five forces shaping the global lodging industry

Five Forces Five Forces Shaping Shaping The Global The Global

Lodging IndustryLodging Industry

Five Forces Five Forces Shaping Shaping The Global The Global

Lodging IndustryLodging Industry

2005 National Travel MONITOR 2005 National Travel MONITOR

Converging ForcesConverging Forces#1: The ascent of leisure travel#1: The ascent of leisure travel

2005 National Travel MONITOR 2005 National Travel MONITOR

Italy 42France 37Germany 35Great Britain 28Canada 26Japan 25USA 13

Source: WTO

Number of Vacation Days Per Year

2005 National Travel MONITOR 2005 National Travel MONITOR

The Busiest Night Of The Week?

The Busiest Night Of The Week?

SaturdaySaturday

2005 National Travel MONITOR 2005 National Travel MONITOR

I am actively seeking ways to use new technology in order to reduce my business travel in the future 35%

I am actively seeking ways to use new technology in order to reduce my business travel in the future 35%

Attitudes Toward Business Travel

Attitudes Toward Business Travel

20052005Agree:Agree:

†

2005 National Travel MONITOR 2005 National Travel MONITOR

2005 National Travel MONITOR 2005 National Travel MONITOR

2005 National Travel MONITOR 2005 National Travel MONITOR

Converging ForcesConverging Forces#2: The commoditization of air transportation#2: The commoditization of air transportation

2005 National Travel MONITOR 2005 National Travel MONITOR

An Uplifting Experience?An Uplifting Experience?

2005 National Travel MONITOR 2005 National Travel MONITOR

2005 National Travel MONITOR 2005 National Travel MONITOR

64%

54%

16%22% 20%

24%

0%

10%

20%

30%

40%

50%

60%

70%

LEGACY CARRIERS LOW FARE CARRIERS REGIONAL CARRIERS

Passengers By Carrier Type (2000 V 2003)

Passengers By Carrier Type (2000 V 2003)

-8.60% -9%

-0.80%

-4.20%

-10.00%

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

2001 2002 2003 2004

YEAR-OVER-YEAR CHANGE IN AVERAGE DOMESTIC FARES

Average domestic fare down 22%

in 4 years.

Average domestic fare down 22%

in 4 years.

Source: IATA, 2005.

2005 National Travel MONITOR 2005 National Travel MONITOR

Converging ForcesConverging Forces#3: The rEvolution#3: The rEvolution

2005 National Travel MONITOR 2005 National Travel MONITOR

Sources Used When Planning A VacationSources Used When Planning A Vacation

23%

10%11%

56%

Travel agentonly

Internet only

Travel agentand Internet

Neither travelagent norInternet

(Leisure Travelers Who Use Airlines/Hotels)(Leisure Travelers Who Use Airlines/Hotels)

2005 National Travel MONITOR 2005 National Travel MONITOR

Broadband AccessBroadband Access

11%

11%

15%

18%

18%

23%

26%

50%

57%

0% 10% 20% 30% 40% 50% 60%

ENGLAND

ITALY

FRANCE

GERMANY

SWEDEN

U.S.

JAPAN

CANADA

SOUTH KOREA

AMONG HOUSEHOLDS WITH INTERNET ACCESS

Source: Yankee Group, 2003Source: Yankee Group, 2003

2005 National Travel MONITOR 2005 National Travel MONITOR

Online Planning And Buying

Online Planning And Buying

In the travel category– More looking than booking– Low conversion rates

Control of transactions– Shopping “BOTS”

In the travel category– More looking than booking– Low conversion rates

Control of transactions– Shopping “BOTS”

2005 National Travel MONITOR 2005 National Travel MONITOR

Meta Search:The Next Horizon

Meta Search:The Next Horizon

“Just keep lookin’ and you’ll get a better deal.”

“Just keep lookin’ and you’ll get a better deal.”

• Growing sense of suspicion about whom to believe because of the filters applied to the information served

– Increased reliance on “objective” sources

– Growing use of blogs

• Growing sense of suspicion about whom to believe because of the filters applied to the information served

– Increased reliance on “objective” sources

– Growing use of blogs

2005 National Travel MONITOR 2005 National Travel MONITOR

.travel.travel

2005 National Travel MONITOR 2005 National Travel MONITOR

Converging ForcesConverging Forces#4: The vigilante consumer#4: The vigilante consumer

2005 National Travel MONITOR 2005 National Travel MONITOR

Strategic ControlStrategic Control

Agree: The single most important change created by the Internet is giving consumers

like me greater control.

Agree: The single most important change created by the Internet is giving consumers

like me greater control.

AGREE63%

2005 National Travel MONITOR 2005 National Travel MONITOR

Strategic ControlStrategic Control

Want to participate in the creation of new options– Personalize products and services

Want to control the transaction– Through access to comparative

pricing

Want to participate in the creation of new options– Personalize products and services

Want to control the transaction– Through access to comparative

pricing

AutonomyAutonomy

62%

74%

55%

60%

65%

70%

75%

2002 2005

Agree: I rely more on my instinctsthan the opinions of experts.

Agree: I rely more on my instinctsthan the opinions of experts.

2005 National Travel MONITOR 2005 National Travel MONITOR

“My IQ Is Higher Than Average”

Agree: 63%

“My IQ Is Higher Than Average”

Agree: 63%

Agree:

Marketers and advertisers don’t treat consumers with

enough respect.

62%

Agree:

Marketers and advertisers don’t treat consumers with

enough respect.

62%

Agree:

Very little, if any, marketing and

advertising I see has any relevance to me.

59%

Agree:

Very little, if any, marketing and

advertising I see has any relevance to me.

59%

33% 41%

2001 2005

Refused To Buy A Product Or

Service In The Past Year As A

Form Of Activism

Refused To Buy A Product Or

Service In The Past Year As A

Form Of Activism

PersonalAuthenticity:

Clarity of values;

conviction they are right for

you; courage to act on them.

PersonalAuthenticity:

Clarity of values;

conviction they are right for

you; courage to act on them.

New Attitude Toward Business

New Attitude Toward Business

Business On My TermsBusiness On My Terms

IT'S USUALLY NOT NECESSARY TO PAY FULL PRICE FOR MOST GOODS AND

SERVICES BECAUSE YOU CAN GENERALLY FIND THINGS ON SALE

AGREE92%

2005 National Travel MONITOR 2005 National Travel MONITOR

Converging ForcesConverging Forces#5: Emerging markets#5: Emerging markets

2005 National Travel MONITOR 2005 National Travel MONITOR

If There Were Only 100 PeopleIf There Were

Only 100 People

2005 National Travel MONITOR 2005 National Travel MONITOR

57 would be Asians21 would be Europeans8 would be Africans5 would be Americans

57 would be Asians21 would be Europeans8 would be Africans5 would be Americans

2005 National Travel MONITOR 2005 National Travel MONITOR

12 would speak Mandarin Chinese as their first language7 would speak English as their first language

12 would speak Mandarin Chinese as their first language7 would speak English as their first language

2005 National Travel MONITOR 2005 National Travel MONITOR

52 would be female48 would be male

70 would be non-white30 would be Caucasian

70 would be non-Christian30 would be Christian

52 would be female48 would be male

70 would be non-white30 would be Caucasian

70 would be non-Christian30 would be Christian

2005 National Travel MONITOR 2005 National Travel MONITOR

80 would be living in sub-standard housing

70 would be unable to read2 would own a computer1 would have a college education

80 would be living in sub-standard housing

70 would be unable to read2 would own a computer1 would have a college education

The Unpredictable Force:The Unpredictable Force:Concerns About Safety, Security and HygieneConcerns About Safety, Security and HygieneThe Unpredictable Force:The Unpredictable Force:

Concerns About Safety, Security and HygieneConcerns About Safety, Security and Hygiene

• Uncontrollable but significant negative impact on demand

• Potential impact on national tourism policies

• Uncontrollable but significant negative impact on demand

• Potential impact on national tourism policies

2005 National Travel MONITOR 2005 National Travel MONITOR

Converging ForcesConverging ForcesThe ascent of leisure travel

The reinvention of air transportation

The rEvolution

The vigilante consumer

Emerging markets

….and a growing concern about safety, security and hygiene

The ascent of leisure travel

The reinvention of air transportation

The rEvolution

The vigilante consumer

Emerging markets

….and a growing concern about safety, security and hygiene

A Vacation Is A BirthrightA Vacation Is A Birthright

Yesawich, PeYesawich, Pepperdine, Brown & pperdine, Brown & RussellRussell

www.ypbr.comwww.ypbr.com

Yesawich, PeYesawich, Pepperdine, Brown & pperdine, Brown & RussellRussell

www.ypbr.comwww.ypbr.com