Marketing Review - Spring 2008 - (Page 24)

rest of us, most seniors can travel whenever the impulse strikes. Often, they do so when prices are down and crowds are thinner. In recent years, their off-season travel has begun to smooth the cyclical downturn typical of the hospitality and travel industry. Seniors will never eliminate seasonality, but the industry will find it less painful than in the past. 3) Tourism, vacationing, and travel (especially international) continue to grow with each passing year. 24 HSMAI MARKETING REVIEW • SPRING 2008 SB10065597S-001/MARTIN CHILD/GETTY IMAGES International tourism grew by more than 6 percent in the first half of 2007, thanks in part to global prosperity. By 2020, international tourist arrivals are expected to reach 1.6 billion annually, up from 842 million in 2006. By 2020, according to the World Trade Organization, 100 million Chinese will fan out across the globe, replacing Americans, Japanese, and Germans as the world’s most numerous travelers. Some 50 million Indian tourists will join them. Implications for Airlines: The fastest growth will be seen in pioneering regions. Intranationally, air travel in China is expanding rapidly, with the Indian air market lagging only a few years behind. Internationally, expect the most immediate growth to appear in the Middle East, where travelers will visit neighboring countries and, to a lesser extent, Europe. In the longer run, the fastest growth, and by far the greatest, will flow to Europe and the United States, thanks to vacationers from the newly prosperous middle classes of China and India. Implications for Cruises: At FI, we expect this segment to grow at approximately the same rate as the travel market at large. By 2015, even India and China are likely to get into this market. Implications for Hotels: See above. Implications for Restaurants: Travel is said to broaden the mind. It surely broadens palates. As Generations X and Dotcom visit out-of-the-way destinations, they are bringing home tastes for foreign cuisines their more traditional elders never sampled. Over the next 20 years, restaurants will prosper by serving this taste for the exotic. Implications for Travel: This trend is itself the result of other trends: the world’s growing prosperity, the continuing health of seniors well into old age, and others all are building a world of habitual travelers, 4 both for business and for pleasure. As a result, all parts of the travel and hospitality industry are growing rapidly. Built as it is on such a firm foundation, this trend suggests that all segments of the hospitality and travel industry will continue to expand well into the future. 4) Consumerism is still growing. Consumer advocacy agencies and organizations are proliferating, promoting improved content labels, warning notices, nutrition data, and the like on packaging, TV, the Internet, and even restaurant menus. On the Internet, shoppers themselves have access to a growing universe of information about pricing, services, delivery time, and customer satisfaction. Japan, China, and other markets are beginning the same revolution that has replaced America’s neighborhood stores with costcutting warehouse operations, discounters such as Wal-Mart, and “category killers” like Staples and Home Depot. As a result, consumer movements are springing up in countries where they have never existed. Consumer laws and regulations will follow. Implications for Airlines: Fliers increasingly will expect quality service to go with their cheap seats. Airlines therefore will have to do a better job of getting their planes into the air on time, even if that means scheduling them for odd hours. Meals can remain optional, but if customers choose to buy them, they had better be good. We believe the consumerism of the past will prove to have been no more than prologue for the greater demands to come. A good example is the new Terminal 5 at Heathrow, where nearly everything is bigger, better, and more luxurious. Check-in kiosks scattered throughout the spacious facility mean that waiting lines are no more than two or three deep. There are six lounges, a luxurious travel spa, more bathrooms than in older terminals, even showers for travelers. There are 22 places to eat, from simple snack shops to high-end restaurants. There are designer clothing stores, a luggage shop, a luxury leather store, a computer shop, bookstore, six newsstands, and even a Harrod’s. When Terminal 5 is fully operational, 80 percent of passengers at Heathrow will pass through it. Chances are that they will be glad to do so. Travelers are likely to be happier still when other air terminals are as conven- 5 ient and comfortable as Terminal 5. Implications for Cruises: The prestige-oriented days of booking through a travel agent are coming to an end. Today’s consumers want value and convenience when buying a cruise package just as they do in any other form of shopping. That means picking through all the tours that seem appealing, selecting the one that gives the best possible value for the price, and buying it then and there. See Trend 6 for more on this subject. Implications for Hotels: In a networked, consumerist society, the hotel or chain’s brand is its most important asset. A reputation for comfortable accommodations, pleasant surroundings, and top-notch service requires constant effort to establish and maintain. It can be lost in moments if a disappointed customer complains in the Internet’s many forums and chat rooms. More than ever before, quality and service are all-important. Implications for Restaurants: See above. “Quality and service are all-important” in restaurants just as they are in hotels. Implications for Travel: Consumer legislation and “bills of rights” are no more than reminders of business basics. The travel and hospitality industries exist to serve their guests. Companies that do it brilliantly will continue to prosper. Those that do not will find many new, fast-growing competitors eager to build a customer base at their expense. The essence of a consumer society turns out to be intense, endless competition to be the best in your industry. 5) When not perturbed by greater-than-normal political or economic instability, oil prices average around $65 per barrel. New energy demand from the fast-growing economies of China and India has raised the floor that until 2004 supported oil in the $25 per barrel range. Nonetheless, prices over $100 per barrel in early 2008 are an aberration that will not last. They are caused primarily by a global shortage of refinery capacity, with another $10 to $15 per barrel of “risk premium” due to fears of instability triggered by the Iraq war. New refineries in Saudi Arabia and other countries scheduled to come on line by 2010 will ease the tight supply-demand balance for oil, and by then the Iraq war should be winding down. At that point, we can expect to see oil stable at $65 per barrel. Implications for Airlines: Air carriers are

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

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