Innovation in Australia

While moderating the Tourism Australia Summit recently, I noted key themes emerging included digital technology and an extraordinary bounty of culinary adventures driving tourism to Australia. Tourism Australia has a reputation for innovation and thinking outside the box with an approach to marketing its destination that others in the tourism industry may want to watch and emulate.  

Technology is the preferred method of providing content to the travel industry and potential long-haul travelers, feeding them an abundance of information on experiences unique to Australia. Bloggers, digital writers and new technology leaders addressed the online/mobile approach to attracting customers. 

An innovative use of new media demonstrated how integral technology is in motivating tourists to dream — and book. Newly developed billboard capabilities recognize when a certain international flight passes overhead. The digital signage generates video of a child jumping up and seemingly pointing at the plane while the billboard displays the destination of that plane. That brand of frontline thinking highlights a new direction and elevated methods converging in travel marketing. 

And the gastronomic news from Australia is undeniable — a result of the incredibly diverse settings and expansive resources that create every experience from sophisticated dining to “bush tucker,” or Australian native bush food. Foodies seeking adventure benefit from rich seafood supplies, a natural bounty of produce by region and climate, a lush wine country and a broad spectrum of choices to suit myriad appetites. Tourism Australia responds to the nation’s obsession with food and wine with Restaurant Australia, a campaign that recognizes food tourism’s global appeal. 

One unexpected way Australia will surely attract American travelers in 2014 is the historic arrival of Major League Baseball at the legendary Sydney Cricket Ground for the first regular season games ever played in Australia, this month between the Los Angeles Dodgers and the Arizona Diamondbacks. 

Attendees at the Tourism Summit were in agreement: the long haul is worth it for the rich uniqueness of Australia, and purveyors of other destinations can and should benefit as tourism is taken to new heights. 

Innovative marketing and successful creative campaigns are encouraging signs that long-haul travel to a destination like Australia is not out of reach in this recovering economy. What do you think? 

Asian Hospitality Industry Energized

Traveling in Asia last month just prior to the arrival of Chinese New Year, I was again reminded just how dynamic the hospitality industry is in Asia. From the number of hotel brands opening new properties in Kuala Lumpur to the transformation of Singapore as a result of integrated resorts to Hong Kong, new restaurant concepts seem to open daily, and hospitality executives are continually reinventing and reenergizing to stay ahead of the curve. Much of this energy, of course, is driven by major property companies that all seem to have hotel subsidiaries. 

Flexibility is the key to the success. Market forces change, but the industry in Asia is adaptable. For example, China is experiencing a rapid slowdown in government entertaining, which has been drastically curtailed by the new government. Concurrently, visitor numbers are down, and hoteliers are realizing that while China remains a massive market, a business mix is essential.  

Looking ahead, the South China Morning Post reported in January that Hong Kong could receive 70 million tourists annually within three years and 100 million within a decade, mostly from the mainland. Tourism experts in the region said more hotels should be encouraged, especially in rural areas. 

I am not seeing much in jaw-dropping new sales and marketing concepts. The focus seems to be on tried and tested methods. Advertising is a combination of digital and print (yes, they still believe in the power of print in Asia) and, in some cases, regional and European television. Manpower is perhaps the biggest issue — finding qualified staff, training, retention and consistencies of delivery are of utmost necessity. 

However, I am energized by the region and its movement toward development or expansion, renovation and restoration, and the motivation to experiment and try new concepts. The professionalism and willingness to serve are apparent, whether it is the doorman at a major hotel in Manila or a check-in agent at the airport. Tourism and hospitality has its act together in this region, and anticipating guests’ needs seems to be second nature. We should all study best practices from Asia. Welcome to the year of the Horse. 

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.

What's Happening With Today's Traveler? - Fees & Social Media

Last time I wrote, I shared insights about popular/less popular destinations and travel trends of today’s affluent consumer based on a survey Strategic Vision conducted with approximately 50 travel advisors at the owner or manager level. We learned that Italy was one of the most popular destinations for bookings in the last six months, Southeast Asia and the U.S. are trending up destinations, Hawaii and villa rentals in Italy and France continue to grow in popularity for family travel (a burgeoning trend in itself), and much more. We also heard from numerous agencies that are experiencing different trends than those surveyed, so I’d like to thank those who shared their feedback.

Keeping the dialogue going, here I review survey results on the subjects of ancillary fees and social media. 

EXPLAINING FEES

We’ve been concerned about fees and wanted to follow the conversation.  Respondents overwhelmingly believed in clearly outlining all fees to their clients – whether ancillary fees from hotels and airlines or service charges from travel agencies – so there are no surprises.  One respondent said their agency has a spreadsheet with all ancillary expenses clearly defined, and that travel counselors “are trained to explain each fee along the way.”  Respondents noted that fees are a “sign of the times” and “part of today’s landscape,” and one commented that “it is a way of life but there are ways around it.”

While the fees are not necessarily a “major issue questioned by luxury clients” because most are “used to them” and not “price-sensitive,” clients do demand more transparency so as to understand exactly what they are paying. This desire for transparency goes beyond fees – clients are continuing to require a cost breakdown for all the elements of their trip.

In terms of agency fees, they cover “time, research and expertise” for “customized services beyond the travel components,” and clients tend to be “amiable” if they understand what the charges are for.

What's Happening With Today's Traveler? A Six-Month Review...

It is half way through the year, which I find is a good time to reflect on the state of luxury travel and to recalibrate our strategic efforts based on the reality of bookings and trends of the past six months. As luxury travel marketers and advisors, it is vital for us to remain on the pulse of the latest news and trends so I surveyed approximately 50 advisors at the owner or manager level who graciously shared some enlightening feedback about today’s affluent consumer.

Read on for their valuable insights…

MOST POPULAR DESTINATIONS
What destinations have been the most popular for affluent clients the past six months?

Accordingly to our survey, 70 percent of respondents named Italy as one of the most popular destinations for bookings in the past six months. Whether it’s the amazing cuisine, gorgeous art, or rich culture and history, Italy has broad appeal – and as one respondent stated, consumers have a “constant love affair with Italy.”

There is a wonderful cultural diversity in Europe – where “clients never seem to tire” of the continent. Respondents repeatedly mentioned France and Spain as well as London, where last summer’s Olympics and the upcoming Royal Baby seemed to have raised the city’s profile. Croatia was also listed for its undiscovered appeal. One agency said that a key with Europe is crafting “wow” moments in classic European capitals, which speaks to the continued desire for the treasured experiential and enriching aspects of travel. One respondent did warn, though, that Europe’s popularity could decrease “if air stays at such high levels even for coach.”

South America – particularly Peru, Colombia and Brazil – ranked high for its “perceived value,” “variety,” and because it is “interesting and luxurious.”

Survey Says...

I have always advocated the importance of research in order to effectively set a marketing strategy – when you’re equipped with knowledge, you’ve secured a degree of power that makes you a savvy strategist. In the effort to build on our wealth of information, Strategic Vision sponsored American Affluence Research Center’s Spring 2013 Affluent Market Tracking Study, a survey of the wealthiest 10% of U.S. households based on net worth.

The survey is based on self-administered questionnaires mailed to a randomly selected national sample of 4,500 men and women in households with specific income and assets ownership and a minimum net worth requirement of $800,000. Following a weighting of the respondents, the participants in this survey have an average net worth of $3.1 million and an average primary residence value of $1.2 million.

Some results were rather surprising...

What Magazines Do Affluents Read?
Marketing requires a constant examination of the luxury consumers’ interests, opinions and product preferences – including what publications comprise the affluent library. When asked what leisure magazines they read most on a regular basis (from a choice of 11 high-end titles), survey respondents indicated Travel + Leisure as their top choice (22%), followed by WSJ Magazine (19%), T: The New York Times Style Magazine (15%) and Departures (13%), which is distributed to American Express Centurion and Platinum Card holders.

Consolidation Breeds Confidence & Renewed Focus on Partnerships

As marketers, we spend a great deal of time exploring consumer-related trends – what they seek from travel experiences, what influences their purchasing decisions, and more – but it is important to take stock of our own industry trends and how these impact stakeholders in our business.

These days, it’s all about mergers and acquisitions! Recent news of the merger between Protravel and Tzell as well as Travel and Transport’s purchase of Ultramar reflects the changing business landscape of our industry. These are two examples in the U.S., but consolidation is happening in other parts of the world as well. These recent deals are a sign of confidence in the travel business, and this eventually trickles down to the benefit of the consumer.

Consolidation Yields Buying Power
After several years of tumult in the travel industry, the past 12 – 15 months have seen steady increases in business, and the money spent on recent agency acquisitions is a reflection of “the strength of travel.” Consolidation means larger agencies have greater buying power when dealing with travel suppliers – and that likely translates into better prices and enhanced value and experiences that can be delivered to consumers.

In the luxury travel sector, agency consolidation signifies a merging of “talent pools.” Travel advisors possess a breadth of knowledge and valued contacts that make them tremendous assets to their agency owners as well as their clients. This talent is the foundation of a strong and thriving agency group and is what breeds future prosperity for these mergers.

As I 'C' It

Times have changed dramatically from when the “four p’s” of product, price, place and promotion dominated marketing strategy. Now, this is “How I ‘C’ It” – Content, Community, Channels, Commerce and Collaboration are the pillars on which to create an effective course of action to target today’s affluent consumers.


The ‘Consumer Age’
Our social and business climates have changed in immeasurable ways during the last decade, and the pace of transformation is best reflected in this quote from author Thomas Friedman:

“When I wrote The World Is Flat: A Brief History Of The 21st Century, Facebook didn’t exist. Or for most people it didn’t exist. Twitter was a sound. The ‘Cloud’ was in the sky. 4G was a parking place. LinkedIn was a prison. Applications were something you sent to college. And, for most people, Skype was a typo.

That all happened in the last seven years. And, what it has done is taken the world from connected to hyper-connected – and that has been a huge opportunity and a huge challenge.”

In the ‘consumer age,’ today’s luxury travelers are intelligent and well-researched, possess distinct expectation, and face diverse influencers. This consumer psyche has resulted in dramatic shifts in marketing strategy amid the constant evolution of the digital and social landscapes. Among the changes, one core point emerges as stronger than ever before – engagement is the cornerstone. It drives relationships, and that ultimately drives sales and profits.

Moving Forward in 2012 - Listen to Clients, Engage Them For Life

As travel professionals, we are constantly on the quest to understand what our luxury clients want from their travel experiences, the latest ‘in’ destinations, and how economics, political unrest and other global events impact the consumer mindset and the future course of worldwide exploration. We have to keep pace like never before! This makes the development and implementation of an effective – and modern – strategy extremely crucial. For me, devising a smart strategy starts with research. To that end, I surveyed approximately 50 advisors at the owner or manager level who graciously shared some enlightening feedback so I’m pleased to recount with you some of their thoughts on “what’s hot” and trends in the luxury marketplace as we move ahead in 2012.


Don’t Just Speak – Listen
“When to book?” is a question constantly on the minds of both travel advisors and their clients. Leads times of 12 – 18 months are not typical anymore, whether consumers are seeking a deal or determining the ‘right’ time to travel. Said the advisors I contacted: “Consumers buy when the price, economic environment, workplace atmosphere, etc. are all aligned” and “Planning ahead doesn’t ‘pay off’ anymore due to unpredictable volatility on all fronts” – currency fluctuations, political instability, natural disasters, and pricing.

Therefore, it is vital for advisors to ensure they don’t just ‘speak’ to their clients but ‘listen’ to them. Genuine engagement can result in loyal clients – and profitability – for life. When travel advisors are indeed speaking with their clients, they should tap into their power to paint an intriguing vacation picture and inspire travelers with a global narrative of adventure, reward and enrichment. The portraits of memories created during a vacation will last a lifetime.

Yes, Consumers Are Traveling Again To All Corners Of The Globe

Spring and summertime bring renewal, and with that an enhanced optimism from valued travel advisors eyeing the state of the luxury industry. In talking with my trusted friends in the travel advisor community, I am pleased to report there is good news, which many of you already know since your phones have resumed ringing – people are indeed traveling again! But, where are they going and why? And, with a rich global tapestry of cultures out there, what motivates advisors to sell certain destinations to clients? I queried a group of 50 well-known travel advisors (at the owner/manager level) around the country and am privileged to share their insight with you.

I was fortunate to have been asked to write a column for the U.K.'s Profile LEADER: Essential Reading for Hospitality Management on the subject of "New Imperatives in Luxury Marketing." I addressed how effective marketing adapts to the mindset of today's luxury travelers and the many ways they can be engaged. I hope you enjoy reading this column. Do please share your thoughts with me. http://www.pmsr.com/leader/april11/peter-bates.asp

2010 - 'A Year in Review' - Market Rebound, Growth, Opportunity & 'Editors of Travel'

For those of us whose lifeblood is in the luxury travel business, I’m sure you’ll join me in celebrating the rebound that is penetrating the market. I’m confident that 2010 is closing more positively than it began, and as we move forth in 2011, we must stay on a path of resurgence with verve and enthusiasm.

So, with the New Year on the horizon, I wanted to take this opportunity to share with you some of my thoughts, culled from my travels and discussions with tourism and hospitality professionals as well as those in the agent community.

1) As we know, luxury travel is rebounding – and with the economic recovery, the luxury travel market is becoming more experiential. When consumers spend money on a customized holiday, they want it to be more meaningful then ever before. That means delving deeper into a culture, a lifestyle, a true experience (such as art, spa/wellness, adventure and the like) so that a memorable travel journey with a ‘wow’ factor can be crafted for a customer.

2) The outlook for growth of business travel is positive as we move into 2011 and 2012 – but of course they’ll be challenges for corporate travel managers who’ll be faced with handling the dichotomy between rising air and hotel costs and the need to manage budgets, re-examine cost-control tactics, and increase business efficiencies. Companies are still tightening their purse strings on the corporate side, which makes leisure travel even more vital to the mix.

Planning for the Rest of 2010

According to conversations I’ve had with my friends in the travel agent community, 2010 is shaping up to be a much better year than 2009, but many challenges still lie ahead as agencies look to climb the ladder of profitability. Doing better than last year is a huge plus, but the barometer you should measure yourself against is that of more profitable years from the recent past. We must keep reality in check.

Now that the first quarter of 2010 is over, I’ve outlined out what I perceive to be the five biggest challenges that remain for the year with some suggestions on how best to address them.

Challenge 1: Maintaining and Growing Your Client Base
Winning new clients and retaining current ones must remain a top priority. We all know very well that a healthy customer base is the foundation of a healthy business.

Stay connected via phone, e-mail and/or social media with your valued clients. Maintain ‘top of mind’ presence by keeping the lines of communication open. Impress your clients with how well you know them by presenting vacation suggestions sure to fit their individual tastes and preferences.

Encourage ‘word of mouth’ praise because the payoff to you is invaluable. Consider incentivizing your current clients to bring you new potential customers. That investment (in terms of an upgrade or special extra to enhance the luxury vacation experience) can yield huge rewards for you and your business.

Tap into local community events to build awareness of your depth of knowledge and the customized travel experiences you can deftly craft.