Travel and the Economy
The other day I was surfing through classified advertising on the web. I was looking to answer three basic questions:
1. What will an average family or travel group expect to pay for a 5 day/4 night vacation?
2. What will they actually spend?
3. What value do they expect to receive from the experience?
At
present, the news media drones on about the sad state of our economy
and an out of control unemployment rate of 9.5% (in some parts of the
country 15%) and how we are in for a least two more very grim years
before our economy recovers. But, somehow the travel industry has not
experienced the same downturn.
Travel Industry Growth
According
to the latest Tourism Satellite Accounting (TSA) research, world travel
and tourism generated close to $8 trillion in 2008, and is expected to
rise to approximately $15 trillion over the next ten years while
supporting 297 million jobs and 10.5% of global GDP by 2018
(travelindustrywire.com). For any industry this is stellar performance.
Of
course the bottom line reason for this success is people still want to
"get out of Dodge" and are willing to pay for it. "How much?" and "Why?"
were two of the questions that took me to the classifieds.
Back To My Research
In
my two-hour surf through the travel classifieds, I found several
discount vacations in a major destination from $700 to $1000. The prices
were for the hotel stay only. Food and travel were extra and could
realistically be expected to double that price. So the price of this 5
day/4 night getaway could easily be between $2000 and $2500. But, then I
came across something that was even more interesting and rooted in my
third question.
At first read, the three questions seemed to be in
order of priority. We would assume that a family or travel group would
first come up with a budget and then plan a vacation. Let's find a place
in a scenic location away from home. We can cook our own meals to save
money. Our budget is based on what we can afford, now what can we get?
And the second assumption is the vacation will realistically go over
budget by an anticipated percentage. These are fair assumptions, but
those assumptions go right out the window when seduced by the
entertainment vacation.
An entertainment vacation is a destination
vacation to any of the world famous destinations, i.e. theme parks, Las
Vegas casinos, International cruises, and the like. Because most
families believe the shared experience of going to Disney World is so
much greater, they are willing to double, even triple the expense. The
stay in a hotel and eat meals in restaurants, even drive a rental car if
they flew to the destination. The entertainment vacation promises a
lifetime memory that a mundane trip to the beach can't.
But wait... there's more!
A
secondary discovery on my journey through the classified ads was the
large listings of time share vacations for sale. The selling point of
this type of vacation was individual ownership of a particular place and
time in the year when you could get away. But, these listings were
offering the timeshare for sometimes half of the original purchase
price. The primary reason for selling was, "I am no longer using it."
There is an apparent shift in vacation value... from being together to
experiencing something entertaining together. That shift is the reason
the travel industry is experiencing near exponential growth.
If an
entertainment vacation could cost the same or less than that trip to
the beach, would you do it? The answer to the question is obvious. Of
course! If you could save 75% on an entertainment vacation, and 50% on
the restaurant meals, would you book it? Again... of course! Because the
vacation value of the shared experience is high and the cost is the
same or maybe even a little lower.
The Travel and Vacation Package
Over
the past fifteen years, several companies are now offering travel and
vacation packages that combine the best of both worlds... high value
experiences with low cost. These packages are different from a travel
agency booking. The package offers a series of discount travel cards and
certificates that allow you to book resorts, theme parks, cruises,
hotels, campsites, restaurants, and more for 50%-75% off. These are not
travel clubs with monthly or annual fees. These packages are offered for
a one time price, usually less than the cost of a typical week long
vacation. The package usually contains the equivalent of thirty or more
vacations, including restaurant discounts, that never expire. Some of
them are even transferable. Usually a package will include several bonus
vacations that can be given away. Often hotel rooms and condo rentals
can be had for the cost of the room tax. While some results may vary,
with a travel package the charge for a $200 per night room could be as
little as $25 a night... an incredible bargain.
Vacation and
travel packages can be found on the internet, but be warned, what I've
written about is not a package from a travel agency for a one time
vacation. These packages come offered by an association of business
people who have negotiated the package through several travel vendors.
The business association is NOT a seller of travel and therefore is not
licensed to sell travel. What is sold is travel and travel related
discount packages that provide discounted access to many travel and
travel related companies.
Wednesday, December 14, 2011
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