Kansas 2006 Travel & Tourism Trends October,2006
2006
2006 will be good - - finally outpacing 2000 levels - - but it is a completely different world* *major behavior change will affect our future
Kansas 2006 Trends • Potential for growth: Outstanding • I-70, I-35, I-135 = “Rivers of Money” • Industry in its infancy – needs to build skill sets in tracking and growing $$$$ • Municipalities & leadership need to be enrolled
Kansas Performance • • • • • • •
Industry Performance: Average Hotels: Doing very well Attractions: Struggling Retail: Up Dining: Up Visitor Information: Not sufficient Biggest need: Orientation & Facilitation
Kansas Destinations • • • • • • •
Understand customer segments Quit operating “same old way” Orientation & facilitation Increase per-visitor spending Educate & enroll community leaders Coach attractions & amenities Be the “voice of the customer”
Average Stats • Lodging Customers: – – – – – – –
30% 20%+ 15% 10% 10% 10% 5%
Business Pass-thru Meetings VFR (weddings, reunions, etc.) Leisure Sports Motorcoach/other
• Day Trip Customers: – 50 – 100,000
Average Stats • Lodging Customers – Daily Expenditures: $ 60 $ 50 $ 30 $ 50 $ 5 $195
Hotel Food Gas/Transportation Retail Attractions/Amusements TOTAL
• Day Trip Customers - Daily Expenditures: $0 $ 30 $ 20 $ 30 $ 5 $85
Hotel Gas/Transportation Food Retail Attractions/Amusements TOTAL
Average Stats • Lodging: Average 600 rooms 600 x 365 = 219,000 available rooms nights x 60% = 131,000 sold rooms night x $195 = $25,623,000
• Day Trip Customers - Daily Expenditures: 100,000 total day trippers x $85 = $8,500,000
• $34,123,000 = Total Local Revenues
Tax Relief • Lodging: Average 600 rooms
600 x 365 = 219,000 available rooms nights x 60% = 131,000 sold rooms night x $195 = $25,623,000 x 5.3% State = $1,358,019 x 1% County = $256,230 Per household Tax Relief = $100
• Day Trip Customers - Daily Expenditures: 100,000 total day trippers x $85 = $8,500,000 x 5.3% = $450,500 x 1% County = $85,000 Per Household Tax Relief = $100
• $34,123,000 = Total Local Revenues
Lodging USA Annual Occupancy
64.0% 62.0% 60.0%
63.7%
58.0% 56.0% 2000
60.3%
2001
63.1% 59.1% 2002
59.2% 2003
61.3% USA Annual Occupancy 2004
2005
Data Source: Smith Travel Research STR Report
• RTM 2006 projection = 64.1% (plus growth in inventory)
Lodging - RevPAR RevPAR Annual Growth
U
pp Lux er ur y U ps ca le U ps ca M le id w/ M F& id w/ B o F& B Ec on o To my ta lU .S .
14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0%
Source: Smith Travel Research STR Report
2004 2005 2006
Lodging in Kansas • • • • • •
% of local lodging by age & type Management of aging inventory Recruitment of high end properties Day-to-day relationship with hoteliers Smith Travel Report STR Know their business
Lodging Trends
Airlines Passenger Volume Annual Growth/Loss 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% 2000
2001
2002
2003
2004
Source: Air Transport Association
• Prices still WAY below 2000 levels • Losses in 2005: $10 Billion – U.S. Fleet 20% smaller – 160,000 jobs cut since 2000
• Perhaps break even in 2006
2005
Kansas Air Visitors • Know what % of your visitors include air • Know where they get information for trip planning • Orientation & Facilitation
Cruise Industry Cruise Lines (CLIA): • Out-performed all other travel segments since 2000 Annual Passenger Volume 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 •2001
•2002
•2003
•2004
•2005
•2006(p)
Convention/Meeting U.S. Business/Convention Travel (domestic): “The overall convention marketplace is declining in a manner that suggests that a recovery or turnaround is unlikely to yield much increased business for any given community, contrary to repeated industry projections.” The Brookings Institution 1/05 Convention Person Trips (millions) 155.0 150.0 145.0 140.0 135.0 130.0 •2001
•2002
•2003
•2004
•2005
•2006(p)
Domestic Leisure U.S. Leisure Travel (domestic person trips) (TIA):
Increase has never faltered
Domestic Person Trips (millions) 1,000 980 960 940 920 900 880 860 840 •2001
•2002
•2003
•2004
•2005
•2006(p)
Kansas Leisure Tourism • “ Respite” …or part of longer trip….or shopping/dining/fun getaway • Vacations demanded • Growth in family travel • Growth in affinity travel • Attendance to attractions down • Shopping, dining, sightseeing • Know your “Must Sees” and “Must Dos”
Kansas Leisure Trips • • • • • •
Extend stay of passers-thru Increase per-visitor spending Tell travelers the “Must Sees” Attractions: Know your visitor segments Target major feeder markets & pass-thru Be realistic
Attractions Challenges • Decline in attendance to historic sites and less animated museums • 16,500 museums in U.S. • 9,000 house museums in U.S. • Boring vs. engaging • Give me fun or else • Desire for less structure • ½ price ticket & then sell food, beverage, retail • “Store, Door & More”
Attractions • • • • •
Expect decrease in attendance – track stats Know your customer segments Orientation & Facilitation Gift Shop $$$$ More connection with each visitor – rate their satisfaction • More $$$ per customer • “Store, Door & More” • Open in the evenings – unique programming in evenings
Consumer Confidence Index • Americans are optimistic, but cautious. • Jan – Sept ’06
• 2000 - 2006
Consumer Confidence Index 160.0 140.0 120.0 100.0 80.0 60.0 40.0 20.0 0.0 2000
2001
2002
2003
2004
Sep-06
Jan-06
Jan-00
Business Travel Business travel will finally return to 2000 levels in 2006 • 48% travel for work less than 5 years ago Management Resources)
(Robert Half
• 45% of business travelers in managed programs used video-conferencing or something instead of travel in 2005 (NBTA) • Typically 1/3 of lodging occupancy
Kansas Business Travel
• Know your statistics – % Men vs. Women
• What is open after 5:00PM? • What do they need to know? • How can you increase their spending?
Group Tour Great Potential • Affinity, affinity, affinity • Customized tours increased from 14% of biz to 56% in 2005 (USTOA) • “Gone are the days of the sold-out per capita tour” • Custom designed for Baby Boomers or other age groups (Dr. on board) • Freedom without the hassle • Cruise ship on land • Something you can’t get any other way • Wireless on board & other tech • Huge growth in student travel – now 25% of international travel (SYTA)
Kansas Motorcoach • Affinity, affinity, affinity • Good, mid-priced meal • Evening entertainment • Part of longer trip
TOP Ten Trends 2006 1. Growth in 2006 in overall travel & tourism revenues
•
We must learn the new behavior patterns
TOP Ten Trends 2006 2. Lodging: Setting new records Growth in high end out-paces growth in low end
TOP Ten Trends 2006 3. Airlines: Light at the end of the tunnel
TOP Ten Trends 2006 4. Business Travel: Controlled Growth • • •
Cost-contained travel Per-diem paid direct to employee On-line deal searching
TOP Ten Trends 2006 5. Demographics: Frontier of opportunity • • • •
Develop “age-appeal” products Baby Boomers still best spending Affinity groups Family groups
TOP Ten Trends 2006 Changing demographics Gen Group 2000 2005 2010 2020 2030 War Gen 80 85 90 95 100 Silent Gen 65 70 75 85 95 Baby Boom 47 53 58 68 78 GenX Gen Y
29 8
34 13
39 18
49 28
2040 105 88
59 38
By 2010 ½ of all Americans will be over 40
69 48
TOP Ten Trends 2006 6. Consumers: Time Poverty
•
Over 30% expect to take fewer trips. Reason? Not able to get away from work.
•
Nearly 50% of all Americans report “time poverty” report desire for all-inclusive to save time
(Yesawich, Pepperdine, Brown & Russell/Yankelovich)
TOP Ten Trends 2006 7. Safety, personal comfort and convenience are primary travel concerns • • • •
Safety Less hassle / non-stress Give me comfortable Up to 40% of decline in lodging occupancy related to safety and convenience (PricewaterhouseCoopers)
TOP Ten Trends 2006 8. Internet: Necessity
• • •
78% of Americans used the internet to find travel in 2005 By 2007 internet will account for 30% of total market Travel is #1 on-line purchase category
TOP Ten Trends 2005 9. Vacations: - Quick/short (4-5 day) - PLUS Longer “sabbatical” vacations • •
4-5 short trips per year on avg. 2 weeks + But not every year
•
Traveler looking for products that simplify life or offer escape and luxury (Source: MarketResearch.com)
TOP Ten Trends 2004 10. Custom-fitted travel - Not a one-size fits all anymore
Other Trends Growth in off-season travel: •Increase in winter vacations. •59% for at least 5 days. • 55% • 13% • 7% • 5%
= = = =
U.S. Caribbean Asia Europe
(Source: National Geographic Traveler and Yahoo! Travel)
Other Trends • Growth in RV market (8 million Americans own RVs) • Traveling with pets – catering to pets (14% of all Americans)
Thriving in 2006 Research is the answer to grow with the new behavior patterns! • Research as a foundation • MUST know your customer!
How to in 2005? Research • Who & why (age, origin, trip purpose, etc.) Look for changes since 2000 • Who is NOT coming & why • How do they choose destination? • What source of info do they use? • Expenditures – by category
Critical Review Determine very strategically which market segments • you can target • that will really be satisfied • and will spend the most.
Kansas Priorities • • •
Visitor Guide Website State travel guide
• • • •
Print ads & billboards PR Maps In-room promotions
• Research • Drive product development (hotels, dining, attractions, shopping)
Judy@RTMnet.com www.RTMnet.com