trip barometer september 2013 the global traveller economy

© Copyright 2013 Daniel J Edelman Inc. Intelligent Engagement 1

TripBarometer by TripAdvisor

The World’s Largest Accommodation & Traveller Survey

Key Findings – September 2013

© Copyright 2013 Daniel J Edelman Inc. Intelligent Engagement 2

The Global Travel Economy

The global traveller in 2013 will be doing the majority of their travelling within their home market, although this trend is due to change in the coming years As travellers look to the future, their plans for holidays are becoming more expansive with an increased willingness to travel further afield This trend is supported by increasing confidence in the economy and an admission that they will be taking more holidays and are willing to make sacrifices in other areas to help make travel possible Accommodation businesses must be aware of this increasing trend – many already are, with a significant number planning to increase room rates in 2014 to response to increased demand and to stay in line with their competitors Globally, accommodation businesses are feeling more optimistic about their future profitability and this increased confidence is driving investment in their businesses

85% are planning to travel in their home

market this year

Travel economy trends for the next two years

1 in 3 feel optimistic about the global

economy

© Copyright 2013 Daniel J Edelman Inc. 4 Intelligent Engagement 4

Q19 Base: All Respondents

Only 1 in 3 global travellers is optimistic about the economy

4%

23%

41%

25%

7%

Very pessimistic Quite pessimistic Neither optimistic nor pessimistic

Quite optimistic Very optimistic

NET Optimistic: 32% NET Pessimistic: 27%

Neither Nor

Optimistic

Pessimistic

•  Central/ South America •  Asia

•  Australasia •  Middle East •  N. America •  Africa

•  Europe

Regional Sentiment:


Q16b Base: All Respondents

Four in ten travellers are planning to increase their travel budget in 2014

NET Less: 22%

NET More: 39% •  20% increase in the number

of shorter holidays

•  11% increase in the number of longer holidays

In 2014, travellers are also planning to take more holidays

3% 5% 7% 8%

39%

20%

11% 4% 2% 3%

76% to 100% less

51% to 75% less

26% to 50% less

1% to 25% less

Stay the same 1% to 25% more

26% to 50% more

51% to 75% more

76% to 100% more

More than 100% more

NB: Results have been rebased excluding ‘don't know’ responses


Africa, South America and Central America are most likely to spend more on travel in 2014

59%

48% 47% 46% 42%

38% 36% 35% 39%

21% 22% 24% 27%

22% 28%

20% 22% 22%

Africa South America

Central America

Middle East Asia Australasia Europe North America Global

NET Increase Budget

NET Decrease Budget

Q16b Base: All Respondents NB: Results have been rebased excluding ‘don't know’ responses


•  Those regions influenced by emerging markets are most likely to have increasing levels of confidence (Asia, Central and South America) and, as a result, be willing to increase their holiday. •  However, being positive about the economy is not the only indicator to willingness to spend and travel. •  Europe is the most pessimistic region regarding the economy but this does not mean Europeans will be spending less on their travels in the future, due to two key factors:

Despite lower levels of economic confidence, Europeans will not reduce their travel plans in the future

15% 18%

I would never spend less on holidays, they are too important

Total

Europe 27% 22%

The global economy

Q17 Base: Those who plan to spend more Q18 Base: All Respondents


42%

29% 27%

18% 16% 14% 10% 6% 3% 3%

16% 15%

I want to discover my own country

Visit family It's cheaper I've always gone on

holiday in my own country

I save time travelling

I don't lose a day or several days travelling

It's easier with the children

No jetlag I don't like flying

I have no interest in travelling abroad

Other Not applicable

•  Central and South Americans are the most likely to say that they want to explore their own country (52% and 45% respectively), while North American and Middle Eastern travellers are the most likely to think that travelling in their home market is cheaper (37% and 36% respectively vs. 27% overall)

Having the opportunity to discover their own country is the main reason behind local travel



Many markets, especially those which are emerging, are willing to use credit to pay for holidays

14% 17% 13% 16% 17% 14% 13% 6% 8%

30%

45% 47% 41%

30% 30% 27%

29% 16%

53% 32% 37% 40%

50% 43% 57% 63%

72%

Global South America Central America Asia North America Middle East Australasia Africa Europe

No, I will not or did not use credit to pay for the holiday Yes, I will pay or paid for part of it on credit

Yes, I will pay or paid for it all on credit



South and Central America – Plans to use credit

10% 18% 13%

51% 44%

47%

33% 32% 37%

Argentina Brazil Mexico

No, I will not or did not use credit to pay for the holiday

Yes, I will pay or paid for part of it on credit




North America – Plans to use credit

26% 16%

27% 30%

42% 51%

Canada US






Asia – Plans to use credit

17% 11% 19% 17% 8%

29% 40%

51%

28% 42%

51% 47% 28%

54% 49%

India Indonesia Japan Malaysia Thailand






Europe – Plans to use credit

2% 8% 2% 15%

4% 1%

23% 4%

11% 17%

12%

31%

6% 3%

24%

16%

84% 73%

79%

48%

85% 94%

51%

78%

Russia UK Spain Germany Italy France Turkey Greece






Australasia – Plans to use credit

13% 12%

27% 29%

58% 55%

Australia New Zealand






Middle East and Africa – Plans to use credit

14% 6%

30%

29%

43% 63%

Egypt South Africa





Q17 Base: Those who plan to spend more

Holidays represent a reward for people and this is something they are willing to make sacrifices for….

35% 28% 26% 24%

15%

25%

2%

I have been saving up for something special this year

I think I deserve to spend more on myself

My family deserve it I am more confident about the economy

I would never spend less on holidays, they are too

important

Other Don't know

•  European and Asian travellers believe holidays are too important to spend less on •  South and Central Americans have been saving up •  Asian and Middle Eastern travellers believe they and their family deserve it



The good, the bad, and the ugly side of holiday sacrifice

51% 43% 40% 38%

31% 28% 22% 19% 16% 13% 7% 7% 5% 12%

Nights out (alcohol, club

fees)

Meals out Clothes or personal items

expenditure

Entertainment expenditure

Cigarettes Gifts Travel expenditure (walking or

getting the bus instead of

tube, downgrading travel class)

Home improvements

Charity donation

Grocery expenditure

Childcare Child's extracurricular

activities

Child's education

None of these

Travel takes priority over other family

commitments Net: 10%


Q28 Base: All respondents

Overall, accommodation businesses are optimistic about their profitability in 2014

68% 79% 74% 74% 72% 72% 70% 67%

56%

9% 6% 6% 6% 8% 7% 8% 9% 14%

Total Central America Asia North America Middle East South America Africa Australasia Europe

NET Optimistic

NET Pessimistic



0% 4%

52%

38%

2% 0% 2%

42% 49%

2%

Decrease a lot Decrease a little Remain the same Increase a little Increase a lot

2012 2013 Key reasons identified by business owners for increasing room rates were: 1.  Paying for increased overheads 2.  Increased demand 3.  Staying in line with competition Supporting the suggestion that the cost increase is a trend seen across the board in response to the increasing numbers of trips which travellers are taking

Hoteliers’ increased optimism is reflected by a significant number of owners increasing room rates in 2014


Increased confidence is driving investment in business


4%

6%

11%

13%

13%

14%

17%

16%

16%

26%

34%

34%

48%

52%

26%

38%

36%

44%

5%

4%

6%

1%

5%

3%

3%

3%

8%

2%

4%

2%

Staff hiring

Back office (IT, accounting, etc.)

Large scale renovations (e.g. new building, remodeling)

Staff training

Small scale renovations (e.g. refurbishments, redecorations)

Marketing or advertising

Much more Somewhat more About the same Somewhat less Much less


Over time, travellers plan to visit long-haul and inter-regional destinations

•  In the short term, consumers choose their home market and region as the preferred destination. However, when looking at future trends in 2 years’ time, international destinations are being considered as an appealing alternative to their local markets*

•  Europe will still be perceived as the preferred destination, not only by Europeans but also by their international peers

•  Middle Eastern, South American and European travellers are the most likely to say that they will travel to Europe in 2 years’ time (42%, 41% and 40% respectively)

33% 27%

20%

8% 6% 5% 4% 4%

32% 24%

18%

8% 7% 7% 5% 4%

33%

23% 19%

8% 8% 8% 9% 7%

NET: Europe NET: North America NET: Asia NET: South America NET: Central America NET: Middle East NET: Australasia NET: Africa

6 months 12 months 2 years *See following slides for full breakdown


•  Consumers are staying close to home when taking a holiday, with local destinations being chosen by the majority:

Local travel prevails in the current climate

Total Region

Africa Asia Australasia Europe Middle East North America Central America South America

NET: Africa 4% 87% 3% 2% 7% 4% 2% 1% 2% NET: Asia 29% 10% 92% 46% 13% 8% 8% 4% 3% NET: Australasia 5% 5% 8% 77% 2% 1% 4% 0 2% NET: Central America 10% 1% 1% 2% 4% 1% 20% 75% 6% NET: Europe 44% 19% 21% 19% 91% 19% 24% 16% 25% NET: Middle East 8% 8% 8% 5% 10% 83% 4% 0 3% NET: North America 37% 8% 19% 14% 13% 4% 83% 50% 25% NET: South America 11% 2% 1% 2% 2% 1% 3% 10% 86%

•  Australasians and Central Americans are more likely to consider more distant destinations, although remain relatively close to their country, ie Asia and North America respectively

•  Aside from receiving a large number of domestic visitors, Europe and North America stand out as the preferred destinations for international travel


Total Region

Africa Asia Australasia Europe Middle East North America

Central America

South America

NET: Africa 4% 58% 3% 2% 5% 9% 2% 2% 3%

NET: Asia 20% 7% 65% 25% 8% 13% 5% 3% 3%

NET: Australasia 4% 3% 6% 53% 1% 6% 2% 1% 2%

NET: Central America 6% 1% 1% 1% 3% 4% 10% 49% 5%

NET: Europe 33% 10% 15% 14% 71% 35% 15% 12% 18%

NET: Middle East 5% 5% 7% 3% 5% 59% 1% 2% 4%

NET: North America 27% 4% 10% 10% 9% 9% 64% 39% 16%

NET: South America 8% 2% 2% 2% 2% 7% 2% 9% 66%

In 6 months


Total Region

Africa Asia Australasia Europe Middle

East North

America Central America

South America

NET: Africa 4% 40% 4% 2% 6% 13% 3% 2% 4%

NET: Asia 18% 10% 49% 27% 11% 19% 5% 5% 6%

NET: Australasia 5% 5% 8% 36% 2% 5% 3% 2% 4%


NET: Europe 31% 21% 20% 18% 55% 38% 18% 23% 27%

NET: Middle East 7% 7% 8% 3% 8% 47% 2% 4% 7%



In 12 months


Total Region

Africa Asia Australasia Europe Middle East

North America

Central America

South America

NET: Africa 7% 26% 7% 5% 8% 13% 5% 6% 8%

NET: Asia 19% 13% 36% 22% 17% 26% 9% 13% 13%

NET: Austalasia 9% 10% 12% 27% 9% 15% 7% 5% 8%


NET: Europe 33% 29% 27% 27% 40% 42% 28% 37% 41%

NET: Middle East 9% 11% 11% 5% 8% 44% 4% 10% 11%



In 2 years


38% 30%

23% 23% 20% 16% 14% 13% 10% 9% 9% 9% 8%

2%

Explore another culture

Experience something specific

to that place

I've always dreamt of going there

Looks fun Explore new food To forget about my life at home

To escape the weather at home

Visit family Recommendation from friends and

family

It's cheaper To get a sun tan Got a great deal I will be on business and have added the holiday

on

In order to show off to others

An interest in exploring the unknown drives international travel, as the further the travel, the bigger the dream…

•  Europeans are most likely to be motivated by escaping the weather, getting a sun tan and experiencing another culture

•  Travellers from the Middle East are looking to escape their life at home when they travel

•  However, exploring the unknown also explains the motivation behind 42% of individuals travelling within their own country


…with Europe being seen as the ultimate dream destination

27%

15% 13% 13% 5% 4% 4% 3%

NET: Europe NET: Asia NET: Australasia NET: North America

NET: Middle East

NET: Africa NET: South America

NET: Central America

•  Central Americans are the most likely to say that their dream destination is in Europe (40%). Only Asian and Middle Eastern travellers perceive their own regions as the ideal destination (27% and 40% respectively)

•  Half would like to travel with their partner (51%) and a third with their family. Interestingly, 1 in 10 Asians would travel alone and a further 19% would go on holidays with their parents.

•  14% would ideally travel in September, rising to 16% among Europeans and to 17% among North Americans


Current travel

Current travel


Future travel

In 2 years’ time


The dream

Dream holiday


Reality vs. the dream

Current travel

Dream holiday

trip barometer september 2013 the global traveller economy

Travel

daniel j edelman

travel plans

travel budget

travel economy trends

local travel central

central america plans

respondents4 copyright

net optimistic