More than 250 delegates attending
the 2001 ATME conference, May 23-24, at the luxurious Sheraton Bal Harbour,
Miami Beach, heard a plethora of travel industry leaders share their
experiences and success stories during the packed-with-information program,
Focus on Managing Customer Relations.
For the first time, ATME
sponsored a trade show featuring 20 travel company exhibitors, held
in the ballroom used for coffee breaks. Delegates had plenty to talk
about and see in-between conference sessions. A conference highlight
was ATMEs annual Atlas Awards Dinner, once again sponsored by
Discover Business Services.
THE BIG PICTURE
During the conferences
opening presentation, travel marketers received more than a dollop of
why, where and how travel trends are developing. The proprietary information
provided by Peter Yesawich, president of Yesawich, Pepperdine, and Brown
(YPB), the marketing, advertising and public relations agency, and Henry
Harteveldt, senior travel analyst for Forrester Research, specializing
in online travel, was probably worth the entire conference fee. Travel
Trade publisher and editor, Joel Abels, shared his perspective on the
impact technology has had on travel agents.
Where we are today
in the country is a place that weve never been before, notes
Peter Yesawich, president of YPB. We characterize todays
consumer mood as one of consumer schizophrenia. This
means that although consumer confidence in the countrys economy
has begun to decline as individual portfolio values have decreased,
consumers are reluctant to give up particular aspects of their recently
upgraded lifestyles, which followed the countrys unprecedented
We have the lowest level of consumer confidence that weve
seen in four years, Yesawich says. Yet consumers are reluctant
to give up vacations, which they consider a birthright. Not true when
it comes to business travel.
Because of diminished confidence,
coupled with the desire for vacation travel, consumers will become much
more aggressive in seeking out or negotiating the best prices.
This consumer information presented by Yesawich is from YPB and Yankelovich
Partners National Travel Monitor, developed from an annual lifestyle
survey of 2,500 U.S. households conducted each January.
As the economy softens, people
will not stop vacationing but they will trade down in the level of accommodations
they use (economy, moderate or luxury properties) and to where they
travel. Several types of travel are likely to decrease in business over
the next six-to-nine months, Yesawich says. They are:
travel, typically corporate meetings;
Overindulged vacations, i.e., holidays which consumers traded
up for during the past three to four years; and
Some types of travel will
become more popular. These beneficiaries will be:
Destinations that are closer to home;
All-inclusive vacations; and
Value-priced vacations, which are bundled.
Fewer consumers will purchase
a la carte vacation packages because they now prefer to know the total
cost of their vacations before they go, Yesawich says.
Im here to declare
the concept of brand loyalty dead. Most travel marketers dont
want to hear that, Yesawich says. I realize that this is
potentially a controversial issue when were talking about customer
Because consumers can access
a wealth of travel information on the Internet, they are now shopping
with a price in mind, and conducting online comparative research. This
online information was not so available four years ago. This is
a different purchasing paradigm, Yesawich notes.
Two-thirds of Americans say that the most important change created by
the Internet is that it has given them greater control. Isnt
that amazing? Because although two-thirds of Americans have not yet
logged on, they believe that when they start to surf, its going
to happen, Yesawich notes.
As consumers use technology, they discover the world is in fact
about them, he says. [Their] strategic control is going
to reinvent the travel marketplace.
is conducted online when thousands of online consumers are ready to
purchase the same item. They can become part of a demand aggregate bargaining
unit to negotiate a better price. Already dotcom companies, such as
Priceline, Hotwire, and Fairair, provide consumers with a way to access
the best deals.
A March 9th travel article
is USA Today explained how consumers can get the best air fares online.
This involves going to the suppliers published fare; then checking
fares on Hotwire.com; bidding at Priceline.com for a better fare; and
if they did not receive a better price at Priceline, going back to Hotwire
The same article could be
written for finding the best room rates, or cruise and package vacations,
Yesawich notes. Take the convergence of a soft economy, the consumer
who says its all about me, and the use of technology.
Stir that all up. You have an interesting future.
ONLINE TRAVEL SPENDING
Senior travel analyst, Henry
Harteveldt, with Forrester Research, shared projections based on Forresters
annual survey of 100,000 U.S. and Canadian households.
This year, 57 percent of
U.S. households have access to the Internet5 percent more than
the 52 percent Forrester previously forecast. Less than one-third of
online households18.9 millionwill purchase travel online
this year, which marks the first time online bookers will
surpass the number of online lookers, who account for 16
million travelers who research fares and destinations online, then buy
through traditional channels. (Forresters projected travel expenditures
account only for airline tickets, hotel sleeping rooms, rental car fees,
cruiseline sleeping accommodations, and vacation packages.)
Bookers in 2001 are expected
to purchase $24 billion for travel products and services. This is an
increase from essentially nothing five years ago, when online travel
transactions were not offered. About $16.7 billion will be spent on
leisure travel, and $7 billion on business travel, primarily managed
In 2004, Forrester projects
more than 29 million U.S. and Canadian households will spend $55 billion
for online travel ($29 billion for leisure and $21 billion for business,
both managed and unmanaged travel). That amount will account for
roughly 27 percent of total travel spending, which is 11 percent in
2001, Harteveldt says.
According to Forrester, consumers
this year intend to make the following online travel purchases: 80 percent
will buy airline tickets; more than half will book rooms; 40 percent
will book rental cars; 20 percent will buy vacation packages; and 10
percent plan to book cruise vacations.
People go online for three reasons, Harteveldt says. Choice,
convenience, and control. The Internet allows people to go online
at any time, from any computer location, and to comparative shop.
CELL PHONES & THE
People who have traveled
during the past year are more likely to use new technology than the
population at large, Harteveldt says. The majority of first users who
embraced the Internet were college-educated and affluent. Now more mainstream
people surf the Web and purchase travel.
According to Forrester, people who have traveled on at least one trip
during the past year have a higher propensity for owning technical devices,
such as a palm pilot, that can be connected to the Internet.
Forty-eight percent of the
U.S. households have cell phones, compared to 60 percent of U.S. travelers
who have cell phones. (These travelers have taken at least one annual
trip.) Of travelers, 4 percent have a Web-enabler phone, and half of
those subscribe to an Internet service through their local phones. By
2003, Forrester projects 22 percent of U.S. households will have wireless
devices. Currently, about 5 percent of U.S. households have palm pilots
or similar devices, compared to 10 percent of travelers with these devices.
People probably will not
buy airline tickets from their cell phones via the Internet, but they
will use phones to access restaurant information and make reservations,
and possibly to purchase event tickets.
Currently, people travel
with their laptops, even on vacation, but in the future they will take
their wireless online communication devices instead, Harteveldt says.
I want you to take
away this one thought, Harteveldt told delegates. What online
marketing is all about is adding value. To accomplish that you must
make your Web site relevant to the online traveler.
People who have been buying
travel online for the past four years are on average: men; in their
mid-40s; have high annual incomes, approximately $70,000; are college
educated; and take an average of four trips per year. The profile of
people who began to buy travel online for the first time within the
past year is more mainstream: their average annual income is $45,000;
40 percent are men; less than half are college-educated; and they average
fewer than two yearly trips.
People who are going
online to buy travel are not the road warriors anymore. They are the
average Joes and Janes. So the challenge that marketers face in selling
travel online is: How do you make the experience powerful, enjoyable,
and efficient for everybody? Harteveldt asks. He also notes
that people have expectations that are ever increasing. For example,
11 percent of travelers already have high Internet access from home.
How are you going to satisfy these customers?
will only get more complicated. But it will also become a lot more exciting.
THE ROLE OF TRAVEL AGENTS
Because the Internet provides
consumers with direct access to travel information and online transactions,
some marketers and suppliers believe the role of the travel agent has
diminished. Travel Trade magazines publisher and editor, Joel
Abels, vehemently disagrees.
I am absolutely 100 percent convinced that travel agents will
be put out of business the day that real sex is replaced by robot sex,
he says. Abels points out that technology is helping agents sell more,
especially in the leisure market.
Travel agents will never
go away, but their role will be diminisheda trend that is already
occurring, Harteveldt says. Simple travel purchases, such as shuttle
airline tickets and direct flights, will be purchased online, but agents
still will handle exotic and honeymoon-type trips. About half of online
individual air travel purchases is bought at the supplier sites, and
will probably account for up to 65 percent of total online travel sales.
Online travel agencies serve airline customers who are brand neutral,
price-sensitive, or first-time buyers on the Internet. He also notes
that a persons first online travel purchase is typically for an
airline ticket, usually on Expedias or Travelocitys Web
sites and will be on the new site, Obitz.com.
A conference speaker and
Atlas awardee, Derek Correia, senior vice president of marketing, Renaissance
Cruises, notes that Renaissance, which had bypassed travel agencies
for direct bookings, has redirected its marketing program to concentrate
on travel agency distribution and partnerships. (See Atlas
THE PICTURE IN DETAIL
Four travel marketers, representing different industry segmentsa
hotel company, a destination, a tour operator, and a theme parkspoke
about how the current economic slowdown has impacted their businesses.
One critically important activity they all share is their redirected
focus on consumer satisfaction.
STARWOOD: ADDING VALUE
Jane Mackie, vice president of advertising and promotions,
Starwood Hotels and Resorts Worldwide, is responsible for three brandsSheraton,
Four Points by Sheraton, and Westin. She notes that with todays
less-than-robust economy when consumers are more influenced by location
and room rates than by brand loyalty, the hotel company is concentrating
on gaining market share by adding value to its hotel products. To grow
market share, Starwood must work just as hard to attract repeat customers
as well as new customers, she says.
To attract customers in the short-term, Starwood can always
lower prices, but a more sustaining incentive is to add value by providing
quality experiences. Motivate employees to take that extra step
to keep customers coming back, she advises.
Even as business trips are cut back, research shows that U.S.
households with an annual income of $50,000 or more are reluctant to
give up travel luxury products: two-thirds of this market are planning
summer travel that will involve a hotel stay, and 40 percent plan to
fly to the destination. Research also shows that people will pay more
for the additional value provided in vacation packages, which is why
Starwood is building both Sheraton and Westin Vacation Ownership products,
During a slowing economy when consumers are empowered, travel providers
need to make it simple for consumers to buy their products. At Starwood,
every advertising collateral and direct marketing piece is designed
to be easily understood. Put the offer, the value compensation
in a headline, make it obvious, dont make consumers work so hard,
she says. Advertising should also include an invitation to buy that
is easy to transact.
In trimming marketing budgets, some areas should not be cut,
Mackie says. These are the activities that offer relationship building,
such as the general managers cocktail party, and customer research.
Get out, meet and greet customers, buy them breakfast, let them
know that we care, she says. Keep your finger on the pulse
of the consumer [through surveys] and dont forget they are the
ones with the power now.
GLOBUS & COSMOS TOURS
Paolo Mantegazza is president and CEO of Group Voyagers, based
in Littleton, Colorado, which markets Globus & Cosmos, among the
worlds leading tour operators, to North American clients. The
grandson of the companys founder, Mantegazza is also responsible
for overseeing sales offices in New Zealand and Australia.
Globus & Cosmos had successfully built its business providing
guided tours to the World War II generation, but by 1995 that generation
had peaked as a tour market. Mantegazza said the company had become
fossilized, and was missing the baby boomer generation as an important
The company needed to adapt to the differences between the seniors and
their children, the boomers. The senior market tends to be passive spectators,
who like to be catered to. Whereas, boomers are active participants
in their holidays. They want to be in control and know every aspect
of the holiday in advance to ensure a terrific experience since time
is a rare and valuable commodity for them.
We had to fully change our philosophy to be much more
customer focused, Mantegazza says. Rather than conduct quantitative
surveys, Globus-Cosmos conducted in-depth personal interviews to learn
exactly what consumers desire in their guided vacations. The findings
were surprising. For example, consumers were much more concerned about
safety in the area around the hotel, if they wanted to take a walk,
than in getting cheaper rates.
Based on the customer research, the company developed a customer-experience
guide, which documents every aspect of the experience that customers
want. These guides are given to everyone in the organization. Customer
focus must be embraced by the entire company so it becomes part of its
culture, Mantegazza says.
To satisfy consumers who desire to directly reach Globus &
Cosmos, which has a 100 percent travel agency distribution, the company
sought agency consultation to design its direct distribution system.
Thats helping us service our travel agencies better because
we now have a better understanding of the relationship they have with
customers, Mantegazza says. In the future, he sees the company
designing more products from the baby boomers perspective.
When tourists visit a destination, their experience encompasses
much more than at their hotels or on golf courses. The holiday experience
includes interaction with all native peoples, whether they are taxi
drivers or shopkeepers.
Vincent Vanderpool-Wallace, director general of the Bahamas
Ministry of Tourism, works to create an exceptional experience to visitors
during their vacation to the Bahamasa Caribbean nation comprising
hundreds of islands and 300,000 residents.
Every single person who lives and works in the Bahamas
happens to be in the tourism industry. That person has an impact on
whether a visitor comes back or not, he says. Four years ago,
research showed that Bahamians believed the countrys marketing
slogan, Its Better in the Bahamas, more than anybody
else. They did not want to change anything, Vanderpool-Wallace
As a result, the government tourism office (GTO) began initiatives
that helped involve the entire population in the business of tourism,
which accounts for one-half of the countrys Gross Domestic Product,
supporting roads, schools, hospitals, and other infrastructure.
The GTO adapted the expression made famous by the Clinton
political campaign, Its the economy, stupid to fit
the Bahamian tourism. Its the experience, stupid,
Bahamians are regularly informed of tourism initiatives, receipts and
statistics through television and radio shows and a newspaper column,
The Voice of the Visitor, reporting on visitors impressions.
A local television show tells residents how they can better host visitors.
The GTO was able to use immigration cards, which travelers
fill out, to effectively gather visitor information. The card includes
the question, What is your travel agency? so that the GTO
knows which agencies most support the islands. A departure form asks
visitors, who would like to receive updates on the Bahamas, for their
e-mail addresses. It also inquires about their vacation experienceWas
anything wrong? How could it be fixed? This visitor feedback is provided
to suppliers in an anonymous format to protect visitors privacy.
In the past four years, tourism growth in the Bahamas has
been astonishing, says Vanderpool-Wallace, who calls this the economic
value of reputation. A survey shows that 62 percent of visitors
said that the attitude of Bahamians was better than they anticipated.
Average room rates in Nassau and Paradise Island have also doubled.
The new marketing slogan became The Islands of the BahamasIt
Just Keeps Getting Better.
That [visitor] experience comes from the people who deliver the
ultimate products, says Vanderpool-Wallace. Thats
something we will never forget.
UNIVERSAL AIMS TO PLEASE
In the last year, change is virtually in every aspect
of what were doing, says Fred Lounsberry, executive vice
president of marketing for Universal Studios, Orlando, Florida. A year
ago the most important tools for the marketing team were the sales and
budget reports. Today marketers pay the most attention to the theme
parks guest satisfaction reports. As our long-term future
goes, guest satisfaction is more important than anything else we are
doing right now, Lounsberry says.
Universal was running pretty fat a few years ago,
says Lounsberry. Now the company is re-examining what it has been doing
for the past decade to create a better structured, more efficient, and
focused organization. Universal is concentrating on improving its distribution
systems: how it best reaches customers, including travel agents, meeting
planners, and other business segments. This involves redesigning its
Web site, which already receives 50 percent of all new bookings through
its online Universal Studios Vacation store.
The other major company focus is to examine ways to provide
a better park experience for guests. A year ago Universal undertook
a huge capital investment to develop a reservation system to alleviate
the long lines at rides and attractions. Visitors can now book reservations
for their favorite rides earlier in the day, so they only have a 10-to-15
minute wait. As a result, guest satisfaction scores have been
off the ballot, Lounsberry notes. The company is working to provide
amenity for visitors before they arrive in Orlando.
Because repeat visitation to Orlando is critical for the theme
park industrymore than 80 percent of guests return within five
yearsUniversal Studios is focused in providing a great guest experience.
According to guest surveys, word-of-mouth is still Universals
No. 1 form of advertising.