2013 Marketing Outlook Forum Wrap UP

Transcription

1 University of Massachusetts Amherst Amherst Tourism Travel and Research Association: Advancing Tourism Research Globally 2013 Marketing Outlook Forum - Outlook for Marketing Outlook Forum Wrap UP Suzanne Cook Suzanne Cook Consulting, LLC Follow this and additional works at: Cook, Suzanne, "2013 Marketing Outlook Forum Wrap UP" (2016). Tourism Travel and Research Association: Advancing Tourism Research Globally This Event is brought to you for free and open access by ScholarWorks@UMass Amherst. It has been accepted for inclusion in Tourism Travel and Research Association: Advancing Tourism Research Globally by an authorized administrator of ScholarWorks@UMass Amherst. For more information, please contact scholarworks@library.umass.edu.

2 2013 Marketing Outlook Forum Wrap Up Presented by: Suzanne Cook, President, Suzanne Cook Consulting, LLC For more information, contact Suzanne at October 28-30, 2013 ~ The Drake Hotel ~ Chicago, Illinois, USA

3 2013 TTRA MOF Wrap-Up

4 Top Trends for 2013 and 2014

5 Trend #1 Are we really in a recovery?

6 Adam Sacks told us has not been as strong as expected with Sequester and government shutdown but there is cause for optimism U.S. consumer has some momentum. Debt down and assets up and hhs in good shape; higher taxes taking a bite but coming out of savings not reduced consumption; home prices rebounding; consumer attitudes improving American companies are in position of strength improved balance sheets, strong profits, high capacity utilization, investment up to prerecession levels, manufacturing output recovering, improved competiveness in U.S., strong energy sector - leading to lower prices Economic headwinds will subside in 2014 GDP growth to top 3% next year When asked if 7% is the New Normal for unemployment, may be but called it reality of the restructured economy

7 Canada - Slow Growth Ahead Source: CBoC economic forecast June conferenceboard.ca

8 Trend #2 It s still the consumer

9 Consumer Confidence Improving but Still Lagging September Each Year 90 considered healthy Sept 03 Sept 06 Sept 09 Sept = 100 Source: The Conference Board

10 Canadian Consumer confidence yet to reach prerecession level Source: CBoC monthly surveys of Canadian consumer confidence. conferenceboard.ca

11 J. Walker Smith told us. Cautious consumer mindset. People see signs of financial upside but remain worried about exposure to economic and lifestyle risks. Slimming Down Unique combination of upside and downside. Pre-recession consumers looking up How do I get more? During the recession and much of the early recovery consumer looking down. How do I avoid becoming like those who have less? Not willing to take the risk and exposure they took before. Now it is both. Consumers ready for more but determined to get it with less. Remain concerned about economy and cautious about finances. Smarter consumers. Smaller share in the Middle Class. Not more frugal consumers don t want to be frugal - rather it is what they do to cope in hard times. Now more focused on spending but also on weeding out wasteful spending.

12 J. Walker Smith (Cont.) Slimming Down - Live large. Carry little." Consumers want a big life but without all of the baggage. Reprioritize Consumer more willing than ever to reinvent their lifestyles and thus the opportunities to connect with them. Travel is #1 in their bucket lists. Evolving Sharing Economy get rid of wasteful spending. Do it well vs. do it all. Demand for headspace Give people back something in terms of experience. Streamline, don t overwhelm Turn every mundane task into a form of play Focus on connections driving focus on everything local Kinship economy IHG move from travel experience to travel relationship Give consumers social currency to spend

13 Trend #3 Travel Continues to Recover

14 Records Set in 2012 Total Total (Millions of Person-Trips) of of Arrivals) Arrivals) rivals) Inbound Visitorss Travel 1,900 2, Source: U.S. Department of Commerce; U.S. Travel Association and Tourism Economics

15 Records Set in 2012 Travel Spending (Dollars in Billions) Source: U.S. Department of Commerce; U.S. Travel Association and Tourism Economics

16 Transportation demand generally positive

17 2013 So Far. Many travel companies (airlines, hotels, tour operators, etc.) reporting better than expected results for Q Forecasts for this summer were optimistic Ski resorts reporting strong advance bookings

18 Trend #4 Leisure Travel Leads Performance

19 with leisure trips leading the way Person Trips % growth Forecast Leisure Person Trips Business Person Trips

20 U.S. Resident Leisure Traveler and Spending (Total Directs Spending and Person-Stays indexed to 2000) 150 9/11 Impact Recession 125 Spending +56% 100 Travelers +42% Leisure Growth Expected to continue '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 DKSA PERFORMANCE/Monitor SM 1

21 Leisure Travel Trends Luxury travel said to be making a stunning comeback Authenticity/Experiential - People seeking diverse new experiences; meaningful and authentic connections with the place and its people Looking for simplicity road trips and National Parks are hot

22 MMGY Global (n=2,300, every 90 days) Tied to a March 2007 Base

23 Overall Traveler Sentiment Index March 2007 July March 2007 = Mar 07 Apr 07 Jun 07 Aug 07 Oct 07 Dec 07 Feb 08 Apr 08 Jul 08 Oct 08 Feb 09 Apr 09 Jul 09 Oct 09 Overall Feb 10 Apr 10 Jul 10 Oct 10 Feb 11 Apr 11 Jul 11 Oct 11 Feb 12 Apr 12 Jul 12 Oct 12 Feb 13 Apr 13 Jul 13 Source: MMGY Global, travelhorizons TM

24 Leisure Travel Intentions Strengthening Percent of U.S. adults who plan to take a leisure trip between August January % 61% 63% 53% 56% 53% 59% Jul 07 Jul 08 Jul 09 Jul '10 Jul 11 Jul 12 Jul 13 Source: MMGY Global, travelhorizons TM

25 Expects for U.S. Resident Leisure Travel Leisure travel and spending continue to grow at a faster rate than business Top leisure destinations to hold their places into the foreseeable future Continued slide of Travel Party size and Length of Stay Caution in trend toward upscale accommodations may be impact of economic climate more affluent travelers continue to travel, less affluent don t rate gap may begin to widen reducing ability to trade up Share of auto travel to continue on slow rise, particularly if air travel does not become more attractive or affordable result is closer-to-home travel Print to survive 24

26 Trend #5 Generational Shifts

27 MILLENNIALS U.S. Generational Cohorts GENERATION X Born years BOOMERS Born years Born years

28 Population Percentage Generation X 20% Boomers 26% Millennial 28% Older 13% Generation Z 13% Source: 2010 Census

29 Importance of Age Cohorts: Share of Trip Volume vs. Spending 30% Millennials Generation X Boomers 25% Percent 20% 15% 10% Volume Spending 5% 0% Base: Overnight Marketable Person-Trips

30 Psychographic Differences Impacting Travel Factor Millennials Generation X Boomers Beliefs and Values Decision Making Earning and spending Marketing and communications Source: 2009 Pendergast Lifestyle, fun Variety, freedom Friends, little brand loyalty Uncertain spenders, short term wants, creditdependent Participative, viral, through friends Experts, information, brand switchers Credit savvy, confident investors Descriptive, direct Work ethic, security Authority, brand loyalty Conservative, pay upfront Mass

31 Generation Share of Leisure Travelers (% Person-Stays) U.S. Travel Outbound Travel Boomer (48-66) 40 Millennial (18-31) Gen X (32-47) Millennial (18-31) Boomer (48-66) Gen X (32-47) 10 GI/Silent (67+) 10 GI/Silent (67+) DKSA PERFORMANCE/Monitor SM

32 Give up sex or your phone? 22% (and 30% females) would give up sex before they would give up their phones. This varies by region, with Latin Americans less likely to give up sex (10%) and people from APAC countries more likely to (31%). 31

33 Trend #6 Diversification of Leisure Travel

34 CRUISE PASSENGER GROWTH 20 Passenger figures (Europe and global) Total passengers (millions) m 13.5m 14.82m 16.32m 20.3m m 5.06m 5.71m 6.18m 6.26m European-sourced passengers Global passengers 33

35 HISTORIC SHIP GROWTH 167 new ships 40 new ships 80 new ships

36 SHIP REVITALIZATIONS

37 River Boat Cruising Returns to U.S.

38 NTA Trends in Tours and Packaged Travel Demographic shift of packaged travelers from largely the traditional senior market to younger markets, including baby boomers, young adults, and student/youth Special interests becoming the driving force for tours much more customization today International inbound markets (based on Travel Trade Barometers for German, UK, Mexico, France, and China) China Inbound Program growth and export value

39 The Attractions Sector Soaring to New Heights

40 RESULTS Aggregate U.S. Attractions visitation was up 2.4% in 2012 much better than the 0.7% decrease in Source: H 2 R Market Research

41 Most Segments of the Attractions Industry Posted Increases in 2012 Zoos Botanical Garden Aquariums Science Centers Theme Parks Water Parks State/national park Museums Major sporting events Historic sites Musical theater Art Museums -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Source: TEA/AECOM, Morey & Associates, Broadway League, ESPN, NPS, H2R Market Research

42 TRENDS 9 EMERGING GLOBAL ATTRACTION TRENDS 1. Reinvestment. 2. Blurred Lines. 3. Architectural Facelifts. 4. Optimizing the GX. 5. Entertaining Queue Lines. 6. Demographics 7. VIP Experiences. 8. Technology. 9. Leveraging Guest Information.

43 H 2 R Market Research Attraction s Industry Forecast Annual Aggregate Variance 3.5% 3.0% 2.5% 2.4% 2.7% 3.0% 2.0% 1.5% 1.0% 0.5% 0.5% 0.9% 0.7% 0.0% -0.5% -1.0% -0.7% f 2014p Source: H 2 R Market Research

44 Family Culinary Student Travel with a Purpose Sports Adventure Faith-based

45 Synergy with Evolving Demographics, Social Values and Lifestyles Culinary (Food) Tourism Shopping Tourism Wellness tourism Medical tourism Eco/Sustainable tourism Adventure travel Sports tourism

46 Special Activities of Interest Millennials Generation X Boomers 25 Percent Exceptional Culinary Experience Winery Tours/Tasting 5 Traveling with Grandchildren Base: Overnight Marketable Person-Trips

47 Special Activities of Interest 40 Percent Eco Tourism Cultural Activities/Attactions Historic Sites/Landmarks

48 Trend #7 Business Travel has a Long Way to Go

49 Traveler Index (Person-Stays indexed to 2000) 150 9/11 Impact Recession 125 Leisure +42% Business -3% DKSA PERFORMANCE/Monitor SM 4

50 Traveler Spending Index (Total Direct Spending indexed to 2000) 150 9/11 Impact Recession 125 Leisure +56% 100 Business +14% DKSA PERFORMANCE/Monitor SM 4

51 BUSINESS TRAVEL PAST YEAR BUSINESS TRAVEL Took at least one business trip during the past 12 months Percentage * 10 0 July 2010 July 2011 July 2012 July 2013 * Denotes a statistically significantly difference from all other years Denotes a statistically significant difference from July 2009, July 2010 and July Q1. In the past 12 months, approximately how many business trips have you taken away from home of at least 75 miles, one way, or that included an overnight stay? Base: Total respondents Source: MMGY Global, travelhorizons TM, July

52 BUSINESS TRAVEL AVERAGE NUMBER OF PAST YEAR BUSINESS TRIPS Took at least one business trip during the past 12 months (Average number of trips) July 2010 July 2011 July 2012 July 2013 Q.1. In the past 12 months, approximately how many business trips have you taken away from home of at least 50 miles, one way, or that involved an overnight stay? Base: Total Respondents 51 Source: MMGY Global, travelhorizons TM, July 2013

53 Business Travel Intentions up Significantly 25 Percent of U.S. adults who plan to take a business trip between August January 21% 20 19% 16% 16% Percentage % 5 0 Jul 09 Jul 10 Jul 11 Jul 13 Jul 13 Source: MMGY Global, travelhorizons TM

54 Demand YTD Sept Compared to 2007: Transient Drives Recovery Transient Group 23.3% 18.5% 14.2% 7.7% -0.5% -0.1% -0.2% -9.0% -5.1% -2.7% -3.2% -17.1% Segmentation Demand % Change, Sept. YTD 2008 through 2013 vs. Sept. YTD 2007

55 ADR YTD Sept Compared to 2007: The Worst Is Now Behind Us Transient Group 2.8% 4.9% 0.9% 1.3% 4.3% -0.4% -4.2% -1.8% -2.7% -6.9% -13.3% -11.7% Segmentation ADR % Change, Sept. YTD 2008 through 2013 vs. Sept. YTD 2007

56 Trend #8 Hotel Demand Sets New Record, Rates Recovering

57 Total United States Chain Scale Key Performance Indicator Outlook 2013F by Chain Scale 2013 Year End Outlook Chain Scale Occupancy (% chg) ADR (% chg) RevPAR (%chg) Luxury 2.3% 5.4% 7.8% Upper Upscale 0.9% 4.2% 5.1% Upscale 1.1% 4.4% 5.5% Upper Midscale 0.9% 3.6% 4.5% Midscale 1.1% 2.6% 3.7% Economy 1.7% 3.2% 4.9% Independent 1.9% 4.3% 6.3% Total United States 1.4% 4.2% 5.7% *as of September 6 th, 2013

58 Total United States Chain Scale Key Performance Indicator Outlook 2014F by Chain Scale 2014 Year End Outlook Chain Scale Occupancy (% chg) ADR (% chg) RevPAR (%chg) Luxury 2.7% 5.4% 8.3% Upper Upscale 0.2% 4.6% 4.8% Upscale 2.7% 5.0% 7.8% Upper Midscale 0.2% 3.2% 3.4% Midscale 1.2% 3.3% 4.5% Economy 2.8% 3.7% 6.6% Independent 0.6% 5.2% 5.8% Total United States 1.3% 4.6% 6.0% *as of September 6 th, 2013

59 Timeshare vs. Hotel Occupancy 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Q Q Q Q Q Q Q Q Q Q Timeshare All Hotel Resort Hotel Source: 2013 State of the Vacation Timeshare Industry: United States Study, produced by Ernst & Young for ARDA International Foundation

60 Industry Trends Total Sales (B) $9.7 $6.3 $6.4 $6.5 $6.9 Intervals Sold Sales Price per Interval 482, , , , ,155 $20,152 $20,468 $19,308 $18,897 $18,723 Points Price per Interval $20,399 $22,243 $19,921 $22,732 $24,723 Weeks Price Per Interval $19,836 $18,999 $14,744 $15,113 $13,267 Source: 2013 State of the Vacation Timeshare Industry: United States Study, produced by Ernst & Young for ARDA International Foundation

61 Travel Agencies in Growth Mode Again Most ASTA agencies are in growth mode again - majority of ASTA members said their first half 2013 performance was the same or better than the first half of There are concerns that the government stand-off will have a negative effect on full year 2013 revenues and we ll see a return depressed growth. Many travel agencies have re-invented themselves and flourished in the new marketplace. There has been a growing trend by younger demographics to use travel agents for complex leisure travel. Source: American Society of Travel Agents

62 Trend #9 International Travel Driving Growth

63 UNWTO 2030 Forecast Arrivals growth by year Arrivals > travelers, reflecting multiple counting across multiple country visits on a trip. Growth rates decelerate through 2030 reflecting 1) an ever-growing base, 2) assumption of increasing transport costs. = 43 million new travelers per year, on average to reach 1.8 billion arrivals by billion if transport costs and GDP assumptions are worse. Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce 62

64 International and Overseas Arrivals to U.S. - Slowing Growth Expected International Overseas 6.4% 6.7% 5.8% 5.3% 4.0% 3.4% * 2014* *Forecasts as of October 2013 Source: U.S. Department of Commerce, Office of Travel and Tourism Industries

65 Percent Change in International Arrivals to U.S. 2012/ Countries in order of 2012 arrivals to U.S. Percent Change 2012/ South Canada Mexico UK Japan Germany Brazil China France Australia Total Korea Arrivals Source: U.S. Department of Commerce, Office of Travel and Tourism Industries

66 Forecasts for Key Inbound Markets to U.S., Countries in order of 2012 arrivals to U.S % Change 2012/2011, 2013/2012, and 2014/ f Canada Mexico UK Japan Germany Brazil China France South Korea Australia f Total Source: U.S. Department of Commerce, Office of Travel and Tourism Industries

67 Forecasts for Key Inbound Markets to U.S., 2018/ Countries in order of projected arrivals to U.S. in 2018 Percent Change 2018/ Canada Mexico China UK Japan Brazil Germany Korea France Australia Total Arrivals Source: U.S. Department of Commerce, Office of Travel and Tourism Industries

68 The European Travel Market Top Spenders Holidays by Air 35,000,000 UK Germany UK France Italy Belgium Spain Sweden Netherlands Euro bn ,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 Germany France Italy Netherlands Sweden Spain Denmark Norway Austria Belgium Finland Czech Republic Poland Slovakia Source: Eurostat

69 Key consumer trends Post Recession European Consumer VALUE CONSCIOUS The Grey Market by numbers 40 seconds someone turns 50 in the UK 50% consumer spending by EU 50+s Authentiseeking Travel with a purpose Experience /Adventure Family / bonding Techno-driven travel Wellness Eco Only 10% marketing spend aimed at over 50s in the EU

70 Spotlight on Two Key Outbound Markets Germany: No.1 European market for international travel approx. 30m outbound holidays by air GDP growth, low unemployment & disposable income stable Slow growing mature market Good airlift Short breaks & cruises growing; Group & coach tours popular Trade important 25% holidays booked online Increasing competition for long-haul destinations Growth forecast + 4m by 2017 Opportunities: focus on specific segments/experiences, seniors, trade distributors, source city focus UK: No.2 European market for international travel - sharp drop in demand from peak 2006/7 Overall outbound down 20% UK NA down 29% UK other long haul down 10% N. America losing market share to other long haul destinations Online v important Tour Ops v important for long haul Recovery expected to continue V good airlift fares increasing Increasing competition for long-haul destinations Opportunities: focus on specific segments/experiences; seniors, cruises, tour operators/otas

71 Brazilians Traveling Overseas Source : ANAC, OTTI, ECT

72 Canada: Total Outbound leisure trips ( 000 of outbound leisure trips, all destinations) 4.1% 4.0% Global Recession SARS conferenceboard.ca

73 Canada: Outbound leisure trips (% share outbound leisure trips) US to become more popular conferenceboard.ca

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75 Five insights about the Second Wave of Chinese Outbound Travel 1. Chinese outbound travellers will continue to gain importance in terms of number of visitors, bednights and amount spent per person per trip ignoring or dismissing them is not an option 2. Distinguishing between the segments of the Chinese market is essential averages won t help you to satisfy the different customer groups 3. Chinese are not just travelling for relaxation and fun to other countries and regions. In different forms, gaining prestige, self-esteem and knowledge are main motivators for package group members, self-organised travellers and MICE customers alike learning to adapt your offers and stories to cater to the fulfillment of motivations will attract Chinese tourists also to smaller destinations 4. Chinese are first-generation affluent, money-rich but time-poor help them choosing, offer them more value for money, not discounts 5. Chinese will be Chinese, with growing experience and language skills they insist more, not less, to see signs of appreciation of the Chinese culture signalise your extra attunement and commitment to Chinese visitors 74

76 Trend #10 Advertising/Marketing Getting the Right Mix

77 Metrics that Matter Successful travel marketing strategy continues its reliance on customer and general consumer data. The most successful organizations have research tightly woven into marketing, with a research staff that understands and exploits the goldmine of customer insights available in analytics and other resources available to track customer behavior Social identity and website usability are converging faster than ever and the change must be embraced Fortunately, traditional analytics are adapting to keep up with the change. By taking advantage of social integrations you can gather better information about your visitor base. Capitalize on the incredible conversion potential of your digital marketing assets by integrating your social and digital channel strategies to ensure consistency in the user experience, which enables a smooth flow from inspiration to transaction. Define the social metrics and ROI that matter to your organization. Strike a balance between Fan/Follower (audience) growth, engagement (reach) and quantifiable audience action (bookings, website referrals, etc.). And don t be afraid to talk to your digital customers! Information gathered through surveys and other methodologies help bridge informational gaps on opinions and behaviors that cannot be understood through the digital footprint alone. Metrics That Matter How To Measure & Achieve Them

78 Trend #11 Don t be too Worried about 2014 (Maybe)..

79 Domestic Trip Volume Slow & Steady 25% of US volume, still below 2007 levels - painfully slow growth since Forecast: 456 million trips, +1.0% 75%, exceeded 2007 peak by 2010; annual growth since Forecast: 1.63 billion trips in 2014, +1.9% 2,250 2,000 1,750 1,500 1,250 1, Total Domestic Person-Trips (Millions) Business Leisure

80 International Arrivals Volume Strong but Leveling slightly Strong climb to record volume since 2009 for both Canada/Mexico & overseas, with similar growth pattern. Forecast: 71.8 million total arrivals, +4.0% Overseas Arrivals the U.S. Canada & Mexico Total International Visitors to the U.S.

81 Total Visitor Spending - Again Reaching Record High Spending continues to rise to record levels after 2008 peak. Domestic spending 5x larger than Int l Forecast: Total to $940 bill.; Domestic to $789 bill., Int l. to $151 bill. $1,000 $800 $600 $400 $200 $ Total Travel Expenditures in U.S. ($ Billions) U.S. Residents International Visitors

82 Spending Growth Strong but Ebbing While expected to reach new records, growth rates are slowing, esp. among Int l., from double digits 2014 Forecast: +4.5% Total; +3.9% U.S.; +7.6% Int l Total Travel Expenditures in U.S. ($ Billions) U.S. Residents International Visitors

83 SUZANNE D. COOK, PH.D. PRESIDENT (202)