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Deloitte Survey Cautiously Optimistic on Leisure TravelNovember 19, 2009 By: George Dooley
While the tourism, hospitality and leisure (THL) sector continues to be challenged by current economic conditions, a new survey from Deloitte suggests reason for cautious optimism heading into the holiday and winter travel season. Domestic travel will expand but the industry, including hotels, must drive demand, Deloitte says.
The survey results suggest that some respondents may still have concerns about economic conditions, with 64 percent saying they are more cost-conscious when traveling. With the economy only in the early stages of a turnaround, respondents appear to remain cautious and are fairly evenly divided on spending plans, Deloitte reports.
More than a third (35 percent) report they will spend less this year; 37 percent expect to spend the same amount; and 27 percent plan to spend more money while traveling. As might be expected, those planning on spending less were younger, with lower incomes, and more likely to have children in the household.
Deloitte’s survey of 2,000 consumers in the U.S. revealed that almost half (45 percent) will take a vacation or leisure trip that involves staying overnight in a lodging facility, such as a hotel, motel or a timeshare, from the beginning of Thanksgiving week through March of next year. Additionally, the survey showed:
* 18 percent will travel overnight and stay at a lodging facility during the Thanksgiving week and weekend
* 22 percent will travel overnight and stay at a lodging facility during December through New Year’s Day
* 32 percent will travel overnight and stay at a lodging facility after New Year’s Day through March
When asked to compare their overnight travel plans for the same time period a year ago, 45 percent of respondents said they will take the same amount of trips this year involving an overnight stay at a lodging facility, while 25 percent said they will take more and 28 percent said they will take fewer trips.
"Conditions appear to be stabilizing in the travel industry as signs of an economic recovery take hold," said Adam Weissenberg, U.S. tourism, hospitality and leisure leader for Deloitte. "Room rates are still low, which is impacting revenue, but consumers are finding special offers and incentives on hotel accommodations which is helping to increase occupancy. Hotel companies should continue focusing on driving demand and building long-term customer relationships with their guests through innovative marketing and loyalty programs. When business travel gets back on track, the industry will see further improvement leading to a more complete recovery."
"This season, spending likely won’t return to levels that the industry enjoyed prior to the recession, but some segments of the population are showing more confidence in the economy," Weissenberg continued. "This could lead to some improvement over the near-term for hospitality companies and restaurants and should translate to improved long-term conditions as the economy strengthens further."
Reflecting on activities planned during the holiday/winter travel season, the majority of respondents will travel domestically and visit family and friends. Additional survey results include:
* 70 percent of travelers will visit a U.S. state and/or city
* 74 percent will visit relatives or friends
* 16 percent will visit a foreign country
* 38 percent will spend at least one vacation doing warm-weather activities (swimming or golf)
* 18 percent will take a ski vacation or do other cold-weather activities
* 34 percent will visit a historic site or a national park
* 22 percent will visit an entertainment park or facility
* 8 percent plan to do philanthropic or environmental work while traveling
The Digital Traveler
Fifty-seven percent of respondents say they often read consumer-written reviews or comments online related to travel. Interest was high across all age groups except retirees, 65 years-old and older. Further, 41 percent have used mobile devices for travel-related assistance, such as reservations or obtaining information. More than a quarter, 26 percent, have visited a travel-related company’s social media fan page. Upper income households were the most active group among all three activities.
Customer Loyalty Programs
Forty percent of travelers say they currently belong to at least one rewards or customer loyalty program from a hotel or other lodging facility. Travelers with the highest income levels were most likely to belong to a program.
"With 60 percent of travelers not belonging to any loyalty program there is an opportunity for hotel companies to build new relationships with these travelers through programs that create long-term brand loyalty and drive repeat business," said Weissenberg.
Sustainability Remains Important
Being green may still be an important factor to respondents who are traveling, with 59 percent saying they try to be environmentally conscious when traveling. Almost half, 45 percent, said they generally think that lodging facilities are acting responsibly with regard to green issues.
"Hotel companies are continuing to pursue sustainability initiatives that are reducing operational costs through increased energy and water efficiency,” said Rod Millott, sustainability leader for Deloitte’s tourism, hospitality and leisure sector. "There are also significant tax credits and incentives available that are making these initiatives more financially attractive. Many of these initiatives are backend and not visible to guests, so there is a real opportunity for hotel brands to communicate their sustainability success and build loyalty with their guests as environmental stewardship continues to be important."
The survey was commissioned by Deloitte and conducted via telephone interviews by Opinion Research Corporation between October 22 and November 2, 2009. The survey polled a sample of 2,000 consumers and has a margin of error for the entire sample of plus or minus two percentage points. Visit www.deloitte.com.