Source: CBI Market Information Database • URL: www.cbi.eu • Contact: [email protected]• www.cbi.eu/disclaimer CBI Product Fact Sheet: Outbound tourism from emerging Eastern EU countries ‘Practical market insights into your product’ The Eastern EU market is an emerging market for outbound tourism which still has to reach maturity. Due to rapidly growing economies, an increasing number of Eastern EU travellers are travelling abroad. The Eastern EU market had the highest growth in outbound trips in 2012. Growth forecasts are also expected to be highest here. Opportunities for tourism providers from developing countries (DCs) are highest in Poland, the Baltic States, Czech Republic and Slovakia. As most of the travellers in these countries are first generation travellers and first generation travellers generally choose mainstream holidays, sun and beach holidays and round trips offer the best potential. Demand for niche products is still relatively small, but interest is expected to increase. Product Definition Emerging Eastern EU countries refer to EU countries that are located in the Eastern part of the EU market. In this study this includes the following countries: Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary, Romania, Bulgaria and Slovenia.
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growth in outbound trips. According to research by the European Travel Commission, the Eastern EU region had the highest growth in outbound trips in 2012. Growth forecasts for 2013 and 2014 are also highest (Figure 2). This is particularly the result of the rapidly growing economies of Eastern EU markets. Eastern EU markets could, therefore, offer interesting opportunities for DC tourism providers. However, as they are all emerging markets with many travellers who are travelling abroad for the first time (first generation travellers), most long haul destinations are not very well known.
3 promising clusters. In terms of
opportunities, the Eastern EU tourism
market can be divided into 3 most
promising clusters:
1. Poland: volume
2. Baltics (Estonia, Latvia and
Lithuania):
strong growth in GDP and
willingness to travel
3. Czech Republic and Slovakia:
high number of outbound trips per
capita and increasing economies.
The main focus in this Product Fact
Sheet will, therefore, be on these 3
clusters.
Considerations for action
Positive country branding is vital to
increasing awareness of your
destination among first generation
travellers. However, you need both the
public and the private sector.
Therefore, join forces with other
tourism stakeholders in your country
and together invest in country
branding campaigns.
If you are already active in other
EU+EFTA markets, you could duplicate
the business model that you used
there (provided that business model
has proven to be successful). Always
adapt your approach to the segment
you are targeting.
Do not view Eastern EU countries as a
whole homogeneous entity. Despite
some similarities, such as the level of
market maturity and economic growth,
there are also differences which you
should take into account. Therefore.
focus on one or two priority countries.
Figure 3: Outbound trips, Eastern EU
markets, 2007-2011, in millions
Source: WTO
Figure 4: Outbound trips per capita, Eastern
EU markets, 2011
Source: WTO
Poland offers volume. Poland is by
far the largest source market in the
Considerations for action
Approach Polish tour operators who
already offer trips to your region, and
0
2
4
6
8
10
12
14
16
Million
trip
s 2007
2008
2009
2010
2011
0
0,2
0,4
0,6
0,8
1
1,2
1,4
1,6
Outbound trips
per capita
Trips to
developing
countries percapita
CBI Product Factsheet: Outbound tourism from emerging Eastern EU countries
Eastern EU (Figure 3) and is, therefore, one of the most promising countries in that region. A strong decline in outbound trips in 2009 was the result of changes in the exchange rate of the Zloty/US Dollar, rising costs for fuel, and the purchase of modern aircrafts. Outbound trips are expected to increase as a result of maturing travel patterns, growing GDP and strong growth in international aviation capacity. The limited access to aeroplane seats in charters to DCs represents a threat to DC tourism providers, since the market is dominated by a few suppliers who make block bookings of charter allocations (TUI, Thomas Cook). However, scheduled flights by international airlines to and from Poland are growing. In February 2013, for example, the largest airline operator in the Middle East, Emirates, started scheduled services to Poland. This is benefitting Polish and other Eastern EU travellers with direct flights to Dubai and onward travel to Asia, Australia and Africa.
Slovakia and Czech Republic have among the highest outbound trips
per capita. Czech Republic is the second largest Eastern EU source market. Furthermore, Slovakia and the Czech Republic have, together with the Baltic States, the highest number of outbound trips per capita (Figure 4). They also have growing economies and good accessibility to scheduled flights, especially the Czech Republic. Although they tend to travel less to long haul destinations (Czech travellers especially go to Germany, Slovak travellers focus more on other Eastern countries), interest in new destinations is increasing and long haul travel is, therefore, expected to grow. Airlines in the Czech Republic, for example, are promoting undiscovered destinations and this provides opportunities for DCs.
present your tourism product to them.
Evaluate first generation Polish
travellers in order to find out their
interests and requirements and adjust
your product to them.
The increase in airlift is very important.
However, you cannot do this alone.
You need both the public and the
private sector. Therefore, join forces
with other tourism stakeholders in your
country and together lobby airlines,
tour operators and tourism
organisations in order to increase the
airlift. Together, also lobby your own
government to liberalise international
air services as this has been proven to
increase international traffic
significantly.
Approach Czech and Slovak tour
operators and present your tourism
product to them.
The promotion of your destination by
Czech Airlines would be a good way to
create awareness in the Czech
Republic and in Slovakia. However, you
cannot do this alone. You need both
the public and the private sector and
together you should lobby Czech
airlines.
CBI Product Factsheet: Outbound tourism from emerging Eastern EU countries
Montenegro (1.0), China (0.8), Thailand (0.8), Morocco (0.6),
Serbia (0.6), Cuba (0.4)
*Data is not available for all countries
Source: WTO
DCs in Europe most popular among Polish travellers (Figure 7). This is mainly the result of the large share of neighbouring country Ukraine (Table 1). Many Polish travellers go to Ukraine for business, shopping or visiting family and friends. For
leisure holidays, Croatia, Turkey and Egypt are popular. Turkey has gained popularity at
Research the travel and tourism preferences and expectations of Polish consumers and adjust your tourism offer accordingly. Study, for example, websites of large Polish tour operators, as these often reflect the preferences and expectations of consumers.
Join forces with other local tourism providers, tourism boards and tourism
0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
0,8
0,9
Poland Estonia Latvia Lithuania Czech
republic
Slovakia
Europe
Africa
Asia
Central America
South America
CBI Product Factsheet: Outbound tourism from emerging Eastern EU countries
the cost of Egypt and Tunisia because of political unrest. The massive switch to Turkey was possible because of well-developed tourism infrastructure in combination with offers adjusted to the expectations of Polish tourists. Large Polish tour operators, especially TUI Poland, are the main drivers of outbound tourism. They carefully monitor customer preferences in order to tailor their offer to customers’ expectations, but they also actively promote new destinations. Polish travellers are expected to continue visiting their traditional destinations such as Turkey and Egypt, but also to penetrate other less known destinations.
DCs in Asia most popular among Baltic travellers. Baltic travellers prefer DCs in Asia. Turkey is by far the most popular destination, because of distance, direct flights, and price. Also, Egypt and Morocco are popular. However, due to political unrest in Northern Africa, there has been a shift to other destinations further away such as Thailand and Bali. Such exotic destinations are especially popular in winter. Mainstream tour operators are successfully selling long haul destinations such as Thailand and the Maldives. There are, for example, charter flights from Riga (Latvia) to Bangkok. Other
popular long haul destinations are India and Vietnam. Increased interest has been noticed in South America. These developments in long haul tourism offer interesting opportunities.
Czech and Slovak travellers prefer
holiday destinations close to their country. The most popular DCs for Czech and Slovak travellers are close to their country: Ukraine, Croatia and Turkey. Overseas destinations are expected to gain market share in the Czech Republic, as tickets have become much more accessible and airlines are promoting exotic and undiscovered destinations such as adventurous Colombo in Sri Lanka and exciting Bangkok in Thailand. However, they do not take consumer preferences into account. Outbound travel in Slovakia is expected to face some difficulties as Czech Airlines reduced scheduled air travel destinations from and to Slovakia.
promotion organisations and together improve the tourism infrastructure in your country.
Approach mainstream tour operators in the
Baltics and offer them unique, attractive products. It is quite difficult to get involved with them and margins are generally low, but if you persevere you will get volume.
As long haul destinations are more popular in winter, you should intensify your promotion in summer and autumn.
Research the travel and tourism preferences
and expectations of Czech and Slovak consumers and adjust your tourism offer accordingly, as many mainstream tour operators do not take these into account. Consequently, invest in marketing on the Czech and Slovak market, for example, by participating in tourism trade events.
For more information on tourism trade statistics and macro-economic indicators
in the EU+ EFTA market in general, refer to CBI’s ‘Trade watch’ for tourism.
CBI Product Factsheet: Outbound tourism from emerging Eastern EU countries
Traveller profile and requirements Sun and beach holidays offer the best potential in Eastern EU markets. Also, round trips offer opportunities as many Eastern EU travellers are curious about other cultures. Demand for niche products is still relatively small, but interest is expected to increase quickly. This is because the tourism lifecycle has accelerated in Eastern EU markets. They jump readily into new phases.
Considerations for action
If you have a sun and beach destination,
emphasise this in your marketing message.
Tour operators should compose attractive
round trip packages that include the most
interesting natural and cultural highlights of
your destination/region.
Poland Many first generation travellers
interested in mainstream holidays. Most Polish long haul travellers are first generation travellers interested in mainstream sun and beach holidays. They generally have higher incomes and often travel in couples. A large proportion of Polish tourists choose all-inclusive sun and beach options in 4 and 5 star hotels as this guarantees a high standard holiday which carries much prestige. Apart from going to the beach, Polish travellers also like shopping, dining, sightseeing and visiting historical places. A strong niche market is religious tourism. However, this mainly concerns travel to catholic places in Europe, not long haul. Due to market size and increasing maturity, interest in other special interest segments such as adventure tourism and emerging destinations is expected to increase.
Poles are price sensitive, especially for travel. As Polish travellers are very price sensitive, tour operators underline price promotions. Since 2009, ‘first minute’ offerings gained popularity. This means anticipated sales of next season’s trips, often purchased in autumn a year before the planned trip. Polish customers are attracted to such offering as they guarantee a fixed price, irrespective of any possible rise in costs.
Polish language important. Polish tourists strongly appreciate having information in Polish.
Considerations for action
Start with targeting Polish mainstream
tourists.
Compose travel packages with options for
different types of accommodation, including
4 and 5 star hotels.
Have your product offer and prices for the
next year ready a year in advance.
Make use of price promotions, for example,
first minute offerings or early booking
discounts.
Have (the most important part of) your
website and information material available in
Polish. Offer the option of Polish speaking
guides. Consider working with freelancers to
maintain your company’s flexibility.
CBI Product Factsheet: Outbound tourism from emerging Eastern EU countries
willing to travel. Their growing economies and disposable incomes encourage them to travel more. Typical long haul travellers are aged over 35 since most younger people lack the money for a less conventional holiday. They generally live in bigger towns and cities and travel in couples or as a family. A number of pensioners are eager travellers too. Although the effects of the crisis are still present, even for wealthier customers, most Baltic people still travel once a year with that single trip being longer than before, generally between 10 days and two weeks.
Sun and beach holidays are most in demand, but niche markets are gaining ground. Sun and beach holidays are the most popular tourism segment, although many Baltic travellers want mixed tailor-made trips combining sun and beach with sightseeing and cultural activities. Baltic travellers are in general more interested in niche markets than other Eastern EU travellers. A dedicated minority is interested in niche markets such as adventure, golf or diving. Niche agencies reported that demand is growing by 10-15% per year. Also, more conference and incentive trips are being organised to long haul destinations, especially to Asia. Outbound business travel
is getting stronger and people tend to combine a business trip with an extension for sightseeing or even a beach holiday.
Baltic travellers value quality, comfort and variety, but also a low price. The most important requirement for Baltic travellers is to have excellent service and maximum comfort at the lowest price. They also want a variety of activities, from sightseeing and culture to shopping and sports. Many agencies in the Baltics reported that their clients prefer package holidays, especially when sunny and warm destinations are involved. Baltic travellers are ok with having English speaking guides as they generally have good English language skills.
Considerations for action
Target Baltic consumers who are aged over
35, including pensioners.
Combine sun and beach with sightseeing,
cultural and/or adventure activities.
Tour operators should compose basic travel
programmes that include the most
interesting natural and cultural highlights of
your destination/region. In addition, offer
optional add-ons (‘building bricks’) that
include niche activities such as hiking, golf or
diving so that Baltic travellers can compose
their own package that meets their interests.
Compose attractive tourism packages for
conference and incentive trips or make your
accommodation suitable for conferences
(develop, for example, a conference hall if
you have the space).
Focus on providing high quality services,
comfort and a competitive price.
Compose tourism packages that include a
wide range of activities.
Have English speaking guides available.
Czech Republic and Slovakia Czech and Slovak travellers are more
interested in nature and
active/sports related holidays than
other Eastern EU markets. Sun and
beach holidays are an important holiday
segment in the Czech Republic and
Slovakia. However, Czech and Slovak
consumers are also very interested in
active/sports-related holidays. Also
health and wellness and cultural visits
are drivers for outbound trips. Czechs
and Slovaks are by nature conservative
Considerations for action
Adapt your product to the interests of
Czech and Slovak travellers, this means,
besides sun and beach activities, also
offering nature and active/sports related
activities.
Try to get positive recommendations from
Czech/Slovak travellers who have already
made use of your product. Place them on
your website and share them on social
media platforms such as Facebook.
CBI Product Factsheet: Outbound tourism from emerging Eastern EU countries
Legal requirements No legal requirements. There are no legal
requirements for long haul tourism as it is offered outside the EU market. However, there are some EU travel and consumer laws that are applicable to tourism within the EU, for example, the Travel Package Directive which protects consumers who purchase package travel within the EU.
Considerations for action
Study the Travel Package Directive. Although it is not applicable to long haul tourism, it can help you to better understand the EU tourism market.
Study the terms and conditions of major
Eastern EU tour operators as these generally
reflect EU travel and consumer laws.
Furthermore, they also give insights into
what they expect from trade partners.
Non-legal requirements Sustainability does not play a large role
yet. In comparison with more mature, Western EU travel markets, sustainability plays a minor role in Eastern EU countries. Eastern EU travellers are not very aware of their impact on the places that they visit during their holidays. Furthermore, price is a very important deciding factor when choosing a holiday and sustainable holidays are often more expensive in these countries. Due to this lack of interest, Eastern EU tour operators offer very few sustainability trips.
Considerations for action
Although sustainability does not play a large
role yet in Eastern EU travel markets, it is
recommended that you integrate sustainable
elements into your product. This will not only
give you a competitive advantage, but will
also increase your opportunities in Western
EU travel markets where sustainability is
playing an increasing role.
For more information about expectations of tourism buyers in the EU+EFTA
tourism market in general, refer to CBI’s ‘Buyers’ Black Box’ for tourism.
Recession changes travel habits. Although Eastern EU markets have growing economies, the effects of the recession are also noted here. Due to the economic uncertainty, demand for package holidays has increased at the cost of customised travel packages as they are generally cheaper. Domestic/regional tourism has gone up, whereas long haul has somewhat decreased. Eastern EU travellers are also trading down in accommodation and they are shortening the length of their holidays.
Low cost carriers continue to grow. Scheduled airlines have a market share of around 50% in Eastern EU markets, versus 25% for low cost carriers and 20% for charters. The recession is helping low cost airlines to gain share from scheduled airlines. Growth is especially stimulated by the expansion of current low cost players such as Ryanair and Wizz Air. Low cost carriers could stimulate long haul tourism as well, since some wealthier Eastern EU travellers will fly with low cost carriers to European hubs and from there to long haul destinations.
Poland: growing demand from families with children who are interested in special tourist attractions. Next to the two important traveller groups of couples and singles, families with children are also becoming an important travel group in Poland as there is a rising trend towards Polish parents travelling with small children (increase of 28% in 2011). They travel especially during summer holidays and organise their trips through tour operators. Singles who travel are mainly people who visit their families and friends living in other countries. Couples comprise a tourist group who combine different purposes, both
Considerations for action
Offer lower budget products/packages, for
example, compose travel packages which
include stays in lower budget hotels or have
rooms available in different price classes.
Consider advertising at airports or in
magazines published by low cost carriers in
order to increase awareness of your
destination.
Adapt your product to the needs and interest
of families with children. Accommodation
providers could offer, for example, family
rooms and organise entertainment for
children.
CBI Product Factsheet: Outbound tourism from emerging Eastern EU countries
visiting and sightseeing. Baltics: new way of reaching
destinations. Baltic consumers who want to travel are increasingly asking for new, attractively-priced destinations. Booking package trips that include regular flights or booking travel components independently can end up being rather expensive. The challenge for tour operators is to find such destinations while ensuring an acceptable price and good quality. One of the largest Baltic tour operators, Novatours, developed a new way of offering new trips at a good price. They offer a new destination at a specific time (for example once a week) with one or two airport transfers (layovers of one hour). Their turnover increased significantly thanks to this new type of offering. This kind of trip is expected to become one of the trends in 2013.
Approach Baltic tour operators and present
your tourism product to them. Come up with
a good sales pitch in which you show them
why your product is so special.
For more information on market trends on the EU+EFTA tourism market in
general, refer to CBI’s ‘Trend Mapping’ for tourism.
Market Channels and Segments
Tour operators important trade channel.
Tour operators specialised in your country/region or in a specific niche market which matches your product offer one of the best opportunities as they are generally more dependent on local partners than mainstream tour operators. However, as demand for niche products is still relatively small in Eastern EU countries, the number of niche tour operators is also small. Travel distribution mainly goes through traditional mainstream players such as TUI or Neckermann that offer standard products. However, as long haul tourism is an emerging market in Eastern EU countries, many destinations are not even offered by mainstream tour operators yet. They are, therefore, also an important trade channel, although it is generally more difficult to engage with them than with niche tour operators.
Considerations for action
Tour operators and DMCs should try to
partner with Eastern EU tour operators, for
example, by joining trade associations,
attending relevant trade fairs or visiting a
number of selected tour operators personally
by organising road shows in their target
Eastern EU country.
Local accommodation and excursion
providers should focus both on local tour
operators and on DMCs and Eastern EU tour
operators.
Sources that can help you find tour operators in the most promising Eastern EU
markets are:
Baltics
Association of Latvian Travel Agents and Operators (ALTA) -
http://www.alta.net.lv - go to ‘ALTA’ and ‘ALTA members’. Refine your
search by ‘Tour operators’ or ‘Outgoing travel’.
B2B Baltic.travel - http://b2b-baltic.travel - assists travel companies from all
over the world to attract more Baltic travellers. They also organise the
Index gives you insights into the competitiveness of your country. The TCCI assesses to what extent a country’s travel and tourism’s 1. regulatory framework, 2. business environment and infrastructure, and 3. human, cultural and natural resources make it attractive to develop the travel and tourism sector. When looking at the most visited DCs by region for Eastern EU travellers, Croatia scores best in the TCCI index (Figure 9). This is especially due to its excellent tourism infrastructure, its rich cultural resources (it has 18 cultural world heritage sites), its sustainability efforts, and good health and hygiene standards. Thailand comes second thanks to its rich natural resources and a friendly attitude towards tourists. The TTCI index is interesting for Eastern EU tour operators as it gives them information about which countries/regions are attractive as new tourism destinations. It is also very useful for DC tourism providers as a benchmark and it gives them insights in
which areas their country is performing well and in which areas they need to improve.
Considerations for action
Identify and focus on your country’s key
competitive advantages over other
countries and differentiate the traveller’s
experience in your country from the
experience he would have elsewhere.
Use the TCCI as a benchmarking tool to see
in which areas your country is performing
well and in which areas it needs to improve.
Go to the Travel and Tourism
Competitiveness Report of the World
Economic Forum for more detailed
information about the performance of your
country and competing countries.
For more information on market competitiveness on the EU+EFTA tourism
market in general, refer to CBI’s ‘Market Competitiveness’ for tourism.