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How to prepare your business to meet traveler trends in 2020

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The travel customer continues to become more demanding, more educated and more tech savvy.

As a result, travel agencies and tour operators need to become more nimble and knowledgeable to continue to meet the needs of future customers.

The higher-spending, experiential traveler will have access to information and technology – and they will demand a higher level of services and products.

Customers of the future are more likely to choose travel companies that protect the interests of travelers, understand their needs, use the same technologies, and understand their habits and buying patterns.

In response, travel companies will need to keep pace with the tools and technology to appropriately manage this growing segment of the travel business that places more demands on providers and packagers of travel services.

Join Tnooz, American Express and PhoCusWright for a FREE webinar that explores the trends that will shape travel and travelers for the future.

Panelists for the FREE webinar are:

Mary Pat Sullivan, research analyst, PhoCusWright
Jessica Patel, vice president of sales, American Express
Kevin May, editor and moderator, Tnooz
Gene Quinn, CEO and producer, Tnooz

This webinar took place on Thursday 14 August 2014.

Publicada em: Negócios

How to prepare your business to meet traveler trends in 2020

  1. 1. Preparing your travel business to meet traveler trends in 2020 Webinar August 14, 2014
  2. 2. Your hosts Kevin May Editor & moderator Gene Quinn CEO & producer
  3. 3. Your panelists Jessica Patel VP of Sales American Express Mary Pat Sullivan Research Analyst PhoCusWright
  4. 4. Preparing Your Travel Business to Meet Traveler Trends in 2020 August 14, 2014 Tnooz Webinar Mary Pat Sullivan Leisure Travel Analyst PhoCusWright Inc.
  5. 5. © 2013 PhoCusWright Inc. All Rights Reserved. 5 This was the image of a travel agent
  6. 6. © 2014 PhoCusWright Inc. All Rights Reserved. 6 Yesterday’s travel agent Order taker General purpose Air was the asset Change-averse Transactional
  7. 7. © 2014 PhoCusWright Inc. All Rights Reserved. 7 Today’s travel advisor Consultative Specialized Expertise, relationships, service are the assets Adaptive Traveler Advocate
  8. 8. © 2014 PhoCusWright Inc. All Rights Reserved. 8 Source: PhoCusWright Inc. Today, however, agents come in so many shapes and sizes, with a multitude of business models. This creates a significant business challenge for suppliers trying to reach and embrace them, and a challenge for the industry to define them accurately.
  9. 9. They have many different names for their profession – another important distinction when addressing this market. Consultant Luxury Concierge Specialist Concierge AdvisorDream Broker
  10. 10. 10 © 2014 PhoCusWright Inc. All Rights Reserved. Travel Agents Serve Special Segments Source: PhoCusWright’s Travel Agency Distribution Landscape 2009-2013
  11. 11. © 2014 PhoCusWright Inc. All Rights Reserved. 11 •Older •Spend more (big ticket, vacation travel) •More complex travel •More international travel Source: PhoCusWright Inc. Travel Agents Serve a Special Segment
  12. 12. © 2014 PhoCusWright Inc. All Rights Reserved. 12 Trip Spend and Complexity by Point of Sale Source: PhoCusWright Inc.
  13. 13. © 2014 PhoCusWright Inc. All Rights Reserved. 13 Travel Agency Market Share of Gross Bookings by Segment, 2013 Source: PhoCusWright’s Travel Agency Distribution Landscape 2009-2013 0% 10% 20% 30% 40% 50% 60% 70% Rail Tour Cruise Car Rental Hotel Air
  14. 14. © 2014 PhoCusWright Inc. All Rights Reserved. 14 Source: PhoCusWright’s Travel Agency Distribution Landscape 2009-2013 Leisure agent clients: 70% are 45 or older U.S. travelers: 50% are 45 or older Mean U.S. leisure trip spend, with mean household size of 2.4: $1,031 70% of leisure agents: per-person trip spend is >$1000
  15. 15. © 2014 PhoCusWright Inc. All Rights Reserved. 15 Customer Demographics May Be Evolving Source: Focus groups conducted by PhoCusWright, 2013 • Majority of agency customers are: •30-45 • Seem to be children of existing clients for many •55 and older • Most popular travel types include: •Honeymoons, destination weddings •Multi-generational trips •Celebration travel “They know us from their parents. They don’t know where they want to go. Destination recommendations can truly come from our travel counselors.” “We have so many smaller groups, putting together trips based on a celebration. Milestone anniversary. 50th anniversary. Close friends all traveling together. “
  16. 16. © 2014 PhoCusWright Inc. All Rights Reserved. 16 Return of Corporate Spillover to Leisure Source: Focus groups conducted by PhoCusWright, 2013 • As leisure lead for a major agency organization, executive attends most corporate client presentations, just as an additional service his agency can provide. •Many of the top people among corporate clients become leisure clients. • Another major agency cited one corporate customer, as an example, which now offers every employee who has been with them for 10 years a certain number of days off, or a $10K trip wherever they want to go. The trip, of course, is booked through their corporate agency’s leisure team.
  17. 17. © 2014 PhoCusWright Inc. All Rights Reserved. 17 Where Are New Clients Coming From? Source: PhoCusWright Inc. • Clientele among the 30-45 age group appears to be growing fastest for most respondents, due to the following: •Internet is overwhelming customers and driving them to an expert to sort the selections and provide guidance. •Destination weddings and other forms of group travel leading first-time users to a travel agent and creating a new customer base. • Short weekends and celebration travel. • Vegas, Florida, New York, Boston – They go for short stays for bachelor/bachelorette parties, birthday celebration travel. • Agents in all markets are reporting a growing customer base. “I think people are going back to agents. I have never been busier in my 38 years in the business than I am now.”
  18. 18. © 2014 PhoCusWright Inc. All Rights Reserved. 18 Question: What percentage of your leisure gross bookings are leisure group travel? (A group is defined as at least 10 people traveling on the same trip.) Base: Retail storefront, Leisure (N=432); Home-Based agents (N=469) Source: PhoCusWright’s Travel Agency Distribution Landscape 2009-2013 Group Travel Bookings Are Big Business Leisure Group Travel as a Share of Total Revenue Home-Based Agents 28% Leisure Agency: 20%
  19. 19. © 2014 PhoCusWright Inc. All Rights Reserved. 19 Why Travelers Book Offline?
  20. 20. © 2014 PhoCusWright Inc. All Rights Reserved. 20 Reasons for Booking Offline: Service, Service, Service Question: Why did you book some or all of your travel offline? Please select all that apply. Base: U.S. travelers (2013 N=1,560) Note: Totals may not add to 100% due to rounding. Source: PhoCusWright’s U.S. Consumer Travel Report Sixth Edition I didn't trust the information I saw online The travel provider/agency did not have online booking I didn't trust that the booking would go through I didn't have Internet access at the time I did not want to submit my credit card online I had technical issues/got frustrated I wanted to use a particular travel agent/agency I did not book in advance I get better service if something goes wrong I can get better deals when I call/visit I had questions not answered by the website I wanted personal service 0% 5% 10% 15% 20% 25% 30% 35% 40% International and big spenders much more likely to use travel agencies
  21. 21. © 2014 PhoCusWright Inc. All Rights Reserved. 21 Service, Expertise, Relationships Drive Consumers to Agents; Agents Say Product Price Much Less Important Question: What is the main reason your clients book with you? Select only one. Base: Retail Storefront, Leisure (N=432); Retail Storefront, Corporate (N=72); Home-Based Agents (N=469) Source: PhoCusWright’s Travel Agency Distribution Landscape 2009-2013 0% 10% 20% 30% 40% 50% Unique product Price Personal relationship Expertise Customer service Leisure Agencies Home-Based Agents Corporate Agencies
  22. 22. © 2014 PhoCusWright Inc. All Rights Reserved. 22 What Drives Today’s Travel Agent? Source: PhoCusWright Inc. Client Satisfaction Personal Experience/ Relationship Brand/Confidence Travel Discounts Commission Cash • Agents are focused on being consultants and advisors • They will turn away business that doesn’t fit them or is not profitable • They tend to do big trips, and may not do all travel for all of their clients
  23. 23. © 2014 PhoCusWright Inc. All Rights Reserved. 23 Average ARC Transaction Value by Channel, 2010 Source: PhoCusWright’s Travel Agency Distribution Landscape 2009-2013 and ARC $638 $593 $391 TMCs Other agencies OTAs
  24. 24. © 2014 PhoCusWright Inc. All Rights Reserved. 24 Big Differences in Product Mix by Agency Type Question: Please indicate how much of each product category your agency books as a percentage of your gross sales volume Base: Retail Storefront, Leisure (N=432); Retail Storefront, Corporate (N=72); Home-Based Agents (N=469) Source: PhoCusWright’s Travel Agency Distribution Landscape 2009-2013 Air, Hotel, Car Cruise, Tour, FIT Other 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Corporate Agencies Leisure Agencies Home-Based Agents
  25. 25. © 2014 PhoCusWright Inc. All Rights Reserved. 25 Home- Based agents Preferred Suppliers Airline* Hotel Car rental Cruise line Tour operator Host Agencies Consortia/ Franchise Agencies And What Will Happen to Those Preferred Supplier Relationships? Note: *Airlines (especially international carriers) continue to pay some compensation, based upon volume, as well as through consolidators. Source: PhoCusWright Inc.
  26. 26. Shopping Habits Continue to Change
  27. 27. Shopping Habits Continue to Change
  28. 28. © 2014 PhoCusWright Inc. All Rights Reserved. 28 11% 9% 9% 8% 3% 2% 20% 17% 13% 17% 7% 3% 69% 74% 78% 75% 90% 95% 1-2 websites 3-4 websites 5+ websites 1-2 websites 3-4 websites 5+ websites "I enjoy the process of planning my vacations." "When planning travel, I always check multiple websites to make sure I am getting a good deal." Disagree Neutral Agree Price comparison drives multiple website shopping. Number of Websites Used During Shopping Phase, by Agreement With Travel Planning Statement Question: When planning leisure travel, how many websites do you typically visit when…? Base: Online travel planners (2011 N=1,861) Source: PhoCusWright’s U.S. Consumer Travel Report Fourth Edition
  29. 29. © 2014 PhoCusWright Inc. All Rights Reserved. 29 Websites Used for Shopping Questions: What type(s) of websites do you typically use when comparing and choosing leisure travel products? Select all that apply. Which of the following, if any, have you done in the past 12 months? Traveled by airplane. Base: U.S. travelers who used websites to compare and choose leisure travel products (2010 N=2,008; 2011 N=1,587; 2012 N=2,041; 2013 N=1,485) Source: PhoCusWright’s U.S. Consumer Travel Report Sixth Edition OTAs and general search dominate shopping, but metasearch is growing. 0% 20% 40% 60% 80% Home/apartment rental websites/apps (i.e., Airbnb) Magazine/newspaper websites (i.e., Travel+Leisure) Travel guide websites (i.e., Lonely Planet) Online social networks (i.e., Facebook) Destination websites (i.e., VisitNewYork.com) Deals newsletters/websites (i.e., Travelzoo) Travel provider websites (i.e., United, Marriott) Travel search engines (i.e., Kayak) Traveler review websites (i.e., TripAdvisor) General search engines (i.e., Google) Online travel agency websites (i.e., Expedia) 2010 2011 2012 2013
  30. 30. © 2014 PhoCusWright Inc. All Rights Reserved. 30 Destination Selection Shopping Booking Sharing* 22% 21% 12% 15% 35% 34% 19% 41% 82% 82% 81% 57% Tablet Smartphone Desktop Devices Used During Travel Life Cycle (U.S. Travelers Who Are Also Smartphone Owners) Note: *Updated social network with trip-related post. Question: Please indicate which of the following travel-related activities you have done online using your desktop/laptop, smartphone or tablet in the past 12 months. Select all that apply for each row. Base: U.S. online travelers who own smartphones (N=1,658) Source: PhoCusWright's Traveler Technology Survey 2013
  31. 31. © 2014 PhoCusWright Inc. All Rights Reserved. 31 The Pace of Technological Change Source: PhoCusWright Inc. 2003-20061995-2002 2007-2012 2013-2015 Technology Change Transparency Social Always-Connected traveler 2020 Technology is getting smaller, more mobile and smarter. Glasses Watches Computers that sense True intelligent assistants
  32. 32. © 2014 PhoCusWright Inc. All Rights Reserved. 32 Use of Mobile Within the Travel Life Cycle Source: PhoCusWright Inc. Dream Plan Explore Share Book Tablet Smartphone The dreaming, planning and booking cycles have been extended through mobile technology.
  33. 33. © 2014 PhoCusWright Inc. All Rights Reserved. 33 Mobile Booking Projections Note: 2013-2015 projected. Source: PhoCusWright’s U.S. Online Travel Overview Thirteenth Edition Mobile Bookings – Share of Total Travel Market, 2013 Mobile The pace of mobile bookings is accelerating. Mobile Bookings – Share of Total Travel Market, 2015 12% 4%
  34. 34. © 2014 PhoCusWright Inc. All Rights Reserved. 34 Social Graph Source: Google Understanding the Social Graph drives further personalization through unique bundling.
  35. 35. © 2014 PhoCusWright Inc. All Rights Reserved. 35 Where Are You in the Social Media Spectrum? Source: PhoCusWright Inc. • Do you have a business Facebook page? • Do you communicate with your customers on a regular basis? • Are you on Instagram?
  36. 36. 36 © 2014 PhoCusWright Inc. All Rights Reserved. The Future Travel Advisor Source: PhoCusWright Inc.
  37. 37. Adapting Can Mean NEW Business
  38. 38. 38 © 2014 PhoCusWright Inc. All Rights Reserved. U.S. Travel Activities Market 2012: US$33B Source: PhoCusWright's When They Get There and Why They Go: In-Destination Activities, 2010
  39. 39. © 2014 PhoCusWright Inc. All Rights Reserved. 39 Why don’t they book in advance? Don’t think about it Source: PhoCusWright’s When They Get There (and Why They Go): Activities, Attractions, Events and Tours in Europe © 2014 PhoCusWright Inc. All Rights Reserved.
  40. 40. 40 © 2014 PhoCusWright Inc. All Rights Reserved. 0% 5% 10% 15% 20% 25% 30% Same dayIn advance1-14 days> 14 days Pre-Departure In-Destination Booking Window for 18.2 Million Land Tours, 2012 Source: PhoCusWright’s When They Get There (and Why They Go): Activities, Attractions, Events and Tours in Europe
  41. 41. © 2014 PhoCusWright Inc. All Rights Reserved. 41 New Entrants in Agent Market Source: PhoCusWright Inc. • New companies are vying for traditional travel agent business and adding agents to the mix for ancillary sales, in-destination sales and much more. • Many of these companies now offer apps or white label website programs that allow agents to be the seller of record and the customer to do the booking online. • ARC Marketplace • VIATOR (recently acquired by TripAdvisor) • Bedsonline • Shore Trips • ShoreEx
  42. 42. © 2014 PhoCusWright Inc. All Rights Reserved. 42 The DMC as a Resource Source: PhoCusWright Inc. • Very important destination resource for luxury market. •Growing exponentially in Europe, Asia. •DMCs are helping to move business to certain destinations because of their ability to find unique opportunities for travelers. • Provides ability for agency to be a “human search engine” for customers. • Provides on-the-ground help for customers while in destination. “Even in the destinations you think you know they make you a superhero!… I got a call from our DMC in Germany, clients can now have lunch or dinner at the Reichstag in Berlin… Well that is FABULOUS!”
  43. 43. © 2014 PhoCusWright Inc. All Rights Reserved. 43 Complexity of Your Sales Will Only Grow Source: PhoCusWright Inc. • Importance of being up on the latest technology • Offering app-based booking and shopping options for your customers • Having DMC relationships and ancillary service relationships • More suppliers, more complexity, more to know
  44. 44. © 2014 PhoCusWright Inc. All Rights Reserved. 44 The Future Challenge for Today’s Travel Seller • Are you adapting fast enough? • Is your business truly ready for the way your customers will shop and buy in 2020?
  45. 45. Thank you!
  46. 46. Thank you! Send your questions and comments to kevin@tnooz.com Replay and presentation of webinar will be available on www.tnooz.com

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