(ORLANDO, FL) - Seems like the bad news just keeps coming. And practically every indication from the field suggests that most in the travel industry (both domestic and international) will have to work harder in the months ahead to capture a meaningful share of the demand that's out there. Some have even questioned, appropriately, if there is sufficient life left in the marketplace to continue to invest in advertising and related marketing efforts given the strong headwinds. The answer, as corroborated through our continuous monitoring of the sentiments of American travelers, is yes, but increasingly for a more upscale demographic group.
As revealed in our most recent travelhorizons™ survey (conducted in conjunction with the Travel Industry Association in Washington, DC the week of October 13th), fully seven out of ten (71%) active travelers in the U.S. intend to take a trip during the next 6 months, the same percentage we recorded the very same month last year (October, 2007). Furthermore, almost half (48% to be exact) stated their travel plans for the next 6 months would not change as a result of the turmoil in the financial markets. That's not to say there won't be some degradation of demand from more value-sensitive travelers, because there probably will be.
Not surprisingly, there is strong positive correlation between annual household income and near-term travel intentions (a robust 82% of those with annual incomes over $75,000 intend to travel during the next six months). Households with annual incomes below $75,000 are also significantly more likely to agree that "travel, in general, is too expensive" and that they are reevaluating their travel plans because of "household budget concerns."
What economic and social forces weigh most heavily on the minds of those who are planning to travel? The specter of high gasoline prices tops the list (thank goodness the price of oil has abated in recent weeks), but the depreciated value of one's primary residence appears to be less of a concern as revealed below:
So what's the message for travel service marketers?
The locus of demand for travel services in coming months will gradually shift upward to reflect a slightly more affluent demographic profile, but these individuals, too, will be aggressive comparison shoppers to insure they get what they consider to be rightfully theirs in a buyers' market: a good deal. Value is, once again, king. As a result, fully seven out of ten individuals who are planning a trip during the next six months intend to go online to "comparison shop for the best prices." And it is interesting to note that affluent travelers (annual HHI >$75,000) are significantly more likely to "comparison shop for prices and rates, specifically on the Internet" than their less affluent counterparts (64% versus 58%).
Assuming you're successful in getting your message in front of them, you probably won't get more than one shot at converting those who are interested because of the spate of competitive offers that are likely to be just one click away. So the smart strategy is to keep the pressure in the marketplace on, and put your most attractive offer(s) right up front without subjecting it to a litany of purchase conditions or disclaimers. There will be more than enough prospective travelers watching to make it worth your while.