Posts Tagged ‘travel industry’

Rolling Out The Welcome Mat

Sunday, October 30th, 2011

Rolling Out The Welcome Mat

Here’s how the hotel industry is working to ensure that international travelers can get here.

Friday, October 28, 2011

Dan Marcec

 

Since 2000, international visitation to the United States has dropped precipitously. According to the U.S. Travel Association, the U.S. share of overseas arrivals has fallen from 17 to 12.4 percent in that period, even as worldwide travel grew by 40 percent over the same timeframe. According to the U.S. Travel Association, losing just one percentage point of the total world international travel market potentially costs the U.S. 161,000 jobs.

You may look at that timeframe and chalk it up to the events of September 11, 2001, and the subsequent emphasis on security constraints. But the larger issue goes beyond the War on Terrorism. Before the Travel Promotion Act passed in March 2010, the U.S. had spent exactly ZERO dollars on advertising itself internationally as a travel destination. Now that this legislation is in place, the Corporation for Travel Promotion, as well as myriad partners throughout the travel and tourism industries, are hard at work to make sure the U.S. is on the map for international visitors.

But travel promotion in and of itself is only the first part of the process. If you attract people to come visit and they can’t get in, it basically amounts to false advertising.

“The worst thing in the world is inviting people to a party and the door is locked,” says Nancy Johnson, executive vice president and chief development officer for Carlson Hotels Worldwide, as well as incoming Chair of the American Hotel & Lodging Association (AH&LA). “International tourists want to come to America, and not only the top destinations like New York, L.A., and Disney, but also the mountains, the rivers, and everything in between.

“We need to put that welcome mat out there, and we need to make it easy to visit,” Johnson adds. “Not treating every tourist like a terrorist is essential.”

Headway on the Hill

Diligence from industry advocates like AH&LA and U.S. Travel have paid off. Just last week, Senators Charles Schumer (D-NY) and Mike Lee (R-UT) proposed the Visa Improvements to Stimulate International Tourism to the United States of America (S.1746), or the VISIT USA Act, which is designed to create jobs. The bill amends the Immigration and Nationality Act to make improvements to the U.S. visa process, which is currently one of the largest barricades to international business and leisure travelers coming to the U.S.

According to AH&LA, provisions of this bill that will break down these barriers include:
• Expediting entry for priority visitors
• Introducing technology into the U.S. visa system, authorizing the Secretary of State to conduct a videoconference pilot program as a method for conducting visa interviews of foreign national applicants;
• Encouraging Chinese nationals to travel to the U.S;
• Encouraging Canadian tourism to the United States;
• Encourage U.S. travel during low peak season; and
• Expediting visas for allies not currently in the visa waiver program.

For more information on these provisions, please visit the AH&LA’s government affairs portal http://www.ahla.com/content.aspx?id=33230.

“Increasing the amount of business and leisure travelers to the U.S. brings significant economic benefits to the U.S. economy, and the VISIT USA Act is comprehensive legislation that makes America competitive once again in the $1.1 trillion international travel market,” says Roger Dow, president and CEO of the U.S. Travel Association.

Overall, AH&LA says that bill is a significant step toward the Discover America Partnership’s goal of recapturing America’s historic share of international travel. Last May, a U.S. Travel Association report identified difficulties international travelers experience with the U.S. visa system. The VISIT USA legislation includes several key recommendations in U.S. Travel’s report, which will help the U.S. regain market share in the overseas travel market, potentially creating 1.3 million jobs and producing $859 billion in additional cumulative economic output by 2020.

For more info on Discover America and the economic impact of international travel, please see http://www.poweroftravel.org.
Expedited Entry = Agenda Item One

As most people know, traveling through U.S. customs is, to put it delicately, challenging. On top of that, international travelers also have to go through a lengthy, and often inconvenient, interview process to get a visa. That’s precisely the issue political advocates in the industry are trying to impress upon the decision makers in Washington.

“From my point of view, the most important issue we need to resolve is setting a 12-day maximum waiting time for visas,” says Chris Nassetta, CEO of Hilton Worldwide, who has dedicated significant efforts to improving visa issues. “ Getting wait times down is crucial to make us more competitive with other nations, and currently all the important markets we target take far more than 12 days to get approval.”

For example, Marlene Colucci, executive vice president, public policy, for AH&LA, notes that the wait time is up to 150 days in Brazil, one of the key emerging travel markets.

“If you have to wait half a year, it’s going to go by, and you’ll either have to re-plan your trip or you’ll decide to go elsewhere that’s less complicated,” Colucci says. “That’s the decision most travelers make.”

Making use of modern technology can also improve the process. Allowing videoconferencing for visa interviews would expedite visa approval immensely. Colucci adds that she understands the State Department’s preference to interview in person, and that security should always be at the forefront. However, the sheer volume of potential Chinese travelers necessitates a re-evaluation of the process. It can take a several hour trip just to be interviewed for a visa to the U.S., which is a challenge in itself.

“The travel and wait time in China is significant, and if you use this technology that’s already here, it expands the number of people you can interview,” says Colucci.

The International Tourism Facilitation Act, introduced by Senators Roy Blunt (R-MO) and Amy Klobuchar (D-MN), takes into account the State Department’s concerns about videoconferencing, and works to improve the process in an alternative way. Namely, the bill proposes “to incentivize the State Department – without risking security – to improve the visa process by allowing the Department to reinvest fees charged for visas if the Department improves the efficiency with which it processes visas, and allow the Secretary of State, in appropriate circumstances, to grant a waiver of up to 3 additional years (4 years total) for foreigners to renew their tourist visas without requiring the tourist to go through another in-person interview,” according to Klobuchar’s official news release.

“No matter what, we want to make sure the system is responsive to the market,” says Colucci. “Demand is up 234 percent, and we have to respond to the demands of the public.”

The good news is that the issue is being addressed in both houses of Congress and in the administration, but the book is still in its early chapters. From here, it’s up to those in the know in the travel industry to continue to make sure legislators and influential policy makers understand how important this is to the overall economy.

“I’m pleased to see the State Department and Department of Commerce working hand in glove with Homeland Security to finally ‘get it’ and collaborate,” says Johnson. “This is an awakening for America. The people who understand what’s happening have to have their voice heard.”

Nassetta agrees. “We started down this path two years ago in earnest, and there was not wide understanding of what facilitating international tourism meant,” he says. “But now, I think there is fairly wide recognition that this is beneficial to the country, and I think there is a very constructive, productive dialogue that’s occurring that will be impacted by this. If it’s done properly, it’s good for everyone, not just the travel industry.”

Business Travel Tips From a Road Warrior

Thursday, October 6th, 2011

Business Travel Tips From a Road Warrior

Radio-free rental cars. No room service. After traveling in good times and bad, our writer shares her tips — and horror stories.

By KRISTEN BELLSTROM

You have to admit, traveling on the company dime has its perks. On one California trip, I found myself in one of the biggest hotel rooms in Sacramento, a sprawling suite overlooking a koi pond, complete with two bathrooms, a wet bar and an Apprentice-style boardroom table for 12. I was recuperating from a long day of meetings, lounging in the plush hotel-issued robe and waiting for my indulgent dinner to arrive. But when the knock finally came, it wasn’t room service carrying a silver-domed steak or lobster tail. Nope — it was the trusty Domino’s guy.

With summer tans long faded, corporate travelers are in the midst of that old fall ritual: the business trip. This year, though, their return is more than business as usual. While experts are still assessing the impact of the recent economic and market news, millions of wheelie-bag toters are booking trips to Cleveland, Detroit and a host of other glamorous destinations. Business travel spending was up in the first half of 2011 and is still projected to rise 7 percent for the year, according to the Global Business Travel Association — not that that’s any consolation when you’re stuck on the tarmac.

After all, does anything ever go smoothly with business travel? Take flying: So far this year, 20 percent of flights operated by the major U.S. airlines arrived behind schedule. But that’s just a minor inconvenience; the same carriers also managed to leave 1,598 planes sitting on the tarmac for two hours or more and received 979,000 mishandled luggage reports. And that’s all before the car-rental company tries to stick you with a minivan or you discover that your hotel room’s not ready for check-in. Then there’s the pressure to travel on the cheap; in a recent survey of business travelers by online travel agency Orbitz for Business, 70 percent reported feeling obligated or “extremely obligated” to save their company money while on the road.

The Cost of Business Travel

(Average, Q1 2011)

  • Domestic Airfare: $247
  • International Airfare: $1,866
  • Domestic Hotel Rate: $150
  • International Hotel Rate: $238

Source: American express global business travel

In my case, the Cheesy Bread supper had less to do with saving my boss money and more to do with the fact that the hotel’s room service had shut down for the night at 10 p.m., which, of course, is just when many corporate travelers are arriving. Sit down with any veteran road warrior and you’ll get an earful of travel-disaster tales that will make you laugh — or, if you’re booked on the next flight out, perhaps cry. Working as a travel reporter for this magazine for the past five years has put me squarely within their ranks. By my estimate, I’ve logged about 120 hours queuing up at airports and nearly three days waiting to check in to hotels or pick up rental cars, all in the line of duty. Along the way, I’ve racked up my share of stories — from white-knuckle flights on bathroom-free airplanes to hotels where I seemed to be the only guest over 4 feet tall. (Steer clear of youth hockey tournaments — you’ll thank me.) Ideally, we learn from our mistakes, and with business travel on its way back, I can’t help but wonder if there’s anything my fellow travelers can learn from mine.

Cars? What Cars?

A line is never a good sign — especially when it’s composed of haggard-looking travelers with expressions ranging from “mildly annoyed” to “I will cut you.” But that was the sight that met me when I arrived at the rental-car desk at Los Angeles International Airport, fresh off a cross-country flight. It didn’t take long for the Kafkaesque explanation to make its way, telephone style, back to the end of the queue: The company — the car-rental company, that is — had no cars to rent.

And so, even though I’d made my reservation days earlier, I took a seat on my suitcase and waited. And waited. When, nearly two hours later, an agent finally called my name, I peeled out of the parking lot, rushing to get the precious car onto the freeway before they somehow changed their minds. That’s probably why I didn’t immediately notice that the car had no functioning interior lights (great for reading directions!) and that there was nothing but a sad plastic panel where the radio should have been. Related note: Driving with your iPod headphones on is illegal. Who knew?

New Business

Corporate travelers who haven’t been racking up the miles lately might be surprised by how much business travel has changed. Below, a look at a few of the biggest shifts.

Taxes

With many cities facing budget gaps, travelers are shouldering increasingly hefty tax bills — an average of $70 per three-day trip. In Chicago, the tax on a $55 car rental is now nearly $14, while New York City visitors pay an extra $26 a night on a $150 hotel room.

Mobile Apps

The app explosion is (literally) putting the power back in road warriors’ hands. Hotel Tonight, for one, allows travelers to book at the last minute — for up to 70 per-cent off. TripIt, which compiles itineraries, maps and more, lets users share those details with fellow travelers or bosses.

Green Travel

Eco-travel is trading tie-dye for pinstripe; one survey found that 28 percent of corporate travel departments now report on carbon emissions. And some Starwood hotels give travelers gift certificates or loyalty points for every night they opt out of housecleaning.

Keyless Check-In

Loathe lines? Hotel brand Aloft is testing a radio-frequency chip that turns guests’ loyalty-program cards into virtual keys. The hotel texts travelers their room number so they can skip the front desk.

In the world of car rentals, it pays to attach some mental air quotes to the word reservation. In fact, rental-car companies are often caught off guard when everyone who has reserved a vehicle actually shows up. That’s because, unlike airlines or hotels, which penalize people for blowing them off, rental companies don’t charge for no-shows, says Michael Kane, president of car-industry consultancy VRCG. And because some travelers make multiple reservations, companies often play a little loose with the number of cars they have available at any given time. It doesn’t help that agencies dramatically cut fleets during the recession; Abrams Consulting Group, which specializes in the car-rental industry, estimates that the number of available rentals has shrunk about 25 percent since 2006. As a result, says Kane, “they don’t have a lot of cars lying around right now.”

Is there a solution? Check your wallet. While struggling airlines and hotel companies have been chipping away at their loyalty programs (think fees to redeem rewards and swelling blackout periods), car-rental companies have largely left theirs intact. Even people without a zillion rentals under their belts can take advantage of perks like skipping the check-in line, and just the act of sticking with a single company should help bump you ahead of less-frequent renters when the pickings get slim. “They know where their bread is buttered,” says Kane.

Nickel-and-Dime Me, Please

Nothing works vacationers into a frenzy of rage faster than mentioning the airlines — and, specifically, the extra charges they’ve tacked on for everything from bags to pillows. But here’s a dirty little secret: Some of those add-ons are this business traveler’s best friend. After all, when I’m booking a trip, my corporate travel system will approve only the most fiscally responsible travel options — often prodding me to sign on for 5 a.m. departures or three-hour layovers, and always, it goes without saying, in coach. But once I’ve left the office, I’m free of the tyranny of the travel overlords. None of those midtrip purchases need preapprovals and, these days, a little plastic can go a long way. After all, on a single flight you can buy not only a better seat ($35) but also a decent meal ($8), Wi-Fi ($13) and a movie ($6). The corporate card still can’t control everything — if only you could buy an on-time arrival! — but in today’s world of air-travel torture, every little bit helps.

I doubt I’m the only traveler feeling the effects of the corporate travel crackdown. In a recent study by Expedia’s corporate travel service, Egencia, nearly half of North American firms said they were enforcing their travel policies more rigorously, while a survey Egencia conducted with the National Business Travel Association reports only 9 percent of firms that have revised their travel policies in the past two years now let travelers upgrade to first or business class on domestic flights. Sound familiar? Well, cheer up — it could be worse: You could be one of the 10 percent of corporate travelers who recently told Orbitz for Business that they’ve shared (or were encouraged to share) a hotel room on a work trip.

Analysts say companies, already coping with rising airfares, would like to bundle those extra fees into the bulk deals they negotiate with the airlines but that, so far, they haven’t had much luck. While a few corporations have told their employees exactly which fees they will and won’t cover, most are still sorting out how to cope with these charges, says Joel Wartgow, senior director at travel-management firm Carlson Wagonlit Travel, often leaving travelers to make the call. One of the most popular perks is Wi-Fi, and there, at least, we have some good news: In-flight Internet might be one of the few areas where extra costs are actually falling. According to research company In-Stat, airline wireless fees are projected to drop 24 percent by 2014.

Glamour and PowerPoint Make Strange Bedfellows

After years of staying in places whose idea of style is paisley carpet and sailboat paintings, I was thrilled when my company agreed to put me up in Los Angeles’s flashy Mondrian hotel. Sure enough, you do get starstruck by the beautiful people lounging in the lobby and the all-white room that looks like a particularly glamorous psych ward. But it didn’t take long for my practical side to start poking holes in the hotel’s glossy facade. First, it took ages to check in, with no DIY kiosk to be seen. Then, just getting my rental car out of valet parking was a half-hour ordeal. The final straw: The riotous late-night crowds at Skybar, the hotel’s trendy open-air bar, located directly outside my window. (Mondrian declined to comment on my stay, saying the property has since “relaunched.”)

There’s a reason those boring midpriced hotels did so well in the downturn. Sure, they’re cheaper, but it’s more than that. While trendier properties were still trying to woo travelers with their swanky bars and restaurants — none of which were getting much play on postcrash expense reports — more-basic hotels were doling out road warrior essentials like free Wi-Fi and breakfast. What’s more, experts say, during the boom years, some boutique hotels earned a reputation for prioritizing cool furniture and comely staff over traveler convenience, driving many business folks into the beds of more practical competitors.

But thanks to a lodging market that’s still lagging behind other aspects of the travel industry, even the most cutting-edge hotels are now catering to the suits. No hotel can survive without weekday (read: business) guests, says Jan Freitag, VP of global development for hotel-research company STR, forcing even the coolest properties to realize that “you have to be functional.” Indeed, a handful of new “lifestyle” hotels, including brands from the Virgin empire and from boutique-hotel godfather Ian Schrager, are specifically targeting no-nonsense road warriors with amenities like gratis Wi-Fi, 24-hour business centers, and laptop- and iPad-lending programs.

Alas, that all comes too late to save my stay at the Mondrian. After a night of Skybar-fueled nightmares, I checked out and moved into a nearby DoubleTree. Beige wallpaper never looked so good.

Why the belle has no clothes at the rental marketplace ball

Friday, September 2nd, 2011

Why the belle has no clothes at the rental marketplace ball

Posted by Special Nodes USA on 16 August 2011

NB: This is a guest article by Jay Karen, president and CEO of the Professional Association of Innkeepers International.

Airbnb and the fast-growing number of rental marketplaces seem like the belles of the ball among travel-related web sites this year.

Some have grabbed the support of big hitters like Ashton Kutcher and there is clearly a lot of money kicking about with nine-figure cash investments.

But let’s take a moment and turn the lights on in the ballroom and take a closer look at some of these belles. After all, if we’re going to dance with the belle, we better know what we’re dealing with.

mask

Propagating illegal activity

I’m not sure why the internet police haven’t been blaring the sirens on this one.

Nevertheless, there is no question many (if not most) of the lodging options that can be found on such websites are not complying with local laws.

Towns and cities across the country and around the world have local laws that prohibit homeowners – especially in residential areas – from using their properties as transient lodging for travelers of less than, say, 30 days.

In other words, it is permissible to be a landlord to a longer-term tenant, but it’s not okay to rent your house, apartment or room to folks night after night after night.

In many cases, such nightly tourism activity can disrupt the culture and atmosphere of a residential area or building (in the case of a condo building, where most of the occupants are homeowners).

It’s no secret that all kinds of questionable activity happens across the web, and the web companies do not bear full responsibility for the activity that happens on or on account of their sites.

In the US, the Communications Decency Act of 1996 does a good job holding websites harmless from the content that gets posted on their sites by site visitors or customers (look at Section 230).

But even a site like Craigslist came around to remove a section of their classifieds that was conspicuously advertising illegal activity. That only happened, though, after much public and legal pressure from a lot of powerful people around the country.

Getting back to rental marketplaces, why isn’t anyone crying foul on this one? Should a homeowner be required to show proof of compliance with the law before being allowed to list a room for rent (it might be happening on Oahu)?

Sure, but the inventory on such sites would likely fall to less than one-tenth of its current inventory. Who would pour hundreds of millions into a site with little inventory?

Licenses, inspections and taxation – oh my

Local authorities everywhere are in the business of ensuring the public’s safety. Regardless of your position on the “government-is-good or government-is-bad” spectrum, few will argue against making sure places of business that are open to the public deserve some kind of inspection or review process.

  • Do you like the fact that restaurants must be inspected? I do!
  • Do you like to know that hotels and B&Bs must follow local fire safety rules? I do!

But…

  • How many of the properties on marketplace rental sites, which mostly appear to be in residential situations, have been inspected by fire officials?
  • How many have the proper business licenses to be offering over-night accommodations to the traveling public?

Many online reviews indicate hosts are offering food to their travelers too, as part of the overnight stay. Do you think the local health inspector checked out their kitchen or sanitary food-handling skills?

Now, let’s talk taxes for a moment. Some rental marketplaces are not collecting taxes on behalf of their hosts, and the host is not likely collecting taxes either.

I know some readers are thinking the following:

“Does Uncle Sam need to grab something from EVERYTHING people earn? So what if some guy is making a little coin on the side by renting a spare room and not collecting taxes?”

Short-term lodging is usually subject to both a sales tax and occupancy tax. Oftentimes, the occupancy tax is levied to help support all kinds of initiatives to stimulate more travel to the area. Is it fair that a host gets to benefit from the traveler’s dollars, but not put in his fair share?

Safety

I already addressed the safety risks involved in not being inspected by local health or fire inspectors.

But ever since the likes of Airbnb and others materialised a couple of years ago, I’ve been telling people that I am just waiting for a tragedy to happen at one of the places rented on their site.

Some creep is going to rent his apartment to an unwitting young lady, and something terrible will happen. It happened with Couchsurfing.

Little did I know it would be the other way around!  The traveler, in this case, recently vandalized an Airbnb property, triggering reams of publicity.

Now, I do not think it is fair to hold Airbnb, in this case, fully culpable for such a transgression. Crimes occur at hotels all the time, but should the hotel always be blamed, let alone the online booking engine where a perpetrator might have booked a room?

No. But, reasonable measures, policies and the law of large numbers exist to try and minimize the likelihood of crimes taking place.

I get the allure of these rental marketplaces from many angles. To the traveler, “staying at an Airbnb”, for example, might be seen as something different and exciting.

The photos on the various homepages are nothing short of amazing, so it is quite seductive. Hosts see it as a cool way to make money and meet interesting people, although this Slate writer certainly differs.

Investors see a new product in the pretty traditional market of lodging. Heck, I represent an industry that perfected the “stay in someone’s home” experience!

But, the tens of thousands of hardworking innkeepers over the years worked WITH local authorities to gain proper recognition as legitimate businesses, have paid our taxes, have gone through inspections, etc.

This isn’t sour grapes about an imposter trying to co-opt our bed-and-breakfast brand (can you see the furrow on my forehead?). It’s bigger than that.

The bottom line, for me, can be explained in an analogy: do you think it would be ok for any one person or any family to start inviting random travelers and locals into their homes for a homemade supper…charge for it…not collect any taxes…and never get inspected by the health department?

Sure, you could just say “Caveat Emptor!”, let the online reviews handle the inspection process and not care about safety or a level playing field.

Would you feel the same way if a friend or loved one bought into this and got incredibly (or deathly) ill from an unfortunate event?

There is not much any of us can do to prevent bad or ignorant people from committing awful acts, but we can support reasonable policies and practices to try and minimize it.  Allowing such sites to propagate possibly illegal and potentially unsafe situations is nothing short of enablement.

Maybe it’s time to take a closer look at internet law and start holding web sites more responsible for what gets posted or what kinds of transactions take place on their sites.

Holding sites completely harmless has in turn caused a great deal of harm to many others (anyone want to talk about the proliferation of libel within online reviews, but the absence of any recourse for justice?), but no one in the travel industry really seems to be talking about that.

Maybe rental marketplace sites that actually collect the room revenue should be required to ensure the legality of their host properties.

Short of that, the rental marketplaces is not much more than pimps for illegal lodging.  Anyone want to propose a new Communications GREATER Decency Act of 2012?

NB: Airbnb, for example, has consistently stated it complies with local laws in the areas in which it operates.

NB2: This is a guest article by Jay Karen, president and CEO of the Professional Association of Innkeepers International.

Vacation Rentals – Friend or Foe? What do you think?

Sunday, May 8th, 2011

#On My Mind – Vacation Rentals – Friend or Foe?  What do you think?
By Jay Karen, PAII CEO
Anyone paying attention to the travel industry these days knows about the rise and success of the vacation rental as a popular lodging option.  Sites like VRBO, HomeAway, FlipKey and others have skyrockted in popularity.  Many cities around the world are concerned with the increased use of houses, apartments, and condos as vacation rentals, possibly altering the culture of buildings and neighborhoods.  Everyone in our industry knows that HomeAway bought BedandBreakfast.com last year, so it brought the vacation rental question into the forefront for our industry.  But how are innkeepers supposed to see the vacation rental market?  Friend or foe?  Of course, it’s not so black and white.

Activities undertaken by the vacation rental industry and its major players may end up benefiting the B&B industry.  For two years now, HomeAway has run commercials during the Super Bowl promoting the hotel alternative.  Since B&Bs compete with hotels (and we do, for those who say we don’t compete with hotels), I like this advertising.  It gets people thinking about alternatives to what can be the “cookie-cutter” experience.  HomeAway received a big infusion of capital from Google Ventures not long ago, and they recently filed to become a publicly-traded company.  The escalating scale and scope of this company will hopefully mean more propaganda to get travelers moving in the direction away from hotels.

Popular vacation rental web sites also provide another distribution channel for innkeepers to market their rooms, cottages, or cabins.  Not all rental opportunities on these web sites are condos and entire houses – some property owners rent rooms as well.  Many innkeepers have months during which occupancy drops to single digits.  Vacation rental web sites may be a great place to experiment with renting the entire B&B out to groups for days or weeks at a time.  I know several innkeepers who are having great success renting rooms on sites like HomeAway.  Think about it this way – there could be some kind of corporate sales training or other group-type function happening near you, and people booking blocks of rooms may not be thinking “B&B” when doing their homework.  But I’ll bet many are looking at vacation rental web sites.

One thing in particular I like about the HomeAway purchase of BedandBreakfast.com is the possible cross-pollination of opportunities.  Maybe HomeAway will find a way to market B&Bs to their vacation rental customers.  Maybe there are technology or marketing ideas that are highly successful in the vacation rental world that will find their way to the B&B world.

But, I do have concerns about the rise of vacation rentals.  When I think about the Gen X and Gen Y traveler – heck, maybe all travelers – and their likes and dislikes, I cannot help but be concerned about vacation rentals.  More and more, travelers seem to want it “their way” and they want it to be fast and easy – everything from the search process to the booking process to the on-site experience.  Some of the top reasons people don’t stay at B&Bs are the real or perceived notions that they will be forced into social engagement with strangers (that includes the innkeepers), that they will have to deal with policies and procedures that make the experience difficult (and which exist to make the lives of innkeepers easier), and that they just don’t know what they’re going to get when they arrive.  Will it be quiet or noisy?  Will the food be good or bad?  Will the innkeepers be absent, perfectly present or intrusive?  Who knows, right?

With vacation rentals, people oftentimes get the benefit of having a nicely decorated and clean experience that rivals just about any typical hotel experience.  When I say nicely decorated, I mean that many are outfitted like upscale homes.  Most have kitchens or kitchenettes – some might even be stocked with rations.  Vacation rentals can feel like “home away from home,” which been the calling card of the B&B industry.  Most have free WiFi.  There is likely no concern from travelers that they will have to encounter anyone but the people they are traveling with, so no fears of socially-forced/socially-awkward possibilities.  They can come and go as they please without worrying about bothering other guests or the innkeepers (I’m in someone’s home, so I better be on my best behavior).  And, they can be found in just about any town or city where B&Bs can be found.

Of course, we know that the best of breed in the vacation rental market cannot compete with the best of breed in the B&B market.  A well-run B&B by a caring innkeeper, who has figured out the right recipe for taking care of all kinds of guests and their wishes provides something that no vacation rental can – the warmth of hospitality.  That’s not my concern, because I know that travelers who get the “B&B bug” after staying at one good B&B will come back and come back often.  What I am concerned about is being bypassed completely by travelers have never stayed at a B&B, who get the” vacation rental bug” after a good experience, and who harbor the prejudicial stereotypes that the average traveler harbors about B&Bs.  Why risk staying at a B&B, where the experience could go either way?  Why not stay at a vacation rental where there is a good chance the experience will likely be what you expect?

Maybe this is another reason why we need the Better Way to Stay campaign more than ever.  Maybe the hotel market is not what we should be worried about.  Friend or foe?  If you’re not using what that industry has to offer innkeepers, then they’re only a foe.  If you are using what they have to offer, then they could be more friend than foe.  What do you think?


Jay

PAII CEO Elected to U.S. Travel Association Board

Monday, April 18th, 2011

For Immediate Release – April 6, 2011
Contact:  Marti Mayne, 207-846-6331, info@maynelymarketing.com

Haddon Heights, NJ – Jay Karen, president and chief executive officer of the Professional Association of Innkeepers International (PAII), was elected by peers in the travel industry to serve a two-year term as an at-large member of the U.S. Travel Association board of directors.  This will be the first time a representative from the bed and breakfast industry will serve the organization in this capacity.

“U.S. Travel is pleased to welcome Jay to our board,” said Roger Dow, president and CEO of the U.S. Travel Association.  “Jay is a champion for the travel sector, and our board will benefit by having a voice for the bed and breakfast industry,” finished Dow.

Jay has fifteen years of experience in organizational and association management and leadership, fourteen of which has been in the hospitality and leisure market.  Since 2007, Jay has served the bed and breakfast industry as president and CEO of PAII.  For ten years prior to that, he served in senior staff positions with the National Golf Course Owners Association, representing and promoting the business interests of golf course operators worldwide.

“I have long admired the work of the U.S. Travel Association, especially over the past few years, during which they have made incredible public policy strides,” said Karen.  “I am honored to contribute to the strategic discussions and mission of the organization.  Inns and B&Bs are among the smallest businesses in the travel industry, and yet contribute to tourism and historic preservation in meaningful ways in every corner of the nation. I look forward to amplifying their voices.”

About PAII: The Professional Association of Innkeepers International, founded in 1988, is the innkeeping industry’s largest trade association. PAII provides education, communications, public relations, advocacy, networking, and research services to its membership and the greater industry. In addition, PAII has created and is spearheading “Better Way To Stay”, a groundbreaking, industry-wide campaign to help travelers discover today’s inns and B&B experience. For more information, visit www.innkeeping.org.

About U.S. Travel: The U.S. Travel Association is the national, non-profit organization representing all components of the $704 billion travel industry. U.S. Travel’s mission is to increase travel to and within the United States. For more information, visit www.ustravel.org.

Examining Current Industry Trends

Wednesday, September 15th, 2010

EXAMINING CURRENT INDUSTRY TRENDS

Dear Travel Colleague:

The summer ended much as it began, with the economy slowing and the travel industry on the cusp of an incipient recovery. Recent economic news does little to restore our confidence, but bright spots in industry performance suggest better days ahead.

Sharp Spike in Imports Drags Down Economic Growth

The U.S. Department of Commerce slashed its estimate for Q2 ’10 U.S. GDP growth from a 2.4 percent annual rate to 1.6 percent, confirming fears that economic growth has slowed significantly. In Q1, real GDP increased 3.7 percent, following a 5.7 percent growth rate in the final quarter of 2009. This deceleration in economic growth was caused primarily by a sharp acceleration in imports. Further, economic entrenchment that began in the second quarter spilled over into the summer, reflecting ongoing troubles in the nation’s housing sector (sales of existing and new homes in July hit record lows), continuing high levels of unemployment (stuck at 9.6%) and first-time unemployment claims, a continuing losing streak in the stock market and a rapidly rising trade deficit (which spiked 16 percent in June). Bright spots included corporate investment in such big-ticket items such as new machinery and computers, corporate profits from current production (they surged 4.6% on the quarter and were up 39.2% year-on-year), gains in U.S. home prices and an improvement in real personal consumption (+2.0%).

Some consumer attitudinal measures have also improved modestly in recent days. The Conference Board’s Consumer Confidence Index (CCI) showed a slight gain of 2.5 points in August to 53.5, reflecting an improvement in consumers’ short-term outlook. Nevertheless, consumers’ assessment of current conditions was less favorable as employment concerns continue to weigh heavily. Consumers remain apprehensive about the future and, overall, are about as confident today as they were a year ago (August 2009 CCI = 54.5). The Reuters/University of Michigan Consumer Sentiment Index also posted a slight uptick in August, but this too remained well below levels seen during the prior six months. The data indicate a slowdown in the pace of growth that will last into 2011 but that outright declines in consumer spending are unlikely. Nonetheless, consumer finances remain weak, and any additional erosion could quickly reduce consumer spending even more.

Further, Gallup’s most recent discretionary spending data (for the week ending August 29) show essentially no improvement from a year ago. Even the well-to-do aren’t immune. “A lot of people who are in the lower-income affluent & from $100,000 to $250,000 & – have dropped out of the luxury market,” says Pam Danziger, whose firm Unity Marketing regularly surveys the top fifth of income earners in America. “They’re back to the middle class.” Most economists expect economic recovery to continue at a similarly weak pace through the rest of the year and some have even upped the prospects of a double-dip recession to 30-40 percent.

Airlines Turn a Profit in Second Quarter

According to the International Air Transport Association (IATA), passenger traffic worldwide grew 9.2 percent in July, reflecting a slowing of growth seen earlier (June +11.6%), but still reaching a level 3 percent higher than pre-crisis levels of early 2008. A July capacity increase of less than half the demand growth (5.1%) pushed load factors higher. IATA says it is clear that the recovery has entered a slower phase but has been faster than anticipated. But, the pace of recovery is expected to slow towards the end of the year.

Reflecting increasing demand, 47 major airlines worldwide reported a cumulative $3.9 billion net profit for the second quarter, reversing the $900 million net loss in the prior-year period. North American airlines earned $1.74 billion in the quarter to lead the world’s regions, turning around from a $514 million deficit in the three months ended June 30, 2009. A $2.5 billion profit is anticipated for global airlines in 2010.

Capacity is starting to return as aircraft have been ordered or taken out of storage. Some say there is even a threat of excess capacity but published schedules suggest capacity growth will remain in line with demand. IATA reports that passenger fares have not rebounded in line with volume. Economy fares on average are 5 percent below early 2008 peaks and premium fares remain some 20 percent below.

In the U.S., airline revenues grew for the seventh consecutive month in July (+20%), passenger demand fell slightly (-1%) and there was a 17 percent increase in the average price to fly one mile, according to the Air Transport Association (ATA). Recently, the ATA released its 2010 Economic Report – When America Flies, It Works, reporting that the air sector remains fragile and its outlook for profits uncertain.

On top of these ongoing financial pressures, airlines are being hit with increasing landing fees, facility rentals and passenger taxes from airports struggling to survive as well as facing depressed passenger demand. Further, Americans’ general displeasure with the airline industry continues to haunt airlines for a fourth straight year, with 41 percent viewing this sector negatively and 30 percent viewing it positively, according to Gallup. Asked to rate 25 business and industry sectors, Americans gave the airline industry a net rating of -11, putting it toward the bottom of the pack. One reason – all the new fees which have proven highly unpopular.

In the face of such uncertainty, airlines continue to introduce new sources of ancillary revenue, such as an Express Seats option (coach passengers can pay for the roomier bulkhead seats or those closest to the front and be among the first to board), as well as increases in bag check fees and fees to transport unaccompanied minors. They are also attempting to raise fares. According to American Express Business Travel’s North America Business Travel Monitor (BTM), overall airfares rose substantially during the first half of 2010 to the highest levels since the first half of 2008. Mid-year international and domestic airfares increased 8 percent and 9 percent, year-on-year, respectively. Carlson Wagonlit Travel North America forecasts that domestic and international coach airfares will increase 3-5 percent in 2011. Domestic first- and business-class pricing, however, is expected to decline 2-7 percent while international business and first classes increase 3.5 percent and 4-6 percent, respectively.

U.S. Travel Outlook Dashboard
U.S. Travel Outlook Dashboard
U.S. Travel Outlook Dashboard
U.S. Travel Outlook Dashboard

To view the monthly data for these and other current indicators click here.

Hospitality Industry Results Increasingly Positive

In July, hotel demand continued to be well above 2009 levels (+9.0%), and signs of room rate recovery had begun (average daily rate +1.3%), especially in the higher end of the market. Five top markets experienced increases in revenue per available room (RevPAR) of more than 15 percent: Oahu Island, New Orleans, Detroit, New York and Denver. This improvement continued in August. During the week ending August 21, the industry’s occupancy increased 8.2 percent, the average daily rate (ADR) rose 1.5 percent and RevPAR increased 9.8 percent. In the coming months, Smith Travel Research (STR) expects to see more balanced RevPAR growth as operators begin to accelerate room rate growth. STR also expects stronger performance in the extended-stay market. The main reason for this is that extended-stay room construction was the lowest in 15 years at the middle of 2010 and it is heading lower.

Hotels continue to look for creative new ways to spur weekend and leisure business, such as an offer by hotel companies such as Kimpton Hotels and chains run by InterContinental Hotels Group to reimburse guests for the checked-baggage fees charged by some U.S. airlines.

Hotels are also reporting resurgence in group and business guests. According to InterContinental Hotels Group, its group and corporate business rose 10 percent in the first half of this year. The Rubicon Perspective reports that committed business on the books for the current quarter through the first two quarters of 2011 is now up 4.6 percent versus the same time last year. Group commitments are up 5.2 percent, while the business segment (which Rubicon considers to be weekday guests booking retail or negotiated rates) is up 10.7 percent. ADR is improving as well, albeit far more slowly than desired.

STR has updated its forecast again to become even more positive, projecting the hotel industry to end 2010 with increases in most performance measurements: supply (+2.2%), demand (+6.6%), occupancy (+4.4%), ADR (-0.1%) and RevPAR (+4.3%). “Room rate growth trajectory will determine the magnitude of recovery,” said Mark Lomanno, president of STR. “We’re still a little bit worried about the ADR part of the equation. The industry is currently facing a lot of challenges, and there are all kinds of pressure on that ADR number: the OTAs, and still rebounding group business to name just two.” STR projects the following for the hotel industry in 2011:
supply (-1.1%), demand (+2.5%), occupancy (+1.4%), ADR (+3.9%), and RevPAR (+5.3%). PricewaterhouseCoopers has revised its forecasts in similar ways. Colliers PKF Hospitality Research forecasts that the average U.S. hotel will achieve a 2.3 percent increase in net operating income during 2010. This follows a 37.8 percent cumulative decline in profit experienced from 2007 through 2009 and is the first annual uptick in forecasted net operating income since 2007.

Just as the lodging industry has begun to recover, it is being hit with yet another challenge. Beginning October 1, per diem lodging rates in 310 of the 378 so-called nonstandard areas (higher-cost areas where federal employees most frequently travel) will decline, according to the General Services Administration (GSA). For federal government employees visiting places like New York City, where lodging per diems will shrink by as much as one-third, in Chicago and Las Vegas where they will decline 21 percent for part of 2011, and in Boston where per diems will fall 18 percent, it could be tough to find affordable hotel rooms. GSA calculated these per diems based on hotels’ ADRs from April 2009 to March 2010, which was the heart of the recession when rates were at their lowest. With rates now beginning to stabilize and projected to rise in 2011, these lower per diems will likely not be sustainable and will put additional pressure on both hotels and on government travelers. U.S. Travel is engaged in trying to correct this situation with the federal government.

Business Travel Continues to Fuel Industry Recovery

Airlines, hotels and car rental companies in the United States all reported good to excellent results as business travel hit a more sustainable stride in the second quarter of 2010. Data from the Airlines Reporting Corporation show an increase of nearly 22 percent in worldwide travel agency sales during the first half of 2010, reflecting 7.5 percent more domestic transactions and 11 percent more international transactions when compared to the same period last year.

The exhibition industry, however, continues to struggle. The Second Quarter 2010 CEIR Index marked the ninth consecutive quarter of underperforming the previous year, down 1.4 percent. Measures of net square feet and revenues continued to decline, but at a much slower rate. Net square feet of exhibit space sold showed a decline of 3.0 percent, with exhibitors declining 3.0 percent. While overall declines continue, the exhibition industry is not performing as badly as it did in 2009 when it had its worst year ever, declining 12.5 percent. Optimistic indicators included a 4.5 percent increase in attendance. It is anticipated that slow growth will continue through 2010 with the fourth quarter of 2010 and first quarter of 2011 likely to show the beginnings of a true recovery for the exhibition industry.

After a tumultuous 24 months, the meetings industry seems to be on the mend, according to travel buyers, 60 percent of whom said they feel the meetings market is stable, according to the latest poll by Maxvantage’s (an alliance between American Express Business Travel and Maritz Travel). Much greater shares of buyers are now reporting that it is more challenging to find available meeting space and harder to negotiate lower rates than did last year. Good news for travel suppliers but bad news for meeting planners and the companies they work for.

Virtual Could Overwhelm Future Meetings Market

Other new developments will also continue to challenge the meetings segment of our industry. A new study by Bernstein Research concludes that “telepresence” or virtual meetings could replace 70 percent of internal travel and 10 percent of external travel over the next 10 to 15 years, leading to an aggregate reduction of 21 percent in corporate travel spending. The U.S. telepresence or virtual meeting market could be worth $30 billion in 10 to 15 years. According to Forrester Research, 17 percent of U.S. business travelers have used either videoconferencing or virtual presence in the past year to reduce their business travel, and 48 percent expect their employers will have policies in place by the end of this year for the use of videoconferencing and virtual presence to reduce demand for business travel.

Leisure Travel Posting Mixed Results

According to the results of Ypartnership’s just-released 2010 Portrait Of American Travelers, the U.S. leisure travel market has finally stabilized. The average American leisure traveler took an average of four trips during the past year and spent more than $3,500 on travel services, and the research suggests that the industry can expect a modest increase in demand in the year ahead. But “value” will remain in vogue and consumers have developed a “new resourcefulness,” allowing them to accommodate many of the unexpected constraints on their travel spending and adopt new shopping/staying techniques so they can satisfy their desire to travel for leisure but in a more affordable manner. This new resourcefulness has altered travel behavior in several interesting ways. Fully eight out of 10 leisure travelers now identify “the ability to check the lowest fares/rates” (83%) and the “lowest price/rate guarantee” (82%) as the two most important attributes in a website that promotes travel services. And a remarkable one out of seven (14%) has purchased a travel service as a result of getting an unsolicited e-mail.

But this nascent recovery in leisure travel seems quite vulnerable. Rural arterial vehicle-miles (a measure of non-local highway travel) remain soft (up less than 1% through June), although Amtrak continues to show strong performance (see Dashboard). In addition to benefiting from increasing business travel, Amtrak reports that third-quarter sales of its vacation packages were up 51 percent from a year ago.

Travel agents report that those postponing vacations last year are making modest vacation plans this year. But with it has come a new level of austerity as vacationers seek frugal ways to get away by juggling their finances, taking shorter trips, visiting less expensive destinations and even staying with relatives. The National Park Service, for example, expects about 285 million visitors this year, and visitor numbers at parks like Yellowstone, Yosemite and Death Valley are running above levels a year ago. Special offers and incentives are continuing to be offered by hotels, resorts, cruise lines, etc., to attract the more reluctant leisure traveler of today.

AAA projected that Labor Day holiday travel would increase 9.9 percent this year over last, with 34.4 million people to travel at least 50 miles from home. But some were skeptical as to whether hotel performance would follow those traveler increases predicted. Reserved occupancy for the Labor Day weekend was up 3.6 percent, according to Rubicon. And, TripAdvisor®’s annual Labor Day travel survey found that 28 percent of Americans expected to travel over that holiday, down slightly from 30 percent one year ago. And Hurricane Earl didn’t help, causing leisure travelers along the Atlantic coast from North Carolina to Maine to cut short their end of the summer season vacations.

The TripAdvisor survey also looked outward to travel during the next few months, finding that 86 percent are planning leisure trips this coming fall, compared to 73 percent that said they took trips last fall. Nearly half (45%) plan to spend more on travel this fall, while 41 percent expect to spend the same amount. One-third intends to spend more than $3,000 on fall leisure trips. Traveling in the fall is getting more popular with married couples in the 55-plus demographic, according to a recent study by Ruf Strategic Solutions for Travel Guard North America.

Destination Performance Mixed As Well

Nevada industry reps are guardedly optimistic about this year, reporting clear signs of improvement – visitation is up and sales tax, one of Nevada’s main revenue sources, appears to have reversed a more than four-year slide. Convention bookings remain strong, with convention room nights for 2011 about 20 percent ahead of pace. But gaming revenue, Nevada’s other major revenue source, is less certain. For those looking to attract the gaming market, you might check out a new customer segmentation model developed by Market Metrix. The purpose of this model is to identify critical behaviors and trends of casino customers that will help casino management better understand and connect with their target customers.

In Orlando, Walt Disney World recently reported that its attendance has slipped as it cuts back on discounts. Attendance fell 2 percent during the three months that ended July 3 and occupancy at Disney World hotels dropped eight percentage points to 83 percent. But some of that lost attendance is being offset through higher average prices. Per-capita spending inside Disney World’s four theme parks climbed 3 percent during the quarter; per-room spending in its hotels rose 4 percent. Elsewhere in Orlando, the opening of Wizarding World of Harry Potter in mid-June – said to be the hottest opening in Orlando this year – has reportedly given many of the area’s hotels and resorts a much-needed summer business lift. The number of visitors expected in Orlando in 2011 is forecast to increase 3 percent compared with this year, according to Global Insight.

New Orleans seems to be heading in the right direction after having its tourism industry crippled by Hurricane Katrina five years ago. The number of visitors to New Orleans – a city in which 35 percent of jobs were reliant on tourism before the storm – dropped dramatically in the weeks and months that followed. Today, New Orleans isn’t quite back to what it once was, but tourism is said to be on the rebound. In 2004, the year before Katrina, slightly more than 10 million visitors came to the city and spent close to $5 billion dollars. In 2006, the year after the hurricane, the numbers dropped to 3.7 million visitors. Last year, despite a nationwide recession and cutbacks in corporate business travel, the number of visitors to the city edged back up to 7.5 million. These tourists, in turn, spent $4.2 billion – just below the pre-Katrina peak.

And, of course, many destinations along the Gulf of Mexico suffered tourism losses this summer because of the BP oil spill. For example, in Beaches of South Walton on Florida’s Gulf Coast, summer occupancy was down 30 percent, and in Alabama’s Dauphin Island, 90 percent fewer people booked summer rentals compared to last summer. June was particularly bad when, for example, lodging receipts tumbled nearly 40 perent and retail sales fell 22 percent in Gulf Shores, Alabama. Similar losses were expected in July. Other communities had deceptively high occupancy rates because BP and federal officials were stationed nearby. They may have filled the hotels but were not spending money in other attractions and retail establishments like tourists do. Further, although the BP well has now been capped, some destinations in the Gulf Coast region may still be suffering from misperceptions, fueled once again by yet another oil platform explosion that threatened further damage as well as re-igniting concerns among potential visitors about the area’s potential vulnerability.

Two surveys conducted by Ypartnership on behalf of VISIT FLORIDA clearly demonstrate these misperceptions, reinforcing VISIT FLORIDA’s argument that the state needs more money from the British oil company BP PLC to continuing promoting the fact that most of Florida’s coastline is untouched by oil. Interestingly, in the face of this crisis, Florida relied on social media, mounting a PR blitz to show beachgoers that Florida’s surf had been spared an oily disaster. On May 11, about three weeks after the spill, the state tourism agency launched a marketing campaign, using the same social media tools that the media used to spread information about the spill. VISIT FLORIDA created a website called Florida Live to provide real time information about how the spill was – or wasn’t – affecting the coast. It increased their website traffic by 46 percent compared to the same time last year, and bumped up its Facebook page traffic about tenfold – now the site has more than 8,000 fans. U.S. Travel synthesized the good online work of state tourism offices affected by the oil spill with creation of the portal site GulfTravelUpdate.com, giving travelers a one-stop source on news from this region.

Activity Trends

The Cruise Lines International Association (CLIA) is reporting some optimistic signs. A total of 13.4 million people cruised on CLIA lines in 2009, up 4.8 percent more than 2008. Two-thirds (8.9 million) embarked from U.S. ports. But to achieve these numbers, cruise lines offered attractive fares and other incentives, reducing cruise lines’ total gross revenue by 11.4 percent. The North American cruise industry continues to expand its presence throughout Europe, a source of new passengers. And cruise lines are reporting positive statistics for 2010 and beyond, citing improved revenue yields for the first time since 2008, strong booking volumes for the second half of the year and the effectiveness of cost-control measures.

Interestingly, as the cruise industry continues to shake out, some U.S. ports will benefit and others will lose. The hardest-hit U.S. cruise markets are on the West Coast, such as the ports of San Diego and Los Angeles, but also others like Norfolk, Virginia. Princess Cruises and Holland America Line, Alaska’s two largest cruise operators, have significantly reduced their Alaska capacity. Some ships are being redeployed to Australia and New Zealand to tap new markets and create new itineraries. Others will go to Europe. But several U.S homeports are doing well, such as Fort Lauderdale’s Port Everglades (homeport of the world’s largest cruise ship, the Oasis of the Seas), Miami, Baltimore and Galveston.

And, as travelers plan their trips, there seems to be a move back to traditional travel agents by some who are becoming increasingly frustrated by travel websites, according to Forrester Research. The number of travelers who would consider using a traditional offline agency increased 26 percent in 2009. Further, 15 percent fewer travelers enjoy using the web and the number of online travel hunters who believe websites do a good job of presenting travel choices has dropped to one in three as more travelers believe their business is taken for granted by websites.

As leisure travel continues its rocky recovery, it will remain challenged by our entrenched work ethic and reluctance to take off vacation time. As explained by John de Graff, Executive Director of Take Back Your Time, U.S. adults who receive only an average of 13 vacation days per year, typically leave three days unused. The U.S. Bureau of Labor Statistics says there are approximately 153 million employed Americans, meaning that each year an average of 459 million vacation days are going unused in the United States. A recent survey suggests that close to half (45%) of working Americans let hard-earned time away go to waste in 2009; furthermore, three-quarters (78%) anticipate leaving as many as 10 vacation days on the table in 2010. Why? Many say coordinating schedules with family and friends is too difficult (51%) or they are not able to afford a “real vacation” (40%). Others admit it is less about personal situations and more about work-life being too busy to enjoy time away (47%). While consumers express pessimism towards the possibility of a work escape, adults who choose to go on vacation feel reconnected with the family (53%), more productive and positive about their jobs (34%), as well as the health benefits of being rested and rejuvenated. You will find more Benefits of Travel data and resources on U.S. Travel’s website.

International Inbound Travel Continues to Contributes to Trade Surplus

International inbound travel is on the mend. According to the U.S. Department of Commerce, international visitors spent an estimated $11.1 billion on travel to and within the U.S. during the month of June – $1.4 billion more (15%) than was spent in June 2009 – marking the sixth consecutive month of growth. International visitors have spent an estimated $64.6 billion on U.S. travel and tourism-related goods and services year to date (January through June), an increase of 7 percent compared to the same period last year. During that same period, Americans have increased their spending on outbound international travel only slightly, spending nearly $50.6 billion abroad year to date (up 2%) – resulting in a $14.0 billion trade surplus for travel and tourism.

But problems remain in some of our key inbound markets. Mintel says the U.K. holiday market will take five years to recover. Value Added Tax (VAT) increases and higher fuel costs will make holidays from the United Kingdom more expensive, which could cause a further dip in the market. Overall spend on overseas holidays is forecast to rise by 17 percent over the next five years, which is significantly more than from 2005 to 2010, but the rise will be driven by higher holiday costs. In constant price terms, expenditures on holidays will decline by 1.6 percent between 2010 and 2015. Overseas city breaks and holiday homes are the two markets that would be most affected. While beach and family holidays will continue to dominate the market, more diversification will be seen in holiday types. Niche products/destinations will see the fastest growth, according to Mintel.

So, How Do We Reach ‘Em?

Social network advertising is getting renewed attention in 2010. Ad spending on social destinations in the U.S. will reach $1.7 billion this year and cross the $2 billion mark in 2011, according to eMarketer. The company driving most of the growth is Facebook, while MySpace is diminishing in importance. Twitter, which finally launched its ad business earlier this year, captured less than $50 million in ad spending in 2010 but its potential in 2011 and beyond could be substantial.

According to the PhoCusWright Consumer Technology Survey, users of social networks, micro-blogs and mobile early adopters are significantly more likely to use the Internet to select their leisure travel destination. But, despite advanced mobile devices like the iPhone making headlines almost daily, the majority of travelers are not using their phones to visit travel-related mobile websites or make travel reservations – not just yet. Further, travel reviews were found to have a significant impact on booking decisions, and, for now, are cited as influential more often than any other type of social media, but their location and content have an effect on how influential they ultimately are. The most popular methods for online travelers to share their leisure travel reviews, however, involve “technologies” that are rarely mentioned these days – in person, phone and email.

And mobile applications are proliferating rapidly. According to Ypartnership/Harrison Group, nearly a third of all cellphones in the U.S. now are so-called smartphones (Web-enabled devices that make surfing the Internet for information easy for people on the go). And nearly 20 percent of travelers have downloaded one or more travel-related applications to their smartphones: 47 percent of these have used GPS functionality to find their way to a destination, 46 percent have searched for flight updates, 29 percent compared airfares or hotel rates, 18 percent booked air travel or lodging, 15 percent viewed virtual visitor guides, and 11 percent downloaded and/or redeemed coupons. Watch for U.S. Travel’s new report Use of Mobile Travel Services by Destination Marketing Organizations, to be published soon. The report reveals significant use of mobile social networks by destination marketing organizations and high ratings for their effectiveness in meeting organizational goals. However, the survey on which the report is based also finds a need for better understanding of mobile travel services and how they can be used for marketing purposes and, most importantly, how best to measure the return on investment on such services.

Four Months and Counting

Now more than halfway through 2010, the economic picture is still a bit fuzzy and a nudge one way or the other may result in either a fairly robust or only “so so” 2010 for the travel and tourism industry. The remaining four months will help determine how we view 2010 from the perspective of 2011. But from whatever lens one is using, we should applaud ourselves for surviving 2009 and taking advantage of lessons learned in 2010 as we approach 2011.

Last Chance to Save Money When You Register for Marketing Outlook Forum!

Time marches on and we are now less than two months out from our 2010 Marketing Outlook Forum (MOF). This year’s dynamite program – an event that you won’t want to, and really can’t afford to miss – will be held in Las Vegas, October 26-27 and will be followed by the Travel Marketers Continuing Education Workshop, brought to Forum delegates once again free-of-charge by the Acxiom Corporation. The Early Bird deadline is Friday, September 10, so register today! In this very uncertain environment, the market intelligence, expert analyses and forecasts, marketing insights and networking opportunities with your peers and industry leaders make this the one must-attend event this fall. I look forward to seeing you there!

Sincerely,
Dr. Suzanne Cook
Suzanne Cook, Ph.D.
Senior Advisor, U.S. Travel Association and
General Manager, Marketing Outlook Forum

Socialnomics: Four Vital Social Media Tips for the Travel Industry

Sunday, July 25th, 2010

Socialnomics: Four vital social media tips for the travel industry
Posted by Special Nodes USA on 28 June 2010
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If you do things right in social media than one can capture 1.5 million loyal followers (JetBlue on Twitter).

Yet, companies can also stub their toe in the world of social media as evidenced by the YouTube success of United Breaks Guitars and Kevin Smith’s quarrel with Southwest Airlines.

Some items are beyond your control no matter how good you are at social media. However, there are a few to steps give you the best chance for success in the social media travel world and to increase sales.

social media escalator

As showcased in the diagram, the four steps are:

1. Listen – to your customer and conversations around your brand.
2. Interact – Join the conversation.
3. React – Adjust your services based on feedback.
4. Sell – If you Listen, Interact, React, this will happen with less effort.

Companies often enter the social media fray and jump straight to step four, selling. This is the worst thing you can do, and it won’t be effective.

You need to start with step one, which is listening. Without listening, the other three steps won’t achieve any degree of success. As many have said before me, there’s a reason we have two ears and one mouth.

After listening, then you have the appropriate baseline and credibility to join the conversation.

Imagine if you were at a housewarming party and walked up to a group of four people who were already engaged in a conversation and said, “I’m not sure what you are talking about, but here is what I want to talk about.”

You don’t want to be “that girl” at the housewarming party and you don’t want to be “that girl or company” in the socialsphere.

Many get the listening and interacting correct, but then they commit a terrible crime. They don’t do anything (react) based on the suggestions and information gathered?

If 90% of the people complain about a certain aspect of your hotel, airline, etc, it’s imperative that the issue is resolved, and resolved promptly.

If 90% of the conversation is centered around certain aspects of the hotel or customer service that people love, then it’s imperative that this information is placed in the appropriate hands (PR, production, sales, customer service, etc.) – let’s make sure we do more of this! Everyone loves it.

We won’t touch on selling too much, because if you do the first three steps well (Listen, Interact, React), then the selling will happen with a proper push here and a prod there.

Notice in the diagram that the steps for the customer then happen in the reverse order of the company. This is huge. It’s these steps that the customer takes within social media that give an exponential return (good or bad).

If it makes it easier to grasp, you can consider the following as steps 5, 6, 7, 8. This is where the magic can really happen.

* Listen: The customer books the reservation from the selling company. The customer’s first step is to listen for what to expect (important expectation setting here). What is the value that will be delivered? What experience can I expect?
* Interact: The customer will then travel.
* React: During or after this interaction, the customer will react according to his or her experience (good/neutral/bad).
* Sell: The consumer’s reaction to the experience will determine if they sell for or against (the company/airline/hotel/cruise line). Keep in mind if it’s a negative reaction, you still have a chance to correct the situation by interacting and reacting.

That’s the beauty of social media. As a company, if you appropriately engage in the four steps, then the stairs in the diagram act more like an escalator (pun intended) rather than a traditional stairway (ie. Social Media Escalator).

It will create a positively circular motion, which, with the appropriate greasing (effort), will continue to take your travel offerings to the top. And that is the true beauty of Socialnomics.

The best strategy in social media is a simple one. Always remind yourself of the fundamentals.

NB: This article is written by Erik Qualman, author of Socialnomics. His book is available on Amazon.
as published in PAII Innfo Newsletter



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