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The Rearview Mirror
By Joe Veneto, the Opportunity Guy

Last October, while attending the annual TIA Outlook Forum in Charlotte, North Carolina, something was missing. After listening in on two full days of sessions with senior executives in the Travel Industry, I realized the Outlook was missing from the Forum.

At the same time, news media, financial markets and on-line Web sites were reporting ripples, bumps and possible bubbles in the economic outlook.

At the Forum, most marketers were looking back at a season that was relatively strong and congratulating themselves. At the same time, it seemed they were planning for a repeat of 2007's prosperity!

Fast forward five months, and a decidedly different picture has emerged. The banking crisis, sub-prime mortgages, inflation, oil prices and consumer confidence have created a perfect storm. I am convinced those same marketers at the Forum are now wondering or worrying about what the season ahead will hold. It is also safe to work from the premise it will not be a vacation season similar to what we have seen during the past few years.

The rearview mirror effect, that objects and situations are closer than they appear, will certainly play out in the market. Discretionary spending, the lifeblood of vacations and the Travel Industry is essential to seasonal success. Recent data on consumer confidence, jobs, spending and rising oil prices indicate that this is not a "business as usual" economy.

Last month, however, the Y Partnership Group in Orlando released recent research on US Household Vacation Planning. The Travel Horizon survey indicated that households planning at least one overnight trip in the next six months remained robust. In fact, since June of 2007, with survey data through the end of the year, the intention of consumers to take a trip has remained constant at 38%. Even as additional economic data on consumers has been released, vacation intentions continue to hold. According to the Y Partnership, for Americans "Vacations are a birthright".

The implications of this proposition is that Americans will continue to get away. However, indicators are that they will begin to downshift or "trade down". This may translate into a number of possible behaviors but people will continue to go and get away.

To counteract the economic clouds on the horizon, marketers must immediately take a proactive approach and play offense. Here are a number of trends you may see with suggestions for formulating some tactical solutions.

Regional Retrenchment:

The distance vacationers will travel will be increasingly important as gas prices hold or rise to new heights approaching Memorial Day. Consumers will search the local and regional market for familiar destinations and travel options closer to home. This will be very similar to the behavior of vacationers seen post 9/11, driving the 2002 travel season.

Driving on a tank full to destinations with high awareness for local and regional visitors will be appealing to the mass market. The average number of days for trip length may also shrink from last year. The overnight and weekend getaways will be most in demand.

Value-Based Products & Offers:

Influencing these consumers will require marketers to freshen up offerings and products in the local and regional market. Since this customer base has high awareness, in most cases, you will need to create new and improved value to counteract the "been there, done that" scenario. In addition, value-based offers will be important, but price must not simply be the defining characteristic in the Value Equation.

On a recent trip to Philadelphia, a radio commercial advertised Family Fun Friday Nights at The Philadelphia Seventy-Sixers. A package of four tickets, four hot dogs, four drinks and four Fandango movie tickets was offered for $99.00 inclusive. Wrapping up value included tickets plus food and another attraction. The Sixers value equation formula addressed potential objections some consumers might be thinking about when considering a trip to the Sixers. It also framed a night out with the emotional connection to family. The package created a value perception beyond the sum of the parts and the components were only available together in this package.

Packaging & Partnership:

Wrapping up your products, services and experiences not only creates value, it addresses important consumer forces. A few of these forces that impact buying behavior are time poverty, convenience and simplicity.

Look at combining your offerings with other travel suppliers to create a winning package formula. Lodging, meals and attractions wrapped up for one price addresses consumers convenience quotient. In addition, multiple attractions, museums and a restaurant might extend a half-day trip to a full-day or potential overnight visit.

Developing package offerings that are unique and exclusive will reap rewards. They will also not be subject to Web commoditization. In addition, when multiple travel partners work together, the sales and distribution channel opportunities increase to include the activities, Web sites and promotional vehicles of the partners.

Creative Promotional Offers:

Creative promotional offers that tie back to a destination's brand elements or theme will also act as hooks to get potential clients' attention. While "Trips On a Tank" with a gas card or food credit might be appealing, it may not be enough to sway visitors. Wrapping up additional elements and attractions from the area will add value and move the needle. Be sure to wrap up the package with a cool title.

Promotion:

Partner with promotion in mind. Look to partners that are active marketers and are ready, willing and able to develop and execute new offerings given the current market. Ask yourself, what partners might be a natural fit to combine forces, based on their offerings and proactive marketing. What partner(s) has a great brand and can provide access to additional clients or market segments? Now is not the time to slow down on your sales activities or cut promotional budgets.

Finally, keep looking in the rearview mirror for clues and changes in the consumer value equation. Then, develop new offerings that you can promote, assess and evaluate on a regular basis to ensure a successful season.

As you ramp up your marketing activities to generate results, remember, "The most difficult thing about change is initiating it." Author unknown.

It's time to hit the Runway!

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