Travel And Tourism

Travel and Tourism Trends

Brad Hillwig, Christie VandenDries, Al Kell, Lisa Fuentes-Szlemko, Teri Lindseth

What is Tourism? The World Tourism Organization defines tourists as people who: “travel to and stay in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited. “

Who, What, When, Where, How, & Why? • Anyone • Anything • Anytime • Anywhere • Any way • Any reason

Carhenge • Located in Western Nebraska • Modeled after Stonehenge • Receives 80,000 Annual Visitors

Who, What, When, Where, How, & Why? • Anyone • Anything • Anytime • Anywhere • Any way • Any reason

Who? • First Wave – Leisure Tourists were mostly wealthy, upperclass citizens. Travel was a novelty for the elite.

Who? • Second & Third Waves - Tourism is available to everyone. - Middle and upper-class citizens in 1st world countries are most likely to be leisure tourists.

When and How? • Seasonal Tourism - Summer, Winter, Spring & Fall - Holidays & Events • Planes, Trains, Automobiles & Boats… Developments in transportation have helped globalize the industry

Where? Well… Anywhere! • Truly a global industry • Nearly every country has a market for Tourism • State and local governments have recognized the economic value of attracting tourists.

Why? • First Wave - Some leisure travel - Religious Pilgrimages, Exploration, Trade, Medical & Necessity • Second & Third Waves: Why Not? Part of the expansion and growth of Tourism is the expansion of reasons to travel

Why? • Segments and Niche Markets - The industry has responded to a variance in traveler tastes by becoming a more segmented and niche-based market. http://en.wikipedia.org/wiki/Tourism

What is Tourism? • Broad Category of Human Behavior - Characterized by lack definition - Encompasses anything and everything people do - Defined by traveler tastes • Global Industry - Travel and Tourism has developed into a global industry - Continued growth and expansion - Development through differentiation and competition

Tourism Expenditures • U.S. : 2008: $ 775.9 billion 2007: $ 739.4 billion • Global: 2008: $ 3.2 trillion (leisure only) 80.7 million jobs 238.2 million jobs (direct & indirect)

Tourism Thru the Waves First Wave • Exploration, Discovery, Migration • Novelty for wealthy, upper class citizens • Religious pilgrimages; trade; medical needs; necessity

Tourism Thru the Waves Second Wave • The automobile • Industrialism: concept of leisure time or vacation time • Commercial airlines • Airline deregulation: travel more affordable • The rise of the travel agent

Tourism Thru the Waves Third Wave • The globalization of the industry • Governments recognize tourism as a valuable source of revenue • CVB’s and destination marketing become more significant • The Internet becomes a true Infosphere, a place where all things funnel and generate commerce

The Infosphere “the fusion of all the world's communications networks, databases and sources of information into a vast, intertwined and heterogeneous tapestry of electronic interchange” --Michael Vlahos

• The Internet: A True, Modern Infosphere • Destination Marketing Organizations • Vast Communication Networks

Online Travelers U.S travel booked online • 2007: 51% • 2008: 56% • 2009: 60% (Projected) Alaska: • 2006: 42% • Overall: 68%

Travelers and the Internet How Travelers Use the Internet • Travel Booking • Destination Research • Travel Specialization • Online Travel Agents • Itinerary Planning • YouTube Video • www.virtualtourist.com • Second Wave Marketing Still Matters

Business and the Internet How Does the Internet Impact Business Travel? • Increased Opportunity & Competition • Greater Need for Differentiation • Customer Centric Marketing • Segmentation and Niche • Increased opportunity for small and medium-sized businesses

Destination Marketing The Role of the Convention & Visitor’s Bureau (CVB) • Economic Impacts of Tourism • Purpose of CVB’s and Destination Marketing organizations

Destination Marketing Organizations • Manage and Promote Tourism • Brand the Destination • Research and Track Visitor Statistics • Promote and Book Conventions

Destination Marketing

Destination Marketing: Methods and Tools The Mission of the CVB • Manage Stakeholders • Build a Cohesive Tourism Network • Create a Membership of Travel Businesses • Offer a Broad Marketing Vehicle

Destination Marketing: Methods and Tools Branding, Differentiation & Customer Relationship Management (CRM) • Branding: – Define the area – Create a compelling reason to visit

• Develop a targeted marketing plan • Customer Centric Marketing • One-to-One Marketing

Destination Marketing: Methods and Tools • • • • • •

Tools & Examples Branding: Anchorage (YouTube) ACVB Buzz Marketing: Alaska B4UDIE Web 2.0 Marketing: Las Vegas Blogs: Portland

Competition in the InfoSphere Marketing Challenges • Fierce Online Competition • Targeting the right audience • Differentiation • CRM

Competition in the InfoSphere Marketing Solutions • Use CVB’s and Destination Marketing outlets • Website & Web Marketing such as Adwords, viral marketing & blogs • Encourage online booking and shopping • Aggressive Local Marketing • Differentiate, Differentiate, Differentiate

The Future of the Infosphere Globalization and the Infosphere • Increased global competition, greater differentiation • Enhanced Marketing toward segments and niches • Continued growth opportunities for small and medium sized businesses

The Future of the Infosphere Mobile Devices & Mcommerce • The Internet continues to grow • Wireless Data & Wi-Max: travelers stay plugged in while traveling • Travel publications and magazines: remain marginally relevant • Travel publishers: embrace e-paper, the Kindle and interactive online publications • Mcommerce: booking and shopping even easier.

Cybertrend Impact on Travel Demise of current typical life and work trends + rise of life and work cybertrends = more time at home

Time Poverty • Implications for hospitality and travel – The weekend traveler – The road warrior

Family Travel • Family structures are becoming more diverse – Multi-generations

– Child friendly locations – Married households – Family Reunions

Solo Travel • http://www.solotravel.org/

Social Networking • Online Social Communications

• Convergence of the Technosphere and Sociosphere

Social Networking • Online social networks are born – Podsouth Africa travel social network – Zimbio.com – Driftr – Lonely Planet's Thorn Tree

Business Alliances in the Network Economy • Star Alliance – codesharing • Travel Alliance Partners, LLC

Power of Peer Review

Social Networking: Keys to Successful Marketing – Facilitate – Become part of the community – Listen to what the masses are saying

Emerging Technologies • Security – IRIS – CLEAR – New Scanners • Logistics – RFID – GPS & NextGen

Emerging Technologies • All-Inclusive Travel Sites • Semantic Web • New Interactive Technology – Microsoft Surface

Production • Core Product – Destination – Activities & Attractions • Long-tail Services

Distribution • Focuses on packaging, promoting, and availability • Distribution Functions – Information – Bundling – Relationship management – Market research

Disintermediation of the Travel Agent

Distribution Today • • • •

Streamlining is key Link all tourism stages Information flows both ways On-demand concierge services

Future Distribution • Prosumption • Business Intelligence – Dynamic packaging – Relationship Management

Generational Marketing • Baby Boomers • Generation X • Generation Y/Millennials

Baby Boomer Characteristics • Travel tops the list for retirement activities • Have money and time to spend on travel • Travel trends – Active travel packages – Travel agents & mass media – Grand Travel • http://www.msnbc.msn.com/id/21134540/vp/17 577747#17577747

Generation X Characteristics • • • •

In their peak career & earning years Spend more per trip Fond of leisure travel Travel trends – Non-traditional vacations – Travel with pets

What percentage of people will only travel to destinations that accept their pets?

• • • •

1% 4% 7% 10%

Gen Y/Millennial Characteristics

Gen Y/Millennial Characteristics • Significant Spending Power

Gen Y/Millennial Characteristics • Tech-savvy • More diverse and environmentally conscious • Travel trends – International – Family oriented vacations – Adventure

Segmentation • Psychographics – Motivations behind choices – People’s activities, interests, and opinions • Demographics

Segmentation • Niche Markets

The Long Tail of Niche Travel • Intimacy & Romance • Experiencing Different Cultures • Ecotourism-Experiencing Unspoiled Nature • Natural Wonders • Culinary tourism • Adventure • Historic sites • Educational

The Long Tail of Niche Travel • • • • • • •

Hobby or sport Event tourism Girlfriend Getaway Health tourism Space tourism Beach/Island Visiting Friends and Relatives • Volunteer tourism • Winter tourism

Bio Sphere • Impact of the tourism industry on the natural world • Challenges and opportunities • Progressive and promising trends

Ecotourism Defined • The International Ecotourism Society: "responsible travel to natural areas that conserves the environment and improves the welfare of local people". • The Australian Commission on National Ecotourism Strategy: "nature-based tourism that involves education and interpretation of the natural environment and is managed to be ecologically sustainable".

New Sustainable Standards • • • •

Involves travel to natural destinations Minimizes impact Builds environmental awareness Provides direct financial benefits for conservation

New Sustainable Standards • Provides financial benefits and empowerment for local people • Respects local culture • Supports human rights and democratic movements

Greening of Hotels and Resorts • Statistic: An average hotel uses how many gallons of water per room per day?

• • • •

10 50 100 200

Ecotourism • http://www.youtube.com/watch?v=_pQkXkvprO A

Greening of Hotels and Resorts • • • • •

Towels and linens Light bulbs Recycling Organic food Chemical-free cleaners

Governmental Organizations • Dept of Homeland Security • FAA

• FBI

• CDC

TSA

Airport Security

TSA • Responsible for security of the nation's transportation systems • Oversees security for the highways, railroads, buses, mass transit systems, ports and the 450 U.S. airports • Introduced a “sanitized” blog for travelers

TSA Service Commitment • Professional Security - Service that delivers positive lasting impressions with proper image and effective communications. • Customer Service - Service is efficient while maintaining the dignity of all passengers. • Attentive Security - Service that acknowledges the passenger strives to minimize passenger anxiety and put them at ease. • Encourage Teamwork - Service of the highest quality resulting from combined individual efforts. • Protect Civil Rights - Service that is delivered with respect and equity.

…We used to fly to Michigan twice a year to visit my in-laws. Thanks to the TSA, I no longer have to do that because flying has become too much of a scary hassle. I figure you guys have saved me over $3000 in travel costs over the last couple years. Better still, I don't have to hear from my father-in-law about how I should go to church more often…

TSA http://anchorage.grouphub.com/projects/24205 73/file/20890598/simplifly_video.asx

Future of Air Passenger Demand

Air Passenger Demand 2000-2030

Aircraft travel is projected to more than double. Current forecasts estimate 1.7 billion passengers by 2030.

Year

Revenue Passenger Enplanements (millions)

2000

697.6

2005

736.6

2010

848.9

2015

1,007.7

2020

1,206.6

2025

1,433.4

2030

1,702.5

Note: Forecasts of scheduled passenger traffic from 2020 to 2030 are based on an assumed annual growth rate of 3.5% currently used by FAA

Source: U.S. DOT/Federal Aviation Administration

Busiest U.S. Airports 1 2 3 4 5 6 7 8 9 10 11

Hartsfield-Jackson Atlanta Int’l (ATL) Chicago/O’Hare Int’l (ORD) Dallas/Ft. Worth Int’l (DFW) Los Angeles International (LAX) Las Vegas/Mc Carran Int’l. (LAS) Denver International (DEN) Houston/G. Bush Intercont’l. (IAH) Phoenix Sky Harbor Int’l. (PHX) Philadelphia International (PHL) Charlotte/Douglas Int’l. (CLT) Detroit Metro Wayne Co. (DTW)

Source: www.faa.gov

FAA • The current air traffic system cannot keep up with the projected demand • NextGen - ground-based radar technology replaced by satellite-based operations • Will allow aircraft to safely use airspace in much closer proximity and with less weather disruption

Centers for Disease Control • SARS - there has been one near pandemic to date, between November 2002 and July 2003, with 8,096 known infected cases and 774 deaths • Cruise ship regulation through Vessel Sanitation Program

Special Interest Groups – Aging Population • AARP has 35 million members • Medical travel will increase • Accommodations for comfort, safety, and mobility will be demanded

Power of the Disabled Population • AAPD (American Association of People with Disabilities • Focuses on access and transportation • Will be relevant to hotels, tours, aircraft, transport • The ADA passed in 1990 could be expanded which would affect travel providers

Consumer Activism • 2007 was the Year of the Angry Passenger • Flight Rights Canada • The Coalition for an Airline Passenger Bill of Rights

Deep Coalitions – Government and Retail • Minute Clinic + Airport Shops = prevention and control of disease

Deep Coalitions – Government and Private Sector • Registered Traveler (RT) Program • Pilot of 20 airports was concluded this year • TSA will partner with service providers

Deep Coalitions - Hotels • Hotels in alliance with – Business parks – Convention centers – Sporting venues – Entertainment complexes • Ownership by Native Corporations

Deep Coalitions – Niche Tour Operators • Booking agencies partnered with large churches to sell faith-based trips • University hospitality degree programs operating small tour business • Environmental cooperatives contributing or donating products and services

Deep Competition • Hotel/resort industry vs. Cruise industry • Will continue to compete based on value • Family vacationers prefer cruises to resorts

Future of Travel and Tourism • Infosphere – Increased global competition – Small business growth opportunities • Sociosphere – Increased social networking – Growth of business alliances

Future of Travel and Tourism • Technosphere – Dynamic packing – Streamlining – Long-tail services • Pyschosphere – Focus on niche segmentation

Future of Travel and Tourism • Biosphere – Ecotourism – Tourist cooperation – Alternative power sources • Powersphere – Shift in airport security control to private sector – FAA’s NextGen – Activism

Dubai – http://www.youtube.com/watch?v=7eUcRjo9Yv4

Travel and Tourism Trends

Brad Hillwig, Christie VandenDries, Al Kell, Lisa Fuentes-Szlemko, Teri Lindseth