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The Long and Winding Road… U.S. Travel Trends and Outlook.

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Presentation on theme: "The Long and Winding Road… U.S. Travel Trends and Outlook."— Presentation transcript:

1 The Long and Winding Road… U.S. Travel Trends and Outlook

2 About the travelhorizons TM Survey Looking forward instead of back Travel intentions in the six months Quarterly online national survey of U.S. adults since March 2007 Current survey conducted between July 19 – 30th Total of 2,200 responses from U.S. adults age 18+ and capturing 1,600 past year travelers per survey wave Respondents representative of the total U.S. population of adults age 18+ Joint program between the U.S. Travel Association and Ypartnership

3 2001 – 2011… One for the books

4 But also a Decade of Rs… Resilience Renewal Re-Birth Recovery Resourcefulness

5 Turning the corner… But when? Another “soft patch” Weak housing market Americans’ spending plans still on hold Weak labor market has weakened again Inflationary pressures still high in travel Ongoing debt crisis Threat of higher taxes

6 It’s the Consumer Corporations, Stupid!

7 Consumer Confidence Plummets… Just can’t sustain consumer confidence Lowest since April as of August 90.0 is considered healthy 1985 = 100 Source: The Conference Board, August 30, 2011

8 Consumer Confidence… Heading in the wrong direction 1985 = 100 Source: The Conference Board considered “healthy” 66.0

9 August Consumer Confidence Index for Past Five Years… 1985 = 100 Source: The Conference Board

10 Even upper-income Americans are concerned

11 Overall Traveler Sentiment Index TM An uptick in July Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2011 March 2007 = 100 Interest in travel Time for travel Money available for travel Affordability of travel Quality of service Safety of travel in U.S.

12 Younger Americans the Most Positive about Travel Traveler Sentiment Scores Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2011

13 And their Positiveness is Gaining Traveler Sentiment Scores Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2011

14 Affordability of Travel Index… Regains some ground Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2011 March 2007 = 100 Gas price rise

15 But travel prices still outpacing inflation Source: U.S. Travel Association Travel Price Index Percentage change through July 2011 YTD TPI = +6.7% YTD CPI = +2.9% Does not include various fees

16 The cost of flying… Higher prices, fees, fees and more fees Carry-on bags Checked bags Changed flights Booking by phone Preferred seating Cut-the-line Curb-side check-in Change to earlier flight Lavatory use (Ryan Air) $9.2 billion in fees to U.S. airlines in 2010 for checked baggage/other services. TSA estimates there were 59 million more carry-ons in 2010 than in 2009.

17 Gas prices up $0.85 from last year… Price of gas still a financial issue facing travelers Source: AAA Daily Fuel Gauge Report as of September 20, 2011

18 Good News… Looks like gas prices will be declining Source: AAA Daily Fuel Gauge Report as of September 20, 2011

19 Relevance of Travel & Tourism… Right up there with other necessities After pumping $60 of gas into his Chevy pickup, Chuck says he’s giving up cigarettes, beer and a vacation. “I’ll sit at home and cook out and won’t go anywhere.” Source: USA Today, Friday, March 11, 2001

20 Interest in Travel Remains Strong Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2011 Traveler Sentiment Scores

21 But affordability of travel remains elusive Positive Negative Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2011 Traveler Sentiment Scores Deep discounts & deals

22 And “money available for travel” not back to pre-recession levels Traveler Sentiment Scores Positive Negative Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2011

23 Travel Performance… We are digging out of the hole

24 First Half 2011 Travel Performance… Looking good Domestic Volume Domestic Leisure Volume Domestic Business Volume 2.6% 2.8% 1.9% Domestic Spending 7.8% Source: U.S. Travel Association and Tourism Economics

25 Leisure Travel Trends

26 States Planning to Visit on Future Leisure Trip… 1.Florida33% 2.California33% 3.Hawaii31% 4.Alaska24% 5.Colorado22% 6.New York20% 7.Arizona18% 8.Nevada17% 9.Texas17% 10.Washington16% Among all U.S. adults Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2011

27 Interest in Visiting CO Varies by Generation… Gen X knocking at your door Among all U.S. adults Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2011 Which states are you interested in visiting on a future leisure trip?

28 And by household income Among all U.S. adults Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2011 Which states are you interested in visiting on a future leisure trip?

29 Domestic Leisure Visitors… Exceeded the 2007 high last year Source: U.S. Travel Association Bah! Millions of Person-Trips

30 56% of U.S. adults planning at least one leisure trip between August and January 7 million more travelers Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2011

31 Leisure travel intentions highest in the West…Good news for Colorado October 2008 = 62% October 2009 = 50% 49% 54% 57% 62% Source: U.S. Travel Association/YPartnership travelhorizons™, July 2011 Lowest on record Plan to take a leisure trip between August 2011 and January 2012

32 And among Gen Xers and Matures… More good news for Colorado Source: U.S. Travel Association/YPartnership travelhorizons™, July 2011 Plan to take a leisure trip between August 2011 and January 2012

33 Financial factors influencing leisure travel… Most not really travel related Financial Factor Influencing Future Leisure Travel % Agree July 2011 Price of gallon of gasoline62% Price of air travel59 Meltdown of the U.S. economy58 High level of credit card debt57 Expectation of making less money56 Expectation spouse/partner will lose job55 High level of personal debt55 Rising cost of healthcare51 Size of the national debt46 Q: To what degree is each of the following financial issues currently affecting your leisure vacation plans over the next 12 months? (Somewhat to much less likely to travel) Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2011

34 Reasons for taking more leisure trips… 3 Rs -- Rest, Relax, Reconnect Reconnect with family/fiends (43%) Relieve stress/need to relax (34%) Break from home/work routine (26%) Have put off traveling due to economy – feeling housebound (25%) Q: Why are you planning on taking more leisure trips during the next 6 months? Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2011

35 Outlook through January 2012 Still willing to travel, but making adjustments in spending Still traveling close to home Overnight leisure trips shorter in duration More day trips More long weekend getaways Plans can change, but….. Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2011

36 Vacations are Needed Now More than Ever!

37 Business Travelers… Not what it used to be

38 Incidence of Business Travel Down 14 Points Over Past 5 Years, but Stabilizing Percent taking business trip in past year Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2011

39 Source: U.S. Travel Association Millions of Person-Trips Domestic business travel inches up… Well below 1998 record high Ouch!

40 Business travel… The province of the young Plan to take a business trip between August 2011 and January 2012 Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2011

41 Lodging Trends

42 Hotel demand… Stronger than expected Source: Smith Travel Research, September Percent change in room-nights sold over prior year

43 Revenue Per Available Room positive… Driven primarily by rising demand Source: Smith Travel Research, September Percent change over prior year

44 Top down recovery for lodging % change in RevPAR through August 2011 by tier Source: Smith Travel Research, September 2011

45 % change in RevPAR through August Getting better Source: Smith Travel Research, August % or more Decrease 7.5% to 9.9% 5.0% to 7.4% 0.0% to 4.9%

46 Hotel Performance Through August 2011 Mountain region and Colorado doing quite nicely 2011 versus 2010 Source: Smith Travel Research, September, 2011

47 STR Forecasts for 2011 and 2012 ADR drives up RevPAR Source: Smith Travel Research, July 2011

48 Air Travel Faces a Bevy of Challenges… Pat downs, no snacks, too many checked bags

49 Transportation demand “unsettled”

50 International air enplanements… Outpacing domestic

51 International Visitors… Welcome back! Spend more per trip ($4,000 per overseas visitor) Stay longer (18 nights in U.S.) $31.7 billion trade surplus Stay in hotels (78%) They enjoy seeing the America we take for granted

52 International arrivals to U.S. sets new record! 9 million more visitors than 2000 Source: Office of Travel and Tourism Industries (in millions)

53 New record high for overseas arrivals… But, back to where we were in 2000 Source: Office of Travel and Tourism Industries

54 2011 Booming! International visitation up 5% and spending up 12% through June Source: Office of Travel and Tourism Industries (% change through June 2011)

55 Percentage Change in International Arrivals Through June of 10 top countries showing increases Source: Office of Travel and Tourism Industries

56 Promoting the U.S

57 Forecasts Through 2013… Break out the Ouija boards!

58 Total domestic visitors… Modest growth *Forecast Source: U.S. Travel Association; Tourism Economics

59 Total Domestic Visitors… Should set new record this year * Forecast as of May 20, 2011 Source: U.S. Travel Association and Tourism Economics In billions

60 Domestic leisure visitors… More solid growth *Forecast Source: U.S. Travel Association; Tourism Economics

61 Domestic Leisure Visitors Will continue to set new records * Forecast as of May 20, 2011 Source: U.S. Travel Association and Tourism Economics In billions

62 Domestic business travelers… Some improvement *Forecast Source: U.S. Travel Association; Tourism Economics

63 In millions Domestic business travel improves… But still well below 1998 record high * Forecast as of May 11, 2011 Source: U.S. Travel Association and Tourism Economics

64 International and Overseas arrivals continue strong as well *Forecast Source: U.S. Travel Association; Tourism Economics

65 Summary…sustained, but slow growth expected in 2011…and 2012 and 2013 Domestic Leisure Volume Domestic Business Volume International Visitors International Spending* Note: Numbers is parentheses are 2010 data 2.4% 1.2% 5.8% 10.0% Domestic Spending 7.3% (3.5%) (3.7%) (8.7%) (7.4%) (9.8%) *Excluding international airfares Sources: U.S. Travel Association; Oxford Economics/Tourism Economics; U.S. Department of Commerce-Office of Travel and Tourism Industries

66 In this travel environment … “If you’re not at the table, you’ll be on the menu.”

67 42 million “not sures”… Must be in the marketplace Not Sure 18% 42 Million No Plans to Travel 26% 60 Million Q: Over the next 6 months, do you plan to take any leisure trips of at least 50 miles one way from home or that will include an overnight stay? Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2011

68 The Rise and Fall of State Tourism Office Budgets… Too much uncertainty from year to year Total State Tourism Office Budgets in Millions Source: U.S. Travel Association, Survey of State Tourism Office Budgets

69 Elected officials giveth and elected officials taketh away…% change 2010/2009 Louisiana +68% New York -63% Source: U.S. Travel Association, Survey of State Tourism Office Budgets

70 Most State Tourism Office funding still tied to the public sector Source: U.S. Travel Association, Survey of State Tourism Office Budgets

71 Funding often at the whim of elected officials

72 “The Power of Travel Promotion” Travel and Tourism…An economic engine Question: How can we fund something like tourism promotion when we have to cover essential services like teachers, safety and highways? Answer: Tax revenue generated by travelers is immediate and are critical to financing essential services. –2010 state/local travel tax revenues more than covered all wages paid to police and firefighters nationally –Almost half of all wages paid to elementary and middle school teachers Source: U.S. Travel Association

73 “The Power of Destination Marketing” What happens when you stop marketing… The Colorado Case 30% loss in market share of overnight leisure trips $1.4 billion in lost traveler spending in first year $2.4 billion lost traveler spending per year within four years of closing $134 million in lost state and local tax receipts Tourism office back in game in 2000 Funding increased to $19 million based on ROI of 12:1 “The Rocky Mountains were there long before the Colorado Tourism Board and they’d be there long after. Surely, the tourists will keep on coming.” Source: Longwoods International

74 Washington State… The Next Colorado

75 Power of Travel Promotion Report

76 Today’s Consumer

77 2010 Census and Beyond Profound P opulation Shifts in Past 20 Years Bigger (Not obese but more of us) Older (Not older, but less young) More Hispanic and Asian More cognizant of multiracial identities More accepting of non-traditional living situations – multi- generational households, unmarried couples, same-sex couples, living solo Less enamored of kids Redefined gender roles (Chastity Bono) More suburban, and less rural Leaning more to the South and West

78 Diversity Reigns

79 New Culture Of Impatience Faster Food Faster Boot Ups Faster Downloads Speed Vacations Consumer Trends to Watch

80 Last-Minute travel is still in… Must be constantly in the market place Took at least one last-minute trip in past year and keeps rising 30 % Source: Ypartnership/Harrison Group, 2011

81 The New Resourcefulness

82 Smarter Shoppers 48% of leisure travelers feel they are smarter shoppers thanks to the economic situation Source: U.S. Travel Association/Ypartnership, travelhorizons TM, February 2011

83 Differences in Buying Behavior… Doing more of than before Gen YGen XYoung Boomer Older Boomer Mature Waiting for items I buy to go on sale 57%54%61%56%51% Using coupons/direct offers Doing more research before making a travel purchase Buying in quantity to get more for my money Buying more with cash Buying the lower cost item in a category Extent to which shopping behavior has changed from a year ago (% more) Numbers shown in red are significantly different from one or more other generations Source: U.S. Travel Association/Ypartnership, travelhorizons TM, February 2011

84 Travelers Demanding More for Their Money More leg room Upgraded guest room More bountiful breakfasts Free Internet & Wi-Fi

85 The New Thrift… Generations and marketing implications

86 The “Great Recession”… Telling it like it is Percentage of U.S. adults who agree with the statement: “Although the recession is technically over, I don’t feel like it is.” 57% Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2011

87 Generations… Recovery is not equal Danny— Have a great day sweetie! xoxo Mom

88 Millennials (Gen Ys)… I don’t understand a thing they say Millenials (Gen Ys) 76 million “20 something's” Line between home and work doesn’t exist More than half move back home with the folks after college The “boomerang generation” Like spending time with parents

89 Gen Xers… Charlie & Robert – Sensing a trend? Gen Xers 50 million Born in 60s to early 80s Post Vietnam Moving in and out of the work force In high demand in work force

90 Baby Boomers… Time flies Baby Boomers 85 million! Expected to have time and $$$ Juggling act between work and home Retiring or thinking about it 10,000 turn 65 every day Purchase 77% of prescription drugs

91 Matures… Seeing the people on the list just kills me Matures Born in 1945 or before Age 65+ Many retired or will be soon Depression-induced attitudes values persist Connected

92 Positive attitudes about travel decline with age Q: Perceptions of travel compared to year ago Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2011 Positive Negative Traveler Sentiment Scores

93 Younger more positive about having money available for travel… Mom & Dad? Q: Perceptions of travel compared to year ago? Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2011 Positive Negative Traveler Sentiment Scores

94 Differences in Frame of Mind… Boomers less positive Gen YGen XYoung Boomer Older Boomer Mature I feel much more optimistic about the future 37%34%23%27%19% Although recession is technically over, I don’t feel like it is 49%53%61%66%60% Have become much more budget minded than in the past 53%56%63%52%57% More confidence in my ability to deal with economic uncertainty 39%38%30%32%36% I am in much better financial shape than I was before the recession 29%24%13%15%10% Recent financial crises have affected sense of financial security negatively 28%36%43%40%44% % agreeing strongly/very strongly with statement Numbers shown in red are significantly different from one or more other generations Source: U.S. Travel Association/Ypartnership, travelhorizons TM, February 2011

95 Differences in Buying Behavior… Doing less of than before Gen YGen XYoung Boomer Older Boomer Mature Buying exclusive brands32%43%57%62%68% Shopping at malls35%45%59%50%52% Purchasing with credit cards33%43%54%39%43% Buying the higher cost item because its on sale 28%37%31%39% Extent to which shopping behavior has changed from a year ago (% less) Numbers shown in red are significantly different from one or more other generations Source: U.S. Travel Association/Ypartnership, travelhorizons TM, February 2011

96 Differences in Spending… Doing less of than before Gen YGen XYoung Boomer Older Boomer Mature Going out to clubs/bars 46%49%61%57%68% Buying jewelry Dining out in restaurants Major household appliances & furniture Entertainment (movies, sports, etc.) Leisure travel Clothing/apparel Computers/electronics Personal care (gyms, hair care, etc) Extent to which your spending has changed compared to a year ago (% less) Numbers shown in red are significantly different from one or more other generations Source: U.S. Travel Association/Ypartnership, travelhorizons TM, February 2011

97 Differences in Leisure Travel Behavior… Older Americans lagging behind Gen YGen XYoung Boomers Older Boomers Mature Stay in more expensive hotels30%27%11%19%17% Take more overnight trips58%61%45%58%51% Take more long weekend trips62%68%54%68%49% Stay more with friends & family76%69%65%56%64% Plan my own vacation to save money 77%74%85%86%85% Take more trips lasting 1 week or longer 39%40%24%37%36% Take fewer long weekend getaways 38%32%46%32%51% Numbers shown in red are significantly different from one or more other generations Source: U.S. Travel Association/Ypartnership, travelhorizons TM, February 2011 More likely to do during next 6 months compared to last year

98 Burgeoning of Multi- Generational Travelers 1/3 of grandparents have traveled with grand-kids; 70% of those trips also included grandkids’ parents My wife and me when we’re at the beach

99 Elusive value of social media… Not yet a trusted source for travel information But can bring about revolutions.

100 Visited a Collective Buying Site for Travel Deals Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2010

101 Visited a Collective Buying Site for Travel… Varies by generation *Denotes statistically significant difference from other generations Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2010

102 Travel Services Purchased on a Collective Buying Site… Lodging and food Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2011

103 Hand-Held Mobile Devices… The next big step is already in the hands of consumers How consumers will purchase travel Make decisions while on the trip Adjust their routes to go off the beaten path Provides more flexibility

104 Travelers are Technology Users… But really distracted drivers Access Internet From… Cell phone that is a Smartphone such as an iPhone, BlackBerry, Palm, etc. 23%32%* A tablet computer such as an iPad, Samsung Galaxy Tab or HP Slate, etc. NA7%

105 Summary…sustained, but slow growth expected in 2011…and 2012 and 2013 Domestic Leisure Volume Domestic Business Volume International Visitors International Spending* 2.4% 1.2% 5.8% 10.0% Domestic Spending 7.3% *Excluding international airfares Sources: U.S. Travel Association; Oxford Economics/Tourism Economics; U.S. Department of Commerce-Office of Travel and Tourism Industries

106 There is light at the end of the tunnel… Stay around for the ride!

107 Ending on a High Note! Sleep tight…and don’t let the bed bugs bite.

108 Concerns About Bed Bugs… Issue doesn’t seem to be going away Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2010 How concerned are you about being bitten by bed bugs in a forthcoming stay in a U.S. hotel or resort?

109 Bed Bug Concerns are Across the Board Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2010 Level of concern about bed bugs by hotel segment stayed in past year

110 Concern is High… But incidence is low Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2010 Ever stayed in a U.S. hotel or resort that had bed bugs?

111 Potential Guests do Check Out Bed Bug Problems Before Booking a Stay Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2010 How often do you check for bed bug information for a specific hotel or resort before booking a stay at that property?

112 Being Proactive and Upfront May be Worth the Expense and Effort Source: U.S. Travel Association/Ypartnership, travelhorizons TM, July 2010 Are you more likely, less likely or just as likely to stay in a U.S. hotel or resort that was known to make pre-emptive Inspections of its guest rooms and public places for bed bugs and treated any problems that may have existed?

113 U.S. Travel Outlook… To keep you in the know

114 David Sheatsley Director, Marketing Research


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