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July/August 2006

Time for a Smile

What were they thinking?

All of these are legitimate companies that didn't spend quite enough
time considering how their online names might appear and be misread.

  1. Who Represents is where you can find the name of the
    agent that represents any celebrity. Its website is:
  2. Experts Exchange is a knowledge base where programmers can exchange advice and views at:
  3. Looking for a pen? Look no further than Pen Island at:
  4. Need a therapist? Try Therapist Finder at:
  5. There's the Italian Power Generator company:
  6. And don't forget the Mole Station Native Nursery in New South
  7. If you're looking for IP computer software, there's always:
  8. The First Cumming Methodist Church's website is:
  9. And the designers at Speed of Art await you at their wacky website: 

Travel Trends

Travel 2.0: Philip C. Wolf of PhocusWright discusses Travel 2.0. “Travel 1.0 started around 1995; it was characterized by the shift from offline to online reservations and was dominated for a decade by three things: price, price and price. Name your price, find the lowest price, price guarantees, 24 hours a day, seven days a week. Price drove online adoption in historic proportions. While price will always be important, several factors have come together to challenge its influence, pushing us in a new direction that PhoCusWright coined ‘Travel 2.0.’”

With Travel 2.0, “new travel researching and planning approaches are empowering consumers in unprecedented ways. As was the case with Travel 1.0, this phenomenon is not entirely about technology; rather, 2.0 is focused on solving big problems for all types of travel customers by exploiting the latest advancements. Travelers are keen to take control and find/create the perfect trip, not just the cheapest trip.”

Wolf’s Travel 2.0 characteristics include:

  • Social travel’s surge takes networking and CRM to new levels.
  • Personalized user-generated editorial profoundly impacts purchasing behavior.
  • Mapping, mash-ups and tagging resonate with travel buyers.
  • Grass root adoption of real-time collaborative tools like wikis, blogs, bots and gadgets.
  • Vertical search embeds travel features and profiling to attract more qualified eyes.
  • RSS comes of age and influences travel distribution.

Americans return vacation days:® recently commissioned its sixth annual “Vacation Deprivation” survey, conducted by Harris Interactive® and Ipsos Reid. The survey revealed that Americans are likely to give back more than 574 million vacation days in 2006, with each employed U.S. adult age 18 and older anticipated to leave an average of four vacation days on the table. The number of vacation days each American is estimated to abandon in 2006 increased by one additional day over last year, boosting the number of total unused vacation days by more than 150 million versus 2005.

One third of Americans do not always take all of their vacation days, despite more than 36% reporting that they feel better about their job and more productive upon returning from vacation.

This year, analyzed vacation habits among employed workers in the U.S., Canada, Great Britain, Germany, France and Australia. Compared to other countries included in the survey, Americans receive the fewest vacation days per year on average (14 days), compared to 17 days in Australia, 19 days in Canada, 24 days in Great Britain, 27 days in Germany and 39 days in France.

Americans love the beach: A recent online Omnibus survey conducted for MasterCard Advisors Global Cardholder Services reveals that Americans prefer sunny, warm destinations.

The most popular destinations were:

  • Beach and other warm-weather activities: 29%
  • Child-friendly destinations: 12%
  • Historical/cultural destinations 10%
  • Almost two-thirds of respondents (65%) said they dreamed of visiting Australia or New Zealand over the next 12 months; only 1% actually planned to head overseas in that period. By contrast, some 69% of those queried said they planned to visit Florida in the same period.

A billion people online:
More than one billion people worldwide now have access to the Internet, and a quarter of them have broadband access, according to a new report from eMarketer.

“The U.S. continues to lead the world in terms of numbers of Internet users and broadband households, with 175 million Web users and 43.7 million broadband households. The eMarketer report projects that there will be 78.3 million online households in the U.S. this year, and 66.7% of them will have broadband service. By 2010, nearly 90% (88.3% of online households) will be broadband-enabled.”

Leisure travelers seek amenities: Leisure travelers now account for the majority lodging demand. A recent Hotel & Motel Management study called 2006 National Leisure Travel Monitor reveals that “the most desirable hotel attribute is simply value for the price.” Location and room rate are next, followed by previous experiences with both the hotel and the brand. More leisure travelers now consider comfortable bedding “more influential in hotel selection than the property’s brand name.”

Leisure travelers seek certain types of lodging when traveling for pleasure:

  • Chain-affiliated properties are preferred by just over 80% of leisure travelers, and this percentage is rising.
  • Moderately-priced accommodations are preferred by two-thirds of leisure travelers, with slightly more of the remainder preferring “economy” over “luxury” lodging.
  • About 80% prefer hotels and motels with fewer than 300 guestrooms (because of the ‘inverse’ relationship presumed to exist between the size of a property and the quality of service it delivers).

2005 was the best:
“The year 2005 marked the most profitable year ever (in absolute dollars) for the U.S. Hotel Industry. Based on statistics compiled by Smith Travel Research (STR), the industry generated some $122.7 billion in revenues and $22.6 billion in profits last year. This profit number is slightly above the $22.5 billion that the industry generated in the year 2000, the highest level achieved prior to 2005.”

A spokesman for STR said that the “nationwide average daily rate and occupancy figures increased 5.4% and 2.9%, respectively, in 2005. Another STR spokesman added that “profits as a percentage of revenue in 2005 was 18.4%, well below the 20.1% profit margin reported in 2000. But 2005 marks the first year that the hotel industry sold over one billion room nights.”

Revenues and profits rise, but so do expenses: A recently released study by PKF Hospitality Research reveals that U.S. hotels were able to turn a healthy 8.8% rise in total revenue into an impressive 15.5% increase in profits. “This marks the second consecutive year of double-digit profit growth for U.S. hotels. However, expenses continue to escalate at a level more than twice the rate of inflation, causing concern for hotel owners and operators.”

In 2005, the cost of operating a U.S. hotel grew 6.5%. Costs for hotels include:

  • Utilities expenses grew 13.6% from 2004 to 2005.
  • Labor and related expenses increased by 5.1% last year.
  • Rooms department expenses increased 7.3%.
  • Management fees increased 8.9%.
  • Franchise fees increased 9.8%.
  • Hotel insurance costs appear to have stabilized. On average, the hotels in the sample paid 3.8% more for property and general liability insurance in 2005.

Revenue for hotels:

  • Limited-service hotels achieved the greatest increase in revenue (10.3%).
  • Full-service hotels achieved the greatest increase in profitability (19.3%).
  • A 2.9% increase in occupancy combined with a 7.4% increase in ADR led to a 10.4% increase in RevPAR.

The forecast:

  • PKF Hospitality Research is forecasting total revenue growth of 7.6% in 2006 and 4.1% in 2007.
  • This is projected to result in profit gains of 14.9%and 7%, respectively, in 2006 and 2007.
  • Based on this forecast, “U.S. hotels will be achieving a profit of approximately $14,800 per-available-room in 2006 and $15,800 in 2007.

Different generations search travel differently:
Compete, Inc. recently announced findings from a new travel study, “Online Travel Comes of Age.” Compete’s research revealed that “over 10% of the 17 million Baby Boomers who research travel online each month will also book online, considerably more than young travelers who tend to window-shop, and seniors who may be uncomfortable purchasing over the web.

Compete analyzed travelers’ behavior in seven different generational segments to understand generational differences in how travelers use online resources as they research and book travel online.

“An April 2006 Compete survey revealed that 79% of recent travelers rely on the Internet as their single most important source of travel information. Recent travelers indicated that of all their travel purchases, 62% were transacted online.

Targeting older shoppers:  According to the New York Times, “many older shoppers are now comfortable with shopping and buying online, and it’s feeding the economy. Because this group has far more disposable cash than any other, retailers are tweaking their marketing strategies to reach them.”

“A recent Nielsen survey found that 27.4 million people age 55 and older bought something online in the last six months, compared with about 26 million a year ago. By contrast, the number of adults who bought something online in the last year actually dropped, to 107.4 million from 112 million. Figures from the United States Census Bureau that show while 40% of the United States population is 50 or older, this group holds 75% of the nation’s financial assets and does 55% of all consumer spending.”

Travelers want reviews: The recent Hotel Electronic Distribution Network Association’s (HEDNA) conference in Frankfurt, Germany, brought some important travel issues to light. “A decreasing trust in advertising and a growing sense of independence among travelers is driving the online purchase of hotel rooms, where consumers are increasingly seeking out authentic reviews and buying into experiences rather than brands.

“The rise of RSS (real simple syndication), podcasts, widgets (pop-up tools), word of mouth marketing, mobile Internet and ‘mash-ups’ (where maps, holidays and photos are integrated) are the tools that were focused on at the meeting.”

Thirty-three percent of online travelers in the U.S. read other travelers’ reviews of destinations, while 64% read the comments and reviews about hotels written by other travelers.

Travelers rely on reviews; innkeepers can too: is “wildly popular with vacationers and business travelers planning a trip or just back from one, with more than 4 million first-hand reviews and related reports from the front lines. But it also has attracted a loyal following among the subjects of the reviews. Hotels and resorts mindful of their reputations can’t afford to ignore this growing force.”

In a time when travelers are do-it-yourselfers, word-of-mouth marketing and reviews from peers are vital. Several positive reviews could solicit a stay, while lukewarm or negative reviews could keep travelers away. ’Word of mouth is everything,’ said veteran Valley hotelier Tom Silverman, co-owner and general manager of family favorite Chaparral Suites Resort in Scottsdale. ‘People want to hear personal experiences.’

”Jupiter Research published a report on how businesses can stay on top of Internet chatter about their products or services. The first two tips: monitor consumer dialogue frequently, and share the findings throughout the company. Tom Kelly, general manager of the luxury Four Seasons Resort Scottsdale at Troon North, started perusing TripAdvisor about six months ago. He and other hotel executives said it gives people who don’t want to talk to a manager or fill out a comment card another option.”

Online population increases: A recent Harris Poll reports the number of adults who are online “continues to grow at a steady rate. In the past year, the number of online users has reached an estimated 172 million, a 5% increase. Harris Interactive calculates that 77% of U.S. adults are now online.”

Online travel market is growing: The online travel market is divided into two segments: leisure/unmanaged business travel and managed business travel. eMarketer estimates that U.S. online sales of leisure and unmanaged business travel reached a total of
$65 billion last year and that the total will grow to $122 billion by 2009.

A comparison of online travel sales with total retail ecommerce sales highlights some important trends. In 2005, U.S. online leisure/unmanaged business travel sales were the equivalent of 75% of total retail ecommerce sales.

By 2010, Forrester predicts that about:
  • 55% of computer hardware/software will be purchased online
  • 46% of total travel sales will be booked online
  • 40.5% of event tickets will be purchased online
  • 28.1% of books will be purchased online
  • 23.3% of consumer electronics will be purchased online

Summer travel plans:
A new poll finds that travelers will go farther from home this summer and stay at destinations longer than compared to last summer. “This summer, 74% of consumers polled said they will leave home for one to two weeks, compared to 54% who planned to stay at their destination for fewer than seven days in 2005, according to Prospectiv.”

Other poll results:

  • 83% of consumers use the Internet for researching and/or booking summer travel plans.
  • 67% of respondents indicated that they use the Internet as their primary resource for summer travel-related information.
  • 58% of those surveyed said they will leave their home state for vacation this summer, representing an 11% increase in out-of-state travelers.
  • Seaside/lakeside resorts were the No. 1 destination for vacationers, with 29% of consumers staying at a seaside resort in 2006, jumping 10% from last year’s poll.
  • Rising fuel prices will affect 60% of consumers’ decisions regarding their 2006 summer vacation planning. But, 31% of respondents said they will spend more money on vacation arrangements this year.
  • 30% of consumers book travel arrangements through online travel sites; 21% book reservations using a hotel’s/destination’s own website; and 31% use online resources for researching summer travel options.
  • 62% begin their summer travel plan research in spring to early summer.
  • 32% of consumers said discount offers for extended hotel stays would increase their summer travel this year; 28% said discounts to preferred restaurants, stores and attractions would get them on the move; and rebates on gas expenses would promote more travel by 26% of consumers polled.

More summer plans:
39.8% of consumers plan to take a vacation within the next six months, a 28-year low, the Conference Board said Tuesday. That’s the fourth consecutive decline measured by the organization, which asks the question every other month. A spokeswoman for the board offers the idea that gas prices and rising costs overall attribute to the statistic.

“A new USA TODAY/Gallup Poll supports the notion that high gas prices are crimping vacations. One-third of respondents in the survey of 1,000 adults said they are changing summer vacation plans because of higher gas prices. Of those changing plans, 37% said they would reduce the number of trips normally taken, while 26% said they’re canceling plans or simply can’t afford to vacation. Some 23% will take shorter trips.

“Even as many Americans say they are calling off summer travel, hotels are packed and airlines are nearly fully booked this summer. The decline in vacation plans could also reflect a drop in employees who get paid time off. The percentage of companies giving paid vacation time fell to 82% this year from 91% in 2002, according to the Society for Human Resource Management.”

Gadgets on vacation: A new study by InsightExpress found that most American families stay connected during their vacations:

  • 85% bring cell phones
  • 75% bring digital cameras
  • 35% bring portable CD players
  • 33% bring portable gaming devices along for the ride
  • 87% said they plan to check personal e-mail
  • 36% will keep up on work-related e-mail

This Month's Sponsor

Gift Certificates

Click here to read recent comments from gift certificate purchasers. One purchaser says:

"Love it! It was very helpful to see exactly where participating B&Bs are located. I read reviews from other sites that recommended your service highly. This makes the perfect gift to thank my in-laws for paying for our wedding!

Wedding season is upon us! Are you missing out? To join the participating inns, just log in to your Home Base, or click here for more information.

Internet Intensives, RezOvation and Expedia, Inc. are hitting the road to bring you comprehensive information about Internet marketing, online reservations, yield management, and property management software. Please join us for these workshops and for an Innkeepers' Appreciation Luncheon. Read more...

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