Étiquette : emerging markets

Catégories
Facts and figures Geographic markets

Global ranking of destinations and source markets

The flow of tourists to various destinations around the world has changed drastically in recent years and data compiled over the past decade corroborates certain trends. New outbound markets occupy the top spots and the ranking of destinations has been turned upside down. Emerging economies are profoundly altering the global tourism market, which is now shared amongst a much greater number of countries than before.

According to World Tourism Organization (WTO) estimates, the number of international tourist arrivals reached 940 million in 2010, or a 39% increase over 2000. Seen over the longer term, growth has been exponential; only 25 million tourists travelled in 1950.

Since the WTO compiles national statistics, methodologies may vary. For this reason, results must be interpreted with caution. In addition, results for the year 2010 were estimated based on partial data.

Top-ranked destinations

Not only has the ranking of destinations changed dramatically over the years, the sheer number of countries visited by tourists has increased tremendously. Here are some interesting observations about the number of international arrivals at the most popular destinations (Table 1):

  • The top 5 countries in the ranking accounted for 71% of all arrivals in 1950, and only 31% in 2010.
  • The “Other” category, which represents the next ten destinations in the ranking, accounted for only 3% of arrivals in 1950, but rose to 34% in 1990 and 44% in 2010!
  • Canada’s ranking dropped from 2nd in 1970 to 8th in 2000, and finally to 15th in 2010.
  • China is not only a very active outbound market; it has also become an extremely popular destination.
  • Malaysia, Turkey and Hong Kong have made major inroads into the tourism market.
  • The tourism sector has been demonstrating its resilience for over 60 years.

The top six destinations have remained been more or less the same since the year 2000. France enjoys a comfortable lead and China – which outranked Spain in 2010 – is now closing in on the United States. Canada has not been one of the top ten destinations since 2004.

Graphs 1 and 2 illustrate, respectively, the top 20 destinations by international tourist arrivals and by international tourism receipts. The two rankings differ somewhat. In terms of tourism receipts, the United States is in the top position, well ahead of second-ranked Spain, which also outranks France. While some countries occupy similar rankings in both graphs, others appear in one and are completely absent from the other. Countries that rank in the top 20 of arrivals but not in receipts are the Russian Federation (27th), Poland (30th), Ukraine (50th), Greece (21st) and Egypt (22nd). Conversely, some countries have high tourism receipts for a relatively lower number of visitors: the Netherlands (21st), Switzerland (28th), Japan (29th), Australia (41st) and India (42nd).

In fact, not all countries have benefitted from the overall growth in international tourist arrivals. Graph 3 illustratesthe change in arrivals for various countries. While some have more than doubled the number of arrivals, others, like Canada (-18%) and Poland (-28%), have recorded major decreases.

Where do most travellers come from?

Europe is currently the top source market for tourists, generating 55% of all international tourists, followed by Asia and the Pacific (20%) and the Americas (16%) (Table 2). Asia and the Pacific, the Middle East and Africa recorded the strongest average annual growth rate for the period covered. The majority of international visitors, approximately four out of five, travel within their own region. However, it would appear that the number of trips from one region to another has increasedat a faster rate than the number of intraregional trips. Industrialized countries remain the primary source markets of international tourists. However, with the increase in disposable income, many emerging economies have experienced higher growth rates in the past few years.

The data in Table 3about tourist-generating countries is expressed in terms of international tourism expenditures, as published by the WTO, not in terms of number of trips. Total spending grew from US$478 billion in 2000 toUS$678 billion in 2005and to US$850 billion in 2009, for an overall increase of 78%. In 2009, source markets saw their international tourism expenditures fall 10% compared to 2008, due to the economic crisis and the H1N1 flu. In 2000, only 10 countries recorded international tourism expenditures of at least US$10 billion, while 23 countries did so in 2009.

The top three spots have been occupied by Germany, the United States and the United Kingdom since 2000, with France, Italy and Japan following close behind.The explosive growth of the Chinese travel industryhas pushed it into the top five even though its population has only just begun to travel. Chinabegan signing agreements in 1999 to permit leisure travel to various countries, but Canada has only very recently obtained the status of an authorized destination (June 2010). The Chinese still travel a lot within their own country, but the proportion of domestic trips to those outside the country has risen from 71 to 1 in 2000 to 38 to 1 in 2009.

Japan is the only country in the ranking below to have reduced its international tourism expenditures. Hard-hit by economic woes and fuel prices, the population has lost some confidence and travels less than before.

The Russian Federation, Saudi Arabia, Belgium, Australia, Singapore, Norway and Brazil more than doubled their spending during this period.

In short, the tourism market is constantly changing and welcoming more participants so it is easy to get lost in the crowd. The good news? The number of tourists from various regions around the world is growing constantly. We live in an age where physical distances are less intimidating than before and where tourists are choosing to travel just about everywhere. We must design our tourismstrategies to reflect a broader geographic perspective and not be afraid to compete with top-ranked destinations.

 

Sources:

– World Tourism Organization. “World Tourism Barometer, Interim Update April 2011.”

– World Tourism Organization. “Tourism Highlights, 2009 Edition.”

 

Catégories
Customer segments Marketing @en

Familiar with tweens? You should be…

A recent development in marketing has been to define a new customer segment: « tweens » or preteens. While young people ages 9 to 14 are no longer children, they are not yet teens, either. With surprising purchasing power and influence on a variety of family decisions, they are an attractive market. Although manufacturers have recognized the potential of this market, the travel industry is just beginning to clue in. In fact, tweens now make up another type of traveller. This does not mean family vacations are a thing of the past; they have simply changed direction – to follow tweens!

What is a tween?

« Tween » is a marketing term used to describe preteens ages 9 to 14. Straddling childhood and adolescence, they have a foot in both worlds. When it comes to technology, they rule: they are online longer, adopt and master new technologies faster than adults and participate in a wider variety of online activities. In Canada, 85% of tweens have access to a computer, 82% to a video game system, 25% to an iPod or MP3 player and 16% have a cell phone (this number rises to 26% among 12 to 14 year-olds).

While their favourite medium is still television (50%), 27% of American 9 to 14 year-olds watch it on the internet. Figure 1 lists their favourite online activities.

activites_tweens

Purchasing power and influence on family decisions

Spending by tweens has doubled every decade for the past 30 years. In the US today, between spending their own money and influencing their parents’ purchasing decisions, this segment controls or influences approximately US$260 billion in spending. According to the BRANDchild study (conducted by Millward Brown among 2,000 young people ages 9 to 14 years in several countries), tweens influence 80% of their parents’ brand purchases.
Tweens2

In 2005, there were approximately 2.5 million tweens in Canada and their average annual income was CAN$1,155. This means they controlled CAN$2.9 billion of their own money in addition to influencing another CAN$20 billion in family purchases.

It is this financial power that differentiates tweens from earlier generations; never has this age group exercised such influence. The generation is populous enough to ruin a brand it does not like or catapult another to success by adopting it. The influence of tweens is particularly noticeable when it comes to choosing a restaurant, groceries and even cars, but they can also affect travel-related decisions:

  • Over 40% of young people believe they have some or a lot of influence when it comes to choosing a vacation destination.
  • Although only a small percentage of tweens feel they have a strong influence on hotel choices, 59% believe they have some influence. Also, 20% of parents say they « always or sometimes » ask for their tween’s opinion when selecting a hotel.
  • Tweens believe they influence the planning of vacation activities 55% of the time.

achat_tweens3

They may be plugged in, but do they shop online?

Surprisingly, tweens and teens are shopping online in increasing numbers, thanks to prepaid gift cards. Major companies now offer prepaid credit cards designed especially for young people. The Visa Buxx card is just one example and can be used everywhere Visa is accepted, particularly online!

Tweens5

Receptiveness to advertising

Young people in the United States, Australia and Great Britain see an average of 20,000 to 40,000 commercials per year and spend 60% more time in front of the television than at school. Two surveys conducted by The Harris Interactive Youth and Education Research Group in May 2006 offer more insight into young people’s attitudes towards advertising:

  • Tweens attach a great deal of importance to objects and brands « cool. »
  • Friends have a tremendous influence on their preferences and they want what their friends have. Their consumer choices are also influenced by advertising.
  • More than earlier generations, tweens are very receptive to celebrity-driven advertising.
  • Young people say they are most influenced by television commercials (54%), magazine ads (23%) and movie-theatre commercials (19%).
  • Advertisements for food seem to attract the most attention from tweens.

Generally speaking, marketing specialists use the strategy of treating tweens like teens. The marketing industry has forced children to grow up faster and studies show that those aged 11 and older no longer consider themselves children.

Ethical debate

There is a major debate concerning the ethics of tween-oriented marketing. By treating these young people like mature, independent consumers, advertisers are taking parents out of the decision-making process and thereby making children more susceptible to unhealthy messages about body image, sexuality, relationships and violence. This is an emotional issue that creates sharp divides. Although the tourism industry is less involved in such marketing, it is important to be aware of the issues.

Some tourism examples

In terms of the tourist experience, tweens are often too old for activities aimed at children and too young for teen and adult activities. Very few tourism-based businesses offer products specifically for tweens. However, some businesses have adapted their products for this segment.

Club Med offers two programs designed for 11 to 17 year olds: Junior Club Med, which supervises young people and organizes group activities (beach volleyball, trapeze, trampoline, sailing, inline skating, tennis, etc.), and Club Med Passworld, an exclusive new zone with special high-tech equipment. Specially-trained counsellors facilitate the discovery of new activities designed specifically for them and encourage their development and socialization.

Some Four Seasons hotels (Atlanta, New York, London, Chicago, Philadelphia and Toronto) have added a youth concierge to their service teams to deal specifically with tweens and teens. These hotels have also conducted focus groups with tweens in the aforementioned cities to identify cool things to do locally. They now have an updated idea of this clientele’s preferences and interests. These hotels also provide special amenities to this customer category, offering things like popcorn, recent magazines and films, an indoor pool, and balanced meals designed especially for them. For its part, the Ritz Carlton in South Beach, Miami, provides a tech centre for tweens and teens.

Finally, the Florida tourism portal lists activities aimed at tweens, like scuba diving, an indoor rink for roller-skating and skateboarding and water skiing.

Be among the first!

Given their economic muscle, tweens will no doubt continue to be targeted by businesses. In addition, since relatively few tourism businesses target this clientele in particular, doing so would probably provide a competitive edge. A few suggestions for reaching this market segment:

  • Carefully analyze their likes, dislikes and influences, to offer products and services tailor-made for them.
  • Speak their language: tweenspeak is the system of abbreviations, symbols, icons and numerals used for text messaging and in chat rooms. This new language enables them to communicate with each other around the world without even speaking the same language!
  • Keep wait times to a minimum. Although no longer interested in colouring, tweens still don’t have much patience.
  • Offer cool products traditionally aimed at older customers, but ensure they are closely supervised to reassure parents.

Sources:
– Business Wire. « iGillottResearch Finds Significant Opportunities for Wireless Devices in the Tween Segment, » July 22, 2005.
– De Mesa, Alycia. « Marketing and Tweens, » Business Week Online, October 12, 2005.
– eMarketer. « What Do Kids, Tweens and Teens Do Online? » www.emarketer.com, October 10, 2006.
– Lindstrom, Martin. « Branding Is No Longer Child’s Play! » Journal of Consumer Marketing, Vol. 21, No. 3, 2004.
– Martin, Suzanne. « Advertising to Youth: What Youth Want And What Advertisers Need to Know, » Trends & – Tudes, Harris Interactive, Vol. 5, No. 7, August 2006.
– Media Awareness Network. « Special Issues for Tweens and Teens, » www.media-awareness.ca.
– Shohan, Aviv and Vassilis Dalakas. « He Said, She Said, They Said: Parent’s and Children’s Assessment of Children’s Influence on Family Consumption Decisions, » Journal of Consumer Marketing, Vol. 22, No. 3, 2005.
– YTV, Corus Media. « 2002 YTV Tween Report: Special Kidfluence Edition » and « Winter 2006–YTV Kids Trend Report. »

 

Catégories
Issues Trends

What can we expect from the tourism bubble in the next few years?

What are the major influential factors that will affect tourism supply and demand this decade? For a start, China and India are poised to become major players as they increase their presence in the travel marketplace.

  • Climate of uncertainty
    The political, economic, climatic and health crises of the past few years have shown us that the travel industry, particularly the airline sector, can become very vulnerable and that no destination is immune from these threats.
  • Rising oil prices
    More gas price hikes are expected in the next few years. Since the price of oil affects tourism-based businesses in myriad ways, travel costs will rise. This situation, coupled with risk factors, could lead to an increase in intra-regional travel. Poorer countries will be hurt by higher transportation costs and require special assistance.
  • Security procedures to facilitate travel
    A country’s methods of providing security and protection for travellers play an important role in its position in the global tourism marketplace. In the coming years, these methods should be harmonized.
  • Increased wealth in both existing and emerging markets
    Economic prosperity drives tourism growth. Existing markets will continue to increase their wealth. Among emerging markets, China and India will experience the most growth. Experts anticipate problems due to overcrowded airline routes.
  • Development of both multilateralism and regionalism
    South-South alliances will develop and create more equitable relations. The current trend towards political and economic consolidation in major global regions will restructure the overall globalization movement. Asia will become an economic centre to watch. As a result, tourism, as well as transportation structures and costs, will be profoundly affected.
  • Technology in the forefront
    Whether we are talking about developments in communication, the convergence of the Internet, cell phones and television or the rollout of new aircraft models, technology will continue to play a primary role in the evolution of the tourism industry.
  • Demographic changes
    Concentrated urban populations and family/work dynamics continue to modify travel behaviour. The populations of large industrialized countries are aging, meaning that more baby boomers will have the time and money to travel. However, some experts have reservations about the amount of discretionary income available to retirees for travel.
  • Increased consumer power, thanks to the Internet
    When it comes to accessing information, prices and reservations, the centre of power has shifted from tourism professionals to travellers themselves. Consumers are very comfortable with the Internet and the decisions it enables them to make.
  • Improved quality of life as a travel incentive
    Travel is seen as an element that can help improve one’s quality of life, whether it is used for adventure and discovery, personal growth, relaxation or to get a new lease on life.
  • Heightened competition
    In an attempt to stimulate economic growth, every city, region and country will be looking for a piece of the tourism pie, creating a context in which branding strategies are key.
  • Promotional strategies involving public-private partnerships
    These types of partnerships are especially common in countries with federal or highly decentralized political systems.
  • Ongoing mergers and acquisitions
    The hotel industry, airlines, distribution network and tour operators will continue their trend towards consolidation.
  • Infrastructure deficiencies
    When it comes to infrastructure, the major Western countries lack the planning needed to respond to the coming international growth. It requires several years’ lead time to expand airports and build more hotels.

  • Booming products
    Green tourism, spa tourism and health tourism (surgery and convalescence) are becoming increasingly popular. Although these are examples of segmentation and specialization, mass tourism is in no danger of disappearing.

    • Flirting with China and India

    Even though China and India are enormous potential markets, there is a long list of countries competing for their business. Over 170 destinations are using their charms to attract Chinese and Indian travellers. Despite these efforts, travellers from emerging markets often follow the same pattern as they start to venture outside their country. They begin by traveling in groups and are most likely to visit neighbouring countries. Afterwards, Europe and North America (particularly the West Coast) are added to the list of destinations and the number of individual travellers increases.

    Not everyone behaves the same, however. Chinese travellers like to feel safe by finding people who speak their language and can provide familiar food. As a result, they will be attracted to foreign countries that boast major Chinese communities. As for travelers from India, their travel experiences have made them more likely to travel alone, anywhere in the world.

    All the same, those who wish to appeal to these travellers are well-advised to get busy.

    Tourism in general likely to continue its upward climb

    If we look at the past fifty years or so, although its growth curve may have had a few blips, tourism is not ready to collapse. And yet, even though international demand is expected to grow by 4.2% annually, there are also more and more regions vying for travellers.

    Sources:
    – Baumgarten, Jean-Claude. President of the World Travel & Tourism Council (WTTC) and a guest lecturer for the Cercle de tourisme du Québec, April 20, 2006.
    – Désiront, André. Interview with Jean-Claude Baumgarten following his remarks to the Cercle de tourisme du Québec, April 20, 2006.
    – Frangialli, Francesco. « Défis pour un nouveau millénaire, » Le Devoir, April 1 and 2, 2006.
    – Sarrasin, Bruno. « Temps de ruptures et continuités, » Le Devoir, April 1 and 2, 2006.

Catégories
Issues Trends

What do we see in our crystal ball?

The pace of everything will only speed up. We see trendy new destinations, enthusiasm for new products, pronounced customer segmentation and new players that shake up a sector of activity. Lots will be going on in the tourism industry.

Overall factors

  • Socio-demographics – Populations will be increasingly concentrated in urban areas. By the year 2015, over half of all humanity will live in cities. By the year 2020, nearly 90% of the Canadian population will reside in the country’s 25 largest urban regions. The globalization of the job market will lead to greater geographic mobility.
  • Growth period – The largest economic increase in global tourism should occur from 2010 to 2020 with the arrival of emerging markets, such as China and India, and significant growth of close-to-home travel and short trips. 
  • Security – Terrorism will be part of the equation, and travellers will adjust. The impact of terrorist attacks will be more local. Security measures will be standardized around the world and their cost will push airfares up.
  • Environment – Environmental and social awareness will increase. In tourism, this trend will take several forms like ecotourism, equitable tourism, responsible tourism and sustainable tourism. Certain hotels will become eco-friendly. As certain places sustain damage, mass tourism will decline. 
  • Technology – Technology will continue to develop at a rapid pace and involve all sectors of the industry. For example, cellular phones will be used to plan and organize all aspects of trips, and high-definition televisions and computers will provide virtual visits of a destination, with sights, sounds, scents and textures, as if the prospective traveller were actually there.  

Sectors of activity

  • Airline industry – With their greater speed and capacity, planes will make available to many travellers destinations that still seem remote. As the world becomes smaller and more accessible, the door will open to affordable long-haul getaways. 
  • Accommodation – Hotel rooms with state-of-the-art technology will make it possible to combine business and pleasure, switching focus as needed.  

Clientele and products

  • Clientele – International tourists will exceed one billion in 2010, rising to 1.5 billion in 2020. As baby boomers retire en masse from 2010 to 2020, they will represent most of this clientele and shape demand; they’re active, educated, healthy, demanding and more adventurous. Forget the shuffleboard! When it comes to emerging markets, young adults will have the most impact. 
  • Destinations – A new hierarchy of destinations will take hold as Asia and India become more popular. Combined with the growth of new destinations (Qatar, Brazil, Slovakia, etc.), competition among countries will be more intense. The various regional economic agreements (EEC, APEC, etc.) will facilitate travel within trade zones, and tourism will become a regional, rather than global, phenomenon. 
  • Products – Offbeat ideas will continue to emerge. Products like extreme adventure, learning travel, and even silence and relaxation will reflect customers’ life styles. The demand for quality products will be strong.

Sources:
– Sarrasin, Bruno and Guy-Joffroy Lord. « L’évolution du tourisme international: une analyse prospective à l’horizon 2010, » Téoros, fall 2003, p. 5-9.
– The Thomson Future Holiday Forum, [www.lexispr.com/thomson/report.htm] 2004.

SEE ALSO

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By Michael Nowlis, Tourism Control Intelligence