Catégorie : Trends

Catégories
Trends

What’s coming in 2006?

Each new year brings with it a new batch of forecasts and predictions on a variety of topics. From new technologies, to the hotel sector, to the latest hot destinations, here are some things to watch in the coming year.

Leisure travel

In 2006, leisure travel will continue to drive tourism growth. According to some US experts, rest and relaxation motivate more than half of all leisure travellers. Destinations like spa resorts and those offering a stress-free atmosphere look the most promising. A recent Tripadvisor.com survey showed that 50% of the 3000 respondents planned to take a spa vacation in the next year. With short stays still in vogue, the challenge facing the industry is to offer the most relaxation within the shortest amount of time.

Visits to national parks will rise, while attendance at amusement parks will drop. The cruise industry should continue its upward climb and enjoy an excellent year, notably due to the launch of new boats and the growing popularity of this product among families. Timeshares on cruise ships have been identified as a promising new trend in the coming years.

Cities that emphasize fun and a wide variety of activities within a small area – ideally within walking distance – are likely to attract more travellers. And, finally, the increased demand for leisure travel has led experts to encourage consumers to reserve early to ensure that what they want is available at the desired time.

Business travel

North American business travel will enjoy a good year with projected growth of 5% in 2006, compared to the 4% recorded in 2005. This increase will be driven primarily by the meetings and conventions sector. However, for their daily corporate needs, business people continue to seek alternatives to having to travel for business.

Recent forecasts from Meeting Professionals International (MPI) confirm a 7% increase in meeting expenditures and the number of events for next year. This forecast is based primarily on national markets, because American and European organizers do not expect more events to be held at international destinations. In Canada, the number of visitors attending American conventions should remain stable.

Good news for suppliers: MPI anticipates that convention lead times will begin to increase. In 2006, it is estimated that lead times will grow by nearly 40%, translating into an additional two or three months between the invitation to tender and the event date.

Hotels

In North America, increased demand and slow growth in supply means average room rates should continue to rise in 2006. The upscale and luxury sectors in particular should benefit from this situation. Furthermore, in 2006, the hotel industry, like all travel and tourism sectors, will face the dual challenge of staff shortages and human resource management. According to a recent US study, 25% of hotel industry employees are dissatisfied with their jobs and 32% of these people would like to find a new job in the next year. The year 2006 is also likely to be challenging for hotel owners in major US cities because many collective agreements are up for renewal.

Transportation

Pressures on the North American airline industry will persist as discount carriers continue to invade the traditional routes of the major airlines. In this competitive environment, ticket prices will remain low, but an expected increase in fuel prices (combined with fewer available seats) should nudge average prices higher among regular carriers. There will also be an increase in the number of pay-per-use in-flight services (pillows, blankets, meals, snacks, etc.).

As for airports, we should see an increase in the services offered to travellers. The addition of shops, restaurants, gyms, beauty salons and professional services are some of the tactics being adopted by airport managers to diversify revenue sources and improve the customer experience.

In 2006, the Airbus A-380 will begin commercial flights. The world?s largest passenger jet, the two-storey airplane will be the first to offer on-board areas for socializing.

In the United States, train travel will grow in 2006. Improved services and schedules, and especially the opportunity to transform travel from a utilitarian role into an experience unto itself, have piqued consumer interest in this service, especially among Generation X travellers.

Technology

Travellers, both business and leisure, are increasingly demanding the opportunity to « plug in » anywhere and any time. Hotels, resorts, convention centres, airports and various types of public transit will intensify their efforts to provide high-speed internet access (for free, if possible!). Sometime in the year 2006, US airlines will begin offering wireless in-flight internet access.

Increased internet use by consumers continues to revolutionize the marketing and distribution of travel products and services. In 2006, the number of online transactions will continue its strong growth. The firm PhoCusWright predicts that by the year 2007, 40% of all travel-related purchases in the United States will take place online.

Furthermore, tourism now constitutes a growing presence on major search engines (Google and Yahoo) and general online shopping sites (Pricegrabber). With more comparison tools now available, the resulting price transparency is forcing suppliers to work even harder on their brands, since the consumer?s perception of value is a combination of price and supplier image.

Tourism marketing should attach greater importance to the internet. It is expected that the concepts of « best price guaranteed », dynamic packaging and search engine positioning (pay-per-inclusion) will grow in popularity. Experts are also pointing to the growing popularity of internet-related media like blogs and instant messaging. Individuals will have a fast and growing influence on the commercial success of products and services.

Destinations

At this point in the year, China is still the destination that excites the most interest and curiosity. According to guidebook publisher Lonely Planet, this country heads the list of hot destinations, followed by Mali, Brazil, Iceland and Serbia & Montenegro. As for destinations offering exceptional value, the publisher puts Argentina at the top, followed by New Zealand, Morocco, India and Mexico.

In Europe, according to American Express, Great Britain, France and Italy remain the most popular destinations for Americans. However, Eastern Europe continues to attract a lot of interest, particularly the countries on the Adriatic Riviera (Croatia, Slovenia, Montenegro), which are a less expensive alternative.

Sources:
– Armstrong, David. « Travel, Tourism Bouncing Back – Conventions and Visitors Returning, but Room Rates and Airfares Are Going Up, » San Francisco Chronicle, January 8, 2006, p. J1.
– Cruise Lines International Association. « Cruise Industry Trends for 2006, » [Traveldailynews.com], January 16, 2006.
– Grossman, David. « What’s in Store for Business Travelers in 2006? » USA Today, January 9, 2006.
– Harpaz, Beth J. « 2006 Hot Spots Include Colorado, China & Croatia, » Associated Press, [CNN.com], December 29, 2005.
– Jones, Steve. « Steady Growth Forecast for Business Travel, » [Travelmole.com], January 3, 2006.
– Meeting Professionals International. « Meetings Industry to Grow in 2006, » [4hoteliers.com], January 11, 2006.
– Randall, Judy. « Top Travel Trends for 2006, » The Charlotte Observer, December 25, 2005.
– Sloan, Gene. « China, the New Croatia? » USA Today, January 5, 2006.
– Westenberg, Kerri. « Travel Trends: Where it’s at in 2006, » [StarTribune.com], January 2, 2006.
– Yesawich, Pepperdine, Brown & Russell. « Ten Trends to Watch in the Year Ahead, » [ehotelier.com], December 30, 2005.

Catégories
Sustainable tourism Trends

Authenticity – What do they really want?

The search for authenticity is a predominant trend driving tourism because travellers are looking for unique experiences that are part of our vibrant and varied world. Quebec is not Venice, the Inuit are not like the Aboriginals of Australia and a sugaring off party bears no resemblance to a traditional raclette party in a Swiss chalet. With the rising interest in sustainable tourism, authenticity is taking centre stage. However, it is also raising a number of issues.

Like eco-tourism, learning tourism and the concept of experience, the notion of authenticity is open to many interpretations, depending on whether one is a tourist or a tour operator developing a marketing strategy.

The theory

Authenticity refers to an original experience that is true to reality. Its meaning becomes clearer when one thinks of its opposites: falseness and imitation. In tourism, authenticity refers to:

  • Wanting to experience a different way of life
  • A manifestation of the identity of a people or a group of people
  • Customs and traditions: examples of how a destination differs from one's own; a window onto its culture, heritage, history and identity
  • The opposite of globalization and its resulting standardization: today, beaches, palm trees and hotels look pretty much the same the world over
  • The discovery of places in a country that remain untouched by modernism and still maintain traditional methods and ways of life
  • Travel with added value and quality of experience

In addition, authenticity quite « naturally » fits with the current trend to sustainable tourism. The search for authenticity reflects the needs of urban tourists from industrial countries; when these people travel, they seek something outside their daily lives, something innovative and different, an escape. They want to experience new things and enjoy the sensation of being where things are real and original. They want to be able to say « I was there. » For example, even though Japanese travellers can easily find clothing in Tokyo made by a top Parisian couturier, buying the same clothing in Paris where the couturier's shop is located is a completely different experience.

Authenticity can be measured in terms of the tourist's own values. It occurs when travellers return home feeling they have truly experienced a change in scenery, gained a better understanding of the country visited and its development, or connected in some way with the local population.

The practice

The authentic nature of a destination is a tremendous resource. One does not need the pyramids of Egypt; every community has a unique history and culture. It is simply a matter of highlighting these elements for the benefit of tourists. For example:

  • Organized tours that include a visit to a sugar bush or some ice fishing
  • A simple forest hike becomes something more when led by a Native guide
  • An evening of storytellers recounting local tales and legends
  • Economuseums showcasing traditional craft trades and expertise
  • Aboriginal tourism with its cultural performances, cuisine and crafts
  • Fall colours and fine meals prepared with regional produce and products
  • Souvenirs created by local artisans who are available to the public
  • Observing snow geese in migration, or whale watching
  • Travellers stepping off the beaten path to discover a community festival and mingle with locals

The grey areas

Writing in the magazine Espaces, Viviane Hamon, a consultant and lecturer at the Institut Universitaire Professionnalisé (IUP) Métiers de la montagne in France, gives the example of the lavender harvest in a Provençal village. Although production is mechanized and propane gas has replaced straw during the distilling of the product, the image tourists have is of people in traditional garb cutting lavender with a sickle. Therefore, during the Fête de la lavande (Lavender Festival), locals dress up and take out an antique copper still and carts to sell their products. The authenticity sought by tourists disregards economic activity and even the natural cycle of the seasons; tourists want to see active distilleries in November, when all the real ones have already ceased production. Can we protest such practices and complain of false representation?

A similar question arises when it comes to souvenirs. The fact is, artisans often adapt their wares to suit the preferences of tourists. Is this a normal process or should this be seen as a threat to product authenticity?

The creation of a tourism product that presents an artificial world or reproduces the attractions of other destinations is the opposite of authenticity. Why, then, are Walt Disney World and Las Vegas so popular? Why are certain destinations, like Dubai, becoming so overstated and excessive? These fabricated worlds are examples of another current trend. Who is legitimately entitled to define the authenticity of a product? Tour operators put together travel products according to demand and this strategy simply echoes the advertising messages that meet the expectations of tourists.

During his speech at the first Tourism Summit in 1999 in Chamonix, Étienne Pauchant, at that time a marketing and development manager at IPK International, succinctly summarized the importance of authenticity in sustainable tourism: « Authenticity is synonymous with tourism that is done well. »

Sources:
– Etienne, Pauchant. « La part de l'authenticité dans le tourisme durable, » First Tourism Summit, Chamonix, December 1999.
– Hamon, Viviane. « Authenticité, tourisme durable et marketing, » Espaces 228, July-August 2005, p. 42-56.

Catégories
Customer segments Trends

Tourism through the crystal ball

From time to time, tourism experts are asked to predict the major developments that will affect the industry in the near future. The following are some of the more significant trends they foresaw in world tourism, some of which are formative and practically inevitable while others are more in the realm of « possibility ».

Products and destinations

Online travel agencies will introduce service fees similar to those charged by conventional agencies.

  • The gap in terms of the services offered by regular and low-cost carriers will widen.
  • In addition to becoming more affordable, cruises will gradually turn into floating entertainment centres.
  • There will be a proliferation of low-cost, short-stay/long-haul travel, i.e., a weekend in Europe or a week in Australia.
  • Beach vacation destinations will be segmented according to specific consumer wishes: relaxation (no cell-phones), families only, celebrations or recreational activities.
  • New destinations will appear on the world tourism stage, with Qatar replacing the Canary Islands, Ljubljana, Slovenia ousting Prague, Slovakia taking over from New Zealand and Brazil set to become the next mass tourism destination.
  • Initially confined to adventure tourists, China’s Silk Road will become one of the world’s most popular destinations.

Clientele

  • A new kind of « hybrid consumer » will emerge who – for example – will combine a low-cost flight and a gourmet dinner, a stay at a 5-star hotel and a fast-food meal, all in the same trip.
  • As internet-users become more comfortable making online reservations, do-it-yourself travel and dynamic packaging will grow in popularity.
  • Low-cost carriers will make increasingly aggressive efforts to reach business travellers.
  • There will be a growing number of solo travellers making spontaneous travel decisions.
  • The industry will have to adapt to the reality of an over-50 set that still wants to act young.
  • Customers will want to go on a virtual tour of their vacation destination before they leave home.
  • Better-informed travellers will be more demanding with respect to product quality and services.
  • Travellers will become inured to crisis situations and will gradually become less affected by them.
  • Personalization features will enable travellers to design packages that reflect their individual preferences.

Sources :
– Thomson. «The Thomson Future Holiday Forum», [http://www.hospitalitynet.org/file/
152001280.pdf], 2004.
– Jarrett, Ian. «Travel Weekly’s hottest news predictions for 2004», février 2004.
– IPK International. «World Travel Trends 2003-2004», 10 novembre 2003.

Catégories
Customer segments Trends

Conventions and business meetings: trends to watch

A panel consisting of 26 British and Australian experts comments on the major trends shaping the business and convention tourism industry over the next few years. The rapidly changing economic, technological and sociopolitical contexts exert varying degrees of influence on the industry's leaders. With ever increasing competition and an increasingly diversified product, the convention market remains one to watch.

The convention and business meeting industry is cyclical, and mirrors fluctuations in the economy. After a marked slowdown during the post-September 11 years, the Travel Industry Association expects the growth noted over the past few decades to gradually resume, reaching approximately 3.6% in the United States in 2005.

Be that as it may, players in the convention sector need to be aware of the major trends that will exert a strong influence in the years to come. Two university researchers did a qualitative study to see if there was any consensus concerning important trends among a sample group of over 250 British and Australian experts from tourism associations, convention bureaus, specialized convention planning services, sectorial associations, universities and convention centres. Three categories emerged from the study results: the business environment, technology and the social and political context.

Competition: the No. 1 business issue

There is growing consensus concerning the significance of global competition. This factor can only intensify, given the rapid proliferation of new convention centres, the modernization of services, the competitive prices offered by emerging destinations and higher customer expectations. For instance, meeting and convention space in the United Kingdom is no longer centred solely in large cities. It is also being integrated into country hotels, educational institutions and other kinds of alternate accommodation, such as castles or even historic sites. Even cinema complexes are trying to attract corporate events with high-tech audiovisual facilities and turnkey service.

The panel also identified currency fluctuations as a major issue. In the context of global competition, this can have a significant impact on destinations with a strong currency. In that respect, the strong appreciation the Canadian dollar over the past few months could negatively affect Quebec's desirability for international travellers.

In fact, convention organizations will have to adapt to the changing nature of the events themselves, which will be shorter, with fewer delegates. These kinds of changes will require marketing initiatives that focus on developing long-term relationships with clientele, to ensure a certain stability and encourage repeat business.

In 2003, Meeting Professionals International identified the major technological factors influencing convention planning. These are: shorter reservation times – primarily attributed to more effective communication – and online reservation services, which greatly assist more rapid event organization. These factors inevitably make the long-term scheduling of events more problematic.

Technological advances

Although equipping convention centres with the latest technology makes them more efficient, it can also create problems. Often, the centre lacks the necessary support; when technological difficulties arise during an event, its efficiency is compromised. This, and the fact that convention centre employees need to be trained to use of the new equipment, are some of the reasons for a certain resistance to implementing cutting edge technology.

On the other hand, many customers are demanding the latest technological innovations. Unfortunately, the costs associated with installation and frequent updates are often prohibitive for smaller convention centres. In terms of technology, this will give the larger centres an increasingly significant competitive advantage.

For the past few years, much has been said about the effect of videoconferencing on business travel. Some experts have hailed it as a substitute for the trips themselves, but it seems this view is not completely accurate. These days, the panel of experts by and large agrees that Web solutions will never completely replace the traditional face-to-face meetings. Despite the technological breakthrough, human contact remains essential for effective communication. This view restores business meetings and conventions to their rightful place as the ideal setting – far better than an online videoconference – in which to make business contacts.

Social and political context

The steady growth in international tourism will increase demand for convention tourism. This is due to the simple fact that the more people travel – whether for business or pleasure – the more acceptable the idea of attending a convention in another country becomes.

Work habits have changed over the past few years, with more and more people working from home. The sense of professional isolation this can engender leads to the growing necessity of bringing together geographically dispersed colleagues in the context of business meetings.

Sociodemographic changes could also create new business opportunities. As the working population ages, a large number of former employees remain active in their field by joining various retiree associations and by attending conventions and business meetings. Also, as work-life balance becomes a more pressing issue, an increasing number of delegates will choose to add a pleasure component to their business trip by bringing along the family. Destinations that are seen as « family-friendly » will benefit from this trend.

Finally, a destination's political stability remains a guarantee of visitor safety, in addition to conferring a significant competitive advantage. In that respect, Quebec must continue to capitalize on its completely safe environment, even in the downtown core of major urban areas. As for the future outlook, it remains to be seen what other factors will influence convention planners – choice of destination.

Sources:
– Biarritz, Anne. «Organiser un événement corporatif dans une salle de cinéma», Le Planificateur, mai 2005.
– Meeting Professionals International. «Welcome to Futurewatch 2003», MPI [www.mpiweb.org], 2003.
– Travel Industry Association. «Travel Industry Optimistic For 2005», Hospitality Net [www.hospitalitynet.org], 2 novembre 2004.
– Weber, Karin et Adele Ladkin. «Trends Affecting the Convention Industry in the 21st Century», Journal of Convention & Event Tourism, Vol. 6, No 4, 2004.

Catégories
etourism and technology Trends

Why purchase online?

A 2005 tourism management study sheds light on the purchasing habits of North American Web users with respect to tourism products. The two primary factors motivating them to conclude online transactions are the quality and accuracy of on-site information and a simple reservation process.

Study context

The main reason consumers have overwhelmingly adopted the Internet is that it enables them to shop 24/7 in the comfort of their home. However, there are a number of factors that differentiate Web user purchasing habits. For instance, those who purchase travel products online are influenced by the complexity of the product. Other important considerations include the ability to compare prices, discounts and a user-friendly interface.

With that in mind, experts have studied the relationship between the purchaser’s motivation to buy and the complexity of online travel products. Since Web expertise plays a significant role in this, consumers have been divided into expert users and novice users. The study aimed to prove that ease of navigation was the primary reason for variations in purchase decisions between online products.

Airline tickets, accommodation and car rentals are considered relatively simple travel products. All-inclusive trips, cruises and tours constitute more complex products.

In an attempt to simplify navigation, many sites have become « content aggregators » that offer one-stop shopping. This strategy has been extremely successful for such agencies as Travelocity and Expedia. Dynamic packaging, whereby Web users create their own package while retaining a certain degree of flexibility, have added a new twist to the tourism landscape.

Motivating factors for Web users

The study examined the top six factors that motivate consumers to make online purchases (see Tables 1 and 2). The factors are as follows:

  1. The opportunity to earn points through a customer loyalty program. Some sites have even set up a special page for members to track their reward points (marriottrewards.com, for example).
  2. The availability of the desired product.
  3. Clear, detailed information that enables the user to make an informed decision.
  4. A simple reservation process is a key factor in the online purchase decision. Especially in the case of more complex travel products, customers must be able to find the information they need to make a decision.
  5. The reputation of the company or site’s banner, as this reassures the purchaser and may positively influence the outcome of the transaction. 
  6. Consumers are more sensitive to the price of online products than they are to conventionally purchased products. This is partly due to aggressive advertising campaigns that have gradually led consumers to expect discount products.


 
 


 

The experts used data from a Canadian Tourism Commission study conducted in November 2001 that surveyed 1,161 Canadians and 1,145 Americans. Although Web user behaviour has admittedly changed since then, the study’s findings nevertheless constitute a valid basis for comparing and understanding travellers’ online purchasing habits, based on their experience with the Web and the type of product in question.

Behaviour varies according to sector

A user-friendly interface is a key factor in the decision to buy any kind of online travel product, regardless of the amount of Web user experience, leading experts to conclude that consumers want a simple reservation process. Competitive prices play a greater role in the purchase of less complex products, such as airline tickets, packages or car rental.

The quality and accuracy of the site’s information was a deciding factor for travellers looking for activities, events, tours, attractions and accommodation. Company reputation was less important to those making « simple » transactions -such as renting a car- compared to those purchasing more complex products. Finally, customer loyalty programs constitute a greater draw for expert users and mainly affect purchases of airline tickets, car rental and attractions.

Sources:
– Beldona, Srikanth, Alastair M. Morrison and Joseph O’Leary, « Online shopping motivations and pleasure travel products: a correspondence analysis, » Tourism Management, No. 26, 2005.
– Ham, Sunny, « The Use of the Internet for Hospitality and Travel-related Activities, » e-Review of Tourism Research (eRTR) [ertr.tamu.edu], vol. 2, No. 6, 2004.

Catégories
Management Trends

Defining a tourist experience

What exactly is a « tourist experience »? The concept is both vast and abstract. Does it refer to that special something that travellers talk about upon returning home? Is it what makes people select your destination above others in a very competitive market? We need to establish just what it is that makes our product stand out.

A mix of many things

Much has been written about the concept of experience: definitions, models, aspects, characteristics, experiential grids, methods, etc. Webster's Dictionary defines an experience as « something personally encountered, undergone, or lived through, » but experience also means engaging the senses and creating long-lasting memories.

Pine and Gilmore have written a book on the subject entitled The Experience Economy. According to these authors, creating an « experience » means making one's service or product more theatrical, so that employees become actors, customers are guests and the site becomes a stage. Hoteliers, tour operators and attraction managers trade in their roles as service providers and become artistic directors. Disney applies this model to its theme parks. A true tourist experience must amaze and astonish:

  • it must create a lasting memory
  • it must differentiate one's product from the competition
  • it must involve innovation
  • it must be highly unique

According to the London School of Business, « In today's environment of ever more sophisticated consumers, those who deliver memorable customer experiences consistently create superior value and competitive advantage. »

The product of many ideas

Today's travellers want to learn, discover and undergo unique experiences. They are looking for something interactive. They want to know how other people live, go behind the scenes and visit places that tourists do not usually see. An experience can be triggered by anything from one small detail to an overall concept:

  • In a restaurant, for example, it could be the package of cookies provided at the end of a quick pre-theatre dinner, the disposable camera for snapping pictures of a birthday celebration or a scarf for a customer who is cold.
  • In an aquarium, it could be the touching pool that enables visitors to handle marine life and the staff biologist who explains the life cycle of the species present.
  • In the case of a travel group attending a play, it could be a post-performance meet-and-greet with the actors.
  • For a tour of an historic site, it could be getting visitors actively involved; to experiencethe everyday life of past generations, visitors could wear their clothes, engage in their activities and eat like they did.

The sum of many details

To provide a true experience, one must not improvise. Extensive planning and effort are required. One must:

  • have a good deal of energy and creativity, know how to innovate and think of things to amaze and surprise,
  • carefully orchestrate every step of the experience, from the visitor's initial contact (advertising, telephone service, Website, etc.) to when the visitor goes home and even beyond (post-visit thank-you or souvenir, a certificate of participation, a CD-ROM of slides, etc.),
  • develop outstanding service; this is always a key to success, and
  • pay special attention to small details which guarantee a smooth-running, successful experience ? a smile, a smell, a little something extra, an element of surprise, the atmosphere (lighting, music, décor, personal appearance and dress, etc.), or a well-written e-mail.

The source of many memories

Many suppliers have their own way of promising a unique experience:

  • Singapore Airlines is very popular among travellers and has accumulated an impressive list of awards to prove it.
  • An entire family gets caught up when planning a trip to a Disney park.
  • The expression « à la Montréal » suggests urban wonders at the lively rhythm of the Montréal lifestyle.

Cirque du Soleil does not have a monopoly on the ability to amaze and astound. Budding artistic directors, try boosting your creative genius with the following exercise: Ask yourself « What aspects of my product could make people sit up and say 'Wow!'? »

« You can't expect to see different results by doing the same things.
You have to challenge yourself to do things differently. »

Graham MacNeil, Maritime Inns & Resorts

Sources:
– Canadian Tourism Commission. « Defining Tomorrow's Tourism Product: Packaging Experiences, » June 2004, 43 p.
– Chair in Tourism. « L'expérience: concepts et évaluations, » Research report prepared exclusively for Tourism Montréal and the Canadian Tourism Commission, April 2004, 36 p.
– Nova Scotia Tourism Partnership Council. « 2005 Nova Scotia Tourism Plan – Deliver the Experience, » 2005, 27 p.
– Paquin, Benoit and Normand Turgeon. « La clientèle et le facteur 'WOW!', » Téoros, Summer 2004, p. 27-33.
– Pine II, B. Joseph and James H. Gilmore. « The Experience Economy, » Harvard Business School Press, 1999.

Catégories
Trends

Commentary from Michael Nowlis on the tourism trends in 2006

François Chevrier's article concerning tourism trends in 2006 summarizes the broad expectations of many analysts in the North American market. As it is difficult to address the multitudinous industry developments in such a brief piece, I am pleased to suggest a few international trends to complement his list.

Gen Y hybrid consumers will use price transparency provided by the Internet and the euro to combine five-star hotel accommodations with low-cost flights, both reserved at discount travel sites. Although practitioners of conspicuous consumption, the Millennial Group sees no contradiction in following a 5-minute lunch at McDonald's with a 5-hour dinner chez Ducasse. New concepts of value for money will result in consumers mixing and matching products to satisfy their desire of the moment.

Merger and acquisition activity in the hotel sector will continue at a torrid pace. Starwood's recent purchases of Meridien and Société du Louvre, the Fairmont-Raffles merger and the reunification of Hilton are precursors of the rapid consolidation ahead.

Multi-brand lodging companies will further capitalize on the reputations of their flagship properties to create upscale product groups using brands such as St. Regis, Waldorf-Astoria and Crillon. These super-luxury properties will justify stratospheric rates by offering enhanced amenities and employing database technology to introduce new standards of service excellence.

As budget airlines emerge in new geographic regions, they will expose the long-ignored fact that air transport is a commodity where low-cost leaders are most profitable. Investors who shied away from traditional carriers will find confidence in these new airlines as manifested by Ryanair's ranking of maintaining the second highest market capitalization of European airlines (behind Air France-KLM).

While travelers become increasingly accustomed to living in an unsafe world, security will play a significant role in selecting leisure destinations. Disease, crime, air safety and terrorism will become important criteria for holidaymakers planning trips abroad.

While Mr. Chevrier provides a broad optimistic forecast for North America, other destinations will manifest greater variations in demand. In Europe, the United Kingdom, Austria and the Netherlands will see increasing growth in their business and leisure markets while Poland, Germany and Sweden will struggle to fill hotel rooms and tourist facilities. François Chevrier cites the growing attraction of China and India but Asian tourism markets such as Indonesia, Sri Lanka and Nepal will suffer from political instability.

In 2006, analysts, scholars and industry leaders will discover the meaning of Albert Einstein's observation that « The only constant in the universe is change ».

Catégories
Customer segments Transportation Trends

Group Tourism takes on a youthful look

When we speak of package tours by coach, it usually means the traditional « tour and travel ». We think at once of customers who are pensioners or persons taking early retirement. Today, we notice a wave of rejuvenation: the average age of the passengers is closer to 55 years than the age of the pensioner (65 years). Thanks to the increase in thematic tours and new destinations, the chartered tours in motorcoach get a second breath and interest a more diversified customer basis.

An important sector

The study on the Québec chartered bus industry, realized in 2001 by the Chair in Tourism of the UQAM, showed the importance of this sector for the tourism and the economy of Québec. We found that some 14% of all the tourist revenue in Québec comes from chartered transport.

Let us clarify that chartered transport defines itself as an occasional service reserved for the exclusive transport of groups of persons, as opposed to the tourist transport which offers a service of tourist visits to the general public. City visits belong to the tourist transport, while the tourist tours, over one or several days, and organized by professional or voluntary tour operators are associated with the chartered transport.

To each its job

Contrary to what we find in Europe, the bus operators in Québec do not usually organize the journeys. This is the job of the tour operators, such as DMC, Transat, who set up the tours and find the customers. Some people act as receptive agencies and work with tour operators. Most of Québec bus carriers limit themselves to the transport portion of the business, by offering a fleet of buses and qualified drivers.

In Europe, the structure of the market differs appreciably. Numerous bus operators do both, producing and distributing tours. These « buses-operators » act as complete travel professionals. In France, the market of group travel represents 3 billions Euro annually.

Baby-boomers at the rendez-vous

We distinguish two main categories within the group travel market, individuals assembled in groups by travel professionals and the groups set up from the start. These last ones often come from clubs, associations, company committees, etc.

The arrival of the baby-boomers (a third of the Canadian population), with more money and free time than any other segment of the population, changes the picture of group tourism. They already have a good experience in travel, mostly acquired as F.I.T. The current boomers (40 – 59 years) are looking for something different from the traditional group travel. Those who opt for traveling in group expect a high comfort, as well as a pleasant group atmosphere.

Tightly packed schedule trips are no longer the rule. Baby-boomers are looking for different ways to be tourists: they want to experience thematic tours, to live a cultural immersion, they want time on their own, and time to relax. In Europe, for example, tour operators count on special events to diversify the offer. They sell the Seville Feria, the Christmas markets in Innsbruck, the Carnival of Nice, etc.

The groups made up of individuals sharing a common interest also constitute an interesting customer basis. These people assemble around a theme, such as gastronomy, museology, ornithology, oenology, sports, etc. There are so many passions which can be the object of thematic outings for targeted customers. A survey by the Direction of Tourism in France confirms that the activities practiced by the groups are more and more diversified, while the themes of culture, nature and gastronomy are the most popular (fig 1).

Fig. 1
Activities practiced by French group tourists in 2003

More than ever, the companies/firms/organisations in the travel industry will have to be very professional. People will expect to see a detailed schedule before departing and that it will be respected. The guide, with the group from the start, plays an important center role, as does the driver, from whom one expects versatility, courtesy and patience.

This can mean significant costs in personnel formation for the bus carriers. In a survey by the Florida International University over 70 carriers in North America, 64% declare investing in staff formation for a better customer service. Many understand the importance of well formed drivers, their main ambassadors with their customers.

Expectations are growing, but value is growing as well. While all included group tours were essentially at the mid and lower range, a luxury window of opportunity is slowly opening. In 2004, Transat has successfully launched high end products in the CAN$4,000 – CAN$5,000 range.

Competition is growing, with new destinations coming of age. For instance, in Europe, Eastern countries like Hungary, Bulgaria and Romania are beginning to be significant destinations with a growing customer basis.

In Québec, group travel will go on, but the offer must evolve if it wants to keep its power of attraction. More diverse formulas will have to be created to attract people not previously interested in group travel. Integrating exclusive elements into the package, unavailable for individual travelers, may become a pole of attraction for these new customers. Finally, developping theme outings may be a winning formula. Among the themes susceptible to have a high level of attraction in Québec, let us mention:

  • Festive events
  • The Saint-Lawrence River and its attributes
  • The wine trail and the country's flavors
  • Québec: the history of a nation and its patrimony
  • The willd life and Nature's great expanse

Furthermore, a renewal of the offered tours will help develop customer loyalty, enticing them to come back for more. Offering segmented tours could also attract the individual Québec tourists, traditionally less inclined to bus travel in group.

Sources
– Filliâtre, Pascale. «Le Tourisme de groupe a encore de beaux jours». L'Écho Touristique, 7 mai 2004
– Carter M., Cheryl et Jinlin Zhao. «A survey of customer service training for motorcoach drivers in United States and Canada», e-Review of Tourism Research (eRTR) , vol1, n04, 2003
– Desvignes, Claudine. «L'enjeu du tourisme en autocar, conquérir de nouvelles clientèles». Espaces, vol 209, nov. 2003
– Désiront, André. «Les baby-boomers se convertissent aux circuits en autocar». La Presse, Vacances Voyages, 10 mars 2004-10-25
– Direction du Tourisme de France et C.O.C. Conseil/Daniel Picon. «Le tourisme de groupe, synthèse des enquêtes réalisées en 2003 auprès des prescripteurs et des professionnels», déc. 2003
– Chaspoul, Claudine. «Fram redessine sa gamme tout autocar», Espaces. Vol. 09, nov. 2003
– Chaire de Tourisme de l'UQAM. «Étude sur l'industrie québécoise du transport par autocar nolisé», 7 septembre 2001.

Catégories
Trends

Global Megatrends Revolutionizing the Tourism Industry at the Dawn of the Third Millennium

Tourism Trends

> The cruise industry will experience explosive growth.

> An older, better-educated population in Europe and North America will increasingly seek ecotourism and cultural travel products.

> « Slow cities » and « slow food » trends will expand from Italy to much of Europe.

> London, New York, Sydney and Dubai will be the leading tourism poles through the end of the decade.

> Non-residents will pay significantly higher entry fees to tourist attractions than those paid by locals (Venice, Petra, Bath, etc.).

> Tourism Satellite Accounting will be adopted by several developing countries but ignored by the U.S., China, Japan, Russia and most Western European countries.

> Prayer rooms and compasses will be installed on most passenger aircraft serving the Islamic world.

> Antarctica will become an ecotourism tourism destination complete with hotels, restaurants and full-service tours.

> Shopping, from mega-malls to folk craft centers, will increasingly become a critical feature for tourism destinations.

> Rides on private spacecraft will become a recreational outing for the wealthy.

> Mega-resorts (Las Vegas, Orlando, Sun City, etc.) will do what no one thought possible: get bigger.

> Cruise ships will sell condominiums, becoming ocean-going resorts.

> In spite of organized international efforts to fight them, sex and drug-focused tourism will flourish.

> Airlines, travel agents and tour operators will ally themselves with financial institutions to offer consumer travel loans.

> Western tourists will shun countries with immense tourism potential but « rogue » leaders (Zimbabwe, Libya, Iran, North Korea, etc.).

> MGM Mirage will beat out rivals Hilton, Harrah's and Bally's to become the undisputed leader of the casino industry.

> National economies in Cuba, Egypt, Spain and Thailand will become dangerously dependent on tourism.

> « Rave » tourists will travel further abroad in search of the perfect party (BringItOn! Travel, Like Hiptrips, Experienceibiza, etc.).

> Enormous infrastructure projects will significantly expand automobile-accessible tourism options (Channel Tunnel car lane, Bahrain-Qatar causeway, etc.).

> China will be the first country to receive 100 million international arrivals in a 12-month period, sometime around 2018 – France will follow within 2-3 years.

Product & Service Trends

> Hotel rooms, increasingly equipped as offices with full-size desks, computers and advanced communications technologies, will minimize the need for business centers.

> Expansion of Europe's high-speed train network will eliminate short haul flights.
 
> Hotel meeting and dining areas will be designed less formally in an attempt to attract the casual business traveler.

> Small super-luxury boutique inns will take market share from Four Seasons, Ritz Carlton and Fairmont.

> Hub airports will install capsule-cocoon hotels in terminal facilities.

> Hotel and restaurant facilities will be designed for an aging population with lower rise steps, more handrails and wider doors.

> Travel guidebooks will become highly specialized and more frequently consulted – primarily on the web.

> The distinction between business and leisure hotels will erode as business clients seek fitness and entertainment activities and vacation guests demand advanced telecommunications IT.

> « 100% Satisfaction Guaranteed » will replace « Let the Buyer Beware ».

> Growth in demand for home food delivery will outpace all other food service segments.

> An aging population and growing infatuation with healthful living will bring a wave of European holistic spas and  'health-tels' to North America and Asia.

> A new wave of budget conference & exhibition hotels will be built to meet the convention needs of cost conscious companies.

> European and Japanese new-build hotels will be obliged to design larger guest rooms closer to North American standards.

> Restaurant groups will operate F&B outlets wherever people gather (Laundromat bars, espresso counters at service stations, etc.).

> Center-city urban resorts will challenge sun, sand & sea vacation villages in the leisure market.

> Credit card check-in/check-out, F&B vending machines, self-cleaning bathrooms and self-serve laundries will eliminate most human contact in budget hotels.

> Luxury resorts that once shunned children will welcome them with an expanded array of activities and tailored dining options.

Investment & Finance

> Hotel real estate assets will be increasingly concentrated in the portfolios of fewer investors, particularly private equity funds.

> Intense competition for hotel operating contracts will push management fees as low as 1% of gross, 5% of IBFC and $4 per reservation.
 
> Airlines will continue to rack up significant losses as they struggle to deal with high fuel costs, new security requirements, an onslaught of no-frills carriers and brutal competition from 'open skies' agreements.

> Following the big American sell off of the 1980s and 1990s, hotel companies will be repatriated to the U.S. (Westin, Ramada, Renaissance, etc.).

> Airline alliances of the 20th century will evolve into acquisitions as weaker players struggle to survive (Air France-KLM, American-TWA, etc.).

> By the end of the decade, a score of management companies will control the world inventory of branded hotel rooms.

> Hotel feasibility studies will become an unprofitable commodity for hospitality consulting firms.

> Hotel operating companies will sell their remaining equity in real estate to free up capital for expansion of management contracts.

> Per room hotel acquisitions in Europe will reach stratospheric new records (i.e. Savoy Group).

> Franchising will experience explosive growth as hotel companies strategically reposition to get out of the hotel business and into the business of hotels (i.e. Radisson, Choice, Cendant, Holiday Inn, etc.).

> Fewer new-build hotels in Europe and North America, more existing property renovations.

Human Resources

> Critical shortages of skilled staff will encourage hospitality corporations to develop or outsource proprietary training centers.

> The introduction of new technologies in the upscale tourism industry will not replace the human element in service delivery – to the contrary, it will gain importance.

> Unionized hotel and restaurant workforces will trade scheduling and task flexibility for job security and quality-of-life benefits.

> Tourism and hotel management schools will move out of the classroom and out of the library, onto the web and into the field.

> Powerful unions, a shorter workweek and reluctance to taper social benefits will maintain Europe's standing as the world's most expensive tourism destination.

> Middle Eastern countries enforcing employment quotas for nationals will experience reduced productivity and higher labor costs.

> Airline employees will accept significant wage and benefit cuts to prevent their employers from going bankrupt.

Marketing

> The Internet will become the dominant distribution channel for all travel and tourism products eliminating most intermediaries.

> Understanding customers as people – their likes, dislikes, habits, interests and hobbies – will become critical to establishing competitive advantage in hospitality marketing.

> Customer retention will replace customer acquisition as travel agencies' strategic objective.

> Homogenization of airline services will render them commodities while lodging products will continue to focus on differentiation.

> Data warehousing and data mining will provide one-to-one and relationship-marketing opportunities never imagined.

> Print media advertising will move onto the Web.

> Increasingly value-conscious customers will demand more and better product information.

> Consumers will increasingly expect to negotiate hotel and airline rates.

> Cross-sector strategic alliances between food service, lodging, travel and entertainment companies will prove to be effective marketing formats.

> Better understanding of psychographic consumer behavior will lead to more precise identification of customer segments and sub-segments.

> As marketers increasingly distinguish between loyalty and satisfaction, frequent use programs will become more elaborate.

> Hotel revenue management systems will become more sophisticated and be relocated from the reservations department to sales & marketing.

> Revenue management tactics will be applied to pricing in restaurants, amusement parks, golf courses, tour buses, cinemas, convention centers and sports stadiums.

> Hotel companies' PMS standardization will result in the transfer of database and data warehousing responsibilities to CRS for greater operational and marketing efficiency.

> Market share and product profitability will be replaced by customer share and customer profitability as measures of marketing effectiveness in the hotel industry.

Safety & Security

> Consumers will systematically consult travel health sites before checking ticket or room availability.

> Security concerns in the Holy Land encourage religious tourists to make pilgrimages to sites in Ethiopia, Cuba, Greece, Italy and Morocco.

> Crime and terrorism will render some traditional tourist destinations unsellable.

> Customer credit cards will replace coded key cards in most hotels.

> Guest room safes will be enlarged to accommodate standard laptop computers.

> International hotel companies will refuse management contracts and franchises for hotels without in-room sprinkler systems.

> Terrorism fears will keep Israel, Indonesia, Iraq and India off the mainstream tourist circuit for the foreseeable future.

> Advanced encryption technology will make on-line payment genuinely secure.

Financial Management & Cost Control

> Zero-based budgeting will become the industry norm.

> GOPAR will replace RevPAR as the standard measure of hotel sales profitability.

> Speech recognition technology will lower staffing levels and operating costs in CRS call centers.

> To improve energy and water conservation, hotels will install usage meters and levy charges for consumption.

> Deregulation of the global telecommunications market will benefit the hospitality industry more than the deregulation of the airline markets.

> As hotel reservations made through global distribution systems diminish, GDS will exploit communications advances to reduce fees and costs.

> While hotel and café guests will increasingly expect wireless Internet access, other factors will encourage hospitality operators to invest in it – serving as a platform for mobile point-of-sales, reducing cable costs and more efficient restaurant table auditing.

Tourism Control Intelligence
E-mail: Nowlis@aol.com

Catégories
Trends

Global Megatrends Revolutionizing the Tourism Industry at the Dawn of the Third Millennium

Tourism Trends

  • The cruise industry will experience explosive growth.
  • An older, better-educated population in Europe and North America will increasingly seek ecotourism and cultural travel products.
  • « Slow cities » and « slow food » trends will expand from Italy to much of Europe > London, New York, Sydney and Dubai will be the leading tourism poles through the end of the decade.
  • Non-residents will pay significantly higher entry fees to tourist attractions than those paid by locals (Venice, Petra, Bath, etc.).
  • Tourism Satellite Accounting will be adopted by several developing countries but ignored by the U.S., China, Japan, Russia and most Western European countries.
  • Prayer rooms and compasses will be installed on most passenger aircraft serving the Islamic world.
  • Antarctica will become an ecotourism tourism destination complete with hotels, restaurants and full-service tours.
  • Shopping, from mega-malls to folk craft centers, will increasingly become a critical feature for tourism destinations.
  • Rides on private spacecraft will become a recreational outing for the wealthy.
  • Mega-resorts (Las Vegas, Orlando, Sun City, etc.) will do what no one thought possible: get bigger.
  • Cruise ships will sell condominiums, becoming ocean-going resorts.
  • In spite of organized international efforts to fight them, sex and drug-focused tourism will flourish.
  • Airlines, travel agents and tour operators will ally themselves with financial institutions to offer consumer travel loans.
  • Western tourists will shun countries with immense tourism potential but « rogue » leaders (Zimbabwe, Libya, Iran, North Korea, etc.).
  • MGM Mirage will beat out rivals Hilton, Harrah’s and Bally’s to become the undisputed leader of the casino industry.
  • National economies in Cuba, Egypt, Spain and Thailand will become dangerously dependent on tourism.
  • « Rave » tourists will travel further abroad in search of the perfect party (BringItOn! Travel, Like Hiptrips, Experienceibiza, etc.).
  • Enormous infrastructure projects will significantly expand automobile-accessible tourism options (Channel Tunnel car lane, Bahrain-Qatar causeway, etc.).
  • China will be the first country to receive 100 million international arrivals in a 12-month period, sometime around 2018 – France will follow within 2-3 years.

Product & Service Trends

  • Hotel rooms, increasingly equipped as offices with full-size desks, computers and advanced communications technologies, will minimize the need for business centers.
  • Expansion of Europe’s high-speed train network will eliminate short haul flights.
  • Hotel meeting and dining areas will be designed less formally in an attempt to attract the casual business traveler.
  • Small super-luxury boutique inns will take market share from Four Seasons, Ritz Carlton and Fairmont.
  • Hub airports will install capsule-cocoon hotels in terminal facilities.
  • Hotel and restaurant facilities will be designed for an aging population with lower rise steps, more handrails and wider doors.
  • Travel guidebooks will become highly specialized and more frequently consulted – primarily on the web.
  • The distinction between business and leisure hotels will erode as business clients seek fitness and entertainment activities and vacation guests demand advanced telecommunications IT.
  • « 100% Satisfaction Guaranteed » will replace « Let the Buyer Beware ».
  • Growth in demand for home food delivery will outpace all other food service segments.
  • An aging population and growing infatuation with healthful living will bring a wave of European holistic spas and ‘health-tels’ to North America and Asia.
  • A new wave of budget conference & exhibition hotels will be built to meet the convention needs of cost conscious companies.
  • European and Japanese new-build hotels will be obliged to design larger guest rooms closer to North American standards.
  • Restaurant groups will operate F&B outlets wherever people gather (Laundromat bars, espresso counters at service stations, etc.).
  • Center-city urban resorts will challenge sun, sand & sea vacation villages in the leisure market.
  • Credit card check-in/check-out, F&B vending machines, self-cleaning bathrooms and self-serve laundries will eliminate most human contact in budget hotels.
  • Luxury resorts that once shunned children will welcome them with an expanded array of activities and tailored dining options.

Investment & Finance

  • Hotel real estate assets will be increasingly concentrated in the portfolios of fewer investors, particularly private equity funds.
  • Intense competition for hotel operating contracts will push management fees as low as 1% of gross, 5% of IBFC and $4 per reservation.
  • Airlines will continue to rack up significant losses as they struggle to deal with high fuel costs, new security requirements, an onslaught of no-frills carriers and brutal competition from ‘open skies’ agreements.
  • Following the big American sell off of the 1980s and 1990s, hotel companies will be repatriated to the U.S. (Westin, Ramada, Renaissance, etc.).
  • Airline alliances of the 20th century will evolve into acquisitions as weaker players struggle to survive (Air France-KLM, American-TWA, etc.).
  • By the end of the decade, a score of management companies will control the world inventory of branded hotel rooms.
  • Hotel feasibility studies will become an unprofitable commodity for hospitality consulting firms.
  • Hotel operating companies will sell their remaining equity in real estate to free up capital for expansion of management contracts.
  • Per room hotel acquisitions in Europe will reach stratospheric new records (i.e. Savoy Group).
  • Franchising will experience explosive growth as hotel companies strategically reposition to get out of the hotel business and into the business of hotels (i.e. Radisson, Choice, Cendant, Holiday Inn, etc.).
  • Fewer new-build hotels in Europe and North America, more existing property renovations.

Human Resources

  • Critical shortages of skilled staff will encourage hospitality corporations to develop or outsource proprietary training centers.
  • The introduction of new technologies in the upscale tourism industry will not replace the human element in service delivery – to the contrary, it will gain importance.
  • Unionized hotel and restaurant workforces will trade scheduling and task flexibility for job security and quality-of-life benefits.
  • Tourism and hotel management schools will move out of the classroom and out of the library, onto the web and into the field.
  • Powerful unions, a shorter workweek and reluctance to taper social benefits will maintain Europe’s standing as the world’s most expensive tourism destination.
  • Middle Eastern countries enforcing employment quotas for nationals will experience reduced productivity and higher labor costs.Airline employees will accept significant wage and benefit cuts to prevent their employers from going bankrupt.

Marketing

  • The Internet will become the dominant distribution channel for all travel and tourism products eliminating most intermediaries.
  • Understanding customers as people – their likes, dislikes, habits, interests and hobbies – will become critical to establishing competitive advantage in hospitality marketing.
  • Customer retention will replace customer acquisition as travel agencies’ strategic objective.
  • Homogenization of airline services will render them commodities while lodging products will continue to focus on differentiation.
  • Data warehousing and data mining will provide one-to-one and relationship-marketing opportunities never imagined.Print media advertising will move onto the Web.
  • Increasingly value-conscious customers will demand more and better product information.
  • Consumers will increasingly expect to negotiate hotel and airline rates.
  • Cross-sector strategic alliances between food service, lodging, travel and entertainment companies will prove to be effective marketing formats.
  • Better understanding of psychographic consumer behavior will lead to more precise identification of customer segments and sub-segments.
  • As marketers increasingly distinguish between loyalty and satisfaction, frequent use programs will become more elaborate.
  • Hotel revenue management systems will become more sophisticated and be relocated from the reservations department to sales & marketing.
  • Revenue management tactics will be applied to pricing in restaurants, amusement parks, golf courses, tour buses, cinemas, convention centers and sports stadiums.
  • Hotel companies’ PMS standardization will result in the transfer of database and data warehousing responsibilities to CRS for greater operational and marketing efficiency.Market share and product profitability will be replaced by customer share and customer profitability as measures of marketing effectiveness in the hotel industry.

Safety & Security

  • Consumers will systematically consult travel health sites before checking ticket or room availability.
  • Security concerns in the Holy Land encourage religious tourists to make pilgrimages to sites in Ethiopia, Cuba, Greece, Italy and Morocco.
  • Crime and terrorism will render some traditional tourist destinations unsellable.
  • Customer credit cards will replace coded key cards in most hotels.
  • Guest room safes will be enlarged to accommodate standard laptop computers.
  • International hotel companies will refuse management contracts and franchises for hotels without in-room sprinkler systems.
  • Terrorism fears will keep Israel, Indonesia, Iraq and India off the mainstream tourist circuit for the foreseeable future.
  • Advanced encryption technology will make on-line payment genuinely secure.

Financial Management & Cost Control

  • Zero-based budgeting will become the industry norm.
  • GOPAR will replace RevPAR as the standard measure of hotel sales profitability.
  • Speech recognition technology will lower staffing levels and operating costs in CRS call centers.
  • To improve energy and water conservation, hotels will install usage meters and levy charges for consumption.
  • Deregulation of the global telecommunications market will benefit the hospitality industry more than the deregulation of the airline markets.
  • As hotel reservations made through global distribution systems diminish, GDS will exploit communications advances to reduce fees and costs.
  • While hotel and café guests will increasingly expect wireless Internet access, other factors will encourage hospitality operators to invest in it – serving as a platform for mobile point-of-sales, reducing cable costs and more efficient restaurant table auditing.

Tourism Control Intelligence
E-mail: Nowlis@aol.com