The Interview: Nine Travel Experts on What to Expect in 2009
What’s your travel forecast for 2009? This is the question I put to nine leading experts in the travel world:
MICHELLE PELUSO, CEO Travelocity
AUDREY HENDLEY, Vice President of Marketing for American Express Travel.
CHRIS MCGINNIS, Editor, Expedia Travel Trendwatch
GEORGE BUTTERFIELD, CEO Butterfield & Robinson
TOM HALE, CEO Backroads
LAUREN HEFFERON CEO, Ciclismo Classico
STEPHEN P. HOLMES, Chairman and CEO, Wyndham Worldwide
ANDY WIRTH, CMO, Intrawest
DENNIS PINTO, Managing Director, Micato Safaris
Here’s what they gleaned from their crystal balls.
It will certainly be a challenging year for travel, given the economy and consumer confidence. Having said that, most Americans view travel as a right, and the slowdown in the economy will definitely mean there will be some great deals for consumers. Travelers have not seen deep travel discounts for a long time. We are starting to see good deals now and we expect them to continue into 2009. Online agencies have historically been a good place for deals, and we are seeing some broad sales in hotels, for example, that are making a difference for consumers. For many people, a savings of a few hundred dollars can greatly impact their trip planning.
Despite some of the economic challenges, many people will alter the way they travel rather than forego a vacation altogether. For example, some will downgrade the hotel, others will choose a less expensive destination, and others will stay closer to home to save money. We also expect we'll see more road trips if the price of gas stays low.
Cruises will be big in 2009, especially cruising from a port close to your home if you live near the coast. Package deals will remain key for consumers — packages are where many hotels and airlines can bundle really great discounts. Watch for cash-back credit card deals and strong add-on incentives like free nights or upgrades with hotel bookings. Surprisingly, 2009 might also be the year to travel to a destination that wasn't previously in the budget, or somewhere new. As the industry launches sales and incentives, some international fares come back down, and the dollar picks up strength overseas, there may be some great opportunities for those who plan, watch and are nimble to nab deals when they pop up.
It is no secret that the economy is affecting travel. People are still traveling and exploring their passions, but travel is slowing. Travelers may just be going for fewer days or staying at more cost-effective places for their budget, but travel is important to people's lifestyles and they don't want to give it up. One thing is for sure: travelers are being savvier than ever before, fulfilling their vacation plans in the midst of the current economic downturn by finding smart ways to save. Consumers are stretching their vacation budgets, seeking value in every aspect of their travel plans and cutting costs wherever they can through measures such as redeeming reward points to offset costs, taking shorter trips, visiting alternative destinations, staying closer to home and choosing less expensive hotels. One statistic in particular points to the fact that travelers are looking to offset costs this holiday season: 87% of agents see customers using rewards points this holiday season (Last year only 70% of agents saw this trend). Now 83% of agents see customers taking advantage of American Express Membership Rewards program points.
Value-related trends for 2009 include "Second City Travel" – Visiting smaller, lesser-known cities within a destination can yield a more affordable, though equally enriching and enjoyable vacation experience.
"Tried and True Travel": Travelers are expected to return to destinations that they know and like in greater numbers in 2009. This allows vacationers to visit and explore a destination more deeply while giving them a good idea of cost so they can better budget their vacation. "Closer to Home" Travel: Expanding beyond this year's "stay-cation" trend, travelers are expected to seek affordable alternatives to overseas destinations. For example, visiting Montreal instead of Paris.
Value is always important to our customers and most especially next year. One form of travel that our agents recognized as having particular value is cruising. In fact, more than half (53%) of the American Express Travel agents polled said that cruising offered the best deals, followed by 38% who said that tour packages provide value by combining airfare and hotel accommodations.
I think it is going to be "the year of traveling frugally." It's going to look a lot like the early 90's when travel sank precipitously after the invasion on Kuwait and took several years to recover. People are still going to travel, but they are only going to go when there are very good deals– and there will be plenty of great deals. Unlike recent years when hotels and resorts were able to jack up rates and get them during peak periods, I think there are even going to be decent prices during peak travel periods like spring break and late summer. We are already seeing evidence of that when looking at hotel prices during the first two weeks of December in Manhattan. While rates are high (as usual) they are not as outrageously high as in previous years. I expect that trend to continue when we are looking a places like Mexico or Florida for spring break, for example.
I think the very best values will be for all inclusive resorts and cruises. There is a lot of overcapacity in these areas and prices are going to tumble to keeps heads in beds. I would bet that we'll see some softening on prices in Europe, especially Italy, which nearly priced itself out of the market in recent years. Latin America will still offer great value to Americans and since it is nearby, the cost of getting there should remain constant even if jet fuel prices spike again.
During uncertain times, people will be working harder than ever and may question if they should travel. But people shouldn't dismiss travel. For me, my kind of travel is the key to wellness. What is my kind of travel? Getting plenty of exercise, eating well, getting a good night's sleep, making new connections with people, taking time for myself, and above all, remembering that friends and family are what really matter. This is the kind of age-old wisdom my grandmother used to tell me. Travel in 2009 will be the perfect time to travel in order to spend time with the family, to connect and reconnect with friends, to get back to basics in taking care of yourself.
So called "green-vacations" are on everyone's minds, but at Butterfield & Robinson, we want to take it a step further. Our new venture is Destinations at Risk, designed to bring interested travelers to regions of the world under environmental or cultural strain. This series of trips will engage experts be they scientists, business leaders, environmentalists, local stakeholders and attempt to educate and enlighten our travelers in a balanced manner on the challenges facing our planet.
As for emerging destinations that seem especially affordable for Americans, South America is consistently a good value for Americans, and there are other benefits such as the relatively short flight and lack of jet lag because of the shared time zones. Peru is always a popular destination and good choice, but the northwest region of Argentina is a hidden gem. We do both a biking and a walking trip there. With the Canadian dollar dipped back down again compared to the American dollar, Canada once again will be a destination of great value for Americans. We run a biking trip on British Columbia's Gulf Islands. A short flight from Vancouver and we are biking alone through stunning mountain passes and ancient old-growth forests, we are getting up close and personal with the sea life kayaking and whale watching.
TOM HALE, CEO, Backroads
I expect that overseas travel will be down in 2009 while travel within North America will hold up a bit better. At the same time, Private and Family trips appear to be doing quite well. For those people that are inclined to travel, I don't see where the opportunities have changed. In Backroads case, we have incredible trips in over 40 countries, whether it be Biking, Hiking, Multisport or Insider. More Family destinations and departures than ever. Private and custom options continue to grow in appeal. The world is still your oyster, and many areas of the world will have more "room to breathe". There was no better time to travel than post 9/11 and I would expect Americans to once again be greeted with more open arms than ever.
LAUREN HEFFERON, CEO, Ciclismo Classico
We are being realistic about growth but strongly believe that people who truly love to travel will continue to do so. They will make different choices. For example if they are used to traveling three times a year, they might travel twice. If they are used to traveling in Europe they might choose to travel domestically and so forth. Our customer base loves to travel and we know that. We will fuel their passion with inspiration, ideas and collaborate with them on how to ensure they follow their dreams. We are of course welcome and invite partnerships from other active travel peers and vendors. Where are the opportunities for travelers in the coming year?
1. Great deals 2. The dollar is back and stronger in Europe. 3. Unique offers from operators. 4. Expect higher level of customer service. 5. Take a well-needed break from the economic stress. 6. Out a job? Enjoy life and find new opportunities. 7. Learn a language.
I think 2009 is going to be a tough year for the economy, and travel is no exception. We see business travel softening considerably, particularly in the meetings side of the business. We also believe that leisure travel, while more stable than business travel, will be down slightly as well. The good news for Wyndham Worldwide is that most of our hotel brands are in the mid-price to economy segments, historically the most stable during times of economic strain as travelers are seeking the best value for their dollar. While we believe the rental segment will be flat, we expect that many travelers will be looking at this alternative as a great way to save money by getting more space with a full kitchen for less than an upscale hotel room. The US traveler is following the example set by Europeans — travel is not a privilege, it is a right. People may modify their travel to stay closer to home and stay away for a shorter period of time, but they will still get away with family and friends.
Look for value-added offers like our stay three nights, get the fourth night free at a Wyndham resort, plus a $100 Amex credit to spend at the resort. Many cities are offering special deals and packages to attract weekend travelers, particularly since business travel is down. The Caribbean is also offering some special pricing, but with the decline in air capacity, some may be more affordable than others. In terms of "emerging trends" we see people staying closer to home, driving not flying, booking closer to the departure date, and taking shorter trips, usually 4 nights or less and often over a weekend. People are looking to save, not stop their travel, looking for the best value for every dollar spent.
With lower fares, that are quite broadly available, there's never been a better time to travel. The state of the economy will continue to suppress the cost of oil and, in turn, the "out of refinery" cost of aviation gas will remain favorable. In turn, globally, airlines will be favorably positioned to stimulate demand for travel with very low fares.
On-line tools dramatically improved the ability to help the customer not only find fantastic prices, but their ability to check out and verify quality of a property or destination.
With the best, most sophisticated search tools ever available to the customer, coupled with improvement to the systems that feed inventory into the many distribution channels, customers will be able to quickly and easily be able to find the substantial inventory of discounted lodging quickly and easily.
Incredibly priced vacation packages will be ubiquitous. Due to limited budgets, the relative cost of mainstream advertising and promotion, marketers will lean heavily on web-based promotion of these great deals. In many cases, you will see more "private sales" than ever before and being on the destinations radar screen will put you at the front of the line.
We see longer stay vacations at "nearby" destinations being a strong and viable message in the current market. Mont Tremblant, in Quebec, is a great example. This is truly a year 'round destination that genuinely feels like a French-European getaway, but is very close to New York. It's a relatively quick, easy drive or there are daily non-stop flights from Newark.
For East and Southern Africa, our business indicators show that our wealthiest clients fully intend to continue with their travel plans, with an eye toward high quality and value. Bespoke bookings dominate our sales reports, and, along with the higher-priced, longer duration safaris published in our brochure, have pulled far ahead of the shorter, less expensive safaris.
While the total number of travellers may lag behind 2007, the quality of the safaris is on the rise. Increasingly those who are travelling are electing to go first class, and guests are looking for special tie-ins to their interests (golfing, wine tasting and buying, thoroughbred racing, private mobile safaris for families are just a few examples). Micato's hallmark is to tailor safari adventures to guests' interests.
Family safaris, often involving 3 generations of family, also remain strong. There is a sentiment about the economy that "this too shall pass" but missed opportunities with family can't be recovered. Existing business has remained steady, with existing bookings proceeding as planned. Most new inquiries are for the middle and latter part of 2009. We anticipate that in 2009 we will see a far shorter time period between the initial call and the departure date. Mid-range clients, who in the past traded up to a Micato Safari (from mid-market trips), are not expected to book in numbers as strong as the past. It is these travellers who seem to be swayed by the unpredictably of the economy, and it remains to be seen whether this business will pick up later in 2009 as the economy stabilizes.