By: Terry Dale, President & CEO, March 2013
As the U.S. Tour Operators Association increases its advocacy role within the industry and in the nation’s capital, we realized that it is critical to truly understand the economic footprint of our active members. To this end, PriceWaterhouse Coopers LLP (PwC) was commissioned last fall to conduct the first ever comprehensive study of our active tour operator members to uncover vital information on sales, jobs, the impact on our hotel and airline partners, the role of travel agents, and the forecast for the future. Launched at our Annual Conference and Marketplace last December in Hawaii, the study paints an accurate picture of how integral our members are to the health of the industry overall and strengthens our voice to all stakeholders.
First, the “big” numbers: active members contributed $10.3 billion to the U.S. tour operator industry in 2011, representing more than 6.1 million individual travelers. This is a clear demonstration of how integral our members are to the overall health of the industry. Moreover, the membership projected a healthy increase in sales in 2012 of 7.5% to $11 billion, with a 5.6% increase in individual travelers, to 6.5 million.
How are you, our travel agent partners, represented? Active members reported that travel agents represent nearly two-thirds (64.4%) of total packages sold in 2011, a number expected to hold steady in 2012. Clearly, travel agents are a critically important piece of our members’ business model, and will continue to be so.
Members anticipate a rosy outlook for 2013. In fact, nearly nine out of 10 (88%) project an increase in sales in 2013 over 2012. Of that majority, a quarter forecast a “boom year” with sales growth in excess of 10%, with another quarter (26.7%) optimistic about sales increasing 7-9%.
When asked in an open-ended question to describe the industry outlook over the next five years, members commented that they see “strong demand, aggressive growth,” and are “optimistic…US economy stabilized, US dollar stronger, enabling us to have a better and improved buying power.”
From Jobs to Heads-in-Beds
On the jobs front, active members employed 10,230 people within the U.S. in 2011, representing $685 million in total wages paid. Members project an increase of 4.3%, or 10,670 jobs in 2012, and a 3% increase in wages to $705 million. And, a nearly two-thirds majority of respondents plan to increase staff in 2013.
To understand the full economic impact of our members, the study also tracked sales of hotel rooms, airline seats and other components of the tour package. In 2011, active members booked more than 14 million hotel room nights and sold nearly 4 million airline seats. The total purchase of goods and services for travel packages, which include air, rail, cruise, ground transportation, accommodations, dining and sightseeing/attractions was $7.5 billion in 2011, with a 9% projected increase to $8.2 billion in 2012.
Who is traveling?
Escorted/guided tours comprised more than half of active members’ passengers in 2011 and in 2012 this number was expected to rise slightly to nearly 56%. The next largest segment was FIT packages at 41% in 2011 with a slight decline in 2012 to 38%; followed by cruises at 24% in 2011 with a slight increase to 24.5% in 2012; student travel, representing 22% in 2011 with a slight increase to 23% in 2012, and custom packages at 20% in 2011 and 2012.
Where are we going?
Experiential, or E-Factor, travel continues to take center stage in member programming. When asked to rank the experiential travel programs they currently offer, 71% of members cited “adventure” followed by “culinary” at 68%, “art” (61%), “multigenerational travel” (58%), safari (52%), and sport (42%).
Travelers looking for unique experiential travel might consider the countries members believe will be the most popular “off-the-beaten-path” destinations in 2013: Myanmar topped the list, followed by Vietnam, India, Peru, Cambodia, Brazil, China, Colombia, Costa Rica and Ecuador. These exciting destinations are predicted to gain popularity in the coming year, and our members plan to increase their itineraries to these locations to make them more accessible to interested travelers.
To stay current and keep the data fresh, USTOA will conduct a full economic impact study every two years. This information is vital to our growing advocacy efforts and will help lay the groundwork for our second congressional caucus this June. It was an enormous undertaking by our members and the incredibly high response rate of 75%, which PwC confirmed is extraordinary, demonstrates how dedicated they are to the mission and success of USTOA.
The clear optimism and clear growth of our members and the industry as a whole would not be possible without the help of you, our valued travel agent partners. On behalf of the members of USTOA, here’s a toast to our continued shared success.
For more information about tours and packaged vacations, visit www.ustoa.com. And, remember that when booking with USTOA active members, you also get the assurance of knowing that they are held to the highest standards in the industry with our $1 Million Travelers Assistance Program. Visit www.ustoa.com for complete details.
A travel vacation should not only be an unforgettable experience, but offer solid peace of mind. That’s why USTOA created a consumer protection fund which protects consumers who book with our Active Members.Learn More