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Perfect storm facing 2009 travel marketing

Caribbean Tourism Organisation European Encounter Event at World Travel Market, moderated and introduced by Debbie Hindle, bgb managing director

"Recent headlines have said: "Obama starts under the clouds of recession" These aren't the high white clouds drifting idly over ahead on a hot sunny day. These are the bruisingly angry clouds of a perfect storm - that terribly rare weather phenomenon in which several conditions happen at the same time to create the perfect conditions for a major storm.

"A perfect weather storm only happens two or three times every century. From where we're now standing we're seeing a perfect economic storm, which feels like a once-in-a-century event. The hard part for us all in facing something we've never encountered before is knowing how to react. Which direction is it coming from? How can we best protect ourselves? And, most important, how can we start to plan for recovery?

"So what sort of storm do we think we're facing? Tomorrow the United Nations World Tourism Organisation launches its Tourism Barometer. In amongst its statistics it will say: "Unlike previous crises such as September 11 and SARS the current downturn does not impact on the desire to travel. The major concern is whether one can afford to travel, or want to spend given the uncertain economic situation.

"And I'm sorry to tell you that perhaps our own weather makes us a rather pessimistic bunch. Malcolm Preston of PricewaterhouseCoopers, speaking at the Association of British Travel Agents' Convention last month, said that British people feel worse earlier and for longer than other nations. In April 2008 apparently 13% of the British population thought their disposable income would get worse. By August 2008 that had risen to 44% of people. It doesn't stake a statistician to know that figure is now going to be much higher.

"We've lost confidence in the stability of the world around us. We've been shocked and - in shock - we're not making big spending decisions even if we have money now. Interestingly research is showing that older people who have been through previous recessions are more cautious than younger generations. So, what's going on? Let me touch on just four things.

"First, as in any crisis, the World Tourism Organisation's advice is that the first and fastest thing to do is to refocus on resilient sectors that might not always be your primary focus in growth times. That's sectors like visiting friends and relatives, repeat visitors, special interest and independent travellers.

"The second area is work more closely with the travel trade. This time there is a swing back to travel trade sales. People aren't confident and don't know whom to trust so they want to talk to someone. At the UK's annual travel industry convention by ABTA in October the word on the street was of the major shift in bookings with agents. Panelists said there was an increase in the number of companies applying for ABTA membership. A speaker from Virgin said that the family market was buoyant but described bookings as "disproportionately high through high street agents" and said that the typical booking pattern had flipped on its head.

"Third - be aware the online world is convulsing in different ways. On Friday there was a report by Travolution and Travel Weekly's digital newswire service saying that in October, the top ten travel agency sites saw visits plunge by 17% compared to the same period last year. The same report said that in October the percentage of total search terms typing in the word "holiday" had dropped by 30%. These searchers haven't necessarily gone away or stopped being interested in travel. They are waiting to see how the world's storm will hit them and marketers are going to need to work harder and smarter to reach and convert them.

"Travolution and the online content specialists Frommers Unlimited(which is one of my clients) recently carried out a survey of almost 100 British travel companies asking them about their online marketing plans for 2009. More than half said they were planning to increase their online spend but many indicated they'd reduce straightforward banner adverts. Instead travel companies are investing heavily in search engine optimisation, but also in destination content. That's a huge opportunity for the destinations in the room today.

"And my fourth and final area to consider today is the luxury sector. This has traditionally been more resilient. What's the picture today? My company had a survey carried out in conjunction with the global travel news site Travelmole and found that two thirds of luxury suppliers expect to see a downturn in 2009 and half expect to market their products to new audiences.

"bgb has also worked with other agencies around the world to create a report on how the luxury market is responding globally. But when we carried out the research in October the view was that serious high net-worth spenders were refusing to downgrade on quality but might take one fewer trip than in the past. However a clear message emerged from around the world that luxury travellers are interested in "understated luxury". Clients don't want to appear crass with their wealth as markets tumble.

"So we're in a storm and we need to be aware of how people are reacting to it, just as much as considering how much money they'll have in their pockets. We're going to need to be bold, brave and challenging to find our way through and to plan beyond it.

"I'll hijack a well-known quote, which says, "the most successful people are those who are good at plan B".

"My prediction for 2009 is that the most successful people will be those that have plan B, C and D."



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