How the Travel Industry Has Failed the Changing Consumer

 The destination/tourism/travel industry

 

Introduction To The Destination and Travel Category

Today, the U.S. consumer has made adjustments to the faltering economy by altering their spending habits, while many of the nation’s largest companies and brands struggle as a result. Many are receiving federal bailout money, others are declaring bankruptcy – and only a few are looking for ways to win and grow market share.

Travel industry choices
How does the travel industry adjust?

Those aiming higher than the rest understand that, no matter the economic situation or the category, a few always emerge as the victors by taking market share from competitor brands.

For that reason, Stealing Share commissioned a national research study of U.S. consumers to get a snapshot of what consumers were thinking in this new economy and how it affects their actions now and in the future. The survey asked consumers about their habits, decision-making processes and beliefs about themselves and the world at large. It also asked questions about many specific industries, including the travel industry.

 

Travel

Americans are certainly traveling less in today’s economy – and even the way they choose has become conservative if they do travel. The research concerning travel eventually points to this: It’s getting harder and harder for destinations to attract new travelers

Nearly half of Americans (43.6%) said they are planning a vacation this year – and traveling to a place they’ve vacationed before. There are several ways to read that data, including that most Americans are either going somewhere new or, more likely, not going on vacation at all.

How do we know this? We have been tracking consumer behavior for the last decade and the current economic crisis puts consumers in a completely new mindset, of which residues may remain for decades.

What we have learned is that consumers are more fearful of change, which is always a hurdle but is now more often feared. To overcome that, consumers do many things: Default to the market leader, seek out expertise, settle for what’s “right” over what’s “best.”

In addition, the known becomes safer than the unknown. That belief has, of course, always been true for most consumers, but the intensity of it has increased. It’s one of the reasons why 58.2% of Americans say they are spending more time at home than they were a year ago.

Therefore, potential travelers are more likely to be vacationing where they’ve been before (think market leaders such as Disney World keeping pace) or simply staying at home.

Trends point to the familiar

In particular, the most damaging piece of evidence for destinations in attracting new tourists is that those with household incomes of $100,000 or more are more likely to vacation somewhere they’ve been to before. More than 55% said exactly that, meaning the ones who vacation most often are the ones returning to what they know.

Travel industry is not keeping up
The past holds us back

That’s something for destinations to think about this summer and in the future. While some travelers do seek new experiences, more often than not travelers seek something both comfortable (which is why it seems many travel to a home away from home) or one that isn’t going to surprise them.

Think of it this way: When you book a hotel online, especially if it’s a hotel in which you’ve never stayed, there is a great deal of apprehension about what it’s going to be like. Will it have the amenities I need? Will it be nice? Will it be clean? Will the rest of my group (whether it’s family or friends) approve?

It’s overcoming that fear of the unknown, or uncertainty, that is the largest obstacle for destinations. Many try to overcome it with a delicate balancing act between adventure and new experience with recognizable amenities and care.

It works relatively well, but it’s not quite right. One of the more surprising data in the research was that 69.4% of Americans disagreed with the statement: “I am less open to new things than I used to be.”

What does it mean?

Now, that could be interpreted that simply their “openness” hasn’t changed and it doesn’t necessarily mean most are open to new things. However, what it does mean is that new things (destinations) can be in the considered set for travelers. It means destinations have a chance.

The main problem for destinations is that their brand marketing is too often about the destination and not enough about the traveler. That is, in marketing Jamaica, for example, Jamaica markets the sights and sounds. That seems reasonable enough, but that does not overcome the barriers of the “known” and “right.” Take out the particulars and it’s just like any other destination.

What does overcome those barriers is telling prospective travelers who they become when they travel to that destination.

This has too often been the problem with many brands in many different categories: Brands confuse preference with being about the brand itself. It’s not. Preference is created when consumers see themselves in the brand so they want to be a part of it. That’s how you match the desires of “known” and the “right choice,” because the identities of consumers represent the known and right choice for those consumers. It speaks to things people most covet.

 

 A deeper look at the travel/destination and tourism category