(704) 677-4018 mobile byoung@youngstrategies

(704) 677-4018 [email protected]

PO Box 12600, Charlotte, North Carolina 28220-2600

Travel Trends AffectingCommunity Travel Development

Finger Lakes Tourism AllianceWaterloo, New York

Wednesday, March 19, 2008

704.677.4018 www.youngstrategies.com PO Box 12600, Charlotte, North Carolina 28220-2600

•Larry Gustke. Ph.D., NC State University•Dynamic partnership•Destination research and strategic planning•Research for 100+ destinations in 26 states•Small to mid sized communities and states•Travel industry focused•National research data and trends analysis•Writing and speaking


““It is not the strongest of the species that It is not the strongest of the species that survives, nor the most intelligent, but the survives, nor the most intelligent, but the one that is most responsive to one that is most responsive to changechange.”.”

- Charles Darwin- Charles Darwin

2008 = CHANGE2008 = CHANGE


2008 and Beyond

Growth in 2008Growth in 2008

finally outpacing 2000 levels-finally outpacing 2000 levels- but it is a completely different but it is a completely different

world…world…

……major traveler behavior change major traveler behavior change isis

forcing the travel industry to forcing the travel industry to reinvent reinvent the experiencethe experience!!


Changing Consumer BehaviorTwenty years of change (1988)

•CNN was new•Compact Disc was new – cassettes going out•Few households had a PC•Internet???•Balsamic Vinegar and Sushi???•No frequent flyer miles•Few luxury hotels•Few fine dining restaurants•No security…anywhere•Videos were predicted to kill going to the movies

•Americans have changed…has your destination?


Ups and Downs

Increases in leisure tourism,Lodging occupancies are up,

BUT• Decline in visitation to many historic

sites• Decline in attendance to many

heritage attractions• Increases & decreases at theme parks• Increase in retail shopping• Increase in dining• Isn’t soccer going outside?


U.S. Domestic Leisure

Increases in Leisure travel • “As long as the kids are happy”

• Respite

• Vacations demanded

• Growth in family travel

• Growth in affinity travel

• Attendance to many attractions is down

• Simplified planning,

orientation & facilitation


Travel Industry Segments• Lodging - returned to pre 9/11 levels –

profits!• Airlines – coming back, profitability &

mergers• Cruises – growth, growth, growth…it’s

easy• Group Tour – rebounding appeals to GenX


Attractions - ActivitiesChallenges

• Decline in attendance to many historic sites and museums

• 16,500 museums in U.S.• 9,000 house museums in U.S.• Boring vs. engaging• Desire for less structure• ½ price ticket & then sell

food, beverage, retail• “Store, Door & More” • FUN

More to do…less time to do it


Consumer Confidence• Americans are pulling back

• June ‘07 – Feb ‘08

• 2000 - 2007


Sophisticated Travelers

Trading Up– Truckers drinking lattes– Trends are changing at a faster rate– Consumer is more demanding– Providers of goods and services will

have to stay on top of rapidly changing trends to survive

– Luxury experiences not for the rich alone

– Fine art/craft as souvenirs


House MuseumsNew or through!

• Hearst Castle worst year in 20 years (USA Today)

• Biltmore Estate best year ever!

• It’s not the product…it’s the EXPERIENCE

• Requires constant reinvestment


Biltmore and more

Seasonality of Visitation

0%

10%

20%

30%

40%

50%

60%

Jan-Mar

Apr-May

Jun-Aug

Sep-Oct

Nov-Dec

1974

1995

2003/04


Top Ten Trends for 20081. 2008 Continued growth

in overall travel & tourism revenues

• Americans predicted to take 1,254.6 million domestic person trips in 2007, up 2.3% over 2006 (Source: IbisWorld)

• Americans view vacations as an essential part of contemporary life (Source: YPB&R/Y)

• We must learn the new behavior patterns


2. Time Poverty – drives all trends More to do…less time to do it

• Expedia survey – 1/3 respondents didn’t take all of their vacation days

• Nearly 50% of all Americans report “time poverty” - report desire for all-inclusive to save time (Source: YPB&R/Y)

Top Ten Trends for 2008


Last Minute Travel

•Who has time to plan Who has time to plan anymore?anymore?•InternetInternet•Visitor centersVisitor centers•SignageSignage•Front-line trainingFront-line training•““MUST-SEES”MUST-SEES”•Seeking unique experiencesSeeking unique experiences•Swift inquiry response!Swift inquiry response!


3.Fragile consumer confidence will affect travel decisions

• Gas prices frustrate but don’t slow us down…yet!

• Real Estate downturn causes anxiety. Despite increasing costs, seven in 10 U.S.

adults plan to take a summer vacation this year…. Even though airline ticket prices are increasing, 60% of respondents say they'll fly as much as they did last summer. (Source: Expedia.com)



4. Traveler frustration Too many hassles

– No time to plan– Airline complaints up up up– Taxis and car rental– Hotel check-in, room quality – Attractions– Dining



Generation Y - MillenniumAge Range: 7 - 25

•Came of age at the Millennium•Optimistic, confident, self assured•Strong•Empowered•Care for others•Care for environment•Love to buy & enjoy life•Relate to the War Generation•28% U.S. population - 80 million


5.Internet: #1

• Travel is #1 in Internet use & sales• Expedia survey (April 2007) summer

vacation planning:– Online travel agency (52%)– Friend/family recommendation (45%)– Travel guide books (25%)– Travel community sites (19%)– Magazines & newspapers (19%)– Traditional travel agents (17%)– Convention and Visitor Bureaus (16%)



6. Geotourism -Increased traveler DEMAND for destinations that:

> PROTECT THE AUTHENTICITY > AND GEOGRAPHIC CHARACTER OF PLACE> it’s environment, culture, aesthetics, heritage

and the well being of residents.

• 55.1 Million Americans > sustainable tourists (source: TIA & National Geographic)

• GEOMAPPING – maps that are user friendly and provide geotourism information in the context of a scaled road map.

•Center for Sustainable Destinations – National Geographic Society



7. Business Travel: Reluctant

Growth• Costs up, desire to travel down• Service complaints up up up• Unhappy business travelers• Younger & more female• Cost-contained travel• On-line deal searching



8. Generational Shifts Retiring BoomersGenX entering peak spending yearsGenY & MGeneration coming of age

• Develop “age-appeal” products• Baby Boomers spending• Affinity groups• Family groups



Embrace Change

Baby Boomers 15 more good $$ years

GenX is entering its peak spending years

Younger Generations…

…Are “deciders”

“Technophilia”


9. Orientation & Facilitation critical Travelers arriving with no plans

Time Poverty drives the need

CRITICAL COMPONENTS:- Gateways- Directional Signage- Visitor Centers (Thurs – Sun

critical)- Kiosks- Front-line training- Padded maps everywhere



Orientation & FacilitationOrientation & Facilitation

Gateways that create a sense of placeA unique destination

Visitors Centers =Sales Centers


10. A New Travel EraChanging Generation groups = NEW traveler

expectations

“Transumers” consumers in transition- airports with shopping malls- retail in lodging rooms

- Visitor centers as heritage centers

- overnights at historic sites



Other Trends

Traveling with pets –(14% of all Americans)

Safety & Security always an issueTeam sports – huge growth – long termDiverse family – grandparents & moreNature travelFamily reunion growthHuge Growth in RV Travel


Destination ChallengeThe definition of

“vacation” has changed

(Go/See/Do vs.

Chill & Immerse)Travelers looking to escapeShort getawaysYear round travelSearch for meaning


Destination Marketing & PositioningYour Best Shot at Success

• “Position” your destination based on unique attributes

• Use research to determine:• marketable assets• target audiences• effective messages

• Develop a powerful positioning statement

• Unify all destination marketing messages• Corporate recruitment• Leisure• Convention, meeting, business

TheTheCustomerCustomeris always is always

rightright


Destination Marketing & Positioning

Elements of Positioning• Your position in the competitive marketplace

• What is your distinction?

• What makes you unique?

• What sets you apart from others?

http://lpe.ajc.com/gallery/view/travel/weekend_away/2006/weekendaway0727/


Research Based Marketing Process

Research Based Marketing Process

A. Destination Research and Strategic Plan

B. Brochure and Ads

C. PR

D. Website & e-marketing

E. Product Development/redevelopment

F. On-going Evaluation

G. Change ONLY if the customer/product changes


An old but reliable rule..

Market- who are you targeting?

Message - What are you saying?

Medium- Where are you advertising?


Equity

Every promotionCan’t benefit everyone

equally every time !

• Market segmentation by:• Geographic location• Type of Visitor (leisure, group, etc.)• Time of year


Don’t let this happen to you..DON’T

•Local politics drive the process…market to the visitor not your civic leaders!

• A generic “vanilla” positioning to please all local constituencies “Small Town Friendly”

• Civic pride can get in the way… “Home of Pepto-Bismol”

• Oversell - “Worlds best…”

• Undersell - “Living and working in…”

• Spend a fortune on logos and image packages…message is more important!


Finally…your best shot at a “Brand”

• ZEALOUSLY guard “the experience”

• What makes you unique……makes you irresistable

• Repeat visits and referrals are gold

• Tomorrow’s visitor is just like the visitor today…know your customer!


Finally…your best shot at a “Brand”

• Combine & coordinate efforts – streamline

• Do research for market, message, medium

• Develop a consistent positioning and “look”

• Focus on your best target segments

• PR is your best friend! (trade publications)

• Stay on top of competition and marketing • Focus on your customer and expect change


TAKE-AWAYS1. Use research to understand traveler behavior

2. Focus on all open days & need periods (slow)

3. Don’t try to copy others…focus on your unique

4. The story is more important than the facts

5. Plan for short attention spans & offer options

6. Look for “transumer” opportunities

7. Broaden the experience through interpretation

8. Pay attention to market segmentation

9. Report successes and research identified ROI


Walt Disney said:

“You don’t build it for yourself.

You ask the customer, and you build it for them.”


Berkeley Young, Young StrategiesBerkeley Young, Young [email protected]

Judy Randall, Randall Travel MarketingJudy Randall, Randall Travel [email protected]

Want to know more?Want to know more?

mailto:[email protected]

mailto:[email protected]



So How Much $$ Do You Have?

• Building awareness for your destination is expensive

• Destination marketing is increasingly competitive

• Multiple messages confuse the customer

• Is it possible to truly “BRAND” your destination?

http://count-money.com/bands.html




What is a Brand?

Travel and Tourism is the world’s largest industry, with some well known brands…

…Brands that cost $$ millions to create and build

http://upload.wikimedia.org/wikipedia/en/5/5a/The_Walt_Disney_Company.png

http://www.carnival.com/

http://www.hilton.com/en/hi/index.jhtml;jsessionid=1SMR3O0PYOGDCCSGBIV2VCQKIYFC5UUC

http://www.princess.com/

http://www.travelandleisure.com/index.cfm?f=hl

http://www.carlsonwagonlit.com/


Brands for Destinations

How many brands can you name?New YorkVirginiaLas VegasWashington, DCPhiladelphiaBostonPittsburghChicago


Brands for Destinations

Is it a brand or a logo?

http://unbridledspiritkentucky.com/product_info.php?products_id=44

http://www.iloveny.com/

http://www.visitlasvegas.com/vegas/index.jsp

http://www.seeseattle.org/aboutUs/

http://www.cvbreps.com/admin_cvbreps.pl?cgifunction=Search&Destination=Lexington

http://www.cvbreps.com/admin_cvbreps.pl?cgifunction=Search&Destination=San%20Diego


FundingYou have to have $$ to compete:• City / County Budgets• Dedicated Taxes (meals, lodging, etc.)• Memberships• Sponsorships• Grants• Contributions

Every one comes with politics and potential animosity within the community.

BEWARE TURF WARS


Lodging Segmentation2006 2007 Category

16-42.6% 22-45.7% LODGING RESPONSE RATE of 54 properties/7,353 rooms

39.0% 41.2%Individual Business Traveler

21.3% 18.5%Convention/Meeting/Group - Corporate

9.0% 7.8%Leisure – Tourists visiting , local attractions, shopping, etc.

5.1% 7.7%Group – Weddings/reunions/family events

4.8% 5.3%Convention/Meeting/Group - SMERF

5.0% 4.6%Group – Sports (team events)

2.8% 3.4%Leisure – Visiting Friends and Relatives

3.3% 2.6%Transient – pass through on highway

0.9% 2.0%Military-base related

1.5% 1.7%Convention/Meeting/Group - Association

3.0% 1.7%University-related

2.2% 1.7%Group Tour/Motorcoach

1.7% 1.6%Convention/Meeting/Group - Government

0.4% 0.3%Other

2006 2007 Convention/Meeting Segments as a % of Total Business

21.27% 18.46% Corporate

4.84% 5.27% SMERF (Social, Military, Educational, Religious, Fraternal)

1.52% 1.71% Associations

1.74% 1.69% Government

29.37% 27.13% Total Convention, Meeting, Group Segment


Local Lodging TrendsAnnual Revenue

$153,656,442

$197,211,440

$190,158,502

$140,145,292

$141,282,779$142,720,712

$178,334,509

$100,000,000

$120,000,000

$140,000,000

$160,000,000

$180,000,000

$200,000,000

$220,000,000

2001 2002 2003 2004 2005 2006 2007

Annual Revenue

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2001 2002 2003 2004 2005 2006 2007

Supply

Demand

$64.18

$59.24

$59.44

$62.03

$68.55

$72.28

$74.37

$98.62

$95.23

$92.82

$94.87

$101.64

$108.93

$115.51

$0.00 $20.00 $40.00 $60.00 $80.00 $100.00 $120.00

2001

2002

2003

2004

2005

2006

2007

RevPar

ADR

Documents

(704) 677-4018 mobile byoung@youngstrategies