Travel Trends and Beyond. NC Governors Conference On Hospitality & Tourism Asheville, NC Monday, March 14, 2011

Transcription

1 Travel Trends 2011 and Beyond NC Governors Conference On Hospitality & Tourism Asheville, NC Monday, March 14, 2011

2 Young Strategies Team Destination research and strategic planning Research for 100+ destinations in 26 states Communities, regions and states Travel industry focused National research data and trends analysis Writing and speaking Board workshops & planning sessions Listening to travelers

3 Its 2011 and we are still new at this 1990 twenty years ago The Internet & Online?? Most small DMO s starting up Branding not on the radar screen First generation of leadership Ads, brochures & visitor centers Sales & shows

4 Who are they?

5 2011 Recovery to expansion Counterintuitive Stock market up, corp. profits up Federal, State & Local governments strapped Spending Taxes Deficit Unemployment languishing close to 10% Personal savings up Personal spending down Higher prices gas, food and yes, travel

6 2011 or the end of times

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9 2011 Expansion not universal February Consumer Confidence

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11 2011 Leisure Travel Rebound Source: Ypartnership Feb, 2011

12 2011 Business Travel Improving Marriott International's Chief Executive said business travel was improving, and that he wasn't sensing cancellations from unrest in the Middle East and higher fuel prices. Business travel accounts for a bigger slice of the market than leisure "We're trending up with group business. It's getting better," J.W. Marriott Jr. told reporters on Monday Source: Reuters, Mon. Mar 7, 2011 Source: Ypartnership Feb, 2011

13 A travel industry in transition Airlines returning to profitability facing debt Increasing fuel prices Increasing capacity HIGH labor costs & disputes Older fleets, dropping regional jets Dropping small airports Car Rentals Profitable Older dirty fleets & controlling costs Mergers & new partnerships

14 A travel industry in transition Transportation Infrastructure Eisenhower Interstate Highway system crumbling Roads beyond capacity and construction delays Bridges Directional signage Airports Parking at capacity Old crowded, dirty terminals Trains & train stations Bus and bus stations

15 Welcome new airport!

16 A travel industry in transition Bottom line- Getting there by: Plane Train Car rental car TAXI Highways Bus/coach Is most likely unpleasant which means they arrive in a bad mood!

17 A travel industry in transition Restaurants Many struggling & closures Per person spend (cover) down Changing the experience Some are doing well! Convention / EXPO Centers Some occupancy improvement in 2010 Smaller, shorter, last-minute meetings MPI reports increases in 2010 Forecasting growth in 2011

18 A travel industry in transition Attractions New & growing or struggling Too many, travelers can t do it all Expanding the experience Prices going up Culture & Heritage Providing the unique that travelers seek Experience not always updated Museum numbers declining Struggle for funding and support

19 Lodging lean and recovering (STR) Source: STR Worldwide Occupancy Data

20 Lodging lean and recovering (STR) 2009 Worst year ever for most 2010 Much better than expected 2011 Pipeline (new development) very slow Growth in luxury & high end experiences Growth depends on local market conditions Demand may recover faster than ADR Business travel coming back Pent up demand for leisure travel

21 Lodging 2011 Forecast (STR) Total United States Key Performance Indicator Outlook Scenario (% change vs. Prior Year) 2011P Hotel Industry Performance Scenarios 2011 Low RevPAR Growth Forecast High RevPAR Growth Supply Demand Occupancy ADR RevPAR

22 Competition Your competition is probably NOT in this room Asheville, Charlotte, Raleigh It s out in the ocean 16 million passengers are expected to cruise in 2011 Up 6.6% over 2010 More ships/new lines

23 An evolving traveler - leisure Last minute planning Value seeking More shorter trips Some closer to home Exploring new planning technology Changing travel party demographics Fewer but more engaging activities

24 An evolving traveler - leisure FUNDAMENTAL SOCIAL CHANGE: Leisure travel is no longer just a luxury For most It is a form of therapy We just have to get away!

25 American Travel Market 44% of all leisure travelers took at least one family vacation. 73% take weekend trips (4 nights or less) 71% take five consecutive nights or more extended trips 1/3 visited a beach or lake and 26% took a theme-park vacation 69% took a vacation to celebrate a life event last year like milestone birthday or anniversary

26 American Travel Market 67% of grandparents took at least one vacation with their grandchildren last year More likely to have taken a vacation in their local area (staycation) 31% took a last minute trip 99% had internet access, 89% got information on line and 87% made online reservations 90% have a facebook page, 23% have visited a blog to seek or preview information about a vacation destination or travel service provider

27 American Travel Market 48% of children play an active role in planning vacations 24% have stayed in a vacation home or condominium 1/3 said they wait for products and services to go on sale before buying Source: YPartnership

28 An evolving visitor experience We keep creating more to do Restaurants Attractions Entertainment Sports Shopping Festivals & events For people who have less time to do it?

29 External events affect us all Gulf Oil Disaster Hurricanes, tornadoes, floods, earthquakes Politics & politicians Local, state and national Arizona and Immigration issue South Carolina flag issue Strikes transportation, sanitation, lodging Swine flu, food safety, bed bugs, accidents

30 THERE IS TOO MUCH GOING ON... TOO MUCH HAPPENING TOO FAST TO STAY ON TOP OF IT ALL - A CVB PRESIDENT

31 Fractured travel industry State, Regional and National Associations Lodging Restaurant CVB/DMO Attractions When does our industry UNITE? Do we speak with one voice?

32 State & local stuff! Your board! Your team! Other groups coming after your funding Time spent making your case In-market spending to keep them happy Are we just supposed to invite them? Or do we have to host them too? When did I become a full-time politician?

33 Branding & rebranding Your destination MUST stand out Appeal as a UNIQUE EXPERIENCE Your brand must: Stand out Be memorable Connect emotionally with the traveler Motivate interest Be consistent Be funded to be visible

34 Website/online/digital/mobile How many times have you branded? Rebranded? How big is your online investment? Technology Personnel - do you have an e-strategist? When was your last online strategy overhaul? Are you tradigital? Have you gone mobile?

35 Social Media - explosive growth

36 Are we so in-touch with research, technology, branding and ROI

37 that we have lost our way, Lost our core focus? Serve too many masters? Lost touch with our traveler?

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39 My first job.before Internet Mary Jaeger-Gale Chimney Rock Park, NC Research Business cards always We work holidays & weekends Our guests are all that matters without them there is no us Regionalism Partnership Get OUT and listen to your visitors

40 Two BASIC Strategies 1. LURE MORE VISITORS Most likely to come Repeat visitors Drive market Seasonality Traveler Segments Online & social media Packages Partnership CONVERSION 2. IN-MARKET SPENDING Extend the stay Orientation Facilitation Information Signage/wayfinding Training = upselling Partnership

41 One MAJOR Tactic! 3. Partnership Partnership Partnership Local Partners (some): CVB/DMO City/County Gov t Lodging Attractions Retail/shopping Dining Transportation Services Citizens Regional Partners (some): State Travel Office State Travel Assoc. Regional Assoc. Travel Agents/Planners Media / Press Publications/Guides Group Planners

42 STRATEGY 1 LURE MORE VISITORS

43 Change your vocabulary Replace tourism with travel industry Business travelers Conference/Meeting travelers Leisure travelers Government related travelers Pass-thru travelers Sports travelers Education related travelers

44 Ask not what your state travel office can do for you Ask what you can do for your state travel office Unity = National + State + Local

45 It all starts with knowing who is visiting our destinations! Lodging

46 First Lodging Market Research (why? Overnight traveler is the critical base) EX: Hotelier Survey for 2009 Segmentation Geographic Area Area - % of Rooms in the Market Business Travel Segments Conference Meeting Group Individual Leisure Other Airport/Downtown 31% 31.8% 41.4% 21.6% 5.2% Beltway 17% 34.2% 34.0% 27.3% 4.5% Casino 10% 9.7% 45.3% 30.0% 15.0% Theme Park 42% 5.2% 43.0% 45.4% 6.4% All County 22.0% 40.9% 30.5% 6.6% Source: Young Strategies 2009 Lodging Survey for a specific destination Total lodging response = 61.8% (4,582 rooms reported out of 7,417 total)

47 Lodging STR Research - Seasonality Example: WEEKLY Occupancy Percentages Halloween Thanksgiving Christmas wk 40 wk 41 wk 42 wk 43 wk 44 wk 45 wk 46 wk 47 wk 48 wk 49 wk 50 wk 51 wk 52 Source: Sample Destinations Data from Smith Travel Research

48 Second - Traveler Surveys By travel segment Where Lodging/Rentals Convention Center Attractions Sports Shopping / Retail Dining What Segments Leisure, business, meeting, sports, VFR, group, blue collar Length of stay Activities Spending Satisfaction Exit interviews reveal total trip behavior

49 Traveler Surveys Party Spending by SEGMENT Category Business Leisure Conv./ Meeting Lodging $93.40 $ $ Food / meals $56.60 $46.43 Attractions / entertainment $47.14 $24.80 Wineries NR NR $28.33 Shopping $45.00 $ $59.50 Transp., fuel, airfare, etc $48.17 $79.04 Average Daily Expense $ $ $ Average Length of Stay Total Trip Expenditures $ $ $827.99

50 Traveler Surveys Party Spending by SEGMENT Category Business Leisure Conv./ Meeting Lodging $93.40 $ $ Food / meals $56.60 $46.43 Attractions / entertainment $47.14 $24.80 Wineries NR NR $28.33 Shopping $45.00 $ $59.50 Transp., fuel, airfare, etc $48.17 $79.04 Average Daily Expense $ $ $ Average Length of Stay Total Trip Expenditures $ $ $827.99

51 Traveler Interviews Party Spending by SEGMENT Category Business Leisure Conv./ Meeting Lodging $93.40 $ $ Food / meals $56.60 $46.43 Attractions / entertainment $47.14 $24.80 Wineries NR NR $28.33 Shopping $45.00 $ $59.50 Transp., fuel, airfare, etc $48.17 $79.04 Average Daily Expense $ $ $ Average Length of Stay Total Trip Expenditures $ $ $827.99

52 Cost Allocation Per Segment

53 Hotel Identified Segment Priorities Overall Downtown Airport Beltway Casino Segment Rank Score Rank Score Rank Score Rank Score Rank Score Corporate SMERF / / Association / / Team Sports / / Group Tour Government

54 Research Based Plan BY SEGMENT Visitor profile by segment Spending Activities/behavior Demographics Put your target segments in rank order Identify your target geographic markets Hint five hour drive market first Streamline your plan Aggressive partnerships Refocus your brand stay on message

55 Refocus your brand

56 Refocus your brand

57 Sales & Marketing Strategy Re-allign sales staff based on segmentation Re-allign budget Sales Marketing Reevaluate advertising placement Revisit your online social media strategy Reevaluate show participation Just because you have always done it is the worst reason to do it

58 Selling the destination experience Partner with CVB/DMO and each other Appeal as a UNIQUE EXPERIENCE Your destination experience must: Be fun Be inspirational Be motivational Be doable

59 Partnership without borders

60 Reevaluate your fulfillment Case Study: Myrtle Beach 2009 Produced 325,000 visitor guides Mailed 245,000 visitor guides $2.72 each $666,400 Inquiries - 80% came through the website Research showed the guide was used most inmarket, planning was done on the website 2010 = stopped mailed fulfillment

61 STRATEGY 2 DRIVE IN-MARKET SPENDING

62 If you want to control the experience control the entrance - Walt Disney

63 Guest EXPERIENCE begins at arrival Gateways Check-in / arrival experience The lodging stay Activities Attractions Activities Outdoors Shopping Dining

64 WE WORK TOO HARD AND SPEND TOO MUCH TO GET THEM TO COME We can t leave it to the Industry to ACTUALLY TAKE CARE OF THEM

65 DMO = Destination Management Facilitating DYNAMIC partnerships Managing the destination experience Managing the destination inventory Tracking the ever changing traveler Looking into the future

66 Increased spending starts at the gateway First Impression first point of contact Orientation and facilitation Signage and wayfinding Visitor/Welcome Center Lodging Check-in Parking Attendant Attraction Ticketing Overall front-line training = experience

67 Gateways that create a sense of place

68 Visitors Centers = Sales Centers Open when the traveler is THERE! EVEN AT NIGHT!

69 Visitors Centers = Sales Centers SOOO much more than a brochure rack!

70 Visitor Center = SALES Whistler Space efficient, revenue generating

71 Fish where the fish are Melbourne - Semi mobile, seasonal, open as needed

72 Fish where the fish are Go Mobile! California - mobile, seasonal, open as needed It Looks like travel = fun!

73 Fish where the fish are Get nimble! Arlington many places at once?

74 Hit The Streets Show them how to find the cash registers Auckland on every block

75 Be Flexible & Connect 1 on 1 Hospitality is SELLING!

76 Promote the slowest periods for growth Seasonality of Visitation 60% 50% 40% 30% 20% /04 10% 0% Jan- Mar Apr- May Jun- Aug Sep- Oct Nov- Dec

77 Hospitality is SELLING! Train your front-line To SELL in a hospitable way

78 Upselling at point of contact for $$ Restaurants Menus Drinks? Appetizers? Specials? Desserts? Take Home? Lodging Welcome to Orientation Directions? Reservations? Tickets?

79 WHEW! Pause for breath

80 What do I think will happen? 2011 better 2-4% growth People WILL travel, it is a RIGHT Travel behavior will continually evolve Fuel, ticket & food price increases will be offset by Increased demand for travel THERAPY Food safety & sourcing Technology reigns, but print still works Meeting attendance rebounds

81 What do I think will happen? Less small airports, regional hubs grow Surface transportation to hubs (buses, trains) Big shifts in distribution OTAs, websites, mobile Major shifts in technology marketing Social media will be refined to drive bookings Brand awareness up brand loyalty down We will emerge better marketers & better service PARTNERSHIP & SELL THE EXPERIENCE

82 The one strategy that WON T work

83 Remember, this is fun! Y C S F S O Y A

84 Berkeley Young, Young Strategies, Inc Strategies

85 Sources U.S. Travel Association Ypartnership Smith Travel Research PKF Hospitality Research Tourism Economics The Conference Board Bureau of Labor Statistics PhocusWright U.S. Census Bureau Cruise Line Industry Association (CLIA) Air Transport Association (ATA) Center for Exhibition Research (CEIR) National Restaurant Association (NRA) American Hotel & Lodging Association (AH&LA)