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2011 So. Cal. Visitor Industry Conference Outlook on U.S. Travel and Tourism Lauren Schlau.
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Transcript of 2011 So. Cal. Visitor Industry Conference Outlook on U.S. Travel and Tourism Lauren Schlau.
2011 So. Cal. Visitor Industry Conference
Outlook on U.S. Travel and Tourism
Lauren Schlau
Acknowledgement to
Suzanne D. Cook, Ph.D.Marketing Outlook Forum General Manager and
Senior Advisor, U.S. Travel Association
Looking back…2001 – 2011… A Decade for the Record books!
•Resignation•Resilience•Renewal•Resourcefulness•Reevaluation (priorities)•Roller-coaster ride•RECOVERY
… but how strong and for how long?
and of many other Rs…….……
Looking ahead – A confusing economic and consumer environment!
Turning the economic corner…Really? When?
• Weak housing market• Lack of recovery in labor markets• Real median HH incomes down 7%
from 2000 • Shrinking middle-class • Inflationary pressures still high in travel• Ongoing debt crisis and political stalemates• Higher taxes?• Threat of a double-dip recession• Americans’ spending plans still on hold
7
U.S. Economic Factors are inconsistent and theconsumer is reluctant to spend
While short term indicators do not indicate stall speed
Companies are in strong position
And Housing is recovering in parts of the country
With highly expansionary Monetary policy
Spurring New growth sectors…
The U.S. consumer is complex, uncertain and lacking confidence.
Most likely scenario in 2012 = growth slowdown
Consumer Confidence…Remains very depressed
Jan '08 Jul '08 Jan '09 Jul '09 Jan '10 Apr Jul '10 Jan '11 Apr Jul '11 Oct0
25
50
75
100
125
150
Percent Change
* January-MaySource: National Park Service
1985 = 100
Source: The Conference Board
25.3
39.8
90 considered “healthy”
Traveler Sentiment IndexTM Down again…
Mar 07
Apr 07
Jun 07
Aug 07
Oct 07
Dec 07
Feb 08
Apr 08
Jul 08
Oct 08
Feb 09
Apr 09
Jul 09
Oct 09
Feb 10
Apr 10
Jul 10
Oct 10
Feb 11
Apr 11
Jul 11
11-Oct
60
70
80
90
100
110
120
100.0
78.2
95.2
83.9
88.5
85.0
Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, October 2011
March 2007 = 100 Interest in travelTime for travelMoney available for travelAffordability of travelQuality of serviceSafety of travel in U.S.
Affordability of Travel Index… Again heading in the right direction
Mar 07
Apr 07
Jun 07
Aug 07
Oct 07
Dec 07
Feb 08
Apr 08
Jul 08
Oct 08
Feb 09
Apr 09
Jul 09
Oct 09
Feb 10
Apr 10
Jul 10
Oct 10
Feb 11
Apr 11
Jul 11
Oct 11
30
40
50
60
70
80
90
100
110
120
130
100.0
124.095.2
66.9
95.0
39.1
Source: U.S. Travel Association/Ypartnership, travelhorizonsTM
March 2007 = 100; the indices run counter to costs
Gas prices rise
But…travel prices continue to outpace overall inflation
Led by still-high gas prices and rising air fares
Motor Fuel Airfares Lodging Food Away from Home
Recreation0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
29.6%
10.1%
2.6% 2.2%0.1%
Source: U.S. Travel Association Travel Price Index
Percentage change through September 2011YTD TPI = +6.9%YTD CPI = +3.1%
excludes various fees
Travel Spending : Will exceed $800 billion for first time ever in 2011
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011p0
100
200
300
400
500
600
700
800
900
$585.8$555.7 $544.9 $560.1
$606.9$653.7
$695.7$738.0
$772.5
$704.4$758.1
$815.2
Source: U.S. Travel Association and Tourism Economics
Billions of Dollars (in nominal terms)
Good News: Travel spending will continue to rise at about 5% over next two years
2006 2007 2008 2009 2010 2011f 2012f 2013f0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
$695.7$738.0
$772.5
$704.4$755.6
$794.9$834.7
$878.8
Source: U.S. Travel Association and Tourism Economics
Billions of Dollars
Recovery began in 2010 and continued in 2011… but is growth softening thru 2011?
Domestic Leisure Volume Domestic Business Volume International Volume-8
-6
-4
-2
0
2
4
6
8
10
-0.4%
-6.7%
3.5%
-2.6%
-5.3% -5.1%
3.4% 3.4%
8.8%
2.2%
1.4%
5.0%
2008 2009 2010 First Half 2011
Source: U.S. Travel Association and Tourism Economics
% Chg. Over prior year
Domestic Visitors… 2011 Volume to slightly exceed 2007 record. Slow but positive 1.5% - 2.5% growth in next 1-2 years.
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011* 2012* 2013*1500
1600
1700
1800
1900
2000
2100
1,8921,870
1,9191,890
1,953
1,992 2,000 2,004
1,965
1,901
1,966
2,0052036
2072
Forecasts as of October 2011Source: U.S. Travel Association and Tourism Economics
Millions of person-trips
Leisure travel: intentions soft…but opportunity to entice 45 million “not sures”
Oct 07 Oct 08 Oct 09 Oct 10 Oct 110
10
20
30
40
50
60
70
55% 56%53%
56%52%
Source: U.S. Travel Association/YPartnership travelhorizons™
Plan to take a leisure trip between November 2011 and April 2012
Moderate gains in domestic leisure travel
00 01 02 03 04 05 06 07 08 09 10 11 12 13
Visitors 2.2 -0.1 6.2 -1.3 3.8 2.9 0.6 1.2 -0.4 -2.6 3.4 2.2 1.5 1.8
-3
-1
1
3
5
7
Source: U.S. Travel Association and Tourism Economics
Forecasts
Domestic Leisure VisitorsWill continue to set new records
1,325.4
1,510.2 1,503.8
1,464.2
1,514.2
1,547.01,570.0
1,598.2
1300
1350
1400
1450
1500
1550
1600
1650
1700
2000 2007 2008 2009 2010 2011* 2012* 2013*
* Forecast as of October 2011Source: U.S. Travel Association and Tourism Economics
Millions of Person-trips
Total International Inbound Visitor Volume Will peak again this year after record in 2010
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011p0.0
10.0
20.0
30.0
40.0
50.0
60.0
51.2
46.943.6
41.2
46.149.2
51.0
56.057.9
55.0
59.862.3
Forecast as of October 2011Source: U.S. Department of Commerce; U.S. Travel Association and Tourism Economics
Millions of Visitors – includes all overseas, Canada and Mexico
Overseas Visitors - The Lost Decade: We are now where were in 2000 as US lost market share
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011p0.0
5.0
10.0
15.0
20.0
25.0
30.0
26.0
21.8
19.118.0
20.321.7 21.7
23.925.3
23.8
26.427.9
Forecast as of October 2011Source: U.S. Department of Commerce; U.S. Travel Association and Tourism Economics
Millions of Visitors
International and Overseas arrivals - slowing growth expected
2010 2011* 2012* 2013*0.0
2.0
4.0
6.0
8.0
10.0
12.0
8.8%
4.1%3.4% 3.5%
11.0%
5.9%
3.8%4.3%
International Overseas
*Forecasts as of October 2011Source: U.S. Travel Association; Tourism Economics
China Brazil Australia France Korea Germany Canada UK Mexico Japan
Arrivals 38 27 21 18 7 6 6 2 -1 -7-5
5
15
25
35
45
Percentage Change in International Arrivals Through July 20118 of 10 top countries showing increases
Source: Office of Travel and Tourism Industries
Attraction Trends – Domain of US and Int’l leisure travelers, seeing a recovery (versus public parks)• Attraction attendance +1.2% and average rates +3% in
2011• Forecast for 2012 = +0.5% • Larger attractions that lost attendance over past few years
experienced greater rebound – driven by families with children
• Growth in “grandtrippers” • Offering increased value
Source: Herschend Family Entertainment
Business Travel.…Not what it used to be
Incidence of Business Travel Down 15 Points Over Past 5 Years, but Stabilizing
Source: U.S. Travel Association/Ypartnership, travelhorizonsTM October 2011
Percent taking business trip in past year
Oct 07 Oct 08 Oct 09 Oct 10 Oct 110
10
20
30
40
50
40% 39%
29%
23%25%
Per
cen
tag
e
Business travel intentions…Stability reigns
Oct 09 Feb 10 Apr 10 Jul 10 Oct 10 Feb 11 Apr 11 Jul 11 Oct 110
2
4
6
8
10
12
14
16
18
20
18%
15%16% 16%
17%16%
17%16%
18%
Source: U.S. Travel Association/Ypartnership, travelhorizonsTM
Plan to take a business trip in next six months
567
494461
437 452 458 466 474
0
100
200
300
400
500
600
2000 2007 2008 2009 2010 2011* 2012* 2013*
In millions
US business travel improves…But still well below 1998 record high
* Forecast as of May 11, 2011Source: U.S. Travel Association and Tourism Economics
Business travel… Increasingly the province of the young
Gen Y Gen X Young Boomers Older Boomers Matures0
5
10
15
20
25
3027%
24%
16%
20%
7%
Plan to take a business trip between November 2011 and April 2012
Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, October 2011
Changing Households: fewer kids, more intergenerational, more singles
Four 2010 Census Findings
Aging Population
Shrinking Wallets
1
43
Growing Diversity: ethnicity, lifestyle2
There is light at the end of the tunnel… but will it be as bright as we’d like in the next 2 years?
Thank You!