(704) mobile PO Box 12600, Charlotte, North Carolina Travel Trends Affecting Community Travel Development Finger Lakes Tourism Alliance Waterloo, New York Wednesday, March 19, 2008

PO Box 12600, Charlotte, North Carolina Larry Gustke. Ph.D., NC State University Dynamic partnership Destination research and strategic planning Research for 100+ destinations in 26 states Small to mid sized communities and states Travel industry focused National research data and trends analysis Writing and speaking

PO Box 12600, Charlotte, North Carolina “It is not the strongest of the species that survives, nor the most intelligent, but the one that is most responsive to change.” - Charles Darwin - Charles Darwin 2008 = CHANGE

PO Box 12600, Charlotte, North Carolina and Beyond Growth in 2008 finally outpacing 2000 levels- finally outpacing 2000 levels- but it is a completely different world… but it is a completely different world… …major traveler behavior change is forcing the travel industry to forcing the travel industry to reinvent the experience!

PO Box 12600, Charlotte, North Carolina Changing Consumer Behavior Twenty years of change (1988) CNN was new Compact Disc was new – cassettes going out Few households had a PC Internet??? Balsamic Vinegar and Sushi??? No frequent flyer miles Few luxury hotels Few fine dining restaurants No security…anywhere Videos were predicted to kill going to the movies Americans have changed…has your destination?

PO Box 12600, Charlotte, North Carolina Ups and Downs Increases in leisure tourism, Lodging occupancies are up, BUT Decline in visitation to many historic sites Decline in attendance to many heritage attractions Increases & decreases at theme parks Increase in retail shopping Increase in dining Isn’t soccer going outside?

PO Box 12600, Charlotte, North Carolina U.S. Domestic Leisure Increases in Leisure travel “As long as the kids are happy” Respite Vacations demanded Growth in family travel Growth in affinity travel Attendance to many attractions is down Simplified planning, orientation & facilitation

PO Box 12600, Charlotte, North Carolina Travel Industry Segments Lodging - returned to pre 9/11 levels – profits! Airlines – coming back, profitability & mergers Cruises – growth, growth, growth…it’s easy Group Tour – rebounding appeals to GenX

PO Box 12600, Charlotte, North Carolina Attractions - Activities Challenges Decline in attendance to many historic sites and museums 16,500 museums in U.S. 9,000 house museums in U.S. Boring vs. engaging Desire for less structure ½ price ticket & then sell food, beverage, retail “Store, Door & More” FUN More to do…less time to do it

PO Box 12600, Charlotte, North Carolina Consumer Confidence Americans are pulling back June ‘07 – Feb ‘

PO Box 12600, Charlotte, North Carolina Sophisticated Travelers Trading Up –Truckers drinking lattes –Trends are changing at a faster rate –Consumer is more demanding –Providers of goods and services will have to stay on top of rapidly changing trends to survive –Luxury experiences not for the rich alone –Fine art/craft as souvenirs

PO Box 12600, Charlotte, North Carolina House Museums New or through! Hearst Castle worst year in 20 years (USA Today) Biltmore Estate best year ever! It’s not the product… it’s the EXPERIENCE Requires constant reinvestment

PO Box 12600, Charlotte, North Carolina Biltmore and more

PO Box 12600, Charlotte, North Carolina Top Ten Trends for Continued growth in overall travel & tourism revenues Americans predicted to take 1,254.6 million domestic person trips in 2007, up 2.3% over 2006 (Source: IbisWorld) Americans view vacations as an essential part of contemporary life (Source: YPB&R/Y) We must learn the new behavior patterns

PO Box 12600, Charlotte, North Carolina Time Poverty – drives all trends More to do…less time to do it Expedia survey – 1/3 respondents didn’t take all of their vacation days Nearly 50% of all Americans report “time poverty” - report desire for all- inclusive to save time (Source: YPB&R/Y ) Top Ten Trends for 2008

PO Box 12600, Charlotte, North Carolina Last Minute Travel Who has time to plan anymore?Who has time to plan anymore? InternetInternet Visitor centersVisitor centers SignageSignage Front-line trainingFront-line training “MUST-SEES”“MUST-SEES” Seeking unique experiencesSeeking unique experiences Swift inquiry response!Swift inquiry response!

PO Box 12600, Charlotte, North Carolina Fragile consumer confidence will affect travel decisions Gas prices frustrate but don’t slow us down…yet! Real Estate downturn causes anxiety.  Despite increasing costs, seven in 10 U.S. adults plan to take a summer vacation this year…. Even though airline ticket prices are increasing, 60% of respondents say they'll fly as much as they did last summer. (Source: Expedia.com) Top Ten Trends for 2008

PO Box 12600, Charlotte, North Carolina Traveler frustration Too many hassles –No time to plan –Airline complaints up up up –Taxis and car rental –Hotel check-in, room quality –Attractions –Dining Top Ten Trends for 2008

PO Box 12600, Charlotte, North Carolina Generation Y - Millennium Age Range: Came of age at the Millennium Optimistic, confident, self assured Strong Empowered Care for others Care for environment Love to buy & enjoy life Relate to the War Generation 28% U.S. population - 80 million

PO Box 12600, Charlotte, North Carolina Internet: #1 Travel is #1 in Internet use & sales Expedia survey (April 2007) summer vacation planning: –Online travel agency (52%) –Friend/family recommendation (45%) –Travel guide books (25%) –Travel community sites (19%) –Magazines & newspapers (19%) –Traditional travel agents (17%) –Convention and Visitor Bureaus (16%) Top Ten Trends for 2008

PO Box 12600, Charlotte, North Carolina Geotourism - Increased traveler DEMAND for destinations that: > PROTECT THE AUTHENTICITY > AND GEOGRAPHIC CHARACTER OF PLACE > it’s environment, culture, aesthetics, heritage and the well being of residents Million Americans > sustainable tourists ( source: TIA & National Geographic) GEOMAPPING – maps that are user friendly and provide geotourism information in the context of a scaled road map. Center for Sustainable Destinations – National Geographic Society Top Ten Trends for 2008

PO Box 12600, Charlotte, North Carolina Business Travel: Reluctant Growth Costs up, desire to travel down Service complaints up up up Unhappy business travelers Younger & more female Cost-contained travel On-line deal searching Top Ten Trends for 2008

PO Box 12600, Charlotte, North Carolina Generational Shifts Retiring Boomers GenX entering peak spending years GenY & MGeneration coming of age Develop “age-appeal” products Baby Boomers spending Affinity groups Family groups Top Ten Trends for 2008

PO Box 12600, Charlotte, North Carolina Embrace Change Baby Boomers 15 more good $$ years GenX is entering its peak spending years Younger Generations… …Are “deciders” “Technophilia”

PO Box 12600, Charlotte, North Carolina Orientation & Facilitation critical Travelers arriving with no plans Time Poverty drives the need CRITICAL COMPONENTS: - Gateways - Directional Signage - Visitor Centers (Thurs – Sun critical) - Kiosks - Front-line training - Padded maps everywhere Top Ten Trends for 2008

PO Box 12600, Charlotte, North Carolina Orientation & Facilitation Gateways that create a sense of place A unique destination Visitors Centers = Sales Centers

PO Box 12600, Charlotte, North Carolina A New Travel Era Changing Generation groups = NEW traveler expectations “Transumers” consumers in transition - airports with shopping malls - retail in lodging rooms - Visitor centers as heritage centers - overnights at historic sites Top Ten Trends for 2008

PO Box 12600, Charlotte, North Carolina Other Trends Traveling with pets – (14% of all Americans) Safety & Security always an issue Team sports – huge growth – long term Diverse family – grandparents & more Nature travel Family reunion growth Huge Growth in RV Travel

PO Box 12600, Charlotte, North Carolina Destination Challenge The definition of “vacation” has changed (Go/See/Do vs. Chill & Immerse) Travelers looking to escape Short getaways Year round travel Search for meaning

PO Box 12600, Charlotte, North Carolina Destination Marketing & Positioning Your Best Shot at Success “Position” your destination based on unique attributes Use research to determine: marketable assets target audiences effective messages Develop a powerful positioning statement Unify all destination marketing messages Corporate recruitment Leisure Convention, meeting, business TheCustomer is always right

PO Box 12600, Charlotte, North Carolina Destination Marketing & Positioning Elements of Positioning Your position in the competitive marketplace What is your distinction? What makes you unique? What sets you apart from others?

PO Box 12600, Charlotte, North Carolina Research Based Marketing Process A. Destination Research and Strategic Plan B. Brochure and Ads C. PR D. Website & e-marketing E. Product Development/redevelopment F. On-going Evaluation G. Change ONLY if the customer/product changes

PO Box 12600, Charlotte, North Carolina An old but reliable rule.. Market - who are you targeting? Message - What are you saying? Medium - Where are you advertising?

PO Box 12600, Charlotte, North Carolina Equity Every promotion Can’t benefit everyone equally every time ! Market segmentation by: Geographic location Type of Visitor (leisure, group, etc.) Time of year

PO Box 12600, Charlotte, North Carolina Don’t let this happen to you.. DON’T Local politics drive the process…market to the visitor not your civic leaders! A generic “vanilla” positioning to please all local constituencies “Small Town Friendly” Civic pride can get in the way… “Home of Pepto-Bismol” Oversell - “Worlds best…” Undersell - “Living and working in…” Spend a fortune on logos and image packages…message is more important!

PO Box 12600, Charlotte, North Carolina Finally…your best shot at a “Brand” ZEALOUSLY guard “the experience” What makes you unique… …makes you irresistable Repeat visits and referrals are gold Tomorrow’s visitor is just like the visitor today…know your customer!

PO Box 12600, Charlotte, North Carolina Finally…your best shot at a “Brand” Combine & coordinate efforts – streamline Do research for market, message, medium Develop a consistent positioning and “look” Focus on your best target segments PR is your best friend! (trade publications) Stay on top of competition and marketing Focus on your customer and expect change

PO Box 12600, Charlotte, North Carolina TAKE-AWAYS 1. Use research to understand traveler behavior 2. Focus on all open days & need periods (slow) 3. Don’t try to copy others…focus on your unique 4. The story is more important than the facts 5. Plan for short attention spans & offer options 6. Look for “transumer” opportunities 7. Broaden the experience through interpretation 8. Pay attention to market segmentation 9. Report successes and research identified ROI

PO Box 12600, Charlotte, North Carolina Walt Disney said: “You don’t build it for yourself. You ask the customer, and you build it for them.”

PO Box 12600, Charlotte, North Carolina Berkeley Young, Young Strategies Judy Randall, Randall Travel Marketing Want to know more?

PO Box 12600, Charlotte, North Carolina

So How Much $$ Do You Have? Building awareness for your destination is expensive Destination marketing is increasingly competitive Multiple messages confuse the customer Is it possible to truly “BRAND” your destination?

PO Box 12600, Charlotte, North Carolina What is a Brand? Travel and Tourism is the world’s largest industry, with some well known brands… …Brands that cost $$ millions to create and build

PO Box 12600, Charlotte, North Carolina Brands for Destinations How many brands can you name? New York Virginia Las Vegas Washington, DC Philadelphia Boston Pittsburgh Chicago

PO Box 12600, Charlotte, North Carolina Brands for Destinations Is it a brand or a logo?

PO Box 12600, Charlotte, North Carolina Funding You have to have $$ to compete: City / County Budgets Dedicated Taxes (meals, lodging, etc.) Memberships Sponsorships Grants Contributions Every one comes with politics and potential animosity within the community. BEWARE TURF WARS

PO Box 12600, Charlotte, North Carolina Lodging Segmentation Category % %LODGING RESPONSE RATE of 54 properties/7,353 rooms 39.0%41.2%Individual Business Traveler 21.3%18.5%Convention/Meeting/Group - Corporate 9.0%7.8%Leisure – Tourists visiting, local attractions, shopping, etc. 5.1%7.7%Group – Weddings/reunions/family events 4.8%5.3%Convention/Meeting/Group - SMERF 5.0%4.6%Group – Sports (team events) 2.8%3.4%Leisure – Visiting Friends and Relatives 3.3%2.6%Transient – pass through on highway 0.9%2.0%Military-base related 1.5%1.7%Convention/Meeting/Group - Association 3.0%1.7%University-related 2.2%1.7%Group Tour/Motorcoach 1.7%1.6%Convention/Meeting/Group - Government 0.4%0.3%Other Convention/Meeting Segments as a % of Total Business 21.27%18.46%Corporate 4.84% 5.27%SMERF (Social, Military, Educational, Religious, Fraternal) 1.52%1.71%Associations 1.74%1.69%Government 29.37% 27.13%Total Convention, Meeting, Group Segment

PO Box 12600, Charlotte, North Carolina Local Lodging Trends