This article first appeared in the Northwest Florida Daily News on Sunday, April 16, 2017.
I’ve discussed recently the many changes that are coming to our local tourist business — generational changes, increases in fly-in visitors, a demand for better level of service and value, etc. I think we’re all surprised by the speed of these changes, thinking that it will take years for them to actually affect our daily lives. However, look how fast Uber, Airbnb and similar new products have altered the landscape.
Back at the end of March, British Airways started to fly non-stop to New Orleans from London, bringing four flights a week. Later in May, Condor, the German airline, will have two flights a week from Frankfurt. While British Airways is banking on a mix of business and leisure travelers, Condor is aimed squarely at the vacation market. These two new routes add to the already existent Toronto flights, routing vacationers into the northern Gulf of Mexico region. There may be no immediate effect on Northwest Florida, apparently giving plenty of planning time.
No one can underestimate the effect that the 9/11 terrorist attacks had on global tourism. Travel patterns changed across the world. The USA tourism market suffered and not only from the reticence of tourists and business people to get on a plane, but also from the perception of travelers from outside the country that the USA had become unwelcoming. The understandable (to US minds) restrictions that were placed on incoming travelers did nothing to alleviate those feelings. The loss of income to the industry has been estimated at $600 billion. Some in the industry have referred to the subsequent 10 years as the ‘lost decade’. The US tourism industry has only recently recovered.
Recently, things have been looking much better for incoming tourism, however 2017 has the potential to be a disaster.
Firstly the strength of the US Dollar, while wonderful for those of us here who want to travel overseas, is a big problem for inbound tourism. Suddenly it’s expensive for most inbound travelers no matter how attractive our destinations and how welcoming our inhabitants. In fact, currency markets are volatile and are affected by many things – interest rates, global politics to name but two. Perception outside the US is that things are more expensive here than they used to be, but that doesn’t really dampen tourism plans too much. It’s a ‘swings and roundabouts’ thing. While writing this, the Chinese Yen has strengthened against the Dollar making it more attractive for the tourists who are spending more on traveling than any other nation. Who knows what the announcement of a British election, the results of the French election or dozens of other local events will have.
The main drivers of people’s decisions about where they take their vacations in any one year are based on simple human emotions. I can’t tell you the number of fellow Americans who’ve asked me (born a Englishman and a European) if I think it’s safe for them to travel to London following the Westminster Bridge terrorist incident, or if Paris, Amsterdam or Stockholm are dangerous. As a life long traveler my answer is yes, of course it’s safe. You’re more likely to be injured in your own kitchen than involved in a terrorist attack. But that doesn’t satisfy the average US traveler. I may not agree with their rationalization, but I do understand it.
So, traveling in the other direction – into the USA – what are the worries of potential leisure travelers?
Without doubt if it’s on the ‘bucket list’ of someone from overseas to visit the Grand Canyon, go shopping in New York, eat in New Orleans or drink wine in Napa Valley then that’s something they will still want to do. They just may not do it right now if their gut instinct is telling them this may not be The Year.
In the dim and distant past we could only judge intentions to travel by looking at actual bookings, or cancellations. The Industry would rely on the buzz from call centers or apocryphal information coming from travel clerks. These days we can see at an instant what people are looking at and what is turning that looking into booking.
Since the beginning of the year we are seeing distinct patterns in what people are looking for and that gives a pretty good indication of what will eventually happen. It does seem that travelers from many destinations are thinking seriously about reviewing their plans to come to the USA.
Obviously the proposed travel bans that came out early in the year would impact potential travelers from the countries affected directly, and indeed bookings from the Middle East fell by around 30% in February. The strength of the Dollar at the time may also have been a contributing factor.
According to Marriott, the largest hotel chain, bookings from Mexico are down 15%. Given the political rhetoric regarding US/Mexican relations that’s understandable too.
What’s not so understandable, particularly for a great number of US Citizens is why bookings and intention to book, from Canada, Europe and Asia are also way down.
Their perception appears to be that the United States is no longer a welcoming place
The travel bans are not in place and they only affect a limited number of countries, so why would Canadians and Europeans be put off from coming? Why would Chinese or Indian tourists not wish to come?
Again it comes down to perception. Let’s take the UK. I can speak to that nation having been born, grown up and spent most of my adult life there. The US is seen by most Brits as a bastion of democracy with legal system developed largely from the English model. The two nations share much history and struggles. They also share a common language – pretty much. However, many Britons are second, third or fourth generation immigrants from counties of the Commonwealth. They have names and religions from those countries and may have visited family traditional homes many times. Their worry is they will be subject to intense vetting, and may be turned back. The news that Mohammad Ali’s son – a US Citizen sharing the name of his US Hero father, has been twice detained in the US while traveling just because of his name and religion, has done the rounds of the UK media. That not unnaturally has an effect.
Although there is a Special Relationship between the US and UK, it’s been rumored that incoming travelers may be asked to hand over their cell phones and social media passwords for examination. Even if that’s not the case, many Britons are thinking that this may not be the year to travel, just to be on the safe side.
From a Florida perspective, we’ve seen on-line enquiries for travel from UK to Florida destinations reduce by between 12% and 60%. Britain is the second largest market (after Canada) for travelers to Florida. Places like Miami, Orlando, St. Pete and Fort Lauderdale are down close to 60%. The phrase ‘bookings are falling off a cliff’ has been used.
What does this mean for Northwest Florida, a region where international leisure travelers account for only 1% of the total visitors? It would appear to be a potential knock-on effect where destinations that have significant numbers of internationals will try to replace the lost tourists with domestic travelers. The marketing budgets of places like Orlando and Miami not to mention New York, Los Vegas and the whole of California are way in excess of those of Destin or Panama City Beach. To those destinations, filling an hotel room with a shorter staying, spending less domestic tourist is better than leaving it empty. They will do anything and everything to entice those travelers away from NWFL.
What to do?
It may be too late for this year. Those internationals have probably decided that 2017 is not the year to Visit USA. Some other destination is going to benefit from their Yen, Rupees, Pounds, Euros, Canadian and Aussie Dollars. But next year it’s all to play for. We have to get the message out that although the USA is prudent in who it admits, the country is still welcoming, friendly and open for business. We have destinations that are incomparable with other countries and a population who are welcoming and friendly. We must stress the emotions shown in a Brand USA video of a few years ago, which you can see here. https://www.facebook.com/OwenOrganization/posts/1318630581555982
No one can underestimate the effect that the 9/11 terrorist attacks had on global tourism. Travel patterns changed across the world. The USA tourism market suffered and not only from the reticence of tourists and business people to get on a plane, but also from the perception of travelers from outside the country that the USA had become unwelcoming. The understandable (to US minds) restrictions that were placed on incoming travelers did nothing to alleviate those feelings. The loss of income to the industry has been estimated at $600 billion. Some in the industry have referred to the subsequent 10 years as the ‘lost decade’. The US tourism industry has only recently recovered.
Recently, things have been looking much better for incoming tourism, however 2017 has the potential to be a disaster.
Firstly the strength of the US Dollar, while wonderful for those of us here who want to travel overseas, is a big problem for inbound tourism. Suddenly it’s expensive for most inbound travelers no matter how attractive our destinations and how welcoming our inhabitants. In fact, currency markets are volatile and are affected by many things – interest rates, global politics to name but two. Perception outside the US is that things are more expensive here than they used to be, but that doesn’t really dampen tourism plans too much. It’s a ‘swings and roundabouts’ thing. While writing this, the Chinese Yen has strengthened against the Dollar making it more attractive for the tourists who are spending more on traveling than any other nation. Who knows what the announcement of a British election, the results of the French election or dozens of other local events will have.
The main drivers of people’s decisions about where they take their vacations in any one year are based on simple human emotions. I can’t tell you the number of fellow Americans who’ve asked me (born a Englishman and a European) if I think it’s safe for them to travel to London following the Westminster Bridge terrorist incident, or if Paris, Amsterdam or Stockholm are dangerous. As a life long traveler my answer is yes, of course it’s safe. You’re more likely to be injured in your own kitchen than involved in a terrorist attack. But that doesn’t satisfy the average US traveler. I may not agree with their rationalization, but do understand it.
So, traveling in the other direction – into the USA – what are the worries of potential leisure travelers?
Without doubt if it’s on the ‘bucket list’ of someone from overseas to visit the Grand Canyon, go shopping in New York, eat in New Orleans or drink wine in Napa Valley then that’s something they will still want to do. They just may not do it right now if their gut instinct is telling them this may not be The Year.
In the dim and distant past we could only judge intentions to travel by looking at actual bookings, or cancellations. The Industry would rely on the buzz from call centers or apocryphal information coming from travel clerks. These days we can see at an instant what people are looking at and what is turning that looking into buying.
Since the beginning of the year we are seeing distinct patterns in what people are looking for and that gives a pretty good indication of what will eventually happen. It does seem that travelers from many destinations are thinking seriously about plans to come to the USA.
Obviously the proposed travel bans that came out early in the year would affect potential travelers from the countries affected directly, and indeed bookings from the Middle East fell by around 30% in February. The strength of the Dollar at the time may also have been a contributing factor.
According to Marriott, the largest hotel chain, bookings from Mexico are down 15%. Given the political rhetoric regarding US/Mexican relations that’s understandable too.
What’s not so understandable, particularly for a great number of US Citizens is why bookings and intention to book, from Canada, Europe and Asia are also way down.
Their perception appears to be that the United States is no longer a welcoming place
The travel bans are not in place and they only affect a limited number of countries, so why would Canadians and Europeans be put off from coming? Why would Chinese or Indian tourists not wish to come?
Again it comes down to perception. Let’s take the UK. I can speak to that nation having been born, grown up and spent most of my adult life there. The US is seen by most Brits as a bastion of democracy with legal system developed pretty much from the English model. The two nations share much history and struggles. They also share a common language – pretty much. However, many Britons are second, third or fourth generation immigrants from counties of the Commonwealth. They have names and religions from those countries and may have visited family traditional homes many times. Their worry is they will be subject to intense vetting, and may be turned back. The news that Mohammad Ali’s son – a US Citizen sharing the name of his US Hero father, has been twice detained in the US while traveling just because of his name and religion, has done the rounds of the UK media. That not unnaturally has an effect.
Although there is a Special Relationship between the US and UK, it’s been rumored that incoming travelers may be asked to hand over their cell phones and social media passwords for examination. Even if that’s not the case, many Britons are thinking that this may not be the year to travel, just to be on the safe side.
From a Florida perspective, we seen on-line enquiries for travel from UK to Florida destinations reduce by between 12% and 60%. Britain is the second largest market (after Canada) for travelers to Florida. Places like Miami, Orlando, St. Pete and Fort Lauderdale are down close to 60%. The phrase ‘bookings are falling off a cliff’ has been used.
What does this mean for a Northwest Florida, a region where international leisure travelers account for only 1% of the total visitors? It would appear to be a potential knock-on effect where destinations that have significant numbers of internationals will try to replace the lost tourists with domestic travelers. The marketing budgets of places like Orlando and Miami not to mention New York, Los Vegas and the whole of California are way in excess of those of Destin or Panama City Beach. To those destinations filling an hotel room with a shorter staying, spending less domestic tourist is better than leaving it empty. They will do anything and everything to entice those travelers away from NWFL.
What to do?
It may be too late for this year. Those internationals have probably decided that 2017 is not the year to Visit USA. Some other destination is going to benefit from their Yen, Rupees, Pounds, Euros, Canadian and Aussie Dollars. But next year it’s all to play for. We have to get the message out that although the USA is prudent in who it admits, the country is still welcoming, friendly and open for business. We have destinations that are incomparable with other countries and a population who are welcoming and friendly. We must stress the emotions shown in a Brand USA video of a few years ago (https://youtu.be/X35rvweRNsg )
In regions like Northwest Florida, we have to step up our game in attracting new domestic markets, and stay on track with long term plans for International guests. After all, NWFL is The Deep South, known for its charm, good manners and welcoming locals.
Tourism is and always has been at the whim of changes to the global scene. It’s success is due to it’s ability to change direction and adapt. As long as we’re aware of trends and move fast we can still welcome our guests in increasing numbers.
But it’s not all gloom. One country is showing huge increasing interest in visiting the USA. Searches for flights to the USA have surged 60% since January – from Russia!
I read an article recently that prompted me to think about how the purchase of travel, and associated products, has changed over the years. More importantly it made me think about how things have stayed the same.
The article was published by organization Tnooz, which is a global provider of news, analysis, commentary, education, data and business services to the travel, tourism and hospitality industry. A sort of Owen Organization on steroids! It was pointing out how travel marketing has become more frustrating than ever because the cost of acquiring customers in the digital age has become very high. The article can be found here http://ow.ly/swbP304mz1e
Back in the ‘80s and ‘90s I was involved in a company selling long haul travel to people in the United Kingdom. The customers wanted to buy air tickets, accommodation and tours that would allow them to travel to Australia and New Zealand. Naturally this wasn’t an impulse purchase, and certainly in those days, it would be termed ‘a trip of a lifetime’. We found that although the customers would phone our offices and have long, long conversations about their proposed trip, many of them wanted to actually visit us in person. I’m assuming they wanted to make sure that we weren’t going to take their money and disappear into the night! These folks would travel a great distance to see us, often half way across the country. They’d arrive with great folders of information that they had gathered over a period. By the dates of the ads they’d torn out of newspapers, we could tell that they had been collecting info often for some years.
It wasn’t just one or two travelers who behaved like this, it was the majority. I guess that if you’re about to have the ‘trip of a lifetime’ then you would be tempted to take a long time in putting it together. The trouble was, that this was’t in general, a one off trip.These customers were ‘frequent fliers’ with us, although frequent meant once every two or five years.
That didn’t mean that they only travel to our destinations, but went on other excursions in the intervening periods, and presumably they put as much research into those trips as they did with the flights ‘down-under’.
That process all happened in the pre-internet days, when research meant reading magazines and newspaper articles. It required the tearing out and keeping of numerous ads from the travel sections of the national press. Watching every travel documentary they could find was almost compulsory. These customers knew more about ‘our’ destinations than we did.
The internet and the World Wide Web changed all that of course. Instant access to information, price comparison sites, peer reviews and OTAs – on line travel agents, have consigned all that to the dim and distant past. Or has it?
More recently I’ve worked with travel companies and destination marketing organizations who have been grappling with how to best spend their money to acquire customers. A great deal of thought has gone into when and where to place ads. Given the ability to track responses to digital ads and to measure the open rates of newsletters it’s understandable that those in charge of the budgets want to know, definitively, what is working and what isn’t. This is all well and good if we assume that all travel decisions are made on the fly and travelers do the same thing year after year.
Making those assumptions – impulse buys and repeating past decisions – encourages the marketeer to place trackable ads and then cease making ad buys that don’t result in immediate bookings, or at least bookings that can’t be linked to a particular campaign. However we must look at the the way people actually book.
A customer sees a print ad in a glossy magazine that prompts their interest. They ‘file’ that away in their memory either consciously or more likely unconsciously. They don’t remember the phone number in the ad, or the ‘trackable’ URL. While driving they hear a radio ad about the same destination. To be honest it’s unlikely they will stop and write down the phone number or URL and so, that’s just another memory. By some miracle the potential traveler either sees something on-line or maybe even searches for info on their iPad or phone. They may bookmark the info for later or perhaps even respond to the ad for more information. Enter the dreaded cookie that tracks their every on-line move, and suddenly every on-line ad they see is about that particular destination, hotel, airline or cruise. Magic! The DMO, or advertiser now knows everything about them and sends out teasers and newsletters. The success of those original print ads and radio spots is called into question. They did not, as far as the digital marketeer knows, result in a booking so it makes sense to stop that particular channel spend.
Our potential traveler now responds to the email they have received. They may forward the email to a fellow traveler or they may just click on a link. More likely, they’ll just remember the general email rather than the full link to the page they viewed. They’ll then go another device – the work based PC, or a phone or other screen to get more info. Of course there’s no cookie following that move, and they may even be using different email address for each inquiry.
Although as marketeers we may rewarded with the trackable booking, it’s more than likely that the ‘thread’ of the booking is lost numerous times.
Another distraction is the length of time it takes to make a decision. I can’t remember the number of times we’ve seen a destination on a movie or in a magazine and said we must go there – this year’s out of the question because we already have plans but next year’s a possibility or the year after…..
Down here on the coast of the Gulf of Mexico we had the tragedy of the Deepwater Horizon oil spill in 2010. The resultant exposure that region the received was the silver lining in that particular cloud. BP were forced to spend millions in the following years. CVBs along the coast worked together to promote the area but more importantly the media (bless ’em!) flooded the airwaves with images of our pristine sugar white sand and emerald green waters. Whatever their apocalyptic message was at the time, the names of Destin, Panama City Beach, 30A, and Pensacola became embedded in the psyche of people who had never heard of us before. Since then, tourism numbers to the Gulf Coast have continued to rise aided by the activities of CVBs (often in spite of the efforts of CVBs!). The area has even attracted groups of visitors who would never have thought of coming previously and now remember that the Gulf is a place to go, even if if they can’t remember what lead them to that thought.
So, have things changed? Maybe. The ability to track the source of bookings is there but definitive answers to what works is absent in the vast majority of cases. Although tourists make last moment buying decisions, those are usually based on ‘bucket lists’ formed over a long time.
To go back to original thought, that it’s becoming more difficult to know where to spend your marketing dollars, yes it probably is. There are many more channels, more opportunities and higher costs. However, people behave in much the same way as they always have.
The more things change, the more they stay the same.
Twickenham Travel’s corporate travel department in the late 1970s. Not a computer in sight!
