As I sat by the fire early
the morning of New Years Eve 2001, I was thankful to be ending
the year on a happy note. We survived!
On that fateful day of September
11, 2001, I was in Noordwijk, Holland, a quiet seaside town outside
Amsterdam. Around 5:00 p.m. on a windy, chilly day, I had just finished
a talk with a group of executives from Preferred Hotels and Resorts
about the likely direction of affluent travel. As I returned to my room
to pack and get ready for the trip home, the sound of rustling paper
caught my attention as a letter slid under my door. It was a message
from the Executive Assistant Manager.
Due to the traumatic
events, tonights award banquet is cancelled. Our hearts go out
to the American people
Very concerned, I turned
on CNN just as the first World Trade Center tower crumbled. With all
airlines grounded and rumors of the President seemingly on the run,
I stood in disbelief.
While hearing the news unfold, I began to reflect on the United States
travel trends I have been measuring for the last eleven years. My concern
began to grow, as I know that safety of the airline, the destination
and the hotel/resort have always been top priorities for leisure and
business travelers. In fact, I thought, What in the hell is going
to happen to the travel industry? These events would surely prove
And as I exchanged emails
with our CEO about the situation, we quickly concluded that we needed
answers from the marketplace to properly counsel our clients and ponder
our own destiny as a travel marketing communications company. At that
moment, it was frightening to think that all of our eggs were in one
A PLEASANT SURPRISE
Within 24 hours of the attack,
Yesawich, Pepperdine & Brown (YP&B) launched the first in a
series of tracking surveys designed to help marketers assess the impact
of the events of September 11 on leisure and business travel. The results
of YP&Bs, Travel Intentions I, a random digit dialed survey
of 800 leisure and business travelers that had taken a trip requiring
overnight accommodations in the last 12 months, were amazingly positive.
The majority of leisure and business travelers reported that they were
not going let the recent terrorism events impact their future travel
Personally, I assumed the
industry would take some comfort in these statistics, but was disappointed
that much of the rhetoric of industry leaders dwelt on a doomsday scenario
rather than expressing a positive outlook. After all, this survey was
taken at the height of emotion; it had to be downhill (albeit a challenging
course) from here. The rash of immediate hotel cancellations was understandable
given the gravity of the events. Yet within 30 days of the attacks,
some companies that had stashed millions in retained earnings were talking
about laying off staff. One true leader in the airline industry did
emerge Southwest took pride in seeing their employees through
the tough times. On the hotel side, Bill Marriott led the way by offering
encouraging words expressing his expectation that the impact would be
temporary and to act accordingly.
And sure enough, the resiliency
and tenacity of Americans was evident as hotel occupancies began to
rise. As consumer attitudes began to be reflected in their behavior,
the consumer story became more positive in the second (October 11) and
third (November 15) surveys.
As of mid-November, about
80% of leisure and business travelers who had planned trips requiring
overnight accommodations indicated that the terrorism incidents (September
11 attacks, Afghanistan, anthrax) would not impact their travel plans.
Wall Street and both private and public companies now need to factor
the gravity of the events and how robust the response of Americans has
been thus far when they establish their expectations. Employers also
need to step up to the plate with support and inspiration for their
employees and customers through responsible marketing leadership. While
we all must be dedicated to financial responsibility, let us not succumb
to plain old greed. Our organizations will emerge stronger if we are
brave and honest during these trying times.
WHAT IT WILL TAKE TO GET
THE MARKET BACK
Still about 20% of leisure
and business travelers future travel plans remain impacted by
the trauma of September 11. As of mid-November, safety and the economy
are key issues interacting with the perceived travel hassle factor and
the anthrax threat. Clearly, safety must be the top priority. Based
on our surveys, I estimate that about half* of terrorism impacted leisure
and business travelers, will return to pre-September 11 levels if we
can effectively demonstrate to the public that air travel is safe (Federal
role in airport security/employee hiring, air marshals, reinforcement
of cockpit doors). Regrettably, these measures are not yet truly in
place and Americans continue to see publicized breaches of security.
Not only will such situations delay the terrorism impacted travelers
from returning to pre-September 11 levels, they are also likely to undermine
the confidence of those travelers who up to this point are fully committed
to future travel.
Apart from solving the safety
dilemma, terrorism impacted leisure travelers also cite economic issues.
Our data suggests that attractive promotional offers from airlines and
hotels would be extremely/very influential in stimulating a return to
pre-September 11 levels of leisure travel. I estimate that such offers
have the potential to bring back 40-50%* of terrorism impacted leisure
travelers. However, such offers are less likely to be effective with
business travelers in that only about 25-30%* indicate they would be
responsive to such offers. Nonetheless, these proportions represent
a multitude of travelers.
The bottom line is that if
leisure travelers are convinced that it is safe to fly and the industry
is able to establish a significant motivation to travel through attractive
promotional offerings, about half of the 22%* of terrorism impacted
leisure travelers are likely to return to pre-September 11 levels. Thus,
about one in ten leisure travelers are likely to remain terrorist impacted
with little or no travel intentions (at least by air). Furthermore these
impacted travelers are likely to engage in other adaptive behaviors
such as travel by car, vacations closer to home, vacations to visit
with relatives or to vacation at home. The terrorism impacted population
will be more likely to avoid mass travel experiences or those they may
perceive as most threatening (e.g. theme parks, cruises, city vacations,
sightseeing vacations, gambling vacations, ski vacations, adventure
outfitter trips). In general, terrorism impacted leisure travelers are
also particularly less likely to take international trips. This international
segment is likely to lag within the overall industry recovery.
Applying the same analysis
to business travelers, about one-half of the 19%* of terrorism impacted
business travelers would return to pre-September 11 travel patterns
if we solve the safety issue or respond to economic issues vis-à-vis
promotional offers. Thus, about one in ten business travelers are likely
to remain terrorism impacted and, as a result they will, not travel
by air, instead they will travel by car or other modes when feasible.
Furthermore, terrorism impacted business travelers are particularly
likely to avoid international trips. As a result, the international
business travel market will lag in the recovery.
As I see it, the best case
scenario for 2002 is that about nine in ten leisure and business travelers
will travel at pre-September 11 levels. However, if the economy fails
to respond, the outlook could become grim. Fortuitously, preliminary
economic indicators (December) are somewhat encouraging. While 2002
is unlikely to be a stellar year for the leisure and business travel
industry, it can be a reasonably good year for savvy marketers who adapt
to the changing environment.
It is important to remember
that the majority of pleasure and business travelers report that their
travel plans will not be impacted by the events of September 11 and
the associated aftermath. Therefore, marketers should be aggressive
with their marketing plans. Furthermore, the domestic U.S. travel market
is likely to benefit from the reluctance to travel abroad by the terrorist
As you plan your marketing programs for 2002, think of the consumer
as having a relatively traumatized mindset. Consumers have been stressed
out for quite some time as documented by our other syndicated research
(YP&B/Yankelovich Partners National Leisure Travel Monitor and National
Business Travel Monitor). Recent events have further contributed toward
stress. Therefore, consumers are not likely to be responsive to hype,
negative selling and offers with endless disclaimers or conditions that
must be filled. From a creative standpoint, promote on the true merits
of your product and make sure that your advertising executions are easy
to understand, attractive and create positive associations. Create value-oriented
promotional offerings that contribute toward your branding effort.
It was true before September
11 and is even more so nowmake your travel experience easy to
buy and easy to use. That starts with the reservation process and extends
to all operational procedures.
Create environments conducive to relaxation and enjoyment. Think of
each aspect of travel as if you were a filmmaker creating the right
setting, the right lighting, the effective use of color and other artistic
treatments. In short, think of your job as creating a series of integrated
authentic, hassle-free experiences that provide a temporary respite
from the reality of todays world.
There is likely to be increased
interest in family travel to solidify frayed emotions. What a wonderful
opportunity for marketers to make a meaningful contribution and at the
same time serve the call of the P & L.
Work the database of your
past customers. Consumers are less likely to want to take risks in this
environment so here is a terrific opportunity to thank your customers
for their past support by making them meaningful offers. They are likely
to appreciate the value more than a new customer would and it is a lot
cheaper to attract a former customer than a new customer.
Finally, adapt your marketing
plans to effectively tap drive markets.