Transcript Keynote Presentation

WELCOME TO SPRINGFIELD
HEARTLAND CONFERENCE
2007!
“The secret to success is to find
out where the people are going,
and get there first.”
-- Mark Twain
Presentation Sources
• Jerry Henry, Henry Enterprises, LLC
– Corporate Director of Research, Herschend
Family Entertainment Corporation
• James V Cammisa, Jr.
– Travel Industry Indicators
How did the Travel Industry do in
2006?
• Domestic Trip Volume – Up 1.5%
– Business Travel was strong
– Leisure Travel was flat as were major leisure travel destinations
(Orlando, Las Vegas, Hawaii)
• Hotel Occupancy – Up 0.9% through October
– Supply Growth was up only slightly by 0.5%
• ADR was up 7.0%, RevPAR was up 7.9%
• Domestic Air Enplanements were down 1.9%
– Shrinkage in capacity (-2.9%) and higher airfares (10.2%) were
the likely cause
• 2006 was a year where the industry regained its pricing
power to make up for a less than robust year in demand
What about 2007?
• The Economy appears poised for a “soft landing”
– GDP is estimated to be up 2.6% compared to 3.3% in 2006
• Business Indicators are all generally positive with
Economic Growth estimated at 1.4%
– The Midwest will lag behind at 0.6%
• In the Consumer Sector
– Consumer Income Growth will rise an estimated 2.8%, down
slightly from 3.0% in 2006
– Consumer Spending will also rise an estimated 2.8% compared
to 3.1% in 2006
– Inflation will be lower at 2.5%
– Consumer Confidence remains positive
What about the Travel Industry in
2007?
• Domestic Trip Volume should increase by 1.7%
• Travel Spending should increase by 6.0%
• Business Travel (trip volume between 2 & 2.5%) will
outpace Leisure Travel (trip volume between 1 & 1.5%)
• Spending for Business Travel should increase by 7.5%
with Leisure Travel increasing by between 5 & 5.5%
• Occupancy should increase a modest 0.4%
– Room Demand should increase by 1.7%
– Supply Growth should increase by 1.3%
• Domestic Airline Enplanements will show modest growth
at 1.8% with airfares increasing between 3 & 5%
What could Affect 2007
Predictions?
• Terrorism Incidents or Geopolitical Shocks
• A Recession instead of a “soft landing”
• Escalation of Gas Prices
What do You do to be Sure Your Business
Performs Better than Projections?
Stay on top of trends and changes in the
marketplace
The 5 Cs of the New Travel
Marketplace
• Connection with friends, family and people like us – in
an entertaining way.
• Convenience is critical. It must be fast and easy.
• Cost is King. People expect luxury at bargain prices.
• Comfort, a driving force of boomers. People want their
travel experiences to be a notch above everyday life.
• Control over their lives and their travel. Travelers do not
want to be dependent upon others to have a good time.
Connection
• When asked to rate the three most
important personal goals over the next 3 –
5 years, people rated “spending more time
with the family” behind only “becoming
more physically fit,” “paying off debt,” and
“eating healthier.”
• Families reconnect through travel.
Convenience
• 20% of all meals today are consumed in
the car
• Disposable income is up in large part
because of women working
– But women working means less time to shop,
cook, or recreate
Cost is King
• It’s not that consumers are cheap, they
just don’t want to overpay
– They are knowledgeable users of competitive
information and know the fair market value
Comfort
• People will pay more for quality and luxury
• With less free time, people feel the need to
treat themselves
• Amenities, comfort, and ambiance are
more important than money
Control
• Consumers want to control their
experience
• Travelers are looking for independent
travel where they don’t have to be at a
certain place at a certain time
• As one example, overnight bus tours are
struggling
Trends that will Affect all
Businesses
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Aging of America
Different Generational Cohorts
Power of the Purse
Cutting through the Clutter
The Evolution of Marketing
Impact of the Internet
Customer-Made
Viral Marketing and the Erosion of Trust
Diversity
Aging of America
• The 55+ age segment will grow at a rate
six times faster than the population under
55
• Number of people over the age of 65
– In 1980, one in ten people
– In 2000, one in five people
Aging of America
• Service levels will need to increase as
older visitors have higher expectations
• Marketing will also need to change
– Images used
– Featured “hot buttons”
– Even the font size
Different Generational Cohorts
• The values we learn as kids will stay with
us for life
• Members of each generation are linked
through shared life experiences
• In 10 years, the Senior generation will be
gone and the oldest Boomers will be 70
• The generations driving the economy will
be Gen X and Millennials
Different Generational Cohorts
• Seniors
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–
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55 million
Born 1925 – 1945
Age: 62 – 82 years
Hard work, self sacrifice, teamwork, conformity,
authority, “One for all, all for one”
• Boomers
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–
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Born 1946 – 1964
76 million
Age: 43 – 61 years
Individuality, entitlement, spenders, control-freaks,
nostalgic, “It’s all about me”
Different Generational Cohorts
• Gen X
– 46 million
– Born 1965 – 1978
– Age: 29 – 42 years
– Diversity, uncertainty, tech-savvy, balance in
life, family-focused
Different Generational Cohorts
TOPIC
GEN X
BOOMERS
SENIORS
Defining Idea:
Diversity
Individuality
Duty
Celebrating:
Savvy
Youth
Victory
Style:
Entrepreneur
Self-Absorbed
Team Player
Managing
Money:
Hedge
Spend
Save
Reward
Because:
Need it
Deserve it
Earned it
Work is:
Difficult Challenge Exciting
Adventure
Inevitable
Obligation
Leisure is:
Relief
Point of Life
Reward
Education is:
Way to get there
A Birthright
A Dream
Future is:
Uncertain, but
Manageable
Now is more
important
Rainy Day to work
for
Power of the Purse
• Women
– Buy 83% of all products sold in this country
– Make 70% of all leisure travel decisions!
• If you are not targeting women and
listening to your female customers, you
are not serious about increasing sales
• You can’t reach women the same way as
you reach men – they’re DIFFERENT
Power of the Purse
Men search for a “good solution”
Women look for the “perfect answer.”
Mission
Go to the Gap, buy a pair of pants.
Men go directly to the store, find a pair of
pants that fit and are reasonably priced,
buy them and leave.
Time: 6 minutes
Cost: $33
Power of the Purse
Women look for the perfect answer, so she
not only needs a pair of pants, but a new
pair of heels that would match and also go
with the cute new outfit she bought last
month. While at the mall, she visits most of
the other stores and shops for a few things
she had been thinking about.
Time: 3 hrs. 26 min.
Cost: $876
Power of the Purse
• Women are “people-powered.” If you want your
marketing message to resonate with them, show
people in your ads.
• Women exchange information through
storytelling. Ask her where she bought her scarf
and be prepared to listen for 30 minutes. Your
marketing message must include people and tell
a compelling story.
• Women control the success or failure of most
consumer products and services. Accept it or
die.
Cutting Through the Clutter
• Consumers are putting up “firewalls” to avoid
advertising
• Your marketing message must be
– Relevant
– Compelling
– Differentiated
• Businesses must determine what is most
important to their guests, differentiate
themselves along these characteristics, and
market those differences to their target markets
The Evolution of Marketing
• Marketing productivity is declining (more
TV stations, radio stations, the Internet,
etc.) and is compounded by the consumer
resistance to marketing
• Word of mouth – from a trusted source –
is more powerful than ever
Impact of the Internet
• More than two-thirds of all travelers have
Internet access and 78% of those plan at least
part of their trips online
• 64% of online travelers, and 43% of travelers
overall, make reservations or book online
• 32% of all lodging purchases were made online
in 2005
• Not only do you need a very good presence on
the Internet, you need to provide access to it for
your customers
Customer-Made
• The era of Mass Production has yielded to Mass
Customization
• “One size fits all” doesn’t work anymore
• Individuals express a strong interest in the ability
to self-customize products and services and
37% are willing to pay as much as 20% more to
do so
• Don’t treat people equally, treat them
appropriately
• Bed & Breakfast establishments may be in a
unique position to capitalize on this trend
Viral Marketing & The Erosion of
Trust
• Only 25% of Americans believe what they hear
on the evening news and less than 5% believe
what they see in travel advertisements
• We do trust recommendations of a friend or
family member (88%)
• Companies are tapping raving fans and
converting them to “buzz agents” by providing
them their own blog
• Again, bed & breakfast establishments can
capitalize on this trend
Diversity
• The days of the Caucasian majority are
numbered
• By 2050, Caucasians will represent less
than 50% of the U.S. population
• In the next 25 years
– White
– Black
– Hispanic
– Asian
+8.0% to 217 million
+33.1% to 50 million
+86.8% to 37 million
+110.9% to 15 million
Diversity
• Diversity is also present in the average family
household
– Less than 24% of all U.S. households have a
husband, wife, and a child under the age of 18.
– The rest are made up of single parents, unmarried
couples, divorced or never married individuals, and
older married couples with children no longer living at
home
• Diverse customers require diverse product
offerings and marketing messages
Things to Remember
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The customer is “queen”
Consumers will pay for quality, but still want a bargain
“Word of Mouth” is an ever better form of advertising
An aging marketplace will change the visitor
Remember generational differences in product
development and marketing
• Diversity must also be considered in product
development and marketing
• Allow your customers to be involved (customer-made) in
shaping their travel experience
Questions?