New Tourism Report shows Luxury Brands Thrive as the Economy Strengthens

With a strong economic resurgence under way, luxury brands seem to be benefiting from the increase in discretionary income and corporate travel budgets more than any other tier. That is at least what is shown in the Hospitality and Tourism Industry Report for Q1 2011 by Perceptions Inc., the web-focused Voice of Customer (VoC) analytics provider.

Luxury brands were among the most negatively impacted by the recent economic downturn. Economic indicators such as increases in employment, disposable incomes and corporate budgets for business travel, all point to the reasons of their strong recovery.

Price still remains a key motivator in booking, even among luxury brands as travelers continuously browse multiple sites to secure the best deal possible. However, with a healthier economy, other factors will weigh in on the booking decision, such as brand reputation and services offered.

2011 will be a year of opportunity for hospitality brands to differentiate themselves from the competition by offering products and services that their competitors do not. With consumers being less financially restricted than in 2010, they may be willing to spend more if what they are buying increases perceptions of the value they are getting.

Other important findings from the report include:

  • Business travel increased from 29% in Q4 2010 to 32% in Q1 2011, while leisure travel decreased from 63% to 60% during the same time period.
  • Luxury hotel stays increased from 36% in Q4 2010 to 44% in Q1 2011. As a result, there was a decrease in visitors who stayed at midscale and economy hotels.
  • Technical difficulties increased from 14% in Q4 2010 to 18% in Q1 2011 for visitors who came to make a reservation and encountered booking problems.
  • Business travelers continued to have difficulty finding specific information related to their stay, such as conference room details, maps/distance to meeting locations and shuttle service.

The report analyzed immediate post-experience feedback from more than 130,000 people visiting over 100 hospitality and tourism sites to identify the most important online issues and trends facing this unique industry. For the full report click here.


Study Snapshot: Business Travel budgets increase but corporations focus on cost savings

GetThere announced the results of the 11th annual GetThere Corporate Travel Benchmark Survey. The survey revealed that while business travel is increasing, corporations are still heavily focused on reducing travel expenses.

While 2010 saw signs of recovery for corporate travel programs, in 2011 the industry should see a greater increase in business travel, according to the survey results. The report reveals that 61 percent of respondents expect their travel budgets to increase up to ten percent in 2011 and nearly a third expect their travel budgets to increase up to five percent. Yet corporations continue to drive down travel costs by achieving higher adoption rates of online travel booking tools.

“Even though the economy is rebounding and business travel is growing, corporations are using the lessons learned during the recession to continue to push for cost savings in their travel programs,” explains Suzanne Neufang, general manager of GetThere.“Online adoption rates continue to rise in every region, representing significant savings for corporations.”

Average online adoption rates increased for the tenth consecutive year. In North America, responding companies reported an average of 78 percent online adoption in 2010, up one percentage point from 2009, and GetThere’s top 10 performing customers reported an average high of 95 percent online adoption. GetThere’s online adoption remains well above the industry average of 51 percent, according to PhoCusWright’s U.S. Travel Distribution 2009 Report.

As a result of higher online adoption rates, respondents reported the following savings:
– An average savings of 70 percent on agency fees
– An average savings of 18 percent and 24 percent on domestic and international airfares, respectively
– An average savings of 12 percent and 31 percent on domestic and international hotel rates, respectively.
– Average rental car rental savings were 4 percent domestically and 18 percent internationally

Corporations Wrap Ancillary Fees into Travel Policies
In 2011, more corporations are addressing ancillary fees in their travel policies as airlines continue to introduce extra fees. In general, most companies are reimbursing travelers for their first checked bag. However, the survey showed a 16 percentage point drop in companies that reimburse travelers for a second bag. Companies reimbursing for on-board food and beverage and Wi-Fi increased by 13 and 20 percentage points, respectively.

“Ancillary fees are here to stay and corporations are developing smart, thoughtful travel policies for these extras that maximize travel budgets and meet employees’ needs while on the road. On-board Wi-Fi is clearly viewed as a valuable productivity tool by more and more corporate travel managers,” said Neufang.

Mobile Space Continues Growth in Meeting Traveler Needs
As corporations continue looking for new technologies and methods to save time and money when it comes to travel programs, mobile tools are invaluable. The mobile space continues to be a growth space for the travel industry, and for the second straight year, respondents ranked obtaining flight information as the most important feature of a mobile solution, while booking flights and hotels ranked second and third, respectively.


Study Snapshot: Travel Industry’s Online Sales Rebound

Fees help overcome slowing penetration rate

The market for leisure and unmanaged business travel has had a tough few years, but a rebound is under way. Online sales picked up steam again last year after a drop in 2009.

eMarketer estimates that US online sales of leisure and unmanaged business travel will increase another 8.5% this year to $107.4 billion, up from $99 billion in 2010.

eMarketer benchmarks its US online travel sales projections against figures from PhoCusWright, for which the last full year measured was 2009, and bases its forecast on a meta-analysis of data from several research firms, as well as overall travel industry trends.

The number of US consumers researching and booking travel online is still growing. More than 114 million people will research travel online this year, and 93.9 million will book it.

But the percentage of US internet users doing so has stabilized. The online travel market is now mature, and only modest growth in the percentage of all trips booked online is expected.

Growth in spending is coming largely from a rise in airfares, hotel rates and ancillary fees, which increase the aggregate dollar amount of online bookings.

This year, eMarketer estimates, the average amount each online travel booker will spend is $1,145. That will go up to $1,213 next year.

Mobile travel research and booking is also on the rise. eMarketer expects this less-mature channel to attract 24.6 million travel researchers and 11.8 million bookers this year.