Vacation.com's Stephen McGillivray, Chief Marketing Office; Tiffany Glass, V.P. E-Commerce; Christine James, V.P. Canada and John Lovell, President
Vacation.com doesn’t shy away from pulling rank. With 530 members in Canada alone, they outnumber their closest competitor by a big margin. Hence, this year’s Think Big conference theme.
At a Toronto luncheon last week John Lovell, President of V.com North America, and Christine James, Vice President Canada, talked about their perspectives on the travel industry -- the latest ups and downs, and where they see the business trending over the next year.
Lovell says that at the beginning of the year he would have predicted a record winter. The trending for the key Jan-March selling season was strong. Then the Costa factor hit, and combined with middle-east unrest and high fuel prices, contributed to a slowdown. “I wouldn’t call it a massive slowdown, but things certainly looked different by the 2nd week of January,” he said.
As for what’s next, Lovell says it all depends on oil. “If fuel prices go over $6 a gallon, it will definitely affect purchasing behaviour.” The hope is that, both in the U.S. and Canada, pent up demand will result in increased activity over the next month. “We’ve definitely seen a rebound in the last 2 ½ to 3 weeks,” he said.
In terms of specific areas, Lovell says Europe is trending weakly in the U.S. mainly due to higher airfares. However, the opposite is happening in Canada. “We are seeing a comeback for Europe mainly due to competitive airfares with the additional capacity and low rates brought by Sunwing,” said Christine James.
On both sides of the border, Mexico is a success story, tracking at double digit growth in the Mayan Riviera. According to Lovell, one of the main reasons he sees the continued popularity of Mexico is that “the best all-inclusives in the world are in Mexico. The service-quality is 2nd to none.” The other factor Lovell notes is that “travel agents are doing a great job of explaining the reality of Mexico to clients.” And he credits the Mexican Ministry of Tourism for keeping the travel distribution field well informed with regular updates.
The retail consortium is also recording year-over-year growth in bookings to both Cuba and the Dominican Republic.
On the cruising front, the mass market product is sluggish. Lovell is optimistic that by Q4, shoppers will come back and boost the category. But, premium cruising is seeing double digit growth, with yields holding well. The luxury cruising market, according to Lovell, “is seeing phenomenal growth. More affluent households are fairly recession proof.”
Growth in the river cruising market in Canada is outpacing the U.S. – with Canada at a 40% increase and the U.S. at 30%. The growth is mainly from land-centric touring customers who are converting to river touring. In terms of total penetration, Canada is playing catch up to the U.S. Lovell underscored the attraction the product has for member agents compared to sea cruising. River cruise commissions reflect the fact that there are no NCF’s and excursions are usually included or pre-purchased.
As far as developments at Vacation.com itself, a Canadian air booking engine has just been launched. AirPRO Canada allows members to search and shop nets from more than 50 airlines and add their own mark-ups. V.com has partnered with Tour East who powers the engine and handles the fulfillment.
As for the Think Big conference, the venue will make it hard for members to do anything but – since it takes place on the largest ship in the world, Royal Caribbean’s Oasis of the Seas.
