2009 Hunker Down Travel and Tourism

1
2009 Hunker Down Travel and Tourism
2
Change

• 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

3
RTM Projections for Revenues

• 2009 5-10 (have a back-up plan for 20
  down)
  
• 2010 5
• 2011 Could last into 2011

4
Issues

• Economy
• Volatile energy costs gas
• Weather
• Airlines deregulation
• Overbuilt lodging supply
• Declining attendance to attractions
• Population shifts
• Changes in visitor behavior

5
NOT a Great Depression!

• Multiple Factors
• Dust Bowl
• 25 unemployment (8 today)
• Lack of basic economic regulation
• Following WWI - too much production, not enough
  purchase ability

6
Disney Vegas

• Disney Buy 4 nights, get 3 free
• Las Vegas Bargains Value
• - room show dinner

7
Consumer Confidence Index

• Americans are worried
• Feb. Now at 25.0 (1985100)
• 144.7 in 2000
• 2000 - 2007

8
DOW since 1928
9
The New Normal

• Working toward a settled economy that is more on
  a slow, steady increase track that is
  sustainable.

10
Good Places to Ride Out a Recession

• Arlington, VA
• Baltimore. MD
• Durham, NC
• Lubbock, TX
• Corpus Christi, TX
• Madison, WI
• Boston, MA
• Pittsburgh, PA
• Baton Rouge, LA
• New Orleans, LA
• Philadelphia, PA
• Anchorage, AK
• Lexington, KY
• Buffalo, NY
• Lincoln, NE
• Chesapeake, VA
• Albuquerque, NM
• Seattle, WA

Diversity of Visitor Mix Government Industry M
ilitary University Medical Leisure Sports Gro
up Wedding/Reunion Meetings VFR Pass-through

11
Places Likely to be Hurt by Recession

• Darien, CN (near NY)
• Bloomington, IL (near Chicago)
• Hoboken, NJ (near NY)
• West Des Moines, IO (near Des Moines)
• Garden City, NY (near NY)
• Summit, NJ (near NY)
• Westport, CN (near NY)
• University Park, TX (near Dallas)
• Mountain Brook, AL (near Birmingham)
• Lake Forest, IL (near Chicago)
• Urbandale, IO (near Des Moines)
• West Hartford, CN (near Hartford)
• Newport Beach, CA (near Los Angeles)
• Westchase, FL (near Tampa)
• Rockville Centre, NY (near NY)
• Naples, FL (near Fort Myers)
• Ridgewood, NJ (near NY)
• Charlotte, NC
• Sioux Falls, SD

12
Lubbock, TX

• Share of jobs in strong industries 39.4
  Number of workers 100,523 Metro area
  unemployment rate 4.1 Agriculture jobs 1.32
  Professional, Scientific, and Technical jobs
  (legal, accounting etc.) 4.01Education jobs
  14.81 Health-care jobs 14.81Public
  Administration (Government) jobs 4.42 Lubbock
  is home to Texas Tech University and hospitals
  including Covenant Medical Center, and it could
  benefit from resilience in the higher-education,
  agriculture, health-care, and energy sectors.

13
Harrisburg
 
14
National Predictions

• Lakshman Achuthan, Economic Cycle Research
  Institute
  
• Global Recession
• - Sell value
• PwC
• RevPAR to drop 5.8 in 2009 (0.8 in 2008)
• 2009 occupancy 58.6 (lowest since 1971)
• Smith Travel Research STR for 2009
• - Occupancy 59.1 (61.2 for 2008)
• - ADR 108.52 (107.44 for 2008)
• - RevPAR 64.10 (65.75 for 2008)

15
The Industry Segments

• ..and what you need to know/do about each one.

16
Lodging

• Source Smith Travel Research STR Report
• 50,000 hotels in U.S. 2 growth in 2009
• 2007 2008 2009
• Occupancy 63.20 61.20
  59.1 (56.5 PwC)
  
• ADR 103.64
  107.44 108.52
  
• RevPAR 65.50 65.75
  64.10

17
What to do

• Get Smith Travel STR Monthly Report for your
  county/region
  
• Know YOUR destinations
• - Occupancy
• - Average Daily Rate (ADR)
• - RevPAR
• compared to others in your state
• compared to other destinations like yours
• Know what your customer wants in lodging

18
Airlines

• 2009 loss projected at 8 billion
• 24 airlines ceased Jan-May 2008
• - 8 U.S. (Aloha, MAXjet, Big Sky, ATA, Skybus,
  Eos, Champion,
  
• Air Midwest)
• Service cuts in over 100 U.S. destinations
• Route cuts, capacity cuts, mergers, survival
• 15 cut in premium travel (first-class)
• Source Air Transport Association

19
Hunker Down Tips - Airlines

• Know what of your visitors fly-in
• Route cuts will affect meeting/event recruitment,
  and business recruitment
  
• Its important to track and monitor air cost and
  convenience (compared to your competition)
  
• Objective Maintain air service capacity

20
Amtrak

• 2008 28.7 million / 78,600 per day
• Objective Increase 5 per year
• Same issues cost convenience
• Know your rail status!

21
High Speed Rail Plan
22
Business Travel

• Typically 1/3 of lodging occupancy
• 71 of Businesses plan to curtail or cut costs in
  2009
  
• (Source Association of Corporate Travel
  Executives)
  
• Avg. cost for trip 1,110 in 2008 (air, hotel,
  car, food)
  
• (Source American Express)
• While on a business trip
• 48 report insufficient sleep
• 43 consider airport security a hassle
• 26 report eating too much
• 19 get lonely
• (Source YPBR/Y 2007 National Business Travel
  Monitor TM)
  

23
What Does it Mean for the YOU?

• Know what of your visitors are individual
  business travelers.
  
• Make sure they know where the good restaurants,
  shopping, experiences are.
  
• Make them want to come back.

24
Conventions Meetings

• Loews Miami Beach Hotel owners reported a loss of
  5 million in 60 days resulting from cancelled
  business.
  
• Primerica Financial Services, part of Citigroup
  Inc., cancelled its 50,000-person June meeting in
  Atlanta, a convention that has been held there
  for 16 years. The meeting was expected to
  generate 55 million for the local economy.
• A prominent labor group attacked a banking and
  insurance association for scheduling its
  Financial Services Roundtable at the
  Marriott-owned Ritz-Carlton in Naples, Fla. The
  meeting was cancelled.
• Marriott reported a 10 million loss in the
  fourth quarter of last year, compared to a 176
  million profit for the same quarter in 2007.
  Chief executive Bill Marriott told investors hed
  speak with key lawmakers to plead the case that
  business travel shouldn't have a negative
  connotation, especially considering the many
  hundreds of thousands of people employed in the
  industry.

25
Convention/Meeting

• 2009
• Under siege
• Reluctant attendees but interested
• in finding out about their industry
• Aggressive competition
• All-in-one site no driving
• Air access is a factor

26
What Does it Mean for YOU?

• More competition less willing customer
• Direct sales by CVBS, facilities and hotels is
  critical
  
• Look for smaller meetings SMERF
• Expect weddings, reunions to increase
• Monitor your air access
• Identify your happy, satisfied customer find
  more like them

27
Convention Meetings

• Customer perceptions of your strengths
  weaknesses
  
• What types of meetings are you successful in
  recruiting? (type, geography, price,
  demographics)
  
• Which meetings had the highest satisfaction?
• Which meetings spent the most?
• Where are other similar groups?

28
Convention/Meeting/Reunions

• Reconfirm all meetings/events 6-9 months out
• Encourage local companies to hold their meetings
  locally
  
• Work SMERF (social, military, educational,
  religious, fraternal)
  
• Reunion self-planner button on destination
  website
  
• Encourage locals to hold reunions in home town

29
Domestic Leisure

• U.S. Leisure Travel (domestic person trips)
  (TIA) Increase has never faltered
  

30
Domestic Leisure

• Expected Future
• UNIQUE EXPERIENCES
• Beaches Lakes
• Mountains
• National/State Parks
• Recreation
• Winter skiing/
• snow sports
• Increase in adults traveling without children
• Year round leisure visits

31
Leisure Tourism

• Increases in Leisure travel
• Respite
• Vacations demanded
• Growth in family travel
• Growth in affinity travel
• Attendance to attractions down

32
Leisure

• Know who they are
• Know where they originate
• Know their activities
• Know their expenditures
• Renew your efforts to provide orientation
  facilitation - - get them to the cash registers
  
• Visitor centers selling showcases
• Maps visitor guides
• Build database E-marketing

33
What Does it Mean for YOU?

• This is your best potential.both in peak and
  off-seasons
  
• Gotta make it easy to say yes and give them
  something uniquefacilitation orientation is
  critical
  
• Niche approach is also excellent
• - Birding - Wildlife - Photography
  - Adventure - Culinary
  
• - Cycling - Kayaking - Grandparent/Grandkid
  - Girlfriends Getaways

34
Attractions

• Changing or declining
• Major theme parks - 5-7 drop in 2009
• 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
• Biltmore vs. Hearst Castle
• Store, Door More
• FUN

35
Hunker Down Tips - Attractions

• Monitor attendance monthly
• local vs. non-resident visitors
• Promote to hotels/lodging
• Help attractions think local regional
• Handmade in America trails

36
Cruise Industry

• Cruise Lines (CLIA)
• Out-performed all other
• travel segments since 2000
• - avg. 7.4 annual growth since 1990
• 12.8 million in 2008, 10.6 million originating
  from North America
  
• 60 Caribbean, 20Alaska, 20northeast/west
  coast/other
  
• Approximately 6 million (56) originate out of
  Florida
  
• 14 out of California/Washington/Hawaii/Alaska
• 8 out of Texas
• 10 out of Mid-Atlanta (NY, PA, NJ)
• 5 out of Massachusetts
• 7 out of Louisiana, Maryland,

37
What Does it Mean for YOU?

• Time poverty drives potential visitors to the
  Southeast to cruises.
  
• You must learn to be a cruise ship on land.

38
Group Tour

• Reinventing the product
• Affinity, affinity, affinity
• Last minute planning taking its toll
• Hard to sell-out per capita tour
• Custom designed for Baby Boomers or other age
  groups
  
• Freedom without the hassle, cruise ship on land
• Something you cant get any other way
• Huge growth in student travel now 25 of
  international travel (SYTA)

39
What Does it Mean forYOU?

• Affinity is best target.
• Know which groups come.find more like them.

40
Spas

• 14,615 spas in the U.S. in 2008
• 5 increase over 2007
• While number is growing, it is slower
• 80 day spas
• 9 resort spas
• 7 medical spas
• 3 club spas
• .4 mineral springs spas
• .5 destination spas

41
What Does it Mean for YOU?

• Make sure visitors know where the spas are!
• Spa packages girlfriends getaways
• Dont assume outdoors or history does not
  include desire for a spa!

42
National Parks 275 Million

• Smoky Mountain National Park 9.3 Million
• Grand Canyon 4.4 Million
• Yosemite 3.5 Million
• Yellowstone 3 Million
• Canadian National Parks -1 to 12 Million

43
National Parks 275 Million

• Yosemite 3.5 Million
• Olympic 2.9 Million
• Rocky Mountain 2.9 Million
• Zion 2.6 Million
• Grand Teton 2.6 Million
• Glacier 2.0 Million

44
National Parks 275 Million

• Per Capita in U.S.
• 1987 1.2 recreation visits per person
• .9 recreation visits per person
• 25 drop in 18 years
• (Source Oliver Pergams, University of Illinois)

45
2007 Rank Order

• Top 10 National Park Historic Site Visits
• Great Smokey Mountains National Park 9,289,215
• Grand Canyon National Park 4,279,439
• San Francisco Maritime National Historic
  Park 3,984,645
  
• National World War II Memorial 3,865,430
• Lincoln Memorial 3,810,347
• Vietnam Memorial 3,629,739
• Independence National Historic Park 3,532,245
• Castle Clinton National Memorial 3,415,397
• Colonial National Historic Park 3,344,018
• Statue of Liberty National Memorial 3,263,585

46
Top 10

• 2007 National Park Attendance 2006 Ranking
• Blue Ridge Parkway 17,352,286 1
• Golden Gate Nat. Recreation Area 14,397,313 2
• Great Smokey Mnts. National Park 9,372,253 3
• Gateway National Recreation Area 8,813,204 4
  
  
• Lake Mead Nat. Recreation Area 7,622,139 5
• George Washington Mem. Parkway 6,837,139 6
• Natchez Trace Parkway 5,777,666 7
• Delaware Water Gap Nat. Rec. 4,836,229 8
• Grand Canyon National Park 4,413,668
  10
  
• Cape Cod National Seashore 4,351,609
  9
  

47
The three regions the country is dividing itself
into are The New Sunbelt, The Melting Pot, and
The Heartland
New Sunbelt
Melting Pot
Source William H. Frey, Brookings Institute
Heartland States
48
Family Vacation Trends

• Resorting (activities with kids and free time
  alone)
  
• Club Med - Beach Resorts
• Water Parks
• Great Wolf Lodge (Wisconsin Dells) - Atlantis
  (Bahamas)
  
• Cruises something for everyone
• International (rank order)
• London - Cancun - San Jose
• Rome - Mexico - Costa Rica
• Paris - Nassau/Bahamas
• Experiential
• Wildlife - Rafting - Rafting
• U.S. (rank order)
• Orlando - Miami - Hawaii
• New York - Las Vegas

49
Kid Quotes

• I loved everything about New York the shows,
  the shopping, the restaurants, the hotels, the
  rides, the things to see and do.
  
• A vacation is not getting in and out of a
  car.thats what we do at home.
  
• I have a great time with my parents when were
  on vacation we talk more and dont fight as
  much.

50
Top 3 Factors in Destination Selection for
Families

• Fast, easy access to a wide variety of family
  and recreational activities
  
• - All at same site - Limited driving
• Room size spacious family of 5
• - kitchenettes - video games -internet
• Hotel services
• - pool -game rooms - fitness
• - kids programs

51
TIA

• Most Popular Items With Families
• 41 Special children menus
• 30 Hotel discounts for families
• 22 Toys video games available
• 13 Supervised activities
• 6 Babysitting services

52
Kids Say

• Top Picks
• 1. Theme parks
• 2. Beach / lake / cruise
• 3. Water parks

53
Kids Say

• Kids favorite vacation activities
• Going swimming
• Eat in restaurants
• Stay in a hotel or resort
• Go to a theme park
• Stay up late
• Going to a beach/lake
• Least favorite
• Getting up early
• Riding in a car
• (Source Yesawich, Pepperdine, Brown Russell
  2005)
  

54
Weather Environment
55
Time Poverty

• 1 in 5 workers spends 50 hours/week
• Email takes 1 full hour per day
• Americans work 9 full weeks more than Europeans
• Children
• - Since 1970s have lost 12 hours per week free
  time
  
• - 25 drop in play time / 50 drop in
  unstructured outdoor play
  
• - Spend 8 hours more /week in school
  than 20 years ago
  
• - Homework has doubled in 20 years

56
Green Sustainable
- Lots of talk, beginnings of action
- People are interested, but majority not
willing to pay more - New study PhoCu
sWright, HSMA, and others Will identif
y values and behaviors - 47 willing to
pay higher fees / 53 were not
YPartnership 2008 Travel Monitor
57
Other Trends

• RV sales down
• -8 million Americans own RVs
• -Campground reservations up 5-15
• Traveling with pets
• catering to pets
• (16 of all Americans)

58
Interesting Tidbits

• 86 of Americans travel with their cell phones
  (call to see whats blooming today)
  
• 70 of 15-30 year olds use social networks
  growing with older travelers
  
• 75 trust reviews more than ads
• 90 of women want a girlfriends getaway
• 36 want a spa experience
• 81 say they want something new/different in
  2009
  
• 50 of convention attendees stay over
• 75 of hotel guests more motivated by photos than
  price
  
• 70 found information at hotel/lodging on things
  to see do
  

59
Evolving Niches

• Travelers with disabilities
• GLBT Market
• Girlfriends Getaways
• Mancations
• Procreation Vacations
• Babymoons
• Culinary Travel
• Medical/Life Enhancement Travel
• Spiritual Tourism
• Voluntourism
• Pet Travel
• Space Travel

60
DMAI on Taxes

• Total Tax on lodging rooms 12.2
• Average hotel room tax 6.7
• Average sales tax on hotel room 5.5
• Average tax on rental car 11.7

61
Summary

• 2009 2010 will be challenging
• Now, more than ever, know thy customer
• Point of origin
• Activities
• Satisfaction ratings
• Know your most likely customer
• Track report monthly
• Monitor your state peer results
• Be visible to your constituents
• Keep your elected leaders informed

62
Thank You

• Judy L. Randall
• Randall Travel Marketing
• PH 704-799-6512
• Email judy_at_RTMnet.com

63
Downturn Threats

• Decline in occupancy tax collections funding to
  your CVB
  
• Blame from lodging, attractions, etc.
• 3. Municipalities needing your occupancy tax
  because sales taxes are down
  
• 4. Closing of CVBs / merging with Chambers and
  EDC groups
  

64
Hunker Down Tips

• First Prove travels economic worth to your
  city/county
  
• 2,000 Hotel rooms in your destination
• X 365 Days
• 730,000 Available room nights to sell
• X 65 Occupancy rate (from Smith Travel
  STR)
  
• 474,500 Sold room night
• X 100 Average room rate (ADR) (STR)
• 47,450,000 Total lodging revenues
• How many other industries in your community
  generate that much revenue annually?
  
• How do you calculate? Smith Travel STR
  Report.or survey of lodging properties
  

65
Hunker Down Tips

• Second Determine daily expenditures
• 100 Lodging
• 50 Food/meals
• 50 Shopping
• 40 Transportation/fuel
• 20 Entertainment
• 260 TOTAL DAILY EXPENDITURES
• How do you calculate? Research to determine
  average daily spending (intercepts or survey)
  

66
Hunker Down Tips

• Third Multiply daily expenditures x sold room
  nights
  
• 260
• X 474,500 Sold room nights in your destination
  
  
• 123,370,000 Total Revenues Generated By Travel
  To Your Destination
  
• Thus, if you have 2,000 hotel rooms your tourism
  industry is generating
  
• 123 million EVERY year. How many other
  industries in your county/city
  
• generate that much?

67
Visitor Mix
Conduct lodging survey in January of 2009 for
calendar year 2008 Repeat monthly Buy Smith Trav
el (STR Report) monthly Talk with your hoteliers
monthly.ask about 2008 compared to 2007 monthly
68
Currituck County, NC
69
Shreveport-Bossier, LA
70
Hershey-Harrisburg, PA
71
Lodging Visitor Mix
72
Visitor Expenditures

• Next, know how much revenues you truly
  generate.by knowing how much each type of
  visitor spends.

73
Visitor Segments
74
Daily Expenditures
This helps your determine exactly how much youre
making on each type of visitor.
You can then calculate which segment is your most
profitable visitor. You can also evaluate what
your CVB is doing to attract each customer
segment, and how you are serving their visitor
information needs.
75
Hunker Down Tips

• March - December
• 1. Conduct monthly 2009 Lodging Survey
• (compare to visitor mix for 2008)
• Monthly Intercept Interviews
• - Match to lodging mix
• - Business visitors what industries do they
  represent?
  
• - Meetings what industries?
• - Leisure visitors what activities?
• Prepare Present Monthly Report
• - Lodging Report occupancy, ADR, RevPAR,
  Supply/Demand, Visitor Mix
  
• - Intercept Report Behavior, industries,
  expenditures
  
• - CVB Activities What actions the CVB is
  taking
  

76
Hunker Down Tips - Lodging

• Get Smith Travel STR Monthly Report for your
  county/city
  
• Know YOUR destinations
• - Occupancy
• - Average Daily Rate (ADR)
• - RevPAR
• compared to others in your state
• compared to other destinations like yours
• Monthly survey report

77
Airlines

• 2009 loss projected at 8 billion
• 24 airlines ceased Jan-May 2008
• - 8 U.S. (Aloha, MAXjet, Big Sky, ATA, Skybus,
  Eos, Champion,
  
• Air Midwest)
• Service cuts in over 100 U.S. destinations
• Route cuts, capacity cuts, mergers, survival
• Source Air Transport Association

78
Hunker Down Tips - Airlines

• Know what of your visitors fly-in
• Route cuts will affect convention recruitment,
  and business recruitment
  
• Its important to track and monitor air cost and
  convenience (compared to your competition)
  
• Objective Maintain air service capacity
• Report Monthly

79
Convention/Meeting/Reunions

• Reconfirm meetings 6-9 months out
• Encourage local companies to hold their meetings
  locally
  
• Work SMERF (social, military, educational,
  religious, fraternal)
  
• Reunion self-planner button on destination
  website
  
• Encourage locals to hold reunions in home town

80
Hunker Down - Attractions

• Attendance to attractions down
• Need to monitor monthly
• Visitor mix for each
• Help attractions think local regional

81
Leisure

• Know who they are
• Know where they originate
• Know their activities
• Know their expenditures
• Renew your efforts to provide orientation
  facilitation - - get them to the cash registers
  
• Visitor centers selling showcases
• Maps visitor guides
• Build database E-marketing

82
Track Inquiries
83
Group Tour

• Affinity, affinity, affinity
• Huge growth in student travel
• Good potential students, seniors, church
  groups, youth groups

84
Customer Segments

• Business
• Meetings/Conventions
• Leisure
• Sports
• Group Tour
• University
• Military
• Medical
• Pass-through
• Know your segments, and what youre doing for
  each! How does your core tools (website, visitor
  guide) work for each
  

85
Other Hunker Down Tips

• Shoe-leather marketing
• Be visible to your constituents (lodging,
  attractions, etc.)
  
• Inform your constituents
• Newsletters, monthly reports, etc.
• Prepare to adjust budget
• Based on your monthly survey, tracking, etc.

86
Other Hunker Down Tips

• 4. Hold frequent constituent gatherings
• Benchmark, keep them reporting talking
• 5. Talk to your state, regional peers
• Know what is going on around you
• Talk to your hotels/lodging properties
• Prove you understand care

87
Other Hunker Down Tips

• 6. Know your customer
• - Be out there talking to them
• 7. Remember The most likely new customer you
  will get is one just like the happy/satisfied
  customer you have today.
  

88
Summary

• Know your numbers stats
• Prove your worth
• Defensive and Offensive
• Know your visitor segments what
• youre doing for each
• Research tracking
• Communicate like your job depends
• on it
• Be visible