travel trends 2011, presented at ustoa by forrester
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TRAVEL TRENDS 2011, presented at the USTOA Annual Conference in New Orleans, by Henry H. Harteveldt Vice President & Principal Analyst, Airline & Travel ResearchForrester Research, Inc.TRANSCRIPT
© 2010 Forrester Research, Inc. Reproduction Prohibited1
© 2010 Forrester Research, Inc. Reproduction Prohibited2 © 2009 Forrester Research, Inc. Reproduction Prohibited
Prospering In 2011
Henry H. Harteveldt, Vice President, Principal Analyst
Twitter: @hharteveldt
December 10, 2010
© 2010 Forrester Research, Inc. Reproduction Prohibited3
Source: Warner Bros.
We depend on the kindness of strangers but by better understanding our customers and their use of technology, we can be more independent and successful.
© 2010 Forrester Research, Inc. Reproduction Prohibited4
What is the 2011 outlook for leisure travel?
How do different generations of leisure travelers interact
with technology to plan and shop for travel online?
What affects the decision making of different generations
when planning a trip—and what should you do to
succeed?
Agenda
© 2010 Forrester Research, Inc. Reproduction Prohibited5
What is the 2011 outlook for leisure travel?
How do different generations of leisure travelers interact
with technology to plan and shop for travel online?
What affects the decision making of different generations
when planning a trip—and what should you do to
succeed?
Agenda
© 2010 Forrester Research, Inc. Reproduction Prohibited6
Numerous factors can affect economic recovery and consumers‘ willingness to travel
Sources: Google Images
© 2010 Forrester Research, Inc. Reproduction Prohibited7
College grads are twice as likely to be employed as people with only a high-school degree
Source: Bureau of Labor Statistics
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Q3 2010 Customer Confidence -3 Points from Q3 ‗09
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$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
Jan.Feb.Mar. Apr. May Jun Jul Aug Sep Oct Nov Dec
2008
2009
2010
2010 consumer retail sales are ahead of 2009, creating hope for 2011
$ millions
Source: US Dept. Of Commerce, US Census Bureau Monthly Retail Trade Report
© 2010 Forrester Research, Inc. Reproduction Prohibited10 © 2009 Forrester Research, Inc. Reproduction Prohibited
13%
15%
12%
16%
13%
13%
8%
11%
11%
10%
54%
58%
56%
58%
57%
4%
6%
6%
4%
8%
15%
11%
14%
10%
12%
0% 20% 40% 60% 80% 100%
Gen Y (18-30)
Gen X (31-44)
Younger Boomeers (45-54)
Older Boomers (55-65)
Seniors (66+)
Spend at least 10% more
Spend 5% to 10% more
No change in travel spending
Spend 5% to 10% less
Spend at least 10% less
My household spends no money on leisure travel
Most travelers intend to spend about the same on travel in 2011 as they did in 2010
“How do you and members of your household expect your travel-related spending
will change in the NEXT 12 MONTHS?”
Base: US online leisure travelers
Source: North American Technographics Retail, Travel, Customer Experience, And Financial Services Benchmark
Survey, Q3 2010 (US, Canada)
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$0
$20
$40
$60
$80
$100
$120
2010 2011 2012 2013 2014
Tours/packages
Cruises
Rental cars
Hotel
Air
Forecast: $840 million of tours and packages to be booked online in 2011 in the US, up from $790 million in 2010
Source: Forrester‘s US Online Leisure Travel Forecast, 2009-2014
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Travelers embrace ―neoFrugal Chic‖
Saving as a point of pride
Every major purchase is
heavily researched and
considered
Travel is a reward, not an
entitlement
Source: Google Images
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What is the 2011 outlook for leisure travel?
How do different generations of leisure travelers
interact with technology to plan and shop for
travel online?
What affects the decision making of different generations
when planning a trip—and what should you do to
succeed?
Agenda
© 2010 Forrester Research, Inc. Reproduction Prohibited14 © 2009 Forrester Research, Inc. Reproduction Prohibited
22%
30%19%
19%
10%
US leisure online travelers
Gen Y (18-20)
Gen X (31-44)
Younger Boomers (45-54)
Older Boomers (55-65)
Seniors (66+)
More than half of online travelers are under age 45
Base: US online leisure travelers
Source: North American Technographics® Travel Online Study, Q1 2010
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Boomers spend the most on leisure travel
88
99
110
109
95
Gen Y (18-30)
Gen X (31-44)
Younger Boomers (45-54)
Older Boomers (55-65)
Seniors (66+)
Average
Boomers and Seniors account for 51% of leisure travel
spending
Base: US online leisure travelers
Source: North American Technographics® Travel Online Study, Q1 2010
Index of reported 2010 annual leisure travel spending
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Technology is a means to an end
The younger the traveler, the more open
they are to technology
Travelers may like technology, but…
Most don‘t see technology as being
―important‖ to them
Put customer benefits at the forefront of
any technology solution you offer – don‘t
let technology get in the way
Source: Google Images
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35%
46%
45%
49%
51%
55%
67%
70%
72%
70%
Seniors (66+)
Older Boomers (55-65)
Younger Boomers (45-54)
Gen X (31-44)
Gen Y (18-30)
It's easy to use the Internet to plan and buy travel
I enjoy planning and buying travel on the Internet
Travelers may find digital channels easy to use, but most don‘t enjoy the online travel planning and booking process
Base: US online leisure travelers
Source: North American Technographics® Travel Online Study, Q1 2010
Percent who agree with the following statements
(4 or 5 on scale of 1 (disagree completely) to 5 (agree completely)
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We make it increasingly confusing for our customers to buy our products and get the value they seek
Do I have to pay to
check my bags?
How much? Are you
kidding me?
Is it a nice hotel? Is it
safe? Which is
better, a superior or
deluxe room?
When is the weather
best?
Where are some
nice places to eat
and shop? What
else is there to do?
Would I save money
if I went on another
day? Or a different
month?
How can I trust what
you‘re telling me?
Should I buy the cheapest fare or something else?
Remember, this is your inheritance we‘re talking
about.Source: Google Images
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Base: US online leisure travelers
Source: North American Technographics® Travel Online Study, Q1 2010; North American Technographics® Travel Online Study, Q1 2008
Compared to 2008, 22% more US leisure travelers in 2010 would use a travel agent if they could find one
Source: Google Images
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We‘re not setting ourselves up for success in 2011
Most leisure travelers in 2010 don‘t feel that travel Web sites allow them to
obtain the information they need to make well-informed decisions about
what to buy
Boomers and Seniors don‘t feel they‘re able to obtain the value they seek
and expect from travel Web sites
A critical mass of travelers don‘t trust the Internet to give them accurate
travel information
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57%
71%
73%
75%
70%
21%
14%
14%
14%
14%
23%
15%
13%
11%
16%
Seniors (66+)
Older Boomers (55-65)
Younger Boomers (45-54)
Gen X (31-44)
Gen Y (18-30)
Bookers
Lookers
Sideliners
The majority of US online leisure travelers buy at least some portion of their travel online
Base: US online leisure travelers
Source: North American Technographics® Travel Online Study, Q1 2010
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65%
73%
77%
76%
72%
65%
67%
71%
71%
66%
Seniors (66+)
Older Boomers (55-65)
Younger Boomers (45-54)
Gen X (31-44)
Gen Y (18-30)
Book
Research
Bookers buy both online and offline, so you need a multichannel selling presence
Percent of leisure travel researched and booked online
Base: US online leisure Bookers
Source: North American Technographics® Travel Online Study, Q1 2010
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0%
10%
20%
30%
40%
50%
60%
70%
Gen Y (18-30)
Gen X (31-44)
Younger Boomers (45-54)
Older Boomers (55-65)
Seniors (66+)
Offline travel agency
Call supplier directly
Offline travel agency Web site
Metasearch site
Travel sales & specials site
Opaque travel agency site
Online travel agency
Supplier Web site
General search
No two generations of traveler uses exactly the same mix of channels to research their trips
Base: US online leisure Bookers
Source: North American Technographics® Travel Online Study, Q1 2010
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0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Gen Y (18-30)
Gen X (31-44)
Younger Boomers (45-54)
Older Boomers (55-65)
Seniors (66+)
Offline travel agency
Call supplier directly
Offline travel agency Web site
Opaque travel agency site
Online travel agency
Supplier Web site
Younger travelers tend to use online intermediaries, older travelers tend to book directly with suppliers
Base: US online leisure Bookers
Source: North American Technographics® Travel Online Study, Q1 2010
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Prepare for new channels and entrants to affect the way you distribute and sell your products
© 2010 Forrester Research, Inc. Reproduction Prohibited26
What is the 2011 outlook for leisure travel?
How do different generations of leisure travelers interact
with technology to plan and shop for travel online?
What affects the decision making of different
generations when planning a trip—and what should
you do to succeed?
Agenda
© 2010 Forrester Research, Inc. Reproduction Prohibited27
How we sell
Where are you starting?
Where are you going?
When do you want
to leave?
When do you want
to return?
How many in
your party?
(Etc.)
© 2010 Forrester Research, Inc. Reproduction Prohibited28
―How long do I want to be
away for?‖
―Who‘s traveling with me?‖
―What do I want included in the price?‖
―How much do I want to spend?‖
―How do I want to feel
when I return?‖
―What do things look and feel like?‖
―Will the hotel be clean?‖
―How long do I want to
stay away for?‖
―What do my friends think/know?‖
―What else do I want
included in the trip?‖
―What‘s the nightlife like?‖
How travelers buy
―How do I know this place is safe?‖ ―What do I feel like doing?‖
―How much comfort will I pay for?‖
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We‘re retailers – to prosper, we can‘t push things to our customers, we have to tempt them
Source: Google Images
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Travelers don‘t always know where they want to go
Source: Google Images
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51%
54%
61%
48%
43%
46%
48%
39%
47%
38%
37%
42%
42%
36%
39%
Staying within my budget is more
important than going to my first-choice
destination
In general, I select the lowest-priced travel
options available
I will accept some inconveniences in order to save money when I
travelGen Y (18-30)
Gen X (31-44)
Younger Boomers (45-54)
Older Boomers (55-65)
Seniors (66+)
Many travelers are focused on saving money…
Base: US online leisure travelers
Source: North American Technographics® Travel Online Study, Q1 2010
Percent who agree with the following statements
(4 or 5 on scale of 1 (disagree completely) to 5 (agree completely)
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0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Gen Y (18-30)
Gen X (31-44)
Younger Boomers (45-54)
Older Boomers (55-65)
Seniors (66+)
Travel is an area in which I'm willing to indulge myself
I will pay above-average prices for noticeably better quality travel products or service
I will pay above-average prices for travel products that save me time and hssle
Yet some travelers will consider trading up – given the right mix of rational and emotional reasons
Base: US online leisure travelers
Source: North American Technographics® Travel Online Study, Q1 2010
Percent who agree with the following statements
(4 or 5 on scale of 1 (disagree completely) to 5 (agree completely)
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How to view traveler brand loyalty as we enter 2011
Source: Google Images
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0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Gen Y (18-30)
Gen X (31-44)
Younger Boomers (45-54)
Older Boomers (55-65)
Seniors (66+)
Travel advertisements help me decide what to buy
I'm annoyed by the amount of travel advertising today
I rely a lot on recommendations from my friends/family when making travel purchases
Adding to your challenges: It‘s tough for marketing messages to reach an increasingly self-directed traveler
Base: US online leisure travelers
Source: North American Technographics® Travel Online Study, Q1 2010
Percent who agree with the following statements
(4 or 5 on scale of 1 (disagree completely) to 5 (agree completely)
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58%63%
72%
2008 2009 2010
Percent of US online leisure travelers who participate in social media
Social media can help travel sellers get around and through travelers‘ resistance to ―formal‖ marketing
Base: US online leisure travelers
Source: North American Technographics® Travel Online Study, Q1 2010
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16%21%
35% 36%
43%
Gen Y (18-30) Gen X (31-44) Younger Boomers (45-
54)
Older Boomers (55-65)
Seniors (66+)
Percent of US online leisure travelers who do not participate in social media
Social media may have been created for younger consumers, but everyone now uses it
Base: US online leisure travelers
Source: North American Technographics® Travel Online Study, Q1 2010
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Social commerce, just starting now, will be expected by the next generation of customers
© 2010 Forrester Research, Inc. Reproduction Prohibited39
Video engages travelers of all ages – and can lead to more sales
Travelers are 3X more likely to watch a brand‘s video than a video posted by
another traveler
© 2010 Forrester Research, Inc. Reproduction Prohibited40
A typical Smartphone in 2010 has the same amount of computing power as Apollo 11
=
Source: Google Images
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Devices are evolving – it‘s time to rethink mobile
Source: Google Images
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18%
21%
13%
8%
3%
0%
5%
10%
15%
20%
25%
Gen Y (18-30)
Gen X (31-44)
Younger Boomers (45-
54)
Older Boomers (55-
65)
Seniors (age 66+)
Gen X travelers lead in Smartphone ownership – for now
Base: US online leisure travelers who own a mobile phone
Source: North American Technographics® Travel Online Study, Q1 2010
Percent who own a Smartphone device
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Augmented reality overlays on mobile devices will enhance a traveler’s
journey, and create sponsorship or advertising opportunities for smart
travel companies
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What should you do to prosper in 2011?
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You have multiple opportunities and channels in which to sell – create your ―story arc‖
Planning Purchase Departure Trip Return Next Trip
Story arc
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Take steps to make your digital channels as flexible and comprehensive as your offline channels
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Create new ways to help travelers find the value you offer
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Make it easy for travelers to open their wallets
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Make sure you offer the right written and visual content –and enable to traveler to configure it to her needs
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Let travelers share your content in their social networks
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Plan to become mobile-friendly
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Thank you
Henry H. Harteveldt
+1 415.206.0889
Twitter: @hharteveldt
www.forrester.com