Marketing Review - Spring 2008 - (Page 23)

materializes, to pass by the middle of 2009. However, at least for the moment, it seems that cruising may be relatively unaffected by the current downturn. Speaking at the Seatrade Cruise Shipping Convention in March, executives from Carnival, Royal Caribbean, and other lines reported that demand for berths remains strong. Many even are planning special facilities for high-ticket passengers. With no fewer than 36 new cruiseships scheduled to set sail between 2008 and 2012, industry leaders certainly are hoping for the best. Long before 2012, we expect that any slight pinch in the cruise market will be no more than a fading memory. Implications for Hotels: Markets such as Washington, D.C., Orlando, and Las Vegas are likely to be relatively little affected. Operators in secondary destinations may find that some travelers who would have stayed at luxury hotels settle for secondtier establishments, habitual second-tier customers cut costs by seeking out lesser accommodations, and so on down the economic scale. European hotels, already feeling the loss of American tourists owing to the decline of the dollar on international currency markets, will host even fewer U.S. visitors if a recession encourages stay-athome vacationing. Another change may be even more significant. Companies sending workers temporarily to the U.S. usually put them up at a hotel for upwards of $4,000 per month. Recently, though, firms with euros to spend have been buying up apartments in New York and other business centers. In the future, traveling employees will stay in them, permanently depriving local hotels of some lucrative trade. One Irish company bought four apartments in New York in late 2007 and made plans to buy eight more. Firms from Korea and Moscow also were planning major real estate purchases. Implications for Restaurants: Again, customers are shifting their buying habits down-scale until recession-inspired fears have passed. However, patrons of mid-level restaurants will not switch to the local Wendy McBurger until the economy recovers. Instead, they will eat at home, finding convenience in the best prepared foods they can buy at the local supermarket and luxury in a modest bottle of wine. Elsewhere, restaurants will feel little or no impact from the American recession. American tourists will return when the dollar recovers on currency markets, not SPRING 2008 • HSMAI MARKETING REVIEW 2 waiting for improvement in the broader economy. Restaurants in India and China will proliferate rapidly as the middle class expands to patronize them. Implications for Travel: With the dollar buying so little abroad, most Americans will vacation near home. Orlando can expect a good year, as people who would have visited Europe head there instead. Those who might have visited Orlando are likely to visit nearer attractions, such as regional theme parks, campgrounds, and—in extreme cases—relatives. The flip side is that the euro and other world currencies buy much more in the States than they do at home. Europeans can hop on a plane for New York or Miami, shop ‘til they drop—their packages, at least—enjoy a few nights out, and return home carrying loot they could not have paid for at local prices. Many of them are doing so. These bargain hunters are bringing needed profits to the American hospitality and travel industry. At the same time, they are helping to ensure that any recession in the United States will be shallow and brief. 2) The industrialized lands are growing older and more diverse. Each generation lives longer and remains healthier than the last. Worldwide, those age 65 and older numbered 440 million and represented 6 percent of the global population in 2002. Their numbers will nearly double by 2020 (to over 9 percent of total population) and more than triple by 2050 (to nearly 17 percent). In the developed world, people age 60 and over—the fastest-growing age group— made up one-fifth of the population in 2000 and will grow to one-third in the next half century. At the same time, large-scale migration is changing populations. There are 30 million international migrant workers in Europe, 20 million in Africa, and 18 million in North America—plus their dependents. About 4 million people immigrated permanently to the countries of the Organization for Economic Cooperation and Development in 2005, 10.4 percent more than the year before, despite antiterrorist security rules. Immigration is quickly changing the ethnic composition of the U.S. population. In 2000, Latinos made up 12.6 percent of the U.S. population; by 2050, they will account for 24.5 percent. Asians in the United States, currently 3.8 percent of the population, will comprise 8 percent by 2050, according to the Census Bureau. Implications for Airlines: The market for relatively short-distance international travel should grow significantly in both the United States and Europe, thanks largely to their expanding foreign populations visiting their former homes. Routes between the U.S. and Mexico and Latin America will grow fastest, while those between Europe and the former colonies of Africa and the Middle East will not be far behind. Implications for Cruises: Immigrant populations represent niche markets that cruiselines may be able to tap. However, for the moment the biggest opportunities emerge from the aging of the Baby Boom generation. To serve the senior market, cruiselines will have to invest in accommodations suited to their needs. These include door levers, which are better suited than knobs to arthritic hands; grab bars in the bathrooms; amplified telephones; large-type signage; doors that can easily accommodate a wheel chair; and “panic buttons” that summon help in case of a fall or medical emergency. Implications for Hotels: As their guests age, hotels will need the same seniorfriendly accommodations required by cruiseships. Implications for Restaurants: In the United States and Europe, foreign-born residents represent significant new markets for well-prepared foods from Latin America and the Middle East. Supplying this demand will fall to small restauranteurs at first, but the major chains can be expected to enter this field as soon as they are sure it will repay their investments. This trend will serve an aging population well, because it promises to introduce strong new flavors suited to the failing taste buds of older diners. Implications for Travel: Seniors are not only the fastest growing segment of the population, they are the wealthiest. Few will be up to making an assault on Mt. Everest, but almost anyone can take a cruise or fly to Orlando or Paris for a long weekend with Mickey and the rest of the Disney gang. Fine dining, a tour of the links at St. Andrew’s, or a visit to the tables in Vegas all will appeal to some seniors and soon-to-be seniors. As the older populations grow, the travel industry can only expand with them. In the process, it is likely to become more stable and less seasonal. Unlike the 23

Table of Contents Feed for the Digital Edition of Marketing Review - Spring 2008

HSMAI Marketing Review - Spring 2008 Contents COLUMN: The Online Marketer COLUMN: Success Stories COLUMN: Guest Column Ten Trends Now Shaping the Future of Hospitality Turning the 2008 Consumer Tax Rebates into Hospitality and Travel Sales 25 Extraordinary Minds in Hospitality and Travel Sales and Marketing The Lure of Lore: Connecting with Customers Through a Unique Brand Story A Careful Balancing Act A Meaningful Relationship: How Technology Affects the Connection Between Hospitality Marketers and Meeting Planners SPECIAL SECTION: The 2007 HSMAI Adrian Awards Building Five Star Imagery

Marketing Review - Spring 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.