Trends

Length of Stay: the Real Challenge Now Facing the Travel Industry

Most industry chatter is replete with anecdotal reports of cancelled business trips, meeting planners who are re-booking groups to more cosmetically 'acceptable' venues in order to avoid the glare of the press, and postponed vacations. Yet the fact of the matter is the incidence of travel in America remains robust, as revealed in our most recent travelhorizons(TM) survey.

Ypartnership The February (2009) edition of this nationally-representative survey of 2,200 U.S. adults which we co-author every 90 days with the U.S. Travel Association revealed that almost two thirds (63%) of U.S. adults are planning to take at least one overnight trip primarily for leisure purposes during the next 6 months (versus 60% in January 2008). Not surprisingly, intentions to travel increase with household income (fully 8 out of 10 households with an annual income over $75,000 are planning at least one overnight trip for leisure purposes during the next 6 months). And one out of 6 adults (16%) is planning to take at least one overnight trip primarily for business purposes during the next 6 months.

So contrary to what one might conclude from the prevailing news headlines, the problem does not appear to be a decline in the percentage of adults who are traveling for either business or pleasure. Rather, the real culprit is revealed in the replies given by respondents to a question about how, if at all, they are planning to change their travel behavior in the months ahead as summarized below:

EXPECTED CHANGE IN TRAVEL PLANS AMONG
ACTIVE TRAVELERS WHO ARE LIKELY TO CHANGE PLANS



As revealed in the table, the most frequently anticipated 'changes' in future travel behavior appear to be motivated by a desire to reduce the cost of travel. No surprise here (hence the reason for the 'trading down' phenomenon now underway in practically every category of the travel industry). And the Internet is clearly the weapon of choice. But the market force that appears to be exerting downward pressure on demand is the conscious effort on the part of travelers to reduce the number of nights they plan to spend away from home, regardless of the purpose of their trip (business or leisure). Fully half of all travelers who state they are likely to modify their future travel behavior plan to do so by staying fewer nights. Assuming an average trip length of 3 nights for business and 4 nights for leisure, the negative impact of the realization of this expectation on the lodging, cruise and attraction industries in particular could be significant. So the implication is clear: the real challenge facing the travel industry is less one of getting people to take trips they otherwise were going to postpone or cancel, and more one of getting them to extend their length of stay. This should therefore be the focus of your creativity, and communications, in future marketing programs.

For further information about the results of our February travelhorizons(TM) survey visit the Publications section of www.ypartnership.com.



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