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January 4, 2010 Industry News

Bowl Fans to Spend $250M in Valley

Football fans are pouring into the Valley for the Fiesta and Insight college bowl games. Fans from the participating teams -- Texas Christian and Boise State in the Fiesta Bowl and Minnesota and Iowa State in the Insight  are expected to spend some $250 million in the Valley.

Among the visiting fans -- Dwayne Tau and Betty Arnett from Minneapolis -- who already have spent some serious cash.  "Wal-mart, the Good Egg, Logan's Roadhouse, Marshall's, Nordstrom's Rack, the Tilted Kilt," Tau rattles off some of the places they have been. 

Another Minnesota fan, Sherry Sharp, plans to do some extra spending because of the unusually cool weather.  "I didn't bring winter clothing," Sharp said. "I'm sure we'll all be purchasing items. We were talking about that. We'll have to go out and buy gloves before the game because, when the sun goes down, I'm afraid it will be kind of chilly Thursday.  Sharp also has booked a couple of tours.

Tau said, "I would say most people, when they figure they're going to come down here, think it's going to cost them a couple of thousand dollars per person by the time they pay airfare, their hotel, that sort of thing. But, it's most enjoyable."

Boise State student Britney Johnson kicked off her week with some shopping.  "We're definitely hanging out around Scottsdale," Johnson said, adding she plans to go to a Coyotes game and possibly to the Green Bay-Arizona Cardinals game Sunday.

Minnesota and Iowa State square off Thursday night in the Insight Bowl at Sun Devil Stadium in Tempe.  Boise State and TCU meet Monday night in the Tostitos Fiesta Bowl at University of Phoenix Stadium in Glendale. (Tom Cutler/KTAR, Dec. 29)

Rates at Luxury Spas Decline but Less than Hotels

The average treatment rate for spas was $146, a decline of 10 percent for the first nine months of 2008, reported Smith Travel Research’s Spa STAR performance survey. But during the same period, the average daily rate for hotels decreased 17 percent to $240.

"As spa and hotel operators in the upper end of the market are looking for the next winning formula and are trying to attract a more value conscious market it should come as no surprise that ADR and ATR are falling in lock step," said Jan Freitag, VP at STR. "Unfortunately, the utilization rates of treatment room hours and guest rooms were also falling."
 
"The rate of decline in the treatment room utilization is so much less than in the guest room occupancy, which could be an indicator of a better capture rate of hotel guests or more promotions to attract a local audience," Freitag said. (Travelmole e-Newsletter, Dec. 29)

Leisure Travel Outlook: Value Continues to Dominate

What's hot in travel? Drive vacations, mid-priced hotels, low cost carriers, all-inclusive resorts, packaged vacations, and cruises (regardless of duration). What's not? Luxury hotels and resorts, first class air fares and five-star dining. That’s according to the tm (Travel Horizons) survey done by the US Travel Association and Ypartnership.
 
“With the arrival of the New Year, there are some encouraging signs that the travel industry is poised for a gradual recovery, although not as quickly as many travel service suppliers would like. The culprit remains the languishing economy,” says the survey.
 
While recent GDP numbers reflect a positive trajectory and job losses have abated, American consumers have adopted more conservative spending patterns and now maintain the highest savings rate observed in the past eight years.
 
The study confirms that Americans still view vacations as a birthright. One encouraging shift in travelers' sentiment involves anticipated length of leisure trips, with only half now planning to "stay fewer nights" (down from two-thirds a year ago).

“The survey results suggest that demand for leisure travel services is likely to remain stable throughout the year ahead, but 2010 will be another year of suppliers battling for market share,” according to the report.

Perceived "value" will remain king, and leisure travel service marketers will have to demonstrate even greater creativity with respect to their pricing and promotional strategies in order to attract their fair share, the report goes on. (Travelmole e-Newsletter, Dec. 29)

Future of the Meetings Market

The impact of the recession on the meeting and incentive market: “You may hear that the recession is over, but you won’t feel it anytime soon.” So says Corporate Meetings Incentive News.

“The impact of the Great Recession on meetings and incentives will continue into the year ahead, though how hard you’ve been hit depends on what industry you’re in,” the site says.

Some highlights of a survey of meeting manager members of the site’s Corporate Meetings & Incentives Advisory Board:

  • Bad press has made the industry “so shell shocked that we may not snap out of the doldrums anytime soon,” believes Todd Zint, vice president of National Financial Partners.
  • Privately held companies have been “totally unaffected by the AIG effect,” reports Bill Boyd president, and CEO of Sunbelt Motivation & Travel Inc., and are proceeding with business as usual, “though their numbers are somewhat reduced.” 
  • The direct-selling industry is booming as the unemployed and underemployed population turns to these companies as a way to supplement or replace income. 
  • The green industry is also doing well. “Our public events are booming with record-high enrollments and waiting lists. Some of this growth is being fueled by ARRA [American Recovery and Reinvestment Act] funding for green jobs and clean energy in the US,” says Marge Anderson, associate director of the Energy Center. 
  • Where years ago meeting planners thought shorter lead times were a temporary condition, they’re now the standard way of doing business for most of the respondents, according to the report. (Travelmole e-Newsletter, Dec. 29)

Travel Industry: Use Stimulus Money to Beef up Security

The U.S. travel industry wants federal economic stimulus money shifted to airport and airline security in the wake of the Christmas Day attempted bombing of a flight between Amsterdam and Detroit.

The airlines and tourism officials say terrorism fears could further discourage travel and spending in an already tough operating environment. Business travel and tourism have been hit by the recession, especially in U.S. markets such as Phoenix, Las Vegas and San Diego.

The U.S. Travel Association said Monday unallocated money from the Obama administration’s American Recovery and Reinvestment Act should to be put toward security measures. That could include further implementation of full-body security scans, which have been test at airports including Phoenix Sky Harbor International raising privacy concerns.

“We call on Congress to allocate undesignated stimulus dollars to the immediate deployment of screening techniques that strengthen security, balance privacy and improve traveler facilitation. Our travel economy is simply too important for America to be anything less than a worldwide leader in research, development and implementation of new security technologies,” said Roger Dow, CEO of the USTA. The industry group’s members include hotels, convention and visitors bureaus and other tourism and travel related business.

“We must find new screening techniques that strengthen security, protect privacy and reduce wait times and other hassles for travelers. A 21st century security system can meet these objectives given the necessary financial resources and investment in research and development,” Dow said.

The Dec. 25 incident involved a Nigerian man who was on U.S. and British terrorism watch listing aboard a Northwest Airlines flight. He allegedly tried to detonate explosive materials in his clothing, but was subdued by other passengers and airline personnel. A wing of the al Qaeda terrorist group claimed responsibility for the attempted bombing. (Phoenix Business Journal, Dec. 29)

Poll: Travel in 2010 Not Expected to be Better than 2009

The sad news is that Americans aren’t likely to travel much more in 2010 than they have this year, according to a new USA Today-sponsored Gallup Poll. The reason: slow improvement in the economy.

“This finding offsets the optimism being expressed by travel industry leaders and market analysts who have said the slowly improving economy would increase demand for airline tickets, rental cars and such services as hotel meetings and business-gathering catering,” the report says.

The poll finds that only 16 percent of Americans plan to fly more or stay more often in hotels next year than they did in 2009. About one-third say they actually will fly less frequently and have fewer hotel stays. “Also, tighter corporate travel policies imposed during the recession to reduce travel spending won't vanish,” the report says.

Earlier, the National Business Travel Association predicted that corporate travel spending would grow in 2010. However, American Express, the world's largest travel agency and travel advisory firm, now says demand for most travel services likely won't return to pre-recession record levels in the foreseeable future.

"We have seen signs that there's been some stabilization and that maybe we've turned the corner," Lane Dubin, vice president and general manager of American Express' business travel sales efforts in the Americas, told USA TODAY. He added: "But that doesn't mean things are going back to the way things were before."  He urged travel providers adjust to the “new normal" of reduced demand. (Travelmole e-Newlsetter, Dec. 31)

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