H2R Market Research. Actionable Insights from the Latest Tourism Research. Reveal Your Customer s Full Experience

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1 H2R Market Research Reveal Your Customer s Full Experience Actionable Insights from the Latest Tourism Research Delivered May S. National Ave, Suite C1 Springfield, MO

2 H2R conducts research across a variety of industries Our heart and majority of experience, however, is in the travel, tourism and attractions industry 2

3 H2R is blessed to serve hundreds of world-class and internationally recognized clients and business partners. TRAVEL & TOURISM ATTRACTIONS QUALITY OF LIFE BUSINESS PARTNERS Training Camps of 3

4 Our toolbox is large, but our field of application is narrow. Our expertise centers around: Voice of the Visitor (VOV) Consumer Segmentation Brand Health and Brand Perception Marketing Impact & Effectiveness New Product & Advertising Evaluations, and Pricing Studies. Today we will be sharing travel insights and discussing how the tourism industry continues to evolve. 4

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6 Travel industry is doing well

7 Travel industry is doing well But, growth is slowing

8 Travel industry is doing well But, growth is slowing Revenue growth need not slow as well

9 Domestic leisure travel is growing But, not as quickly Leisure travel +2.0% in 2017 Growth is slowing again, +1.8% in 2018 Source: U.S. Travel Association. January % 3.0% 2.0% 1.0% 0.0% U.S. Leisure Travel Forecast 3.6% 1.8% 2.0% 1.8% f

10 International travel is slumping We think % thru 2017 Q3 Connecticut hosted 323k in 2016, < 1% U.S. International Travel Forecast 5.0% 3.6% 0.0% -5.0% Source: National Travel & Tourism Office (NTTO) % % 2017

11 Lodging is doing well Growth there is expected to slow as well Nationwide, room demand was +2.7% in Occupancy was +0.9% In 2018, forecast +1.9% in demand and -0.2% occupancy In Connecticut, room demand was +3.2% in Occupancy was +1.8% YTD, room demand is +4.4% and occupancy is up 3.0% Source: STR, Marketing Outlook Forum

12 But, Connecticut s growth has trailed the U.S. by a third over the past 5 years, +1.9% vs +2.8% per year 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% Connecticut vs USA Room Demand Var 4.5% 3.3% 2.9% 3.2% 2.7% 2.2% 1.8% 1.5% 1.7% -0.3% CT USA Source: STR, Connecticut Office of Tourism

13 Attractions attendance is growing But also not as fast as in past years Source: PGAV Destinations & H2R Market Research (March 2018), Voice of the Visitor. PGAV Destinology Series. U.S. Visitation +1.5% in 2017 CT Visitation -3.7% in 2017 U.S. attractions forecast +1.4% in 2018

14 In fact, only found one segment who is not expecting slower growth Can you guess who?

15 The tourism industry is doing well Travel volume is still growing But, nationwide growth is slowing Why?

16 Travelers remain economically optimistic Consumer confidence is at Source: PGAV Destinations & H2R Market Research (March 2018), Voice of the Visitor. PGAV Destinology Series. 48% expect economic improvement vs 21% who expect economy to worsen.

17 Maslow s Hierarchy of Needs is alive and well Improved consumer confidence has satisfied safety needs and freed travelers to begin thinking about higher order concerns #MeToo #MarchforOurLives #BlackLivesMatter #Blackfish Consumer Confidence is strong Unemployment stands at 4.2%

18 Slowing growth is the result of the changing travel landscape Consumers are anxious, and travelers are embracing new behaviors

19 Skift recently reported U.S. travelers are in what they call State of Permanxiety

20 H2R has observed travelers are turned off, some tuning out Destination marketing awareness fell 15% among U.S. over the past 15 months Source: H2R Market Research

21 In Connecticut s feeder markets, both unaided brand awareness and interest in visiting have been declining Awareness - 1 point Source: H2R Market Research & Connecticut Office of Tourism (February 2018), Brand Awareness Study. But market reach was up 11% in Connecticut last year. COT is doing best they can with what they have to use Interest - 6 points

22 New forms of competition are disrupting your market space

23 Source: White-Hutchinson Digital Social Connectedness

24 A new day has dawned

25 To survive, let alone thrive, you must advance your approach Deliver visitor experiences and make insightful marketing decisions

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27 Who are they? Where do they live? What do they do? How do they find out about you? Why do they visit? What makes them different?

28 The most reliable way to forecast the future is to try to understand the present --Futurist, John Naisbitt

29 Voice of the Visitor PGAV Destinations & H2R This first and most comprehensive U.S. report on destination guests collective opinions, attitudes, and expectations generated directly from guest feedback.

30 Experts across travel segments are forecasting slower growth in demand that does not necessarily have to mean slower growth in revenue

31 It does mean you have to dig deeper, get smarter and increase your yield & efficiency

32 Increase visitor frequency. Remind today s guests of all the coming events that will occur tomorrow Increase length of stay. More activities translate into longer lengths of stay. Suggest longer itineraries to pique interest Leverage brand promoters. Arm your brand ambassadors with news & insights they can share with their followers, and organically increase your market reach Ensure your website delivers. According to McKinsey & Company, one s website is the most important consumer touchpoint. If you do not win here, you lose Optimize price. If you are an attraction, the fastest way to greater profitability is ensuring price is at equilibrium. Are you charging an amount that maximizes revenue?

33 We need to adapt our business strategies and take advantage of opportunities that present themselves Travelers are less risk averse Source: PGAV Destinations & H2R Market Research (March 2018), Voice of the Visitor. PGAV Destinology Series.

34 First-Time Visitors Consumers are venturing further from home, traveling farther & searching for new experiences. First-time visitors tend to stay longer and spend more. But, they are less likely to return Critical mass & authenticity are important to 75%+ of New England travelers Source: PGAV Destinations & H2R Market Research (March 2018), Voice of the Visitor. PGAV Destinology Series.

35 H2R s Dual Factor Growth Principle Successful destinations require both satisfiers and motivators to grow their visitation level. High visitor satisfaction is good Because low satisfaction causes attendance to decline. But, higher satisfaction does not necessarily always lead to higher visitation. Satisfaction has diminishing marginal utility. Growth requires acceptable levels of satisfaction, as well as motivators such as fresh new experiences. Source: H2R Market Research

36 Address visitors unmet needs Nationwide, most pain points revolve around a lack of motivators Lack of variety More discounts Fresh experiences New types of attractions Source: PGAV Destinations & H2R Market Research (March 2018), Voice of the Visitor. PGAV Destinology Series.

37 Invest in something fresh, new, different Reposition longstanding experiences as new, provide a different spotlight Marketing hooks need not be expensive But, we must choose new wisely, and. Post-mortem assessment via a Marketing Hook Evaluation Model

38 Collaborate with Your Visitors

39 What are Connecticut Visitors Looking For? Traveler Profile Brand Health Study Dashboard of KPIs STR Performance Economic Impact Monthly Jobs Report Attractions Performance Google Analytics

40 Leisure travel accounts of 78% of Connecticut s annual visits Source: OmniTrack (formerly TNS). Connecticut Traveler Profile. Travels America Research.

41 Most (74%) Connecticut travelers spend the night. The average travel party spends $439. Those visiting casinos or attractions spend more. Source: OmniTrack (formerly TNS). Connecticut Traveler Profile. Travels America Research.

42 Connecticut s most popular tourist activities include visiting friends/family (30%), casino gaming (19%) & shopping (16%).along with rural sightseeing (11%), visiting historic sites (8%) and museums (7%).

43 Source: OmniTrack (formerly TNS). Connecticut Traveler Profile. Travels America Research. The average Connecticut visitor is 51.4 years of age, and 24% have children with them.

44 Connecticut s biggest feeder markets are NYC (30%) and Boston (16%). Source: OmniTrack (formerly TNS). Connecticut Traveler Profile. Travels America Research.

45 Connecticut travel brand is perceived as: Beautiful fall foliage Interesting small towns to explore Beautiful scenery Casino entertainment Lots of historic sites to visit Source: H2R Market Research & Connecticut Office of Tourism (February 2018), Brand Awareness Study. Choice drivers: Fun destination Lots of things to see and do Place to visit with spouse/significant other Rest & relaxation Arts & culture

46 Looking Forward Listen to your visitors Remain close to travel constituents Invest in relevant new technologies Measure everything Practice continuous improvement

47 The best way to predict the future is to create it. -- Peter Drucker

48 10 Takeaways to Optimize Growth 1. Advance your approach. Find ways to increase our yield & efficiency 2. Leverage your brand promoters 3. Ensure your most important consumer touchpoint (our website) delivers, converts prospects 4. Optimize your price points to maximize revenues. 5. Practice consumer centricity 6. Deliver epic visitor experiences that compete with new competition from Digital Social Connectedness 7. Reassess your priorities through the lens of the H2R Dual Factor Growth Principle 8. Address your visitors Unmet Needs 9. Collaborate with your visitors when adding new hooks & compare to Industry Norms 10. Measure post mortem performance using a Marketing Hook Evaluation Model 48

49 Thank You! Reveal Your Customer s Full Experience 4650 S. National Ave, Suite C1 Springfield, MO