Home for the Holidays? For many, it will be a last-minute decision

in Travel by Lincoln Merrihew — December 2, 2010 at 5:32 pm | 3 comments

The holiday season invariably finds millions of Americans scrambling to finalize their travel plans, with Thanksgiving being among the most active travel times of the year. The travel industry naturally looks to this time of year for heavy volumes and relied-upon revenue generation and figures from a recurring survey conducted by Compete for several months starting in June pointed to heightened expectations for Thanksgiving travel. Data through Thanksgiving week tell a different story, however, and suggest that Thanksgiving travel expectations dwindled to such a degree that they’re comparable to those of 2009. The prognosis: no Thanksgiving travel rebound in 2010, at least based solely on consumer expectations.

In addition to a general malaise about economic conditions, this dampened outlook owes itself to lower travel value perceptions. An average 50 percent of those surveyed, for example, rated the overall value of flight travel this year as worse than in 2009.

Hotel perceptions, though not as dramatic as flight, also trended worse.
Such value perception is reflected in the trends: back in June, 11.5 percent of consumers surveyed reported that they expect to book air travel for Thanksgiving; however, by November, that number had dropped to about three percent. Also on the decline, expectations to make Thanksgiving hotel reservations fell from 11 percent in July (at its highest), to a seven percent in November.

Is there any chance of a rebound?

Perhaps not until next Thanksgiving, but the data suggest a possible silver lining: off-peak travel. Against the backdrop of a continued recession, consumers have been showing hesitation to commit in advance to travel spending. As the eleventh hour nears, however, and consumers balance the desire to travel against monetary pressure, there seems an increasing willingness to book travel where last-minute and off-peak deals are available. These packages may be the best hope for the travel industry–and may also help the year-over-year decline in Thanksgiving travel: consumers may be traveling the week before or the week after, or saving the family visit for another time.

The downward spiral of travel value perceptions underscored by Compete’s survey results highlight the mix of opportunity and challenges in the current travel environment. Consumers’ increasing willingness to consider off-peak travel, for example, may represent an opportunity to capture travelers that otherwise may not have entered the market. The overall hesitancy to book packages, however, may represent a key hurdle for travel entities seeking to compensate for less revenue from one category by tapping into secondary categories (such as an airline seeking to sell hotel nights). With consumers watching every travel dollar, it is important that travel industry watch every change in leaning (the “why”) in tandem with behavior (the “what”).

About Lincoln Merrihew: Lincoln Merrihew is the Managing Director of Automotive and Travel at Compete. At Compete, Lincoln is responsible for steering the Transportation Team, which encompasses automotive and travel. Before Lincoln joined the Compete Team he worked at TNS Custom leading the Automotive team, and then continued on there to lead business development for 10 different industry verticals. Lincoln's career aspiration is to create game-changing solutions and insights. Connect with Lincoln on LinkedIn at http://www.linkedin.com/profile/view?id=2482634&trk=tab_pro

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