JuicyInfo

Youth travel

I'm working on a great project right now all about youth travel. Of course, travel and tourism really does have its work cut out at the moment doesn't it. Not only a global recession to contend with, but also a global pandemic in the form of swine flu. I think that subject is being well-covered pretty much everywhere, so i won't dwell on that.

On my research travels, I came across this rather fascinating document from The Lonely Planet. It's very topical, looking at how consumers are embracing social communities, with a great comparison of how brands stack up in their approach. There's also some insight into how communities are feeding into the editorial process. I particularly like this stat: "In 2007, The Lonely Planet had feedback from 13,500 travelers, which, in turn, created over 30,000 useful bits of information. Pretty impressive.

If you're into social media and communities, it's definitely worth a read. Perfect for the bank holiday weekend.

Travel and Social Media. The Lonely Planet Story

View more presentations from opaline.

When low-cost means zero value

Like many people this Easter weekend, I am jetting off to take advantage of the extra few days holiday. Not going far, only over to Northern Ireland (from London), so using the delights of low-cost air travel. 

Low-cost airlines used to be a lot more appealing as a mode of transport. In their hey-day back in the 1990's, they offered us a cheap and modern approach to travelling fast. But what has happened to them? OK, there were never really that many added extras, but compared to the competition - mostly rather dull, and pricey national airlines - they offered value. One fixed low price, plus some refreshing branding and little extras like 'real coffee.'  

Fast-forward to today, and they seem to have lost what value and charm they had. Traditional airlines have caught up on price. And little by little, costs have been going up. There are now extra costs for checking in at the airport, checking in hold baggage, and consequently prices really don't seem to be that low anymore. Ryanair even recently stated that it was considering charging for toilet use - a basic human need. Maslow would be turning in his grave. 

My point is, does it really have to be this way? Where is the entrepreneurial innovation and ideas we saw in the early days from Stelios & co. Perhaps the Easyjet's and Ryanairs should look again at their business models and think about what consumers really, really want. Low price, yes, but if there's no value then what's the point.

State-side, Jet Blue is doing wonders. Responding to the fragile economic climate by offering travellers low fares and a simple promise: 'Happy Jetting.' These guys are not removing value, they are actively building it. To quote just a few elements: they offer your first checked bag free, unlimited brand name snacks, plus TV and radio channels, and of course wrapped in some very cool branding and service. Jet Blue has been embracing social media for some time now, using it to learn about and respond to the needs of their consumers. On Twitter they have over 300,000 followers alone. In stark contrast, Ryanair is using it to fire out promotions. 

I realise the market is somewhat different in Europe than the US, longer distances and so forth, but Jet Blue proves that there is another way. This is the kind of approach we need in Europe - in my humble opinion. Wouldn't it be nice to get excited about short-haul travel again...

Would love to know people's thoughts and perspectives. Anyone know of any other low-cost airlines out there doing great stuff...?

Happy travels.

Business travel hits hard times

As part of a broader downturn in travel, businesses are making big cutbacks in trips forcing airline and hotel brands to embrace new tactics. British Airways and American Express have both been pushing affiliations with value brands and services, in order to help their customers through difficult times.

BA's Executive Club has been pushing its affiliation with Tesco Clubcard to help its members earn air miles. American Express recently announced new reward offerings, enabling consumers to redeem points for petrol, household appliances and gift cards. Back in December. AMEX also launched a complimentary travel assessment service for businesses of all sizes, anywhere in the world, helping them tackle the recession. 

Some budget brands are capitalising on rising demand for affordable travel. Travelodge has introduced a new business account card, which acts as a credit card for businesses looking to spread the cost of travel expenses. According to company info, Travelodge has seen considerable growth and aims to take an extra £30 million in business from competitors in 2009.

Looking at the overall industry, prospects for 2009 are not great. At the corporate end of the market, nearly three-quarters of large companies now plan cuts in the US, according to the Association of Corporate Travel Execs (USA Today). Research from the CIPD (Chartered Institute of Personnel and Development) finds some two-fifths of companies have reduced travel spend in the UK.  

The land of luxury

The worsening problems in the global banking industry continue to dominate the news headlines, but has the demise of the most wealthiest industry impacted the luxury travel and tourism market as yet? Juicy was in Dubai last week, a place where it seems there is no shortage of demand for high-end luxury hospitality and where new constructions on the skyline are as guaranteed as the blue skies.

In the UK, there is still optimism. At a recent ABTA travel convention, Travelmole highlighted that the luxury end of the market continues to prove resilient for UK providers, with ultra luxury cruises set to record 2-3% growth into 2009. Luxury Travel Magazine also reported that the luxury sector will largely remain insulated driven by demand for experiences. However, airlines are already feeling the pinch of the financial turmoil, suggesting that luxury travel operators may be next. BA outlined that September sales of business and first class tickets were down 8.6% as reported on Bloomberg. As the high levels of redundancies in the finance sector take effect on the affluent's disposable income, the broader luxury travel sector could well experience some turbulence in months to come.

Not so much doom and gloom

As the topic of recession continues to gain ground in the media, it’s good to see some positive trends. Below we highlight some companies that show signs of bucking the trend with strong sales results, or committing to significant business expansion. 

Retail: Consumer confidence in the UK high street has undoubtedly weakened, but some brands are shining. No-frills fashion brand Primark has defied weakening high street sales, with an increase in revenues of 25% to £899 million for the first quarter of 2008. Although its credentials have taken a beating on the ethical front, price-conscious consumers are undoubtedly attracted to this brand. House of Fraser, the UK department store has just embarked on a major expansion programme to move the brand upmarket. It’s new store in Belfast is now its largest and is part of some £60m being ploughed into stores.

In line with the general positive trend twoards internet advertising, e-Commerce is expected to remain healthy. According to a recent global survey conducted by The Nielsen Company, over 85 percent of the world’s online population has used the Internet to make a purchase, up 40 percent from two years ago. In the US, Forrester Research reports that online retail sales (excluding travel) will rise 17% in 2008 to $204bn. Tesco's latest results show that it's online retail business is one of its strongest areas. Internet sales now contribute 4.2% of Tesco's group profits and 3.1% of sales. Profits from Tesco's online foods sales were up almost 50% on sales that grew 31% and a customer base of more than one million active users that was up 20%.

Travel & tourism: In travel and tourism, although the World Travel and Tourism Council recently cut its projections for global tourism growth to 3% for 2008, with $8.4 billion expected in revenues, that is not deterring some. Sheraton has announced plans for its largest expansion in North America, where some £2bn will be spent on new hotels.

There is also still much confidence in business travel. A recent Barclaycard business survey with 3,000 business travellers, found 33% plan to travel more in 2008 than they did in 2007. Over three-quarters anticipate travelling the same amount or more due to general business or overseas expansion. However, economy travel will become more common due to cost-consciousness and the ongoing shift towards low-cost airlines. The annual survey saw EasyJet’s share increase from 7% to 15% and Ryanair from 3% to 8% year on year. BA remains the number choice with 28% of survey respondents.

Sources: Travelmole, Barclaycard business travel survey, Internet Retailing

A bit about travel

The British government recently announced it will be injecting some much needed capital into our local seasides. As part of its Seaside Change Initiative, some £45 million will be ploughed into so-called "faded" English seaside resorts over the next three years. From an environmental standpoint this is good news. There is definitely a need to encourage people to stay in the UK and reduce their airline carbon footprint. Research by VisitBritain, shows that consumers are increasingly choosing to take more short breaks, but going abroad remains a far popular choice.

In 2007, domestic trips taken purely for holiday purposes grew by 1% in volume and +5% in value, according to Visit Britain, but outbound tourism is outpacing this. In Europe, British consumers continue to be drawn by no-frills arlines giving them access to more routes at low prices, while the $ is currently a major pull to US shores.

New research by Halifax Travel Insurance found that short breaks to far-flung destinations are actually on the rise. A total of one-in-ten Brits are planning a so-called 'breakneck break' this year, flying at least seven hours for a holiday lasting less than a week. The number of such trips to the US increased 35% in 2007 according to the survey.

As the green movement evolves and sustainable tourism becomes more important, it will be interesting to see how many consumers will be willing to forfeit their overseas holidays to stay in the UK. Holidays are now much more of necessity for many consumers and with time a precious commodity, consumers what to make the most of their leisure time. The ever increasing range of cheap overseas options is bound to remain a major pull.

Some qualitative research by England Marketing in Spring 2007 revealed that sustainable tourism in the UK was still in its infancy. It found that being "responsible" is perceived by consumers as somewhat of an effort and luxury, although consumers believe it will become more a necessity over time.

Sources: Travelmole, VisitBritain, International Passenger Survey