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Title Goes here. Outlook on U.S. Travel and Tourism Suzanne D. Cook, Ph.D. U.S. Travel Association. Suzanne’s Top 10 Trends for 2010 & 2011. Outlook Improves from “Awful” to “Ho Hum”. Trend #10… You call this a recovery?. Economic Trends… “Uncertainty” rules the day.

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Title goes here

Title Goes here

Outlook on U.S. Travel and Tourism

Suzanne D. Cook, Ph.D.

U.S. Travel Association


Suzanne s top 10 trends for 2010 2011

Suzanne’s Top 10 Trends for 2010 & 2011

Outlook Improves from

“Awful” to “Ho Hum”


Trend 10 you call this a recovery

Trend #10…You call this a recovery?


Economic trends uncertainty rules the day

Economic Trends…“Uncertainty” rules the day

  • Recovery underway but has slowed. Gradual acceleration expected.

  • Business conditions remain favorable

  • Gains in employment starting to encourage spending, but unemployment remains high

  • Housing market remains key problem

  • Corporate and consumer uncertainty is slowing the recovery

  • Oxford Economics forecasts growth of 2.6% this year and 2.5% in 2011.


Trend 9 it s the consumer stupid

Trend #9…It’s the Consumer, Stupid!


Consumer confidence improves slightly

Consumer Confidence Improves Slightly

But, we consumers are still in a funk

111.9

61.4

50.2

25.3

1985 = 100

Source: The Conference Board, October 26, 2010


Traveler sentiment index tm reverses three quarter decline just barely

Traveler Sentiment IndexTMReverses three quarter decline…just barely

March 2007 = 100

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM


Affordability of travel still positive but down 16 points from october 2009

“Affordability of Travel” still positive, but…Down 16 points from October 2009

March 2007 = 100

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM


Travel prices up 4 2 ytd gas prices only 22 higher

Travel prices up 4.2% YTDGas prices “only” 22% higher

Percentage change through September 2010

Does not include

various fees

Source: Energy Information

Administration

Source: U.S. Travel Association Travel Price Index


Money available for travel continues to be troublesome

“Money Available for Travel” Continues to be troublesome

March 2007 = 100

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM


Interest in travel first increase in four quarters but 9 points below october 2009

“Interest in Travel” First increase in four quarters, but 9 points below October 2009

March 2007 = 100

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM


Time for travel somewhat seasonal on par with october 2009

“Time for Travel” somewhat seasonal On par with October 2009

March 2007 = 100

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM


Trend 8 travel finally getting off the bottom

Trend #8… Travel finally getting off the bottom?


It s been a very rough ride enjoy the recovery

It’s been a very rough ride…Enjoy the recovery!


Change in u s visitation 2009 vs 2008 how the year ended or things to forget

Change in U.S. visitation 2009 vs. 2008…How the year ended or things to forget

- 2.4%

- 3.4%

-3.4

  • 5.3%

- 6.5%

  • 6.3% (Overseas)

Sources: U.S. Travel Association; Oxford Economics/Tourism Economics;

U.S. Department of Commerce-Office of Travel and Tourism Industries


Visitation was down but reduced spending really hurt 2009 vs 2008

Visitation was down… but reduced spending really hurt, 2009 vs. 2008

- 7.3%

- 7.9%

- 8.8%

- 12.2%

- 14.4%

*Excluding international airfares

Sources: U.S. Travel Association; Oxford Economics/Tourism Economics;

U.S. Department of Commerce-Office of Travel and Tourism Industries


New forecasts expected gains in u s travel in 2010

New Forecasts:Expected “gains” in U.S. travel in 2010

Domestic

Leisure

Volume

Domestic

Business

Volume

Domestic

Spending

International

Visitors

International

Spending*

2.8%

(-2.4%)

4.2%

(-6.5%)

7.2%

(-7.9%)

8.0%

7.9%

(-5.3%)

*Excluding international airfares

Note: Numbers is parentheses are 2009 data

Source: U.S. Travel Association and Tourism Economics; 2010 Projections

(-14.4%)


Trend 7 leisure travel back to normal

Trend #7…Leisure travel – back to normal?


Percentage of u s adults traveling for leisure on the decline

Percentage of U.S. adults traveling for leisure on the decline

Percent of U.S. adults taking a leisure trip in past 12 months

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM


But leisure travel intentions for next six months up modestly

But, leisure travel intentions for next six months up modestly

Plan to take a leisure trip between November and April

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM


Opportunities exist to entice over 49 million not sures to take a leisure trip

Opportunities exist to entice over 49 million “not sures” to take a leisure trip

Not Sure

21%

49 Million

No Plans to Travel

24%

56 Million

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, October 2010


Frequency of leisure travel plans unchanged little change in past five quarters

Frequency of leisure travel plans unchangedLittle change in past five quarters

Leisure travel plans for next six months compared to last year at this time

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, October 2010


Average number of planned leisure trips stable

Average number of planned leisure trips stable

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM


Leisure travel behavior more spending strong drive market

Leisure travel behavior…More spending & strong drive market

Changes in leisure travel behavior in next 6 months compared to same period in 2008 and 2009

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, October 2010


Leading travel indicator declines six month outlook worrisome

Leading Travel Indicator declines…Six month outlook “worrisome”


Most destinations report growth in domestic visitors in 2010 different picture than 2009

Most destinations report growth in domestic visitors in 2010…different picture than 2009

Source: U.S. Travel Association, October 2010


And an even more positive picture for 2011 none expecting declines

And an even more positive picture for 2011…None expecting declines

Source: U.S. Travel Association – Survey of 348states/cities, October 2010


Attractions industry performance in 2009

Attractions Industry Performance in 2009

  • Segments that performed better than average:

    • Aquariums

    • Zoos

    • State/National Parks

    • Water Parks, and

    • Botanical Gardens

  • Segments that performed below average:

    • On and Off Broadway Shows

    • Science Centers

    • Sporting Events, and

    • Theme Parks

+0.1%in 2009

Aggregate Attractions Industry

Source: Jerry Henry, Herschend Family Entertainment


Projection for 2010 and beyond

Projection for 2010—and Beyond

  • Mixed bag of results once again. Only this time, it is the “destination attractions” that appear to be posting the largest increases while attractions in urban destinations appear to be trailing behind.

  • The diversity of the industry prevents wholesale decreases and likewise caps large increases.

+0.9%in 2010

Aggregate Attractions Forecast


Projection for 2011 and beyond

Projection for 2011—and Beyond

  • 2011 and beyond expected to provide slow and steady improvement (+1.5%). But much is riding on a return of consumer confidence and an increase in employment. True recovery will not begin until these two factors return to a more normal range.

30


National parks outlook

National Parks Outlook

  • After a surge in visitors in 2009, slight retreat in 2010

    • But, Yellowstone set a new record; Yosemite and Glacier also saw increases

    • Lesser known parks doing better than iconic parks

    • Value-driven itineraries

    • Deepwater Horizon Oil Spill – negatively affected several parks

  • 2011 expect 0.9% increase – greatest strength in National Capital, Intermountain and Northeast regions

  • Implementation of Strategic Plan – key demonstration projects:

    • Discover our Shared Heritage Travel Itinerary Series

    • CW150 – Sesquicentennial of Civil war (4 year campaign)

Source: National Park Service


Civil war sesquicentennial marketing opportunity

Civil War Sesquicentennial… Marketing opportunity

  • 17 states have programs in place; 80 sites in NPS have primary focus on Civil War

  • 31% of U.S. adults (72.2 million) are Civil War Enthusiasts

  • Interest across all demographic sectors and regions of U.S.

  • Civil War Enthusiasts have a higher interest in many other activities than travelers overall

  • Excellent marketing opportunity to promote domestic and international visitation

Source: David Sheatsley, Jason Stienmetz and Dean Reeder; travelhorizons™ – U.S. travel Association and Ypartnership


Other nature based tourism trends positive

Other nature-based tourism trends positive

  • Most components of the recreation industry reported gains in 2010; outlook for 2011 is optimistic.

  • Many state parks saw increases this summer but some faced budget-related park closures.

  • RV parks and campgrounds generally comparable with last year

  • Ski industry – strong 2009-10 season (skier visits up 4.2% and spending up); even better 2010-11 season forecasted

  • Snowmobile industry optimistic – show attendance up

  • Purchases of expensive recreational items/adventures recovering unevenly from large declines.

  • RV shipments up 44.8% in 2010; for 2011 expect another

    8.2% gain

Source: American Recreation Coalition, Recreation Vehicle Industry Association


Trend 6 business travel climbing by seat of its pants

Trend #6…Business travel climbing by seat of its pants


Percentage of u s adults taking business trips continues to fall

Percentage of U.S. adults taking business trips continues to fall

Percent of U.S. adults taking a business trip in past 12 months

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, October 2010


Shares of business travel by type

Shares of business travel by type…

Percent of U.S. adults taking a business trip in past 12 months

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM


Average number of business trips taken transient business up but the rest

Average number of business trips taken…Transient business up, but the rest?

* Percent of U.S. adults taking a business trip in past 12 months

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM


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Convention & Trade Show Attendance…

Looking to 2014 as the new target

Average attendance to U.S. convention centers

Source: PriceWaterhouseCoopers


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Exhibition and Events Trends…

Coming off of “dreadful”

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  • 10,000 exhibitions and trade events in U.S. each year

  • 2008 and 2009 Experience “dreadful”!

  • Q2 ‘10 CEIR Index : Overall -1.4%

  • Both exhibit space and number of exhibiting companies down but attendance up (+4.5% )

  • Modest recovery forecasted for Q4 ’10

  • Outperforming sectors include energy, (particularly “green”), healthcare, and technology

  • Sectors performing most poorly include automobile, construction, manufacturing and food

Source: International Association of Exhibitions and Events


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A New Era: Meetings and Corporate Social Responsibility

  • “Using sustainability to strengthen my business while also having a positive impact on society”

  • McKinsey Global Survey - positive economic results from sustainability initiatives:

    • 53% report improved operational efficiency

    • 48% report increase in brand loyalty

    • 39% report gaining access to new markets

  • MPI Survey:

    • 80% report increased requests for CSR meeting components

    • 90% believe will grow even more in future

  • Skeptic/distrustful consumers

    • 74% skeptical of hotels environmental claims

    • 25% skeptical of all green claims

    • More than 40% look for third-party certification

  • Booming sector for certification and standards

Source: Meeting Professionals International


Business travel intentions stability reigns

Business travel intentions…Stability reigns

Plan to take a business trip between November 2010 and April 2011

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM


Frequency of business travel plans no change in past five surveys

Frequency of business travel plans…No change in past five surveys

Percent of U.S. business travelers’ plans during November 2010 through April 2011

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM


Trend 5 hotel industry positive signs

Trend #5…Hotel Industry – positive signs


Hotel demand 2010 gains outpacing 2009 declines

Hotel demand… 2010 gains outpacing 2009 declines

Aug

Oct

Nov

Sep

Sep

Jun

Dec

May

Mar

Feb

Aug

Jan

Apr

Jul

Source: Smith Travel Research


Scales demand percent change september ytd 2008 2009 and 2010

Scales – Demand Percent Change September YTD 2008, 2009, and 2010

2010 Smith Travel Research, Inc.

Largest Demand recovery at upper end, esp. Upscale (trade-up)


Us regions demand percent change september ytd 2008 2009 and 2010

US Regions – Demand Percent ChangeSeptember YTD 2008, 2009, and 2010

2010 Smith Travel Research, Inc.

New England & Mid Atlantic strongest


Revenue per available room positive but a lot of ground to make up

Revenue Per Available Room positive…But a lot of ground to make up

Jan

Dec

Feb

Mar

Aug

Oct

Nov

Sep

Aug

Jun

Jul

Apr

May

Sep

Source: Smith Travel Research


Change in revpar through sep 2010

% change in RevPAR through Sep 2010

7.5% or more

5.0% to 7.4%

2.5% to 4.9%

0% to 2.4%

Decrease

Source: Smith Travel Research


Title goes here

What we see in Q4 2010Key Performance Indicator Outlook Scenario (% change vs. Prior Year)Year-end 2010F

YTD Aug

2.3

7.4

5.0

-1.0

4.0


Total united states key performance indicator outlook scenario change vs prior year 2011f

Total United StatesKey Performance Indicator Outlook Scenario (% change vs. Prior Year)2011F


Trend 4 air travel believe it or not satisfaction is up

Trend #4…Air travel…believe it or not satisfaction is up


Transportation demand unsettled

Transportation demand “unsettled”


International enplanements zooming and domestic less bad

International enplanements zooming and domestic “less bad”


Lately a few tough years for air travel

Lately, a few tough years for air travel

2007

Flying high!

2008

At the end of a barrel

2008 & 2009

Oh, yeah, it’s the economy stupid!

2010

Putting it all back together

Source: Bureau of Transportation Statistics


Capacity discipline

“Capacity discipline”

Airlines begin to put capacity back but have not made up for deep reductions in ‘08 and ‘09

Source: Innovata SRS - Schedules Reference Service


Trend 3 international visitors welcome back

Trend #3…International Visitors…Welcome Back!


World tourism arrivals receipts 2002 2009

World Tourism Arrivals & Receipts(2002-2009)

Traveler Receipts

($billions)

Number of Travelers

(millions)

Source: U.N. World Tourism Organization

2009 estimates are preliminary subject to revision. All others are revised .


Top origin markets for international travelers to the u s

Top Origin Markets forInternational Travelers to the U.S.

Origin of Visitor 2009p09 / 0810/09 Jul. YTD

(000s)(% change) (% change)

International Total *54,958 -5%12%

1Canada17,973-5%13%

2Mexico13,164-4%11%

Overseas **23,756-6%12%

3United Kingdom3,899-15%-3%

4Japan2,918-10%21%

5Germany1,687-5%1%

6France1,204-3%7%

7Brazil89316%40%

8Italy753-3%10%

9South Korea744-2%51%

10Australia7245%27%

* International travelers include all countries generating visitors to the U.S.

** Overseas includes all countries except Canada and Mexico.

Record year for travel to U.S.


Short term forecast inbound travel to the u s

Short-Term ForecastInbound Travel to the U.S.

Visitor ActualChangeChangeChange

Origin 200909/082010f10/092011f11/10

(000s)(%) (000s)(%) (000s)(%)

  • Grand Total54,958-5%59,9569%63,3746%

  • North America31,202-5%34,24110%36,1506%

  • Canada17,973-5%19,76010%20,9466%

  • Mexico13,229-3%14,4809%15,2045%

  • Overseas *23,756-6%25,7158%27,2236%

  • Europe11,550-10%11,6581%11,9072%

  • Asia5,669-8%6,73819%7,38110%

  • South America2,7427%3,18016%3,50710%

  • Caribbean1,2065%1,2645%1,3285%

  • Oceania8722%1,02818%1,13911%

  • Central America758-2%7702%8146%

  • Middle East666-2%75213%7956%

  • Africa294-7%32511%3538%

  • Overseas includes all countries except Canada and Mexico.

  • Sources:OTTI; Statistics Canada; Banco de Mexico - October 2010 forecast


Long term forecast top 10 future markets inbound travel to the u s

Long-Term Forecast – Top 10 Future Markets Inbound Travel to the U.S.

Visitor ActualChangeChangeChange

Origin 200909/082015f15/09Change15/09

(Ranked by 2015)(000s)(%) (000s)(%) (000s)(%)

  • Grand Total54,958-5%82,8489%27,88951%

  • 1. Canada17,973-5%26,4328%8,45947%

  • 2. Mexico13,229-4%19,7428%6,51349%

  • 3. United Kingdom3,899-15%4,71910%81921%

  • 4. Japan2,918-10%4,2859%1,36747%

  • 5. Brazil89316%2,66220%1,769198%

  • 6. China5256%2,34135%1,816346%

  • 7. Germany1,687-5%2,27312%58635%

  • 8. Korea744-2%2,01520%1,271176%

  • 9. France1,204-3%1,5668%36130%

  • 10. India549-8%1,22618%677123%

Sources:OTTI; Statistics Canada; Banco de Mexico - October 2010 forecast


Corporation for travel promotion

Corporation for Travel Promotion

Daniel Halpern, President and CEO, Jackmont Hospitality, Inc., Atlanta, Georgia

David Lim Chief Marketing Officer, Amtrak, Washington, D.C.

Roy YamaguchiOwner and Founder, Roy’s Restaurant, California

Lynda S. ZengerlePartner, Steptoe & Johnson LLP, Washington, D.C.

Mark SchwabSenior Vice President-United Airlines, Chicago, Illinois

Al Weiss President, Worldwide Operations, Walt Disney Parks and Resorts, Orlando, Florida

Stephen CloobeckChairman and CEO, Diamond Resorts International, Las Vegas, Nev.

George FertittaCEO, NYC & Company, New York, N.Y

Tom KleinPresident, Sabre Holdings, Southlake, Texas

Diane ShoberTourism Director, State of Wyoming, Cheyenne, Wyo.

Caroline BetetaPresident and CEO, California Travel & Tourism Commission, CA


Trend 2 doing more with less

Trend #2…Doing more with less

Source: Rick Newman, 17 Ways Consumers are Changing, January 15, 2010


Change in sto budgets average fy04 05 fy09 10

% Change in STO Budgets: AverageFY04/05 – FY09/10

* Projected

Source: U.S. Travel Association, Survey of U.S. State and Territory Tourism Office Budgets


In this travel environment if you re not at the table you re on the menu

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


Brand building remember the good ol days when it was just tv print and travel guides

Brand building…Remember the good ol’ days when it was just TV, print and travel guides?

Source: Lynn Carpenter, California Travel and Tourism Commission


Title goes here

Implications for the travel industry…First person to develop a successful social media ROI gets to retire

  • Opportunity to bring travel alive in new ways with video, sound, tools, interactivity

  • Ability to update in real time with integrated content management

  • Potential for customer data collection

  • Opportunity to close loop with travel transactions, direct links

  • New business models:

    • Paid vs. free content?

    • Travel advertising support?

    • Specific apps vs. comprehensive digital publications?

    • Costs to drive awareness and demand?

Source: Barb Newton, Sunset Publications


Trend 1 2011 will be a better but not a great year

Trend #1…2011 will be a better, but not a great year


Looking forward to 2011 still digging out of the hole

Looking forward to 2011…Still digging out of the hole?


Looking forward to 2011 a long slow climb

Looking forward to 2011…A long, slow climb


Sustained but slow growth expected in 2011

Sustained, but slow growth expected in 2011

Domestic

Leisure

Volume

Domestic

Business

Volume

Domestic

Spending

International

Visitors

International

Spending*

1.6%

2.6%

(2.8%)

3.7%

(4.2%)

(8.0%)

4.5%

(7.2%)

10.0%

*Excluding international airfares

Sources: U.S. Travel Association; Oxford Economics/Tourism Economics;

U.S. Department of Commerce-Office of Travel and Tourism Industries

(7.9%)


Good news travel spending on the rebound

Good News: Travel spending on the rebound

Billions of Dollars

Source: U.S. Travel Association and Tourism Economics


What to expect in 2010 and 2011

What to expect in 2010 and 2011

  • 2010 better than 2009; growth will slow in 2011 but will be sustained

  • Corporate/consumer anxiety and conservatism- reluctance to add jobs and spend money

  • Domestic travel up modestly – business better than leisure

  • High unemployment dampening consumers’ willingness to spend - leisure travel’s growth will be constrained

  • Nascent recovery in international visitation generating strong growth in 2010; also expected to slow in 2011

  • Top down recovery for lodging industry; rates strengthen

  • Welcomed improvement, but don’t confuse with return to “normal”


2011 above water

2011 – Above water?


Title goes here

Suzanne Cook, Ph.D.

Senior Advisor

[email protected]

www.USTravel.org


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