Welcome to 2019: American Traveler Sentiment Weakens

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Complete results from our January The State of the American Traveler survey will be released in February.  As an early sneak peak, this post looks at domestic traveler sentiment and what may be early signs of a softening leisure market.

The new year has started with undertones of considerable uncertainty. While economic indicators had remained strong for much of the past year, talk of a slowdown now is in the wind. Sluggish growth, trade wars, higher interest rates, inverted yield curves, political gridlock and government shutdowns are all part of the conversation. We are currently experiencing what may be early signs of a pessimistic shift in the collective traveler psyche, as our latest sentiment tracking survey point toward a potential weakening of the domestic leisure travel market.

Every quarter, Destination Analysts ask a representative sample of 2,000 American leisure travelers about their travel plans for the upcoming year. In the most recent survey wave, the percent of travelers who said they expect to travel more in the next 12 months decreased. Only 33.4 percent said they would be taking more trips, compared to 37.0 percent one year earlier. As this data typically has a seasonal pattern, comparing past January waves is likely to be the best point of reference. The chart below shows how travel expectations have dipped significantly below performance levels seen in the past two years.

 

 

 

 

 

 

 

 

 

 

 

 

 

This moderate degree of pessimism seen in trip expectations also extends to future travel spending. When asked if they expect to spend more in the upcoming year on leisure travel, only 32.2 percent of American leisure travelers said that they would be beefing up their expenditures. This is down from 36.5 percent one year ago.

 

 

 

 

 

 

 

 

 

 

 

 

 

Travel volume and spending expectations have indeed softened, but potentially more unsettling is a drop in the general sentiment of how important leisure travel is as a budgetary item. Once a year, we ask how much priority travelers intend to place on leisure travel as they allocate their family budgets. At this time last year, nearly two-thirds of American leisure travelers (65.3%) said that leisure travel would be at least a “somewhat high priority.” This year, the corresponding figure has sharply dropped to 59.6 percent. The chart below shows the results from this year.

 

 

 

 

 

 

 

 

 

 

 

 

So, what’s the bottom line? It may be too early to tell. As we move further into 2019, we expect that the domestic leisure market will likely remain robust, however a significant downside potential exists. With uncertainty on so many fronts, we’ll hold our breath and hope for a positive outcome.

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Red Tide: DMOs & Ecological catastrophes

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Earlier this year, our blog examined a variety of natural disasters through which our clients had unfortunately been suffering. (Read more here)  Of course, we hoped that was the end of it. Our friends in the industry would see no more trouble; or as the great Willie Nelson said, “nothing but blues skies from now on.” Alas, those dreams were shattered this summer when a severe and unusually persistent Red Tide ravaged the south Florida tourism industry.

If you’re not familiar with what a Red Tide is, it’s a real mess. Red Tide is a dangerous accumulation of naturally-occurring microscopic alga that has been documented along Florida’s Gulf Coast since the 1840’s and occurs nearly every year. It can harm sea life as well as cause respiratory inflammation and unpleasant burning skin reactions in humans. A combination that is not good for tourism. This year, an unusually persistent Red Tide — the longest in the area since 2006 — happened along the Florida Gulf Coast. In coastal tourism communities, the impact to the local tourism economy was severe.

If there is any good news in the situation, it’s that only half (49.1%) of American leisure travelers had actually heard of the Red Tide situation prior to taking our most recent The State of the American Traveler survey. (This may be one of the few cases where a destination marketer wants its customers to be in the dark, unfamiliar with its product.) Still, amongst American leisure travelers, the event has had a significant impact on desires to visit.

When asked how the Red Tide would impact their travels in the next 12 months, 40.3 percent said it would make them less likely to visit the Florida Gulf Coast. While a certain percentage seem interested in experiencing this unusual event, they are outnumbered 5 to 1 by those who say they are less likely to visit.

Impact of the 2018 Red Tide
(Effect on Likelihood to Visit the Florida Gulf Coast in the Next Year)

 

 

 

 

 

 

 

 

 

 

 

 

The impression left by this disaster with travelers isn’t good. While it is unclear how this will actually impact travel behavior, let’s hope that people have short memories and that the upcoming year will be a banner one for Florida tourism. As a matter of fact, as we move into the New Year, let’s hope for a 2019 free of the disasters that have recently destroyed the great work being done by our destination marketing community.

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California Dreaming

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Americans love the great outdoors. Two out of three say experiencing nature (away from urban areas) is usually an important part of their leisure trips. Furthermore, over 40 percent say the idea of taking leisure trips focused primarily on being outdoors and experiencing nature is appealing. With this in mind, we look at which destinations are set to capitalize on this passion in 2019.

No doubt about it—the winter days are upon us. Time to slow down, cozy up and dream of the tropics. What’s that? Humidity’s not for you? Right then—maybe the slopes. Saguaro and desert blooms? Mangroves and mossy trees? Amber waves of grain? Lucky for us, our beautiful country has it all.

If you’re like most Americans, you probably have a pretty good idea of where you’ll go next to soak up the great outdoors. (Forest bathing in the Redwoods, anyone?) But if you’re looking for further inspiration, we’ve got you covered. In our latest The State of the American Traveler survey we posed the following scenario to a nationally-representative sample of leisure travelers. “Imagine a friend wants to take a leisure trip focused primarily on being outdoors and experiencing nature. This friend comes to you for advice and asks where to he or she should go. Which two states would you be most likely to recommend for being outdoors and experiencing nature?”

Here’s a list of the top states. Where would you recommend your friends go in 2019? Will you take your own advice?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wherever your greener pastures lie, take advantage of these extra-long winter nights to conjure the outdoor odyssey of your dreams.

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BOT Wars! Alexa vs. Google Home: Which is the top travel planning assistant?

While A.I. bots are far from ubiquitous, their growing presence in American homes is undeniable. According a recent Destination Analysts’ The State of the American Traveler Survey, over 15 percent of travelers report having used such an artificial intelligent assistant device to plan their trips in the past year, up from 13.3% one year ago.  Younger travelers are clearly the most active users of these high-tech assistants.

Q: In the PAST 12 MONTHS, have you used a device like Amazon Echo or Google Home for travel planning?

As our reliance on this technology’s ability to quickly disseminate information and answer burning questions such as, “How tall is Shaq?” increases—it begs the question, what role will these devices play in the travel space? As our industry ponders this greater question, Destination Analysts set out to answer a simpler question: Is Alexa or Google Home the better travel planning assistant?

How we answered the question: In an open forum at this year’s eTourism summit we pitted two travelers against each other; one avid Google Home user and one Alexa advocate. Our participants brought in their own devices and each were tasked with completing three different travel planning assignments: 1. Gather inspiration for a travel destination 2. Find information on a specific destination they wanted to visit and 3. Book travel or accommodations for an upcoming trip. At the end of this fearsome bout, the unequivocal champion was Google Home. Alexa repeatedly failed to provide accurate responses to simple queries, meanwhile Google spouted useful and actionable information without skipping a beat. You can read more about the Battle of the Bots in The Travel Vertical’s article here: https://thetravelvertical.com/2018/10/16/expedia-launches-action-for-google-assistant/

The applications of this new digital medium are continually evolving. As we look to the future it will be interesting to see how marketers take advantage of this platform to get their message in front of these tech conscious consumers. Destination Analysts will be tracking these trends and sharing our findings in later editions of The State of the American Traveler so stay tuned!

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America’s Tourism Challenge: The Trump Slump Update

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Global Tourism is booming. An estimated 1.3 billion persons traveled internationally in the past year, marking a robust 7 percent annual growth rate. However, it’s painfully clear that America hasn’t kept up. Our country has been losing market share, and with it, billions of dollars in tourism revenues. How much does the controversy swirling around Donald Trump contribute to this situation? Our The State of the International Traveler survey sheds some light on the topic. This year’s findings suggest that while the exchange rates and the cost of visiting the U.S. are the most important factors behind our declining market share, our politics matter too. The actions and policies of President Trump, the most visible symbol of our contentious political climate, have clearly played a role in America’s ongoing tourism challenge.

Five years ago, our company decided to launch a research effort to understand and track what international travelers think about America and its many diverse destinations. This survey, conducted at the start of each year, is called The State of the International Traveler. In it, we probe the minds of more than eleven thousand likely international travelers in America’s fourteen largest feeder markets. This study also gives us the opportunity to learn about current social issues, such as the controversial positions and policies of our 45th President.

America’s Tourism Brand in Decline
(% writing in America as one of the destinations they most want to visit this year)

It’s clear that America is facing a challenge. We ask international travelers an unaided question to write in the top three countries they “most want to visit” in the upcoming year. Fortunately, we are still the world’s most popular destination, but our lead is narrowing. Since 2015, the proportion of international travelers reporting that the U.S. is one of their top destination has steadily declined, slipping by 12.4 percent.

Our contentious politics are one part of this problem. Nearly half of all travelers surveyed reported having a worse opinion of the United States based on our political situation, specifically the “actions and policies of President Donald Trump.” When asked how the actions and policies of President Trump has impacted their view of the United States, half (49.8%) said their opinion of our country has worsened to some degree. Offsetting this, about one-in-five (18.1%) said their opinion of us has improved. Shifts in interest in visiting the United States is somewhat less pronounced. About one-third of likely international travelers (35.4%) say they are less interested in visiting due to our President’s actions and policies.

Interestingly, the large overall proportion of travelers reporting they’re less likely to visit (35.4%) masks significant variation between countries. The charts below show that while there are problematic outcomes in much of the world, in India, Brazil and China, the situation is reversed. A larger share of travelers in these countries are “more likely” to visit than “less likely,” indicating President Trump may be a net positive in these markets.

The root cause of the decline in America’s market share is complicated, and politics are only one part of the full picture. The situation bcomes clearer when we look at reasons travelers have decided not to visit the United States. The chart below shows the proportion of all likely international travelers who say each reason keeps them from visiting the U.S. more often.

 

 

 

 

 

 

 

 

 

 

 

As expected, the reasons most commonly cited for skipping on a trip to America were financial. The most frequent answer given was that the U.S. is “too expensive,” followed by the closely-related “unfavorable exchange rates.” The strong dollar in recent years has made travel to America costly, and the situation is unlikely to change in the near future. Still, nearly one out of every five (18.2%) likely international travelers say that discomfort with our national politics is keeping them away.

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Three Reasons Destination Marketers are Obsessed with China

Among the many intractable challenges DMO marketers face, deciding which traveler types to go after is always top-of-mind.  One thing is clear though: our industry’s keen interest in the relatively nascent Chinese travel market is well-founded.  Not only is the volume of potential visitors from China staggering, Chinese visitors intend to do the one thing that is most desired by destinations–spend a lot of money in market.  Our 2018 The State of the International Traveler survey asked likely international travelers to report what they would expect to spend on a two-week vacation in the U.S.  The chart at the bottom of this post shows the average amount that travelers from each country say they would expect to spend overall, for shopping and for hotels.  Three fun facts about Chinese travelers jump out at us.

  • Chinese travelers have, by far, the largest travel budgets. The typical Chinese traveler would budget $6,362 for two weeks in America, or $454 per day, which far surpasses the closest competitor. The second biggest spending country was Australia at $5,355 for a two-week trip, or $383 per day.
  • One Chinese traveler’s economic impact equals three Canadians. The sheer difference in terms of expected budget for an American vacation between China and other countries is extraordinary.  China’s travel budget gap with other countries is most pronounced when we look at America’s largest contributor of international visitors, Canada.
  • Way outside the norm set by other countries, Chinese travelers would also plan to spend more on shopping than on lodging. The typical Chinese traveler would budget $1,888 for shopping and only $1,271 for lodging in hotels.  This won’t be music to the hotel revenue manager’s ears, as that represents a meager $91.78 per day.  Chinese travelers’ budget for shopping is almost as large as the entire trip budget of Canadian visitors.  It is more than double that of most other countries studied.  When it comes to retail spending around a destination, nobody compares.

Average Expected Travel Budgets: Two Week Vacation in America

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: The State of the International Traveler, 2018, Destination Analysts, Inc. A survey of over 800 likely international leisure travelers in each of 14 of America’s biggest feeder markets.

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Safety First: A Key Concern of International Visitors

America may be the most high-profile of countries. What happens here can quickly find its way into the news around the world. Of course, no news travels more quickly than bad news, and America has recently had no shortage of such content. Mass shootings, wildfires, landslides, violent protests, hurricanes (and even now a volcanic eruption in Hawaii) have all punctuated the news cycle this year. Does the American proclivity to deliver sensational headlines keep international travelers away? It seems so, at least to a degree. One in five likely international travelers in America’s top feeder markets say personal safety concerns have kept them from visiting more.

The last few years have seen a substantial increase in overall global travel volume alongside a downward trend in unaided interest in visiting the United States. The latter trend has been measured in our annual international tracking study The State of the International Traveler. In 2017, we saw a -2.9% decrease in the overall number of international travelers writing in “The United States” in an open-ended question asking about destinations that they most wanted to visit in the coming year. Our most recent 2018 wave of the study showed an additional -4.7% drop in that figure. This consistent downward trend in unaided interest in visiting the United States strongly suggests that international travelers are choosing other destinations over the United States when they travel.

In this most recent wave of our international tracking study, we added a question to determine major deterrents to visiting the United States. The top two reasons cited for not visiting the U.S. most often were financial in nature, “too expensive” and “unfavorable exchange rate.” Not too surprising with the strength of the US dollar nowadays. But the third most cited deterrent to visiting was “Concerns about my personal safety.”

Personal safety is a serious concern of many travelers. One-in-five (20.8%) travelers around the world say safety concerns have kept them from visiting the U.S.  Interestingly, when we look at the responses by country, we see that the Asian countries of China, South Korea and Japan are the most likely to report personal safety concerns while traveling in the United States.  Nearly half of Chinese travelers reported this concern, a disturbing result.

 

 

 

 

 

 

 

 

 

 

 

 

 

Safety is also a major consideration when travelers are deciding which specific U.S. destinations to visit. Information about safety was rated overall as the fourth-most important type of information to U.S. destination decisions, following only hotels/lodging, restaurants/food and national parks. Information about safety outranks information about shopping, iconic and historical attractions, entertainment/events and transportation, to name just a few.

Travelers from China, Japan and South Korea were also the most likely to say that online video content would be influential in their travel planning and most importantly in the destination decision. This suggests that there is an opportunity, especially for destinations who are focused on moving the needle on visitation from countries like China, to create more online video content about how safe and welcoming it is here in the United States. Some destinations are already capitalizing on this opportunity. Take the “Everyone is Welcome” video campaign from Discover LA. The Los Angeles Tourism & Convention Board reported a substantial increase in visitation from China last year, setting them apart from the downward trend in visitor interest currently seen by the nation as a whole.  You can read more about it here.

Marketing Insight:  Online video content featuring welcoming, safe communities is a win on two counts: it addresses a top-of-mind travel concern, and delivers the message in a popular, preferred channel.

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The State of the International Traveler 2018 Quiz

How Well Do You Know International Travelers?

--This Quiz is hard, but give it your best shot!--

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Is Influencer Marketing Worth Your Time?

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Now trending on Instagram, YouTube, Pinterest and beyond, digital influencers are moving the needle for destinations of all types. Our latest research sheds some light on the extent of their impact.

Influencer marketing has quickly grown into a big business over the past few years, and savvy destinations around the world are already working to incorporate it into their marketing mix. However, there seems to be a general lack of understanding about this relatively new approach to destination promotion. Whether the goal is to create “buzz” around a destination’s brand, to establish credibility in the marketplace, or simply to generate direct bookings, many of our clients have admitted that they feel like they’re flying in the dark. With this in mind, we added a few relevant questions to this month’s The State of the American Traveler survey to take a basic measure of the market. Specifically, we sought to learn how many leisure travelers are using content created by these so-called digital influencers, which traveler segments are being influenced, and, perhaps most critically, what they’re using this content for.

But this isn’t an easy nut to crack. A major hurdle faced in asking travelers about the impact that digital influencers have had on their travels is a definitional one. What exactly is a digital influencer? In marketing circles, we at least have an idea of what the term encompasses, but of course, it would be poor survey form to expect all travelers to be familiar with the concept. So, we defined it for them:

DEFINITION: A “DIGITAL INFLUENCER” is a person who has established credibility online and who shares their opinions and experiences with a large audience. This can include bloggers, travel writers, YouTube personalities and/or persons with large followings on social media (Twitter, Instagram, Facebook, Pinterest, etc.).

 

For those interested in entering the game of influencer marketing, the survey results look promising. Nearly one in five American leisure travelers (18.3%) reported that they have indeed used the opinions of a digital influencer in their travel planning sometime in the past year. Furthermore, the generational differences among respondents is striking. Over one-third (36.8%) of Millennial travelers say they have used content from a digital influencer to help plan a leisure trip in the past year. For now, it seems that the older generations are somewhat less susceptible to being ‘influenced’ in this way – only about one in five Gen Xers (19.9%), and fewer than one in ten Baby Boomers (8.0%) reported using the opinions of a digital influencer to help plan their travel in the past year.

And what types of decisions are they influencing?  The answer will be music to the DMO marketer’s ears. (Drumroll please.) When asked what travel planning tasks they had used digital influencer-generated content for, survey respondents most commonly said it was to help select the destinations they would visit. More than half of those influenced in any way (55.1%) said that in the past year, they had made at least one destination decision based on digital influencer content. The typical respondent also indicated that several of their other travel-related decisions were impacted, too – on average, a total of 3.6 decisions (see chart below).  The decisions affected range from the restaurants they choose to dine at in a destination, to which hotels to stay at, where to shop, and to how to get around using local transportation.

Finally, those who indicated that they had selected a destination to visit based on content from a digital influencer were asked to categorize the type of place it was that they visited. Beach destinations, national parks and big cities were the most common answers, but as the chart below shows, destinations of all types are receiving traffic driven by digital influencers.

Simply put, digital influencers are important. They’ve already carved out a significant niche in the battle for consumer attention, and their impact will likely continue to grow.

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The Impact of Recent Disasters on Destinations

Natural and man-made disasters have been known to wreak havoc on a destination’s reputation and visitor volume. But how much do disasters truly affect the interest of travelers in visiting a destination, and how long do these effects linger? We asked American leisure travelers for an answer, and found that people may not hold onto these negative associations for as long as we had thought.

They say that life comes at you fast, and in the last several months, several of our friends in the industry have experienced this firsthand. Unexpected natural or human-caused disasters have touched their destinations, consequently impacting their brands and their ability to attract visitors. From wine-country wildfires to political riots on the East coast, a series of disasters have struck the destinations represented by several of our clients. Beyond the immediate difficulties, concerns and questions about their longer-term effects are being raised.

To help shed some light on the issue, we added a few pertinent questions to our most recent The State of the American Traveler surveys. This blog post shares some topline findings, and suggests that travelers may not hold onto these issues as long as we think.

The first piece of good news is that awareness of these disasters is far from universal. In fact, when we began looking into this last October, only about one third of American leisure travelers said they were even aware that the California coast at Big Sur had been closed to visitors due to crippling winter landslides. Fewer than half of travelers (48.8%) knew that the State of Oregon had been hamstrung by crippling wildfires. Even in these crazy times, politics may not be on the mind of as many of us as one might think. Only two-thirds of American leisure travelers were aware that the City of Charlottesville, Virginia had been the scene of dramatic political unrest late last summer. Amazingly, one in ten of us was not aware of the Las Vegas mass shooting in October.

The chart below shows recall rates for each of several disasters happening last year, and fortunately, it appears our memories for these things are not long. For each of the disasters studied, in just three short months, the percent of travelers who report having heard about the event dropped significantly.

Recall of Disasters

There’s even more good news in the data. While the initial impact of a disaster on traveler sentiment may be significant, these negative feeling also appear to fade quickly. For example, in October when the fires had just ended, 37.1 percent of travelers said the Napa/Sonoma fires made them less interested in visiting the destination in the next twelve months, but by January this figure had fallen to only 18.4 percent. Similar results were seen for the other disasters.

Impact on Interest in Visitation

So it appears that uncomfortable feelings about a place generated by calamities evaporate fairly quickly. Damage to the tourism sector caused by these events doesn’t need to be long-lasting. Travelers’ memories are short, and people intuitively understand that time heals wounds caused to a place. Life does indeed come at us fast, but disaster-related problem for destinations can also quickly fade in the rearview mirror.

Data source: Destination Analysts, Inc. The State of the American Traveler, October 2017 and January, 2018. Note: The Thomas Fire was added to the survey in January. No data is available for October, 2017.

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