Travel & Tourism: A Market On The MoveBy Cynthia Ironson
Experts agree: The conditions are right for a travel and tourism industry comeback. Here's what you need to know to create promotions that are just the ticket.
The turbulence felt in the travel and tourism industry over the past three years is finally subsiding. Concerns over terrorism, war, SARS, high energy prices and the faltering economy have held the industry back, and even threatened some entities within the field with extinction. But this diverse and complex industry just won't go down without a fight. The World Tourism Organization (WTO) published a report in June 2004 stating that "tourism is on the rise again." The WTO World Tourism Barometer claims that in the major tourism-generating markets conditions are present for "demand to be back on track for growth." Augusto Huéscar, the WTO chief of the market intelligence and promotion department, says his team has seen consistent positive change in economic and geopolitical conditions. Though uncertainties like terrorism and high energy prices still exist, they don't seem to be affecting tourism. "Confidence returned among travelers and the industry and the tourism sector is heading for a robust rebound in 2005 on the weak figures of the past years," he notes.
Another industry authority agrees. The Travel Industry Association of America (TIA), a non-profit organization representing the $555 billion U.S. travel and tourism industry, released its quarterly Traveler Sentiment Index in September, which showed an increase in the third quarter versus the second quarter of 2004. The TIA says more consumers are confident they have enough money to take leisure trips and are interested in taking them. "The economy is growing and many consumers feel optimistic about their financial prospects," says Dr. Suzanne Cool, the TIA's senior vice president of research. "The good news for the travel industry is that travel demand is improving, but consumers are experiencing higher travel prices because of it."
As conditions improve for travel and tourism, promotions will rise again, too. Hotels, airlines, airports, cruise lines, resorts, restaurants, tourist attractions, tour companies, rental car companies, visitor and convention bureaus and other entities in the travel industry that cut back on promotions over the past three years should prepare for take off again. If you want to create a promotion that capitalizes on the travel industry comeback, familiarize yourself with trends and call your promotional consultant to help you create an exciting program that can meet your goals.
A New Direction For Travel Agents
Lucky for us, several organizations keep tabs on the mega-billion U.S. travel and tourism industry. One is the American Society of Travel Agents (ASTA), the world's largest association of travel professionals with more than 20,000 members including agents and companies that sell tours, cruises, hotels, rental cars and more. How many travel agents are there in the U.S.? The Bureau of Labor and Statistics says 103,840 in 2003.
Online travel booking has changed everything for travel agents. According to the TIA's Travelers Use of the Internet study, the number of people booking all their travel online continues to grow. Nearly 64 million travelers - 30% of the U.S. adult population - used the Internet in the past year to get travel and destination information. Of that group, 44.6 million actually booked at least one travel service or product online in the past year.
Promotional consultant Joe Scott works with travel agents and acknowledges that online booking has forced them to take their businesses in new directions. Travel agents are looking at niche markets, like group travel or couples planning a honeymoon. By using market and demographic data, they are struggling to figure out how people are using travel, he says. Bulk mail advertising or handing out logoed magnets is abandoned in favor of highly targeted promotional programs like sending personalized thank you gifts to "advocates and early adopters" to encourage these people to travel again and generate "soft referrals" to their friends and neighbors who might be interested in a trip.
"The smart travel agents are recognizing that they have to put together unique travel experiences," Scott says. "What the travel business needs to do is take the focus off traveling there and back safely, which is a commodity, to creating travel that appeals to a person's passions - whether it's wine tasting, horseback riding, NASCAR, opera or listening to the blues."
One example is an equestrian vacation where travelers ride from castle to castle in Scotland. Another example appeared in a Metropolitan Opera House Playbill: a tour offered during an annual opera festival in Verona. Tickets for the festival, accommodations, transportation and airfare were packaged together for a three-night, three-opera or a two-night, two-opera trip.
Unique travel experiences can be marketed through any number of clubs or organizations centered on people's hobbies or passions, Scott says. "These are expensive trips, but it's all about the experience," he notes. "If you can be in fantasy-land with your spouse for a week or two, what's that worth?"
The travel agent's business aside, what else is happening in travel and tourism? The ASTA sponsors a consumer-oriented Web site (www.ASTAnet.com) dedicated to helping people "live out their travel dreams." Recently, the site posted several travel trends as reported by CNN.com and USAToday.com. Here are two highlights:
"The prices of hotel rooms are on the rise. In some parts of the U.S., popular hotels are booked up mid-week. The main reason is that business travel has recovered, causing a rate increase across the country. "One thing follows the other," says one industry researcher. "The travelers come back, rates go up." It stands to reason that hotels that benefit from the recovery may have more in their budget for guest amenities and VIP gifts - including logoed pillow gifts and other booking incentives.
"U.S. airlines look toward lucrative international flights. Data provided by the major airlines shows a sharp increase in flights to foreign destinations in the last year. As demand increases, airlines stand to make more money on these longer flights. Plus, there is an absence of low-cost carriers on these international routes. Airlines will need to promote new flight times, new international destinations or more seats on international flights.
Justin McNaull, spokesperson for the Automobile Association of America (AAA) notes two more important travel trends: a push towards culture- or historic-driven travel and a renewed focus on cruise travel from more than two dozen ports around the country. He says the emphasis on cultural- and historic-driven travel has been present since the terrorist attacks of 9/11 and offers an example: The Lewis and Clarke expedition began just over 200 years ago and has been commemorated by ongoing bicentennial events. "Destinations are trying to recognize ways that can lure people in to spend money to help support the local economies," he explains.
As for cruise lines, it's no longer necessary to fly to Florida to catch a cruise from Miami or Port Canaveral, McNaull says. Now cruises leave from New York harbor and ports in Philadelphia, Baltimore, Virginia and North Carolina year round, something he says this country hasn't seen since the days of trans-Atlantic cruising.
Products and Promotions
Any travel industry promotion can be enhanced by promotional products. There's no shortage to choose from, from the obvious like luggage tags, passport holders or travel cases to the not-so-traditional, like clocks, umbrellas or any product that can reinforce a brand message. Many promotional consultants will tell you that the choice of product should depend on the goal of the promotion.
Kayla Tollen, a promotional consultant located in Florida and a contributor to this magazine, has recently created campaigns for hotels and some travel-related businesses like restaurants. She names some goals of travel-industry promotions: to increase the bookings of meetings, to enhance referral rates, to motivate sales staff, to thank attendees at a sales meeting, to promote a property in an off-beat location, to give as holiday gifts and more. She suggests logoed products like note pads and paper, 10-year calendars, pencils bent into the shape of an airplane, gift baskets, pocket planners and message pens to her clients.
"I like to provide something functional and informational," Tollen says, adding that those in the industry that have been hit hard want to know that they will get a return on investment. "They want to know that they'll increase bookings, sales, referral bases, and get their staff motivated." Promotional consultants who are in synch with the travel market and who have done their homework about the direction the travel industry is headed in can help create goal-oriented promotions, she notes.
Some promotional consultants end up acting as a full-service ad agency for a client in the travel industry. James Slater, a Michigan-based consultant, has a long-term business relationship with an airport in his home state, which happens to be the fastest growing airport in the country. He creates promotions for the airport from start to finish. The airport must do a lot of direct marketing, he says, sometimes joining forces with the city's convention and visitors' bureau. "They do a lot of personal sales calls or meetings where they might have 20 companies present. They always like to leave something behind, and depending on the market they're going to is how expensive the imprinted leave-behind gift is," he notes.
His client also continually exhibits at trade shows in different states to try and get travel agents to direct bookings to the airport. Coolers, umbrellas and travel kits have all been given away at booths. Slater considers where the trade show is taking place and comes up with unique ideas for the airport to help them stand out from other exhibitors. Other promotions he's created include gifts to give away at inaugural parties introducing a new airline/destination and gifts given to passengers who take an inaugural flight.
Since cruising is hot these days, it's worth noting what kind of strategies and promotions cruise lines use to get passengers on board. Christine Arnholt, vice president of marketing services for Carnival Cruise Lines, says promotional products reinforce the company's brand to travel agents, repeat cruisers and potential first-time passengers. The main challenge, she says, is to get people to cruise, period: only 15% of North Americans have taken a cruise at all.
"Our biggest opportunity is to get first-times to try us, and while logo exposure isn't what we use to do that, because we have to explain the product, it does help us reinforce afterwards," Arnholt says. "So with our travel agents - our primary distribution channel - we use logoed merchandise when we bring out a new ship or have an inaugural event. We put our logo on items to reinforce the Carnival message [and] to expand awareness."
Carnival also uses logoed products in other ways. It provides them to travel agents to distribute at local consumer shows and events; it uses them as leave-behinds by sales reps; the media receives them to announce new ships or inaugural voyages; and consumers get them to commemorate special voyages or past-guest cruises, Arnholt says.
There's one thing that promotional consultants who work with the travel and tourism industry appreciate: It is an open-minded industry that's willing to consider creative programs and promotional products. For instance, Slater's airport client has used logoed gumball machines as sales leave-behinds. It also distributed a compass while using the tagline, "Your direction to our airport."
Slater and other promotional consultants enjoy thinking "out of the box" for travel-industry clients. "Whether it's special events that they're doing or special sales calls, they're not afraid to take a look at different ideas," he says. "That makes it fun."
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