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Travel & Tourism Market Trends

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Denise Richardson

on 19 April 2013

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Transcript of Travel & Tourism Market Trends

Travel & Tourism
Market Trends What is travel & tourism? Airplanes
Hotels/Resorts/Home Swaps
Entertainment (restaurants, amusement parks, state parks, museums, movies, theater, etc.)
Travel Agencies Technology = Globalization Market Segments JetBlue reaches business travellers through YouTube commercials Social Media & Technology Travel & Tourism Evolution of Travel & Tourism Evolution of Travel & Tourism Air Travel Market Segments Hotels Hotel Trends Marriott Rewards Airlines Cruises Current Major Marketing Campaigns 2013 North American Deployment Trends Technology Trends Case Study Early forms of Travel Early Reasons to Travel Food
Law Cruise Industry Trends - New Markets More homeports in Asia are able to serve luxury cruisliners Asia leads the world in international tourism growth Azamara Club Cruises - building 40 new ports in Far East including Beijing, Shanghai, and South Korea Princess Cruises: Sun Princess going to Japan for spring-summer season in April 2013; 9 more sailings by 2014 Shanghai's port arrivals for luxury liners expected to grow from 62 in 2012 to 150 in 2013 US Market demographics from TNS, Cruise Lines International Association 2011 Cruise Market Profile Royal Carribean
iPads in every stateroom aboard Splendor of the Seas
Wayfinder System with plasma and LCD touch-screens throughout the Oasis of the Seas and Allure of the Seas Crystal Cruises - "Fast-Track check-in" barcode on cruise tickets Disney - every inside statement features a "Magical Porthole" on the Dream Norwegian - iConceirge Smart Phone App for onboard guess information Carnival - "Thrill 5D Theater" to watch 3D films with special effects Carnival Corporation & PLC Chariman and CEO, Mickey Arison We remain well positioned for a recovery in 2013 and beyond evidenced by the resilience of our global portfolio of cruise brands as consumers continue to capitalize on cruising's superior value versus land-based vacation alternatives. Continued expansion of digital marketing use and social media to cultivate fans of brand Use of Twitter to enhance customer service Blogs by ship captains, ship staff, executive pursers, and special guests Reward programs for repeat guest including reduced fares, gifts and expedited embarkation Social Media Strategy Educate consumers on value of cruising Source: Stephanie Leavitt, Senior Manager, Online Experience & Operations, Carnival Cruise Lines Encourage consumer reviews as reviews from friends are more enticing Allow consumers to help build part of the "magic" Stay focused on user-generated content Connect with first time cruisers Carnival PLC Brands Large spectrum of brands to appeal to all demographics Select Service (low-end): Fairfield Inn, Springhill Suites, TownPlace Suites, and Residence Inn Mid-market: Marriott Hotel and Resorts, Marriott Vacation Club Example: Marriott High end: Ritz Carlton and JW Marriott Affordability and Choice Company Goal: Everyone can stay at a Marriott! 3-4 Marriott locations within a few mile radius of each other Invention of the wheel led to the horse and buggy Evolution of Travel & Tourism Steam Engine Evolution of Travel & Tourism Gasoline Powered Engine Evolution of Travel & Tourism Early Cruising Evolution of Travel & Tourism Family: Cousin Eddie
Location: Pensacola, Fl
Relation: First Cousins
Demographics: Single Male, no children, 45 years old
Occupation(s): Stay at Home “Handyman” Location: Chicago, Il
Relation: Grandparents
Demographics: Husband / Wife (2 x grandkids)
Occupation(s): Retired Family: The Mitchells’
Location: San Antonio, Tx
Demographics: Husband / Wife and 2 Children (Son; 10 yrs and Daughter; 13 yrs)
Occupation(s): National Director of Sales and Housewife Meet the Mitchell’s William Mitchell must go on business to Atlanta for 1 week in April 2013. Looking forward to a vacation and is letting his wife plan the entire event. Cousin Eddie managed to guilt William into bringing him (at no cost to Eddie). He is trying to convince William to go to Egypt. Planning the Vacation of their Dreams Summer of 2013 William’s parents have asserted themselves onto the trip, but want to cruise Alaska. Martha Mitchell is planning a family vacation to Europe for 2 weeks in June 2013 The Mitchell kids want to go on a Disney Cruise for their vacation in the Caribbean. Profiling William Mitchell
aka The Business Traveler William’s Business Travel Cycle William William’s Business Travel Cycle Profiling Martha Mitchell
aka “The Pleasure Traveler” The Europe Influence… The Research… 2 1 Profiling Grandpa and Grandpa Mitchell
aka “The Retired Pleasure Traveler” Travel Frequency: Several domestic vacations a year – mainly to visit friends and family
**The last time Grandpa Mitchell was in Europe was during WWII
Technological Savvy: Still have corded telephones in their homes, but have a computer with email
Social Media: What???
Preferred Method of Travel: As long as they aren’t behind the wheel – it’s all good!
Preferred Airline: Don’t Have One
Preferred Hotel: Any place that takes an AARP Discount
Favorite Part of Traveling: “Relaxing and seeing family”
Immediate Goal: Have an awesome vacation with their grandchildren – hopefully in Alaska Immediately went to website to sign up Received this email from AARP 2 1 Why Alaska? Travel Frequency: is lucky to leave Pensacola once a year; never been out of the country
Technological Savvy: CB Radio is one of his primary uses of communication
Social Media: Don’t even think about it…
Preferred Method of Travel: Doesn’t care as long as alcohol is served
Preferred Airline: Has never flown
Preferred Hotel: Doesn’t care unless it has a bar
Favorite Part of Traveling: Wearing his best outfit
Immediate Goal: Seeing the Egyptian Pyramids Profiling Cousin Eddie
aka “The non-social Pleasure Traveler” Read this ad in a magazine, while waiting to get his oil changed Why Egypt? 9 out of 10 business travellers will book with Marriott Marriott Rewards is the foundation of the customer relationship strategy After joining Marriott Rewards members nearly double their hotel stays Rewards members contributed 50% of Marriott's total paid lodging With more than 28 million members Ranks among top 3 "most often used websites" for making hotel reservations, tied with Orbitz after Expedia and Travelocity Marriott.com Cumulative average growth of 38% per year Now the largest lodging website in the world exceeding US$5 billion in gross revenues (2007) Definitions Please! Tourism: travel for recreation or business purposes Travel: movement of people or objects (such as airplanes, boats, trains and other conveyances) between relatively distant locations Tourists: people traveling to and staying in places outside their usual environments for not more than one consecutive year for leisure, business or other purposes Who's Traveling? Travel & Tourism Statistics Travel & Tourism GDP Contribution T&T is one of the world's leading industries, accounting for 9% of global GDP (2011) Expected to become more important to global economy over next decade (2011-2021) Slightly less than banking sector, 11% More than automotive industry, 8.5% US Travel Industry Impact Aviation Air transport lies at heart of modern globalized economies Significant structural transformation with entry of LCC Would rank 21st in terms of GDP if it was a country ($425 billion) ~5.5 million workers employed directly in industry worldwide 1/3 of global trade in manufactured goods transported by air 3 billion passengers 50+ million tons of freight flown around the world every year Hotels Important employer: offers wide range of full and part time jobs for young people, first time job seekers, minority groups, retired people and working mothers Middle East & Africa together are responsible for almost 1/2 of the new rooms under construction Number of new rooms planned or under development = 1.3 million (7%+ of existing worldwide stock Currently 12.7+ million hotel rooms around the world Cruises One of fastest growing sectors in Travel and Tourism over past 10 years Emerging Market - river cruises Total estimated cruise passenger count at more than 16 million worldwide Avg. annual passenger growth rates for members of the Cruise Lines International Association (CLIA) has been more than 7.5% , reaching 14.8 million in 2010 Emerging Markets Brazil, Russia, India, China and South Africa (BRICS) 81% of travelers find user reviews important
46% of travelers post hotel reviews
49% of travelers won’t book a property without reviews Travel Review Sites Social Media Mistakes Mobile = connectivity all the time
Smartphone usage:
80%+ of business travelers
60%+ of leisure travelers
Travel booking behavior changing
Technology is giving people confidence that they can book everything on the fly Mobile Device Use – Purchasing Travel Online (age) Generate 200% more room nights & more than 430% more revenue than mobile devices
iPad users = 96% of bookings and 98% of revenue from tablets
iPad searches will increase 68% in 2013
Hotel related travel inquiries (in 2013) will rise on tablets 180%, on mobile 68% and decrease on desktop PCs by 4% Tablets Hotel Stays by Gender Household Size Source: DK Shifflet & Associates Ltd., http://www.hoteladnetwork.com/hotel-demographics.html Source: DK Shifflet & Associates Ltd., http://www.hoteladnetwork.com/hotel-demographics.html Marital Status Source: DK Shifflet & Associates Ltd., http://www.hoteladnetwork.com/hotel-demographics.html Source: DK Shifflet & Associates Ltd., http://www.hoteladnetwork.com/hotel-demographics.html Hotel Stays by Income Source: DK Shifflet & Associates Ltd., http://www.hoteladnetwork.com/hotel-demographics.html Hotel Stays by Age http://www.marriott.com/Multimedia/PDF/Hotel_Development/PowerofMarriott_brochureEMEA.pdf http://www.marriott.com/Multimedia/PDF/Hotel_Development/PowerofMarriott_brochureEMEA.pdf Major Marketing Strategy Corporations
Families http://www.marriott.com/Multimedia/PDF/Hotel_Development/PowerofMarriott_brochureEMEA.pdf Oasis of the Seas How cruise vacations compare to other locations: Being pampered
Chance to visit other locations
Fine dining
Unique and different
Get away from it all High quality entertainment
Hassle Free
Variety of activities
Easy to plan and arrange
Romantic Getaway
Exciting and adventurous Industry Information & Statistics Spending directly supported 1.2 million U.S. jobs and wages of $28.5 billion International Travel Spending (export receipts) in 2011 = $153 billion creating a trade surplus of $43 billion in favor of the U.S. Challenges: burdensome visa process & unwelcoming entry experience Overseas arrivals represent 45% of all international arrivals, yet account for 78% of total international travel receipts (arrivals = avg. growth 3%/yr) Each overseas traveler spends approx. $4,300 when visiting the U.S. and stay on avg. 17+ nights International Travel continued Digital Marketing Budget Visited by US Internet Users Top 10 Travel Websites Top leisure activities for international travelers to U.S.:
1) Shopping
2) Dining
3) City Sightseeing
4) Visiting historical places and
5) Amusement / Theme Parks Direct Spending
By resident and international travelers in the U.S. avg.:
$2.2 billion/day
$92.8 million/hour
$1.5 million/minute
$25,778/second Travel Spending Sources Source: U.S. Travel Association * in billions $813 billion in total direct travel expenditures Food Service
$192.0 Public Transportation
$156.1 Lodging
$147.6 Auto/
$147.2 Recreation/
$85.4 Retail
$84.7 How Facebook is shaping travel decisions JetBlue - part of solution in migration Westin Casuarin Resort & Spa on Grand Caymen - pool & beach patrons received libations for posting pictures at pool or beach Considerations Substitutions
Alternative airlines and other modes
Lack of diversity
Price switching - low cost carriers
Price Sensitivity
Buyer Independence Marketing Strategy and Trends Acquisition Trends cont. Airport amenities Others – based on miles SWA – based on trips Frequent Flyer Targeted mobile consumers ($37 mil) There’s an app for that… Virtual Travel Location Social Media Customer Service Awards Airline technology JetBlue Carmageddon Niche routes Situation: The Mitchell’s are planning the ultimate summer 2013 family vacation. They are a busy American Family with different influences driving their vacation desires – plus, we will take a deeper look into how the “business traveler” makes traveling decisions.

Problem (or of you can think of a better heading):
William Mitchell is busy and does not have a lot of time to help his wife plan – is indifferent as to where they go.
William Mitchell wants to use rewards points for air travel and hotel stays.

Where does the William Mitchell decide to take his family on vacation? The Mitchell Case Study Travel Frequency: One domestic vacation a year, however, has never been out of the country
**Doesn't have any friends who have been to Europe
Technological Savvy: Owns a Smart Phone, iPad, and Apple Computer, has Geek Squad on speed dial
Social Media: Facebook account
Preferred Method of Travel: doesn't care as long as she gets there safely
Preferred Airline: doesn't have one
Preferred Hotel: doesn't have one
Favorite Part of Travelling: "Leaving her worries behind"
Immediate Goal: Plan the Ultimate European Vacation “I think my family would love Europe!” “Well, that looks nice!” Immediately goes to a local travel agent and is quoted this package William can pay for two airline tickets with his Southwest Rewards Points Why Disney Cruises? Cousin Eddie decides not to go along because there are no camels in the sea! Once they are done with the cruise, they are able to visit Disney World and tour the European Markets at the by Epcot center The grandparents get their cruise – and spend time with the kids The kids are happy His Marriott Rewards points can be traded in to reduce the amount of money paid for the cruise Why Disney? Travel Frequency: Several domestic vacations a year – mainly to visit grandparents
Technological Savvy: both have iPhones, iPads and Apple laptops
Social Media: Everloop Account
Preferred Method of Travel: Flying because it’s cool!
Preferred Airline: Don’t Have One
Preferred Hotel: Any place that has a pool
Favorite Part of Traveling: “blogging and bragging with friends”
Immediate Goal: Convince parents to go on a Disney Cruise! Profiling the kids
aka “Pleasure Traveling Children” Accessible Tourism Medical Tourism (Germany is the leader) Adventure Travel (Hard and Soft) Green Consumerism Airline Market Segmentation Incentive by Segment Age/Income Segmentation Marketing Strategies The Team Louis
"Hotel Aficianado"
Gallo Karla "Technology" Sutton Eduardo "Cruiser" Macias "Pilot" Kyle Mickelsen Ruben "Case Study" Ayala Denise "Prezi's the Best!" Richardson
Full transcript