Marketing Review — Fall 2008 - (Page 43)

TAI, running in tandem with hotel TAI scores in this same time period. HSMAI/DKSA Traveler Acceptance/Indexsm Chart 1: Total travel of the three sectors HOTELS—Hotels closely mirror TAI levels with rental cars during this period. Interestingly, the hotel sector, with significant product improvements and removal of poor product, rapidly increased its TAI from 2000 to 2004, plateauing in 2004 and, compared to the other sectors, never losing significant TAI score again during this business cycle. “As the market improved from 2000 to 2004, consumer acceptance levels were generally value driven as opposed to satisfaction driven,” says Shifflet. “For air, auto, and hotels during this time frame, prices were held low, salaries started going up, travel products were improving and people therefore started to feel better about their overall travel experiences. This is reflected in an upswing in the TAI for all three segments during this time.” 2005-2006: Economy on the Upswing, Travel Satistaction High AIRLINES—Airlines moderate their TAI scores in both business and leisure segments in 2005-2006. They do this by holding reasonable satisfaction ratings, but generating declining value ratings particularly among leisure passengers. RENTAL CARS—Rental car TAI scores bloom in 2005 and 2006, rocketing rental cars to the highest levels earned by any of these travel sectors. Drivers of rental cars continue to be thoroughly pleased, showing the highest satisfaction ratings of any sector. DKSA theorizes that rental car companies don’t have to bring as many new cars into their fleet when economic times are tough—prices can be kept lower through the use of older cars. Demand then begins to increase and new cars are brought in, which results in improved satisfaction levels among both business and leisure travelers. FALL 2008 • HSMAI MARKETING REVIEW HOTELS—Hotels are in their “balanced” phase and plateau here, delivering TAI scores well above airlines, but lower than the temporary TAI bubble in rental cars. Hotels are “balanced” as their products continue to improve commensurate with their rate increases so that they hold their value ratings even as they raise rates. “During this mid-cycle period as business booms, the TAI becomes primarily satisfaction driven among business travelers,” Shifflet notes, “while leisure travelers continue their price sensitivity with the more commoditized experiences such as air travel.” structures and pricing add-ons. The drop in 2007 puts business travelers’ TAI back to the low levels posted in 2001, with business flyers giving airline TAI extremely low value ratings in 2007. TAI levels are expected to continue decreasing through 2008, with a dramatic drop from the 2006 level. For perspective, by the end of 2008 the airlines will have lost half of their sector’s total TAI gain to 2004—but they are still well ahead of the year 2000 (base year) levels. 2007-2008: Renewed Economic Concerns Drive TAI Levels Down AIRLINES—Airlines show a sharp fall off in 2007, with a predicted, though somewhat less severe drop in 2008 as those who continue to fly absorb carriers’ shifting fee RENTAL CARS—Rental cars experienced a steep decline in traveler acceptance in 2007, losing 26 percent of this sector’s TAI score. The sector showed some decline in the value dimension from business and leisure, but shows a much more substantial loss in satisfaction levels. Leisure rental customers give their lowest satisfaction ratings for the car rental sector during this time frame, indicating a perceived decline in product offering, possi43

Table of Contents Feed for the Digital Edition of Marketing Review — Fall 2008

Marketing Review – Fall 2008 Contents The Online Marketer Success Stories Forecasting Trends Ian Schrager: The Revolutionary Man Leaving No Stone Unturned: The Quest for Ancillary Revenue Gaga Gadgets for Execs on the Go: Functional New Portable Technology to Make Life and Work on the Road More Hospitable Effectively Weathering the Ups and Downs of the Economic Cycle Experiments in Podcasting Higher Transportation Costs and a Slowing Economy Shift Hotel Room Demand

Marketing Review — Fall 2008

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