(704) 677-4018 mobile [email protected] PO Box 12600, Charlotte, North Carolina 28220-2600 Changing Trends Affecting Cultural & Heritage Travel

(704) 677-4018 [email protected]

PO Box 12600, Charlotte, North Carolina 28220-2600

Changing Trends Affecting Cultural & Heritage Travel

Cultural & Heritage Tourism Alliance Conference

Seattle, WashingtonDecember 1, 2007

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

•Dynamic partnership•Destination research and strategic planning•Research for 100+ destinations in 26 states•Small to mid sized communities•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 change.”one that is most responsive to change.”

- Charles Darwin- Charles Darwin

2007-08 = CHANGE2007-08 = CHANGE


2007 and Beyond

Growth in 2007 and into Growth in 2007 and into 20082008

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 (1986)

•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


Ups and Downs

Increase in leisure tourism,Lodging occupancies are up,

BUT

• Decline in visitation to many historic sites

• Decline in attendance to many heritage attractions

• Increase at many theme parks• Increase in retail shopping• Increase in dining


2007 and Beyond

““If cultural and heritage If cultural and heritage tourism tourism

is so HOT?is so HOT?

Why are my numbers NOT?”Why are my numbers NOT?”


National Lodging

Data Source: Smith Travel Research STR Report

• RTM 2007 projection = 63.7% (growth in inventory)• ADR & RevPAR up!• Less resort hotel building, more fractional ownership resort development


Airlines

Source: Air Transport Association

Prices below 2000 levels but going up

• 2005 Losses: $4.1 Billion

• 2006 Losses: $0.5 Billion– U.S. Fleet 20% smaller

– 160,000 jobs cut since 2000

– Fuel costs doubled over 2005

• 2007 projected profit = $5.1 Billion

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

2000 2001 2002 2003 2004 2005

Passenger Volume Annual Growth/LossAirline Selection Criteria:Schedule/convenience-61%More leg room-11%Earning Flyer Miles-9%

Price increases expectedSource: Travelocity 12/06


Cruise IndustryCruise Lines (CLIA): • Out-performed all travel

segments since 2000• It’s easy!• Formidable growth in 2007

Annual Passenger Volume

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

•2001 •2002 •2003 •2004 •2005 •2006


Convention & MeetingU.S. Business/Convention Travel (domestic): Growth is driven by:

• Fun location (resorts, riverfronts, casinos, etc.)

• Convenience (walking scale once there)

• Unique experiences, events & great speakers/topics

• Cost containment

Convention Person Trips (millions)

130.0

135.0

140.0

145.0

150.0

155.0

•2001 •2002 •2003 •2004 •2005 •2006(p)


Domestic LeisureU.S. Leisure Travel (domestic person trips) (TIA):

Increase has never faltered

We all NEED to get away!

Exploring UNIQUE places

Domestic Person Trips (millions)

840

860

880

900

920

940

960

980

1,000

•2001 •2002 •2003 •2004 •2005 •2006(p)


Domestic Leisure

Increases in Leisure travel

• “ Respite”

• Vacations demanded

• Growth in family travel

• Growth in affinity travel

• Attendance to many attractions is down

• Simplified planning, orientation & facilitation


Consumer Confidence• Americans are cautiously optimistic

• FEB ‘07 – Oct ‘07

• 2000 - 2007 Consumer Confidence Index

0.020.040.060.080.0

100.0120.0140.0160.0

2000 2001 2002 2003 2004 2005 2006 Oct-07


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


Group Tour

Great Potential for Rebound

• Affinity, affinity, affinity• Last minute planning taking its toll• Hard to sell-out per capita tour• Custom designed for Baby Boomers or other

age groups• Freedom without the hassle, cruise ship on land• Something you can’t get any other way

• Huge growth in student travel – now 25% of international travel (SYTA)


AttractionsChallengesMore to do…less time to do it• 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


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

Major Business Units• Destination

– Attraction– Inn on Biltmore Estate– Explore Biltmore Estate

• Biltmore Estate Wine Company• Biltmore Estate Reproductions Inc.

Key Statistics• 1,000,000 visitors annually• 140,000 cases of wine• 42 licensees• 66,000 room nights


Biltmore and moreKey Statistics• $117 million in revenue• $350 million impact on community• 10% – 12% return on sales• 1,500 employees• $12 million in taxes


Biltmore and more

NEW TOURS, ATTRACTIONS, EVENTS…

• Downstairs Tour• Behind the Scenes• Christmas• Festival of Flowers• Winery• Retail• Dining• Hotel


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


Biltmore and more

William Amherst Vanderbilt Cecil

“We don’t preserve Biltmore Estate to make money—

we make money to preserve Biltmore

Estate!”


Top Ten Trends for 2007-081. 2007 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 2007-08


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


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



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 are 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



Destination ChallengeThe definition of

“vacation” has changed

(Go/See/Do vs.

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


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


Thriving amidst Change

Research is the answer to grow with the new behavior patterns!

• Research as a foundation• MUST know your customer!• Market segmentation approach• A focused plan for the community• BE a unique destination


Walt Disney said:

“You don’t build it for yourself.

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


Want to know more?Want to know more?

Berkeley YoungBerkeley [email protected]

mailto:[email protected]

Documents

(704) 677-4018 mobile [email protected] PO Box 12600, Charlotte, North Carolina 28220-2600 Changing Trends Affecting Cultural & Heritage Travel