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December 21, 2009 Industry News
U.S. Forges New Open Skies Agreement with Japan
The U.S. and Japan have reached an agreement on the text of a landmark Open-Skies aviation agreement, liberalizing U.S.-Japan air services for carriers of both countries. The agreement was reached after five rounds of negotiations that began in May of this year. Under the new agreement, airlines from both countries would be allowed to select routes and destinations based on consumer demand for both passenger and cargo services, without limitations on the number of U.S. or Japanese carriers that can fly between the two countries or the number of flights they can operate. The new pact was reached as two different airline alliances, led respectively by American and Delta, are competing to add Japan Airlines to their rosters. (Page B1, Wall Street Journal; www.TravelPulse.com; Travel Advance, Dec. 14)
Facebook has crossed the 100-million-user mark in the U.S. a week after announcing it had surpassed 350 million members worldwide. That's a nice round audience figure to present to advertisers in the market representing the bulk of its revenue.
The social network today hit 100.5 million U.S. users Monday – up from 98.1 million a week ago, and has averaged a few million new domestic users over most of the last year, according to Inside Facebook. That makes the U.S. the first country to reach the 100 million threshold, although 70 percent of Facebook's monthly active users live elsewhere.
Last month, says OnlineMediaDaily, comScore estimated Facebook's U.S. audience in October at 97.4 million unique visitors – well ahead of the 82.9 million for Fox Interactive Media, whose chief property is MySpace. Facebook eclipsed its social networking rival in U.S. traffic in May, according to comScore.
Facebook is rumored to reach revenue of more than $500 million this year, and in September, founder and CEO Mark Zuckerberg said the company was generating positive cash flow ahead of schedule. Facebook will grow to $710 million in revenue in 2010, according to an estimate from advisory firm and market-maker NYPPEX cited in a Wall Street Journal report yesterday.
Building its audience in the world's biggest advertising market will only help Facebook to reach that level. The site's U.S. demographics are also attractive to marketers, with 52% of users between 18 and 34 years old and 19 percent from 35 to 44. (Marketing & Trends e-Newsletter, Dec.15)
Marketers who embrace social media stand a good chance of engaging people says MarketingDaily. Marketers who communicate relevant messages in the consumer's language and on their terms stand an even better chance of acquiring customers and growing sales.
This outlook reflects findings from a comprehensive study by Performics and ROI Research, which recently surveyed more than 3,000 Americans to determine how various segments use social networks in their daily lives. Questions specifically probed use of different types of social sites, receptivity to marketer messaging within those sites and use of social networks as it relates to other media channels.
According to the study, people are willing to engage with and talk about brands on social networking sites. Some key findings from the study include:
- 34 percent have used a search engine to find information on a product/service/brand after seeing an advertisement on a social networking site
- 30 percent have learned about a new product, service or brand from a social networking site
- 32 percent said messages about printable coupons on social sites resonate with them
- 28 percent said messages about sales or special deal notifications resonate with them
While many marketers have shied away from direct marketing or selling on social media for fear of alienating people, this study reveals a rationale for letting go of that hesitation. In fact, not only do many people want to interact with brands online, they specifically indicated a desire to receive offers and promotions. This attitude becomes even more prevalent with those who use specific social networking sites:
- 46 percent will talk about or recommend a product on Facebook
- 44 percent of Twitter users have recommended a product
- 36 percent of YouTube users have gone to an online retailer or ecommerce site after learning about a brand on a social network site
Although different social networks prompt varying behaviors, users of each network expressed openness to marketing/promotional messages. Many also reported actively using as many as four social networks and doing so through multiple devices. So not only are social media users interested in buying; they're reachable through a variety of Web properties and personal devices. (Marketing & Trends e-Newsletter, Dec.15)
New research shows that demand for business travel is expected to remain flat in the early part of 2010. The projections from PKF Hospitality Research show only 18 percent of adults plan to take at least one business trip – including trips to attend business meetings and conventions – before April 2010. That number is essentially unchanged from the 17 percent recorded in July.
Expectations with respect to the average number of business trips provide encouragement, however, as this number has increased steadily throughout the year from an average of 3.3 in April to 4.8 in October. The Phoenix area’s tourism sector has been severely hurt by the recession. That’s evidenced by the fact that local hotels and resorts have been cutting rates to lure travelers. According to Smith Travel Research, the average daily rate at metro Phoenix properties dropped 16.1 percent to $95.81 the week of Nov. 29 through Dec. 5 compared to the same time last year. (Phoenix Business Journal, Dec. 15)
Tourism spending rebounded in the third quarter but hovered below pre-recession levels, the Commerce Department said Tuesday. Travelers spent more on transportation, and fuel prices jumped, contributing to higher overall tourism spending. Spending increased at a 6.4% inflation-adjusted annual rate in the third quarter after rising 0.2% in the second quarter. The overall economy grew at a 2.8% pace in the third quarter and shrank at a 0.7% pace in the second. At $587 billion in the third quarter, travel spending remained below the $619 billion spent in the third quarter of 2007, before the recession officially began. Both business and leisure-travel activity perked up in the third quarter with a 26.3% increase, at an annual rate, in spending on air transportation. Spending on accommodations, such as hotels, climbed 17%, primarily from an increase in leisure travelers lured by cheaper room rates. (Page A2, Wall Street Journal; Travel Advance, Dec. 16)
U.S. Travel Association CEO Roger Dow said he was hopeful that the Travel Promotion Act would become law in this calendar year, but whether that happens depends on how long the Senate keeps its single-minded focus on healthcare. Dow, speaking at a Travel Weekly 2010 Virtual Conference and Tradeshow on Tuesday, also said the Travel Promotion could be attached to an omnibus spending bill if it isn't passed as an individual bill. The Travel Promotion Act would provide up to $100 million annually in funding promotions for inbound travel to the U.S. Congress will go into recess on Dec. 23 and will not return until after the New Year. (www.TravelWeekly.com, 12/15; Travel Advance, Dec. 16)
WestJet today unveiled its flight schedule for the summer of 2010, featuring five new routes and expanded service on 19 trans-border and international routes. The summer schedule also includes new non-stop service between Vancouver and Kitchener-Waterloo, Vancouver and San Francisco, Edmonton and Kamloops, Edmonton and San Francisco, and Toronto and Puerto Vallarta. Five Canadian cities will see seasonal routes become year-round, including:
- Vancouver to Los Angeles, Puerto Vallarta and Cancun
- Edmonton to Cancun
- Calgary to Phoenix, Palm Springs and Cancun
- Toronto to Atlantic City, Miami, Puerto Plata, Bridgetown, Cayo Coco, Varadero, Turks and Caicos, St. Maarten, St. Lucia and Cancun
- Montreal to Las Vegas and Cancun
"This is a strategic expansion of new routes within our network and an extension of flight offerings to some of our key winter routes that remain popular destinations through the summer season," said Dr. Hugh Dunleavy, Executive Vice-President, Strategy and Planning. "This schedule also demonstrates our strong commitment to take Canadians where they want to go, when they want to go. Now, our guests will have the opportunity to visit more of their favorite destinations on a year-round basis." For more information, visit www.westjetvacations.com.