Travel Pulse | Frank Belzer | December 16 2022
In a recent survey of travelers conducted in October of 2022 (by Destination Analysts), we learned that more than 40 percent of potential vacationers believe that as we enter a potential recession, this is a very bad time to plan travel or vacations.
Is that a big deal?
After all, hasn’t history taught us that some people still plan trips even when they believe the economy is poor? Additionally, maybe the concerns around a slump in the economy will not be realized or at least not reality for a significant enough number of people.
The bottom line for many of us is that we have been through slumps before and survived, and we made it through COVID which was the biggest disaster for our industry in decades. Both are true and relevant but surely its worth asking if anything has changed this time? In other words, were the almost 5,000 people sampled in this survey feeling or thinking any differently about travel during economic hardship, than others might have felt when asked similar questions at similar times prior to the pandemic?
And if they did feel differently then perhaps the market will not be as resilient or conversely more resilient than previous downturns. To answer we need to think about what has changed pre and post:
The Cadence or Cycle of Vacation Planning was Interrupted
For many families there was a routine that had developed around travel planning, this year here, next year there, another trip here and then back to the first destination. It's not how I travel, but these patterns are representative of a huge portion of the travelling public. What happens to this cycle, this cadence when for two years it is put on pause? Maybe it’s a mistake to assume, as I have heard so many people say, “it’s coming back” when we may not know for sure.
Options Previously Unexplored Were Now Considered
With travel restrictions in place many Americans explored national parks, RV and camping vacations and many Europeans and Brits turned to canal tours and self-guided road trips. Many have commented that in addition to being less expensive, the quality time close to home translated into family ties being strengthened. It’s easy to view these as necessary substitutions but what if instead they became viable alternatives? That can mess up predictions and forecasts in a hurry.
More and More Dynamic as Opposed to Static Pricing
It seems as if everyone in the industry invested time and effort into getting their dynamic pricing systems up and running, so consumers (who never asked for or wanted dynamic pricing) were welcomed back to a world where prices changed quickly and dramatically. While dynamic means prices can go up and down it has been noted that they only seem to go up. Has this focus on price fed the belief that travel is expensive and that it is a bad time to plan?
Reservation Systems Limiting Spontaneity
Cruise lines and theme parks are leading the way in forcing consumers to select activities before, long before, they travel. Ask any consumer and they will tell you how frustrating it is to decide where you want to dine seven months from now on a Wednesday at 7 p.m. (what will I be in the mood for) or which experience you want to reserve (will it be raining) and yet we have plowed ahead believing somehow that our efficiencies as a destination will translate in guest satisfaction. The jury is still out on this and even the most advanced systems are causing a lot of unrest and criticism from guests.
Maybe the survey is wrong and maybe the factors listed will have no impact on tourism in 2023. We can be hopeful of that. On the other hand, think about what might happen to your value proposition if you were to assume that everything I list has affected the consumer's mindset. It might sound like this:
We are going to treat our potential guest like it is the first time they ever traveled to our destination, we are going to woo and sell them on their visit all over again. They will feel important and valued as we message this to them.
We are going to assume that our potential guests have explored options that were less expensive and more focused on family fun together, closer to home. We will recognize and honor that by ensuring we offer value and design experiences that allow families to build on those connections.
Yes, there are many options with pricing, we know it can be tiresome, but we will help accommodate your needs and ensure you get the best value and don’t pay more than you need to pay. We have kept our system simple so that even non calculus majors can comprehend and understand the booking path.
We know that having flexibility is important and respect that, at the same time we try and assign times so that you can get the greatest value out of your time with us. In the event that something happens, we will work with you to manage and adjust your schedule as much as possible during your visit. We have live concierge agents available to make those changes and to ensure your happiness.
To me, looking at the world with a perspective of adding value for customers at every stage is always going to drive a strategy in the right direction. We are referred to as the “hospitality industry” and that is not just a sic code designation.
Hospitality should be an adjective that describes what we do and how we operate.
Jim Hepple is an Assistant Professor at the University of Aruba and is Managing Director of Tourism Analytics.