NEW ORLEANS, Lousiana – As 2010 rapidly comes to a close the question on the minds of many in the travel industry is “what is the outlook for 2011?” So ubiquitous is this question that the 2010 USTOA Annual Conference and Marketplace’s opening seminar was devoted solely to answering it.
The conference kicked off Friday, December 10, pulling hundreds of suppliers and tourism representatives from all over the world to the Sheraton New Orleans for some serious networking and updating. The first seminar, Travel Trends for 2010/2011, hit the ground running. It was presented by Henry Hardeveldt, vice president of Forrester Research, and sponsored by the Ecuador Tourism Board.
Surviving and Prospering
Surviving in this industry and in this economy is not just important, but imperative. The real question is 'how can you prosper and get ahead?' Hardeveldt presented key questions that need answering in order to achieve a higher level of success.
The first is what is the outlook for leisure travel? There is good news and bad news in this vein. Consumer confidence is first and foremost. The good news is that confidence has increased exponentially since 2009, but the bad news is “it’s as wacky and unstable as Lindsay Lohan,” according to Hardeveldt. In fact, compared to the global average, U.S. consumer confidence falls short.
“We’re dealing with a very scary consumer, and this uncertainty will continue because we are living in an unstable environment,” Hardeveldt said.
To gauge the market, Hardeveldt urged the business side of the industry to pay attention to a few key points. The first is commercial real estate. As this market fluctuates, the banking industry changes. We want to be able to predict where things are going to go. The last thing we want is to plunge further into another recession.
The second area to keep track of is government policy, especially because it is highly uneven.
We also need to be on top of retail sales. While sales are up compared to last year, customers are still holding onto their credit cards. Thirty-eight percent of travelers are reporting that they will be spending less using their credit cards in order to climb out of debt. As a seller of travel, you need to be asking, “How do I adjust how I sell travel?” Looking at new forms of payment is one place to start.
On the bright side, Forrester is forecasting that $840 million worth of tours and packages will be booked online in 2011, which would be up from $790 million in 2010.
This is a term you need to know. But what does it mean? Today’s traveler uses savings as a point of pride, rather than extravagance. Consumers aim for their savings to outweigh their spending. Today’s consumer researches every single purchase. As a seller of travel, you need to approach 2011 portraying travel as a reward, not as an entitlement.
Tempt the consumer, don’t push travel on them. According to Hardeveldt, one in five travelers does not always know where they want to go. It is your job to introduce, persuade and inspire.
Technology Across Generations
We now live in a world in which we depend on technology. Is that a good thing? Research has shown that while travelers find digital channels easy, they don’t enjoy the process of online booking and planning. The process can become thoroughly confusing. In fact compared to 2008, 22 percent of consumers say they would use a travel agent if they could find one — the majority of these numbers coming from Generation Y (ages 18-34), the most tech-savvy generation.
Do not let technology come between you and your customer. “Put your customer benefits at the forefront of anything you do with technology,” said Hardeveldt. Customers need to see context, and not just numbers.
Preparation for new channels is also key, especially in light of the recent Google travel news. Agents need to test out different entrants, which will undoubtedly change the way travel is distributed and sold. It is imperative to test and evaluate new methods, because some will have a dramatic change in the future.
Social Commerce Has Begun
The initial blast of social media has lost its luster. Facebook and Twitter have changed the game, and that isn’t a secret. But how they continue to shape the market is still hot news. Hardeveldt anticipates Facebook partnering with booking engines in the future, making travel planning on Facebook a very real possibility.
How to Prosper
Above all else, and not shockingly, you must make it easy for clients to open their wallets. Emotion is huge when it comes to selling travel. Make your client feel the necessity of travel. Visual content combined with written descriptions and clear pricing is a sure way to succeed.
Capitalize on social media and let travelers share your content. Not only will this excite your clients about the trips they have taken and encourage them to travel more, but it is free advertising. And bottom line – tempt. Temptation is the key to selling. The agents are coming back and the community is realizing more and more why they have always been necessary.