Travel & Tourism
Executive Insight |
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All indications from 2004 are that the travel industry continues to enjoy steady growth and the forecasts through 2006 support this trend. While there was certainly an impact from the high volume of hurricanes in the southeast and particularly from Katrina on the overall U.S. travel industry, even this region, while struggling to get its businesses reopened and attract visitors again, is making positive strides.
Business and convention travel experienced its first increase in five years with growth of 4.6 percent in 2004 over prior year and a forecast of 1.0 percent growth in 2005 and 1.6 percent in 2006.
- The U.S. hotel industry had another consecutive year of growth in 2004 with room demand increases of 3.2 percent. Room revenue is expected to have increased a whopping 8.1 percent in 2005 with a two percent growth in employment.
- Total travel spending in the U.S. by both domestic and international travelers totaled an estimated $646 billion in 2005, an eight percent increase over the prior year, with a record-breaking $675 billion expected in 2006.
- RV rentals are up 22 percent (Cruise America) in 2005, while sales declined modestly despite posting their second best year in 27 years. • Amusement and recreation services earned an increase of 5.1 percent in 2004 with expected growth in 2005to be another 5.1 percent. Theme park attendance was up nearly two percent in 2005.
- According to CLIA, there was a 5.5 percent increase in the number of passengers taking cruises in 2005.
- Sales through travel agencies, tour operators and other travel planning companies increased 2.6 percent in 2004. Nevertheless, use of the Internet to plan and book travel increased significantly more. TIA’s Travelers ‘Use of the Internet report published in November, 2005 reports that a distinct majority (78%) of online travelers say they consulted the Internet for travel and destination information.'
- Air travel, which has now surpassed pre-9/11 levels, is expected to decline two percent in domestic service, while increasing 6.5 percent internationally. Load factors will remain at record levels and fares will start to rise (Air Transport Association).
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Though severe acts of terrorism have caused serious interruptions in travel, they have not stopped the public from traveling. Indications show the public is becoming 'accustomed to' travel inconveniences and even where travel is stopped altogether, it resumes quickly, as seen in the London bombings of 2005 and the reaction of the public to the 2006 foiled terrorist plot to blow-up trans-Atlantic carriers. Despite an optimistic outlook on this, travel executives at all levels must remain alert and vigilant to the prospect of service interruptions and catastrophic events, with strong, workable planning available to aid passengers in distress. |
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Raising the stakes |
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Because travelers follow predictable patterns in their planning, travel marketers need to consider their visibility and presence in the places travelers would look to shop for destinations both online and offline. This may affect a wide range of marketing communications such as media placements, cooperative marketing agreements with destinations, online link strategies, use of referral websites that evaluate travel destinations, participation in web logs (“blogs”) or podcasts that involve destination content and traditional co-op advertising and public relations. Some creative tools have been deployed for different travel segments. For example, some travel marketers have created vacation planning websites that allow far-flung travel parties to communicate effectively online so the entire group is aware of the resulting vacation plans. The U.S. Leisure Traveler 2005 Edition report profiles this important consumer group and looks at recent trends. |
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