Gary Sain, ATME’s Chairman and CMO & Partner of YPBR and Mary Pat Sullivan, VP Marketing Communications, The Travel Institute led a lively discussion with ATME Board Members and the attendees on December 2nd. Here are the highlights from the discussion:

Cruise Industry

Bob Sharak, ATME Board Member and the EVP & CMO at CLIA (Cruise Lines International Association representing 19 cruise lines (95% of the industry) described 2004 as a banner year for the industry. There were 10.5 million passengers. The industry added 12 ships in 2004 and 15 ships in 2003 (there will be 5 new ships added in 2005). Even with all this new capacity occupancy was at 102%. Because of occupancy rates prices are coming back up. And more importantly, yields are increasing.

There are 30,000,000 who say they would like to cruise who haven’t yet. That pent up demand should increase yields even more.

The QM2’s launch and massive public relations campaign raised the bar for everyone in the industry.

When asked if there have been any shifts in the age of cruisers Bob answered that they are slowly getting younger (no longer the “nearly dead”). He also mentioned that the boomers are a big target for the cruise industry.

Interesting Factoid: Sharak mentioned that cruises sold via travel agents reaped the highest yields. The reason being that agents can easily upsell a client to a higher price/level of service and the consumer using a travel agent is less driven by bargain hunting than online consumers tend to be.

Airlines

Joel Chusid, ATME Board Member and Managing Director Sales & Marketing, China Eastern Airlines gave a rundown on what the airlines were doing from a marketing perspective.

Aer Lingus is becoming a low cost carrier across the Atlantic.

Virgin Atlantic, once marketed as a backpackers budget buy, is now focusing on the redesign of its premium class and creating flat beds, comic books for adults, massages in flight, limos to and from the airport, etc. Their market is what they’ve playfully coined the “JetroSexual”.

Singapore Airlines is going for the long haul with their new 18 hour non stop flight from New York to Singapore in the huge new Airbus. Their challenge is to keep people occupied during such a long flight.

American Airlines which prefers the description “network” carrier to legacy carrier is having a difficult time as are all the “legacy carriers” managing rising fuel costs, labor unrest (with possible strikes looming), high labor costs, and low fares, etc.

US Air, Delta, Continental, United, American and Northwest are all struggling and at least one if not two will probably not survive. They all have full planes but aren’t making any money because the yields are so low and the expenses are so high.

Nevertheless, American is initiating a new touchy feely ad campaign “We know why you fly”. To which someone in the audience muttered, “to be squeezed like a sardine and generally mistreated”.) And Song, Delta’s in house budget high-style airline is marketing to women reasoning that where the women go the men will follow.

Cendant TDS

Cheryl Scheideler, Director of Partner Marketing, Cendant TDS announced that Cendant had just acquired another online company - EBookers which adds to their market share with Orbitz, CheapTickets (Trip was folded into CheapTickets). She mentioned that the brands will remain separate. Cheryl sees the trend moving towards an expanded corporate travel segment online and says the Group Meeting side will also expand online.

Corporate Travel

Scott Boone, ATME Board Member and CMO of TravelLeaders, sees a trend toward one stop shopping for corporate travel. TravelLeaders offers corporate accounts either a traditional agency experience or a $15 per transaction solution. All corporate travel RFP’s now include Orbitz, Travelocity, Expedia, in the mix.

Media

Chris Baum, ATME Board Member and Travel Marketing Director, The New Yorker said that there is a higher spend committed to for 2005. There’s more emphasis on branding, and many are going from 3 time frequency to 6 and 9 times.

Jacqueline Johnson, ATME Board Member, and Executive Travel Director, The Fairchild Bridal Group said that travel marketers overall budget remains the same for 2005 but that they are going to other mediums and cutting down on print programs in the process.

Joanne Nelson, Associate Publisher, Travel Professional mentioned that trade advertising is coming back. Travel agents are stronger than ever and marketers are realizing that they are important because the yield on sales through travel agents is higher. She also mentioned that electronic ad sales is now a profit center, no longer an add-on.

Joe Buhler, CEO, NetStrategic LLC said that as more clients are seeing more profits they are interested in trying new things including web solutions.


The Caribbean

Hugh Riley, ATME Board Member and Director of Marketing, CTO (Caribbean Tourism Organization) described what he considered a branding dilemma. The Caribbean in general, versus each individual country. The problem: How should countries spend their marketing dollars? For the entire region or as an individual stand alone destination?

He continued by saying that there is a shift in the way destinations market. The shift is from a primarily promotional organization to one that must now close the sale as well. Now destinations have to have booking engines on their websites or turn to the CTO to use its booking engine. He concluded by saying that the region expects to end 2004 with a 4-5% increase in visitors over the previous year.

One to One Marketing

Madigan Pratt, ATME Board Member and Managing Director, Madigan Pratt & Associates, said that destinations and hotels are trying to understand who their customers are. They are learning the importance of database marketing.

Mary Pat Sullivan concurred by saying that The Travel Institute used a one to one database driven message/marketing campaign over a 6 week period. In that 6 week period they achieved what would normally have taken 9 months.