by Peter J. Bates

Friday, January 17, 2014

Is the Mega Trade Show Dead?

Last fall at the World Travel Market I spent several days conducting meetings, making new connections and absorbing all the interactions around me. After taking stock of my own experience and mulling over my observations, a huge question came to mind — are governments spending too much money on a formula that might no longer work?

Let me be clear — I believe in the power and impact of trade shows. For as tech-focused as we are now in a Twitter world where mobile devices are never far from our fingertips, face-to-face meetings are a crucial part of conducting business. Building relationships is at the core of an effective marketing strategy, and they yield a great return on investment (even though sometimes the return takes a while to receive). It was this emphasis on face-to-face relationship building that prompted me to consider the question about government spending and the trade-show formula.

I saw massive stands by countries (Spain, Turkey and several Middle East countries were particular standouts to me) with a compelling visual presence, but it seemed that few hotel companies had their own stands. The hotels joined their country stands, which created larger destination branding. The stands were a showcase for the destination experience. What was clear to me (and equally troubling) was that people manned their stands and waited for delegates to visit them — without an appointment. Or, there were stands left unattended, which basically conveys to delegates, “My destination is worth passing by.”

To me, this strategy didn’t make sense. Decades ago when I started in this business, hoteliers and tourism officials waited at their stands for people to visit, but today, our world and the travel industry are completely different. Today, you must make advance appointments in order to really maximize your investment. A program of structured, timed meetings (whether you set them yourself or attend a show that is shaped by an appointment process) is more substantive and yields stronger business, and thereby offers the greatest benefits. The best trade-show experience isn’t about people picking up brochures and business cards as they robotically go between the aisles. It should be about conversations and experiences (preferably personalized ones). Furthermore, trade shows should be manned by people who intimately know the product at hand and are serious about doing business — not people more interested in exploring the dynamic city in which the trade show is located.

People could pass your stand all show long, and they might think, “I need to stop there,” but never do because they are on their way to pre-scheduled meetings. So, I think it’s not so much a question of whether or not the trade show is dead — it truly can be a great showcase of travel experiences and travel selling. What should be gone, though, are strategies that simply don’t work.

What do you think?

Read my blog here.

Wednesday, January 15, 2014

Predicting Luxury Travel Trends for 2014

Visionary Marketing for Luxury Brands

Predicting Luxury Travel Trends for 2014
Affluent Survey: A survey by the American Affluence Research Center

Once again, Strategic Vision has sponsored the American Affluence Research Center’s (AARC) Affluent Market Tracking Study, a survey of the wealthiest 10% of households determined by the Federal Reserve Board based on net worth. I continue to advocate the importance of this kind of research and data collection for industry leaders to gain insights and implement effective marketing strategy in the luxury travel arena.

The survey is based on a self-administered questionnaire mailed to a randomly selected national sample of 4,500 households expected to meet the minimum net worth requirement of $800,000. Following a weighting of respondents, the participants have an average residence value of $1.3 million, an average household income of $295,000, and an average net worth of $3.1 million.
Read on for their valuable insights…

Booking Leisure Travel -- Online Travel Agencies (OTAs) or Traditional Travel Advisors?
Survey results I found noteworthy:

In this flourishing digital culture, we all know that leisure travelers increasingly use their computers and mobile devices to book travel. While the growth of OTAs is undeniable, the number of those surveyed who continue to work with travel advisors or make a direct call to a branded entity (airline or hotel) still outweighs use of OTAs when combined.

Travelers Explore OTAs

Of those responding to the question, “Have you ever used an OTA to book leisure travel?” -- 69% said yes. Still, a significant 31% of all respondents said they had never used an OTA.

Forty percent of affluent consumers who said they booked leisure travel through an OTA had logged on in the prior three months, and 37% had booked digitally within the last year. Expedia was the OTA most respondents used (40%), with Orbitz coming in second and Travelocity a close third, each with about 23%. Fifty-six percent of those using OTAs were under age 50, and 78% who said they navigated online specified they shopped through a single OTA.

Opportunity for Travel Advisor Growth
The research found that a remarkable 66% of those surveyed rely on an advisor or reach out to a major brand when booking leisure travel, the ability for affluent travelers to make a direct connection is still an appealing influencer.

When asked if they had employed a traditional travel agency to book leisure travel in the past year, 23% of respondents said they had. And 20% of those surveyed said a traditional travel agency was the choice they used most often for booking travel.

Forty-three percent answered that they book directly by calling airlines or hotels or using their websites. Of those who book in this way, 30% were under age 50. As a young travel advisor recently told me, “There is so much information out there through OTAs and online resources, the agent becomes the editor/navigator for the client.”

Are Hotel Loyalty Programs Important to You?

Marketing and branding strategies necessarily adjust with the changing times and consumer habits. In this mobile-driven and online booking climate, a significant number of affluent travelers trend toward brand loyalty in the hotel category. In the American Affluence survey, 63% of those responding said that hotel loyalty programs are either very or somewhat important. Of total respondents, 52% said they were members of Marriott Rewards, 45% joined Hilton Honors, and 32% belonged to Starwood’s program.

Overall, the responses of high net worth consumers to survey questions regarding leisure travel booking offer encouraging numbers and promising opportunities for travel advisors to expand their client base as affluent travelers seek a connection and strong brand direction.

In Closing
Cautious Optimism Looking Forward
As 2014 begins and consumers look ahead, a few interesting findings of the AARC survey are worth considering:

• The affluent seem to have a slightly better outlook for the economy and their personal wealth than the general public. Almost a third expect their net worth to be higher in March 2014.

• The new research reveals a significant 7 point improvement among those surveyed who said they planned to defer or reduce expenditures in the coming 12 months. Only 37% said they would cut back this year as opposed to 44% of affluent respondents in Spring 2013 -- a forecasting of positive spending trends as we enter 2014.

• Of 17 product categories tracked in the AARC survey -- such as fine jewelry, major home appliances and designer clothing-- only one, domestic vacation travel, is in positive territory; eight are in the neutral range and eight are in negative territory suggesting a decline in spending.
• An encouraging mood and spending plans of the affluent may be carrying through the new year with the stock market hitting record highs on Christmas Eve -- 2014 is a year to watch.
As always, I welcome your feedback. Let's keep the conversation going.