Marketing Review - Spring 2008 - (Page 35)

actually ended up spending more than they initially indicated they would. Soon after paying down debt with the rebate (3 to 9 months later) consumers used the credit cards and the new available freed-up credit to spend even more—on average spending 40 percent more than the original amount of the tax rebate. Thus, if consumers use the 2008 tax rebate in a similar fashion as the 2001 rebate study suggests, consumers will spend more of the rebate than originally planned, generating opportunities for boosting 2008 travel demand. 2. Perfect timing for consumers receiving tax rebates and travel booking periods. During this period, most consumers have needed information to plan trips as most employees have vacations dates approved at work, and they know the summer schedules for children involved in sports activities, summer camps, and other family gatherings. The IRS projects that approximately 46 percent of all 2007 tax returns will be filed electronically, and 54 percent will be filed using paper returns. Thus, the timing of the rebate checks to land in the hands of consumers in two waves offers the opportunity for strategic date-specific targeted sales and marketing campaigns to boost 2008 travel sales and revenues. When Do Consumers Plan to Spend Tax Rebates? spend the tax rebates they receive relatively quickly. Examination of the survey results in Figure 2 shows 49 percent of consumers planning to spend the rebates within one month after receiving them, and 76 percent of consumers expect to spend the rebates four months after receiving them. 3. Targeted marketing campaigns with travel deals will attract consumers. Booking patterns for hotels and resorts, airlines, rental cars, vacation destinations, and attractions for summer and some fall travel indicate the majority are purchased and booked during a 60 day period from May 1-June 30, matching the same period the tax rebate checks will be distributed. Figure 2 shows the results of a survey by the Consumer Electronics Association (CEA), asking consumers when they expected to spend the 2008 tax rebates. Results indicate consumers intend to TABLE 2: Electronic Tax Filers—Direct Deposit Schedule for Tax Rebates (for tax returns processed by April 15) Last two digits of Social Security No. 00 through 09 21 through 75 76 through 99 Date payment will be electronically transmitted by the IRS May 2 May 9 May 16 TABLE 3: Paper Tax Filers—Postal Mailing Schedule for Tax Rebates (for tax returns processed by April 15) Last two digits of Social Security No. 00 through 09 10 through 18 19 through 25 26 through 38 39 through 51 52 through 63 64 through 75 76 through 87 88 through 99 Date payment will be mailed by postal mail by the IRS May 16 May 23 May 30 June 6 June 13 June 20 June 27 July 4 July 11 In selected vacation destinations, increased competition by summer, fall, and winter travel providers and online travel distributors will generate creative marketing and strategic pricing plans for travel packages targeted to consumers receiving tax rebates. In a slowing U.S. economy, price sensitive and value conscience consumers will seek travel deals and discounts for 2008 travel products. For example, after a similar 2001 tax rebate plan was announced, online travel distributors Travelocity and Expedia packaged special travel deals and promotions with hotels and resorts, cruise lines, golf, spa, attractions and other travel products targeted toward consumers receiving tax rebates. In 2001, Travelocity developed a targeted marketing campaign for tax rebate recipients with the promotion “What Uncle Sam Giveth, Useth to Go Away:” and Expedia used a marketing campaign with the tagline “The Great Tax Rebate Vacation,” targeted mostly to consumers seeking short weekend getaways trips and family vacation packages. Thus, consumers with tax rebate checks will be attracted by creative advertising and marketing campaigns with travel deals and packages designed to motivate them to spend tax rebates on travel, providing another opportunity to boost 2008 travel demand. 4. Consumers could use tax rebates as new income in their travel budgets to off-set higher gas prices. SOURCE: U.S. Treasury Department, Internal Revenue Service, www.irs.gov. SPRING 2008 • HSMAI MARKETING REVIEW Higher gas prices remain a major factor for consumers considering traveling to drive-to vacation destinations. How did travelers react to the first time $3 per gallon spike in gas prices in 2006 and continuing into 2007? Research from the Tourism Institute at the University of Tennessee (available online at: www.utk.edu/tourism ) found that even with higher gas prices in 2006 & 2007, travelers to Tennessee still had a strong propensity to spend on travel. However, 35 http://www.utk.edu/tourism http://www.irs.gov

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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