France
• Restructuring completed
• Change at the top
• ‘brite spokes’ launches in the US
• The Legends Continue
• Crunch Fitness and Health Road Trips
• Get the Drift
• Let's Rally
• Cover Your Bases
• Imbibe Ride
• Structure
• Tour operating
• Destination travel services
• Emerging Markets & Specialists
• Brands
• Nordic brands
• Swiss brands
• Outbound Specialists Switzerland
• Asia365
• Trails.Cotravel
• Dorado Latin Tours
• Travelintens
• Kontiki Saga
• Manta Reisen
• Private Safaris
• Railtour/Frantour
• Unique Travel
• UK brands
• Outbound specialists
• Carrier
• CV travel
• Journeys of Distinction
• Kirker Holidays
• Voyages Jules Verne
• Destination Management Specialists
• AlliedTPro
• Asian Trails
• Australian Tours Management
• Desert Adventures Tourism
• Distant Frontiers
• Private Safaris
• Sita
• Emerging market brands
• India
• China/Hong Kong
• VFS Global

DER Touristik

• SWOT analysis
• Recent developments
• DER Touristik is new umbrella brand
• Upgrading the distribution network
• A strong summer season
• More winter tours
• Expanded coach tours
• Structure
• Brands
• Tour operators
• clevertours.com
• ITS – the mainstream brand
• Jahn Reisen
• Tjaereborg – the dynamically priced brand
• DERTOUR
• Meier’s Weltreisen
• ADAC Reisen

FTI Touristik

• SWOT analysis
• Recent developments
• Strong growth so far in 2013
• More winter flights to Egypt and Canaries
• Oman
• FTI enters the French market
• Structure
• Brands
• 5vorFlug
• driveFTI
• Fly.de
• LAL Sprachreisen GmbH
• sonnenklar.TV

Club Med

• SWOT analysis
• Recent developments
• Club Med taken over in €556-million deal
• A troubled history
• China, the great hope
• Difficult to value Club Med
• Structure
• Asset heavy
  • Figure 35: Holding structure of Club Med villages & bed capacity, 2012
• Brands

Alltours

• SWOT analysis
• Recent developments
• Higher profits and hotel investments
• More Canaries and long-haul for the winter
• Structure
• Brands
• Alltours
• Other branded activities
• Allsun Hotels

Oad Reizen

• SWOT analysis
• Recent developments
• eCircle optimises Oad Reizen’s customer response rate
• Structure
• Brands

Hotelplan

• SWOT analysis
• Recent developments
• Revenue declined in 2012
  • Figure 36: Turnover, by strategic business units, FY 2012
• Hotelplan has exited Russia
• Structure
• Brands
• Swiss tour-operator brands
• Italian tour-operator brands
• UK tour-operator brands
• Interhome

Alpitour

• SWOT analysis
• Recent developments
• Alpitour sold to private equity funds
• Structure
• Brands
• Alpitour
• Francorosso
• Villages Bravo
• Viaggidea
• Karambola
• Neos
• Alpitour World Hotels & Resorts
  • Figure 37: Alpitour World Hotels, 2013
• Welcome Travel Group
• Jumbo Tours

Major Country Markets

• Outbound spending key for the travel trade
• China number 1
• But importance to be relativised
• Russia up, Italy down
• Top European outbound markets
  • Figure 38: Top European countries for expenditure on outbound tourism, 2011-12
• Germany
  • Figure 39: German holiday trips, 2011-12
• Destinations
  • Figure 40: German holiday destinations, by % share*, 2012
• Distribution
• Tour-operator market structure
• Soaring growth for Schauinsland Reisen
  • Figure 41: Market shares of major German tour operators, 2012
• TUI, the market leader
  • Figure 42: Five largest tour operators in Germany, FYs 2011-12
• Trends and outlook
• Club operators target the German market
• TUI’s Robinson Club & Magic life
• Aldiana
• DER Touristik’s Calimera
• Club Med
• UK
  • Figure 43: Trend in UK holiday trips & spending abroad, 2000-12
• Destinations
  • Figure 44: UK holiday travel & spending, by country & region, 2012
• Cost of living in holiday destinations
  • Figure 45: Cost of living per day, by holiday destination, 2013
• Distribution
• TUI UK & Ireland
• Thomas Cook UK
• Monarch Group
• Trends and outlook
• Two million head overseas at the end of July
• Domestic tourism booming
• Russia
• Destinations
• Distribution
  • Figure 46: Top 10 Russian tour operators, 2013
• Trends and outlook
• France
  • Figure 47: Package tours sold in France, by destination during FY 1/11/2011-31/10/2012
• Destinations
  • Figure 48: French package-tour destinations, FY 2011-12
• Distribution
• Trends and outlook
• Italy
  • Figure 49: Holiday trips taken by Italians, 2010-12
• Destinations
  • Figure 50: Regions of holiday trips taken by Italians (in % of category total), by duration, 2012
  • Figure 51: Destinations of holiday trips taken by Italians (in % of category total), 2012
• Distribution
  • Figure 52: Booking channels for holiday trips (% of category total), 2011-12
• Trends and outlook

What Next?

• Changes to the EU’s PTD
• Reflecting changes in the way people travel
• A largely positive reaction
• Mega resorts coming to Europe
• Las Vegas- or Macao-style mega resorts are to be built in Spain, but will European tourists go for it?
• BCN World
• ‘EuroVegas’ in Madrid
• A mixed reaction
• Popular opposition to EuroVegas
• Local hoteliers in Catalonia positive