Abstract
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Product coverage
Car rental; Demand factors; Health & wellness tourism; Tourism flows domestic;
Tourism flows inbound; Tourism flows outbound; Tourism receipts and
expenditure; Tourist attractions; Transportation; Travel accommodation; Travel
retail
Executive summary
Growth in demand continues to boost travel
In 2006, continued economic growth increased demand for both leisure and
business travel. Domestic travel, more resilient to economic fluctuations,
continued to grow. Meanwhile, international travel continued to grow and
surpass its 2000 peak despite a weak dollar. As a result, airline companies
were able to continue fare increases and capacity cuts from 2005. Hotel and
car rental companies also continued to raise prices without deterring demand.
Demographic differences result in increasing differentiation
Diversification in travellers resulted in growing differentiation among
providers seeking to attract different consumer types. Baby-boomers continue
to play a growing role in travel demographics, increasing the importance of
older age groups. Those aged 50 and up are often "empty-nesters", with their
children having moved out of the family home, and travel without children.
This afforded them more options in trip length and destination. They are most
likely to use luxury cruise ships to travel, as this safe and planned mode of
transport suits their needs. They are also likely to travel longer distances
abroad to exotic destinations, as they can afford the cost. Young adults
between the ages of 25 and 34 are meanwhile entering higher education and the
workforce. They enjoyed fast financial gains with the ability to spend more on
travel. However, the demographic group that continues to account for the
majority of travellers is that aged 35-49 years. These consumers focus more on
domestic travel, taking short haul trips to spend time with their families.
Terrorism fears subside
Even though the British authorities thwarted a terrorist attack aimed at
US-bound flights in August 2006, fears of terrorism have not deterred demand
for travel. Travellers were more upset about the increased security measures,
which increased the hassle of air travel, than the threat of terrorism. Demand
for air travel was temporarily impacted by the more restrictive security
measures. Air travel for domestic and international trips grew in 2006,
however, signalling that Americans are now more resilient to the threat of
terrorism.
Growing internet development continues to affect travel
Internet development continues to revolutionise the travel and tourism
industry. Direct suppliers are beefing up their websites to attract consumers
and increasingly avoid selling through online travel agents. Additionally,
direct suppliers increased incentives for booking directly by adding dynamic
packaging to their websites and by guaranteeing the lowest prices. However,
online travel agents are fighting back with loyalty programs, destination
guides and more consumer-generated content.
Additionally, the Web 2.0 phenomenon is growing. Consumers are uploading their
own content to share via this medium. This includes reviews of hotels,
activities and destinations as well photos and videos. As a result, it is
easier for consumers to customise their own trip and choose which elements
will be suit their travel needs.
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