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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?



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 unchanged sures” to take a leisure tripLittle 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 sures” to take a leisure trip

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


Leisure travel behavior more spending strong drive market
Leisure travel behavior… sures” to take a leisure tripMore 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… sures” to take a leisure tripSix month outlook “worrisome”


Most destinations report growth in domestic visitors in 2010 different picture than 2009
Most destinations report growth in domestic visitors in sures” to take a leisure trip2010…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… sures” to take a leisure tripNone expecting declines

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


Attractions industry performance in 2009
Attractions Industry Performance in sures” to take a leisure trip2009

  • 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 sures” to take a leisure trip 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 sures” to take a leisure trip 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 sures” to take a leisure trip

  • 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… sures” to take a leisure tripMarketing 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 sures” to take a leisure triptourism 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… sures” to take a leisure tripBusiness 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… fall

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… fallTransient 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


Title goes here1
Title Goes here fall

Convention & Trade Show Attendance…

Looking to 2014 as the new target

Average attendance to U.S. convention centers

Source: PriceWaterhouseCoopers


Title goes here2

Exhibition and Events Trends… fall

Coming off of “dreadful”

Title Goes here

  • 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


Title goes here3
Title Goes here fall

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… fallStability 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… fallNo 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… fallHotel Industry – positive signs


Hotel demand 2010 gains outpacing 2009 declines
Hotel demand… fall2010 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 fall 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 Change fallSeptember 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… fallBut 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 fall

7.5% or more

5.0% to 7.4%

2.5% to 4.9%

0% to 2.4%

Decrease

Source: Smith Travel Research


What we see in Q4 2010 fallKey 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 States fallKey Performance Indicator Outlook Scenario (% change vs. Prior Year)2011F


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




Lately a few tough years for air travel
Lately, a few tough years for air travel bad”

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” bad”

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… bad”International Visitors…Welcome Back!


World tourism arrivals receipts 2002 2009
World Tourism Arrivals & Receipts bad”(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 for bad”International Travelers to the U.S.

Origin of Visitor 2009p 09 / 08 10/09 Jul. YTD

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

International Total * 54,958 -5% 12%

1Canada 17,973 -5% 13%

2 Mexico 13,164 -4% 11%

Overseas ** 23,756 -6% 12%

3 United Kingdom 3,899 -15%-3%

4 Japan 2,918 -10% 21%

5 Germany 1,687 -5% 1%

6 France 1,204 -3% 7%

7 Brazil 893 16% 40%

8 Italy 753 -3% 10%

9 South Korea 744 -2% 51%

10 Australia 724 5% 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 Forecast bad”Inbound Travel to the U.S.

Visitor Actual Change Change Change

Origin 2009 09/08 2010f 10/09 2011f 11/10

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

  • Grand Total 54,958 -5% 59,956 9% 63,374 6%

  • North America 31,202 -5% 34,241 10% 36,150 6%

  • Canada 17,973 -5% 19,760 10% 20,946 6%

  • Mexico 13,229 -3% 14,480 9% 15,204 5%

  • Overseas * 23,756 -6% 25,715 8% 27,223 6%

  • Europe 11,550 -10% 11,658 1% 11,907 2%

  • Asia 5,669 -8% 6,738 19% 7,381 10%

  • South America 2,742 7% 3,180 16% 3,507 10%

  • Caribbean 1,206 5% 1,264 5% 1,328 5%

  • Oceania 872 2% 1,028 18% 1,139 11%

  • Central America 758 -2% 770 2% 814 6%

  • Middle East 666 -2% 752 13% 795 6%

  • Africa 294 -7% 325 11% 353 8%

  • 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 bad”Inbound Travel to the U.S.

Visitor Actual Change Change Change

Origin 2009 09/08 2015f 15/09 Change 15/09

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

  • Grand Total 54,958 -5%82,848 9% 27,889 51%

  • 1. Canada 17,973 -5% 26,432 8% 8,459 47%

  • 2. Mexico 13,229 -4% 19,742 8% 6,513 49%

  • 3. United Kingdom 3,899 -15% 4,719 10% 819 21%

  • 4. Japan 2,918 -10% 4,285 9% 1,367 47%

  • 5. Brazil 893 16% 2,662 20% 1,769 198%

  • 6. China 525 6% 2,341 35% 1,816 346%

  • 7. Germany 1,687 -5% 2,273 12% 586 35%

  • 8. Korea 744 -2% 2,015 20% 1,271 176%

  • 9. France 1,204 -3% 1,566 8% 361 30%

  • 10. India 549 -8% 1,226 18% 677 123%

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


Corporation for travel promotion
Corporation for Travel Promotion bad”

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… bad”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: Average bad”FY04/05 – 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 bad”…“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… bad”Remember the good ol’ days when it was just TV, print and travel guides?

Source: Lynn Carpenter, California Travel and Tourism Commission


Implications for the travel industry… bad”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… bad”2011 will be a better, but not a great year


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


Looking forward to 2011 a long slow climb
Looking forward to 2011… bad”A long, slow climb


Sustained but slow growth expected in 2011
Sustained, but slow growth expected in 2011 bad”

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: bad”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 bad”

  • 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”



Suzanne Cook, Ph.D. bad”

Senior Advisor

[email protected]

www.USTravel.org


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