Tourism is lucrative business — in 2005 travel and tourism contributed $650 billion to the U.S. economy. Travel and tourism is the third largest retail industry in the USA, behind automotive dealers and food stores. The industry directly employs more than 8 million people and creates a payroll income of $171.4 billion and tax revenues of $104.9 billion for federal, state and local governments. (Source: Travel and Tourism Works for America, September 2006; Travel Industry Association).
While people have less free time (Only 14% of Americans plan to take a two-week vacation in 2007, down from 16% in 2006 according to a new study by Harris Interactive for Expedia), there is greater competition for those rare leisure hours. For instance, museums and attractions continue to expand and multiply while attendance is shrinking.
In June 2007, the Consumer Confidence Index was posted at 103.9, down from 108.5 in May 2007. Lynn Franco, Director of The Conference Board Consumer Research Center addressed the June report statistics saying, “A perceived softening in present-day business and employment conditions are the major reasons behind this month’s pull-back in confidence. In fact, the Present Situation Index now stands at levels not seen since the final quarter of last year. Looking ahead, consumers remain rather subdued about short-term economic prospects. All in all, the glass remains half empty and half full.” Other prevalent trends that are dramatically shaping the travel and hospitality industries are:
- Traveler frustration with hassles, inconvenience and poor service – the US Air Travel industry is in poor condition: with overcrowded airports, poor in-flight service, stranded planes, and hotels constantly ‘under construction’
- The Internet: the net is the number one source of travel planning and purchasing – Forrester Research predicts that travel will remain the number-one online retail category and grow to $119 billion by 2010. An April 2007, a survey conducted for Expedia by Harris Interactive asked travelers where they would turn for accurate information for summer travel planning. Information from online travel agencies was the top response (52%), followed by a recommendation from a family or friend (45%). The remaining responses were divided between travel guide books (25%), travel community websites (19%), magazines and newspapers (19%), traditional travel agents (17%) and convention and visitor bureaus (16%).
- Generational Shifts: The Boomers are retiring and Generation X is entering its peak earning years. Generation Y and “MGeneration” (‘M” stands for Multitasking and Mobile) is becoming more progressively more defined as a market.
- More demand for “orientation and facilitation”: travel is evolving into a “concierge service on demand”. According to TIA’s ¨Ideal American Vacation Report¨ released in February of 2007, the ideal vacation destinations for American vacation travelers are those that offer an easy travel experience, a sense of fun and adventure, and local flavor.
These trends suggest that in order to be successful as a Travel Retailer (online or traditional), Consolidator, or service provider, customer preferences and customer experience have to be top priority. Additionally, the challenges companies face from this changing consumer behavior and external market forces call for additional technology and process changes, such as a more sophisticated client-facing travel system.
We believe that XpertSHARETM can provide a more advanced, interactive and richer experience interface, while improving business intelligence, and connecting the customer to the right travel expert. The interactive exchange between the client and the travel expert is guided by the criteria set by the client and the adaptability of the platform and the expert to present the most optimal and most desirable option.