While online travel will decline in 2009, PhoCusWright will still far outperform the broader travel market and return to positive growth much sooner. With the recession in full swing and leisure and corporate travelers alike pulling back, the total U.S. travel market will decline 11 percent in 2009 to approximately $241 billion. This returns the total market to pre-2006 levels, when U.S. travel supplier revenue reached $251 billion. The drag on the total travel market is driven primarily by an even sharper decline in the corporate travel and groups and meetings markets.

“The travel industry has been experiencing significant declines in both traveler demand and revenue since the financial crisis unfolded, but not all travelers—and not all segments of travel—have been affected in the same way,” said Douglas Quinby, PhoCusWright’s senior director of research. “Companies mapping their strategies for 2009 and beyond must understand how different segments of the traveler population are responding to current economic conditions and the impact those responses will have on both product selection and booking channel.”
The newly released PhoCusWright’s U.S. Online Travel Overview: Update 2009-2010 delivers revised market sizing and forecasts for the U.S. total and online travel markets (including segmentation by travel product category and channel), in-depth analysis of shifting online travel agency and supplier website dynamics, and discussion of the traveler segments that will be traveling less—and more—in 2009. The Update 2009-2010 is included in PhoCusWright’s Research Subscription: Global Edition.

Consumer segmentation is critical to understanding the significant changes the industry will undergo in the upcoming year. PhoCusWright’s Consumer Travel Report Part One: Behavioral Trends examines U.S. traveler intentions for 2009 by describing the changes they plan to make in comparison to 2008. The findings highlight just how differently various segments of travelers are adjusting their trip behaviors in 2009, and what the industry can expect in terms of shift in consumer demand. PhoCusWright’s Consumer Travel Report Part Two: Psychographic Trends relates traveler behavior to psychographic attitudes and values and will be released in May. Introductory pricing is available through April 28. The two parts are available separately or packaged together and are also included in the Global Edition. For more information, visit www.phocuswright.com. 

AdventureLink, Inc. announced the acquisition of its key competitor, Denver – based Adventure Central Inc., in an all-stock transaction.  In addition, Allegis Capital, the largest investor in Adventure Central, has backed AdventureLink with an additional investment. 

AdventureLink is the largest online source for booking adventure travel, worldwide, while Adventure Central is the dominant supplier of single day adventure trips. The acquisition brings these two, leading, online travel companies together creating the most comprehensive online source for finding and booking adventure travel.

The combined companies now represent over 60,000 trips and activities sourced from nearly 1,800 suppliers in 165 countries, enabling consumers and travel agents to easily find, learn about and book some of the planet’s most memorable and authentic travel experiences.

AdventureLink CEO Kelly Tompkins states, “Adventure Central is a natural fit for AdventureLink, adding a broad range of day trips to our existing multi-day portfolio. Our objective with this inventory is to forge partnerships with hoteliers, web affiliates, and others interested in utilizing our affiliate system to sell day or multi-day adventure trips.”

Peter Bodine, managing director at Allegis Capital, says the combining of these top adventure travel companies creates a comprehensive source for anyone looking to find, review, or book their next great adventure trip.

“Our firm is extremely bullish on the Adventure Travel sector,” says Bodine, “and AdventureLink represented one of the most attractive ways to monetize the further growth of Adventure Travel on the web.”

In February, AdventureLink announced its launch of the world’s first online booking system for adventure travel developed in conjunction with its partner, VAX VacationAccess. The AdventureLink system opens up booking capability for adventure travel opportunities worldwide providing easy access and distribution to over 70,000 leisure travel agents across North America.

Also in February, AdventureLink announced the completion of ‘Series A’ funding with top Southern California venture capital firms Anthem Venture Partners (www.anthemvp.com) and The Mail Room Fund (www.mailroomfund.com). 

With the acquisition, Adventure Central will relocate to AdventureLink’s L.A. headquarters and AdventureLink will continue to maintain the AdventureCentral.com website and other Adventure Central affiliate partners’ sites.

PhoCusWright dispelled this piece of misinformation-and debunked five additional online travel myths-at its first-ever Analyst Forum, held September 10 in New York City.

In addition to the misconception that online travel buyers are declining, The PhoCusWright Analyst Forum corrected these five other online travel myths:

2. More and more online travel shoppers use supplier sites than online travel agencies. While this belief is widespread in the travel industry, it is simply untrue, according to PhoCusWright, the travel industry research firm. In terms of popularity, online travel agencies are making a comeback (source: The PhoCusWright Consumer Travel Trends Survey Tenth Edition or “CTTS10″).
3. Travel agencies are experiencing a resurgence as travelers return to traditional purchasing channels. Not so. In reality, even many formerly exclusive offline buyers are migrating online for travel shopping and buying, according to CTTS10.
4. The next generation of travelers prefers to do everything online. The truth is, less than half of what 18-28 year olds spend on travel is spent online, according to The NEXTgen Traveler™ report, jointly published by PhoCusWright and Ypartnership.
5. Social networks and travel reviews have the greatest influence on travel decision-making. The NEXTgen Traveler™ report reveals that while social media is widespread, destination Web sites and online travel agencies are favored by nearly half of next generation travelers during the travel shopping process.
6. Online travel markets need high credit card and Internet penetration to succeed. The structure and ambitions of the travel marketplace are even more important drivers than infrastructure. Case in point is India, one of the most dynamic online travel marketplaces today, where roughly 98% of the population does not use credit cards or have access to the Internet.

The sold-out Analyst Forum provided attendees with a clearer understanding of the realities of the online travel marketplace, offering facts, figures and insights for strategic planning and decision-making, especially as attendees find themselves engaged in 2009 budget planning.

“Nobody wants to make strategic errors based on bad information,” said Lorraine Sileo, vice president, research for PhoCusWright. “Through this Analyst Forum, we were able to educate attendees about online travel myths and the realities in consumer behavior and to paint a picture of the new distribution landscape so that they can better assess their channel partners, such as travel agencies.”

PhoCusWright’s Analyst Forum will continue to take place on a quarterly basis in New York City featuring research and analysis on a variety of travel, tourism and hospitality topics.

The Future of Relationships
The challenge today is that many companies are going into crisis mode. Because air travel and gas costs are high, they’re using video and Web conferencing, as well as the new high-end videoconferencing called telepresence offered by Cisco and HP, to save travel money. However, if their only motivation is to save money on travel, rather than the more important goal of enhancing communication and collaboration throughout the enterprise, then they’re simply creating another fad. Video conferencing has evolved tremendously over the past few years, and companies need to use the technology of today to pave the path to future profits, all of which hinge on relationships.
To add fuel to the fire is the fact that rising gas prices and travel costs are not cyclical this time; they’re permanent. Major social changes are taking place worldwide in such places as China and India, and the increased global energy consumption affects everyone. In other words, fuel costs will fluctuate but will not go back to the low levels we once enjoyed. Therefore, smart companies are changing how they think about meetings and the new video conferencing technology, and they’re realizing that it offers business something more powerful than they’ve had in the past. These companies are thinking in terms of “visual communications” rather than simply video and Web conferencing.
Visual communications heighten the bond you have with someone when you cannot see them face to face. It’s about adding dimension to the communication. There’s a reason why you shake someone’s hand when you meet them: The more senses you involve, the higher the connection. Those companies that can enhance their communication, both internally and externally, are the ones who can cause change faster and stay competitive longer.

How to Make Visual Communications Work
Before you mandate that video conferencing be the only way of conducing meetings, consider the following principles of visual communications.

• First, realize that the need to meet, establish relationships, and share information, knowledge, and wisdom is not going away. No amount of high-tech gadgetry is going to change that in a fundamental way. That’s why face-to-face meetings are still the dominant form of meeting and extremely relevant, because there is no better way to build trust. In our increasingly global marketplace, trust is the glue that creates strong, successful, and enduring business relationships. Those who believe video conferencing will end face-to-face meetings are using “either/or” thinking, which often occurs when dazzling new technologies first appear. They view the new thing as destined to totally supplant the old thing, except that rarely happens.

• Companies that make visual communications work will have the new and the old coexisting by allowing each to do what it does best. Video conferencing is a superb tool for saving travel time and expense, focusing on a structured agenda, obtaining senior-level points of view in real-time, building consensus, and making announcements. It’s not so good at smoothing out contentious give-and-take or handling emotional or sensitive issues. Fortunately, both virtual meetings and face-to-face meetings are readily available. It’s not either/or anymore. “Both/and” thinking is the new paradigm.

• In the past, video conferencing required a big fancy room with expensive equipment. That’s not the only option for video anymore. Many new computers come with a built-in video camera. That means you can do video conferencing on a personal laptop from your desk, your home, or anywhere in the world. The software is free and comes with your system. And with some computers, you can have multiple people on at the same time and video conference with them all at once.

Let the Meeting Goal Determine the Role of Technology
The future of business includes an interdependent world that generates increasing quantities of data, information, knowledge, and wisdom that companies need to communicate. The key is to develop guidelines for determining what type of meeting to have. To do this, you must look at the meeting’s goal.
One of the traps people fall into when planning a meeting is looking at business goals instead of human/emotional goals. Therefore, before you plan any meeting, ask yourself, “What is this meeting’s goal? Is it to inform, motivate, inspire, persuade, influence, sell, gain trust, negotiate, gain respect, establish new relationships, strengthen existing relationships, share information, share knowledge and experiences, gain credibility, change how people think, solve a problem, determine a strategy, or simply create dialog?” Thinking about the goal for the meeting in this way makes it easier to decide what type of meeting will be best and what technology is most appropriate.
Once you know your meeting’s goal, use the following guidelines.

• If the goal is primarily to inform by sharing data and information, then a meeting may not even be necessary. It might be far better to use email, groupware, a wiki, a blog, or an Intranet or Extranet and let people collect and absorb the information at their own rate and in their own time.

• If you determine that sharing the information at the same time with everyone would be best, then consider audio conferencing and/or web-conferencing as an alternative to a face-to-face meeting.

• If the information delivery will primarily be one-way, then an e-conference would serve the purpose. If, however, informing involves hands-on demonstrations and/or high levels of interactivity, then a face-to-face meeting is definitely in order.

• If the goal is to influence, build on existing relationships, share knowledge and experiences, gain credibility, solve a problem, or determine a strategy, then a face-to-face meeting is best, but it is no longer the only option. Technologies such as high-end videoconferencing telepresence systems and satellite-broadcast services that use full-motion video could help you accomplish your goals. If all participants have access to broadband connections, and almost all today do, then web-conferencing offers another increasingly attractive option. Audio-conferencing could also be a viable option depending on the number of people attending and the amount of interactivity required during the meeting.

• If the goal is to gain trust and/or respect, or to inspire, motivate, persuade, establish relationships, negotiate, or change how people think, then a face-to-face meeting is a must. If this is not possible, then the next best thing would be telepresence video conferencing rooms, which typically have three huge curved screens and a fourth screen above for shared work, custom lighting and acoustics, and life size images.

Despite the current conditions of gas prices, transportation costs, and airline cuts, the need to meet, share knowledge, and develop relationships will continue. Therefore, successful meetings will depend on your ability to master the concept of visual communications and develop guidelines that leverage both old and new tools to build trusting relationships that foster greater communication, collaboration, and community.

About the Author:
Daniel Burrus is the founder and CEO of Burrus Research and author of six books, including the highly acclaimed “Technotrends.” Over the past two decades he has established a worldwide reputation for his exceptional record of accurately predicting the future of technological change and its direct impact on the business world. Dan monitors global advancements in technology driven trends to help clients better understand how technological, social and business forces are converging to create enormous, untapped opportunities. For more information, please visit: www.burrus.com

The traditional tour operator package model, offering a pre-assembled bundle of transport, accommodation and other travel services, has been under increasing pressure from the rising popularity of tailor-made ‘dynamic’ packages.

Significantly, for tour operators, the game revolves around their decision to choose between scale, which is related with commodity, and specialization, which means special service.

On what factors should tour operators consider while opting between scale and specialization, Brian Robb, SVP Corporate Development, The Mark Travel Corporation, says, “My recommendation is to choose one. There are very few with the product leverage, the brand, and the marketing reach to successfully complete in the commodity game, much less in both areas. Most likely, operators will have to be either a low-cost provider or a value-added provider.”

Robb, who is scheduled to speak during EyeforTravel’s Travel Distribution Executive Conference 2008, to be held in Las Vegas on 1-2 October 2008, say that in the US and in today’s world, rarely traditional tour operators or traditional travel agencies are very traditional in their business practices or in their adoption and development of technology.

“The term “traditional” is a carryover from the time before the advent of online travel agencies (OTA’s) when tour operators offered vacation “packages” for sale via travel agents. Tour operators made a simple and cost-effective vacation purchase available for consumers and they sold them only via travel agents. In many cases that included charter airline flights. That’s where the stereotype of a “pre-assembled bundle” comes from; you had your choice of the Tuesday or Saturday departure pattern in order to get a better deal. Nowadays, a company, which was around during that era tends to be called a “traditional tour operator,” says Robb.

“In the 1990′s, companies like Funjet Vacations and others changed all that by providing packages which allowed for departure on any day with the option of charter of scheduled airline transportation and a broad selection of hotels for stays from two days to several weeks duration. All of those choices were dynamically packaged to custom fit the vacation needs of the customer. Those “dynamic packages” were constructed in real time directly by consumers online or by travel agents using a simple browser-based booking tool,” he added.

Speaking of traditional travel agents, Robb said they’ve evolved to a point where today they include the original high street, or shopping mall retail model with which we’re all familiar to include a full spectrum of practices that include the pure online (OTA) model and various models in between.

“So the real question becomes; how can tour operators compete when they have the added cost of distributing via travel agents, and how can travel agencies compete when they have overhead costs which the OTA’s don’t have and don’t have the marketing reach that OTA’s have?” probed Robb.

Commenting on the consolidation, which took place in tour operators segment in Europe last year, Robb said, “I think its an indication that the charter market in Europe is struggling and that the consolidations were in part due to better manage associated risk.”

“I think another thing to watch for is the actions those engaged in the sale of low margin travel commodities exploring additional opportunities starting with advertising revenue. For others, we’ll see a focus on growing in other areas such as destination experiences and travel-related services,” said Robb.

Travel Distribution Executive Conference 2008

EyeforTravel’s Travel Distribution Executive Conference 2008 is scheduled to take place in Las Vegas on 1-2 October 2008. The conference is part of Travel Distribution Summit, North America.

For more information visit: www.eyefortravel.com/tdsusa/conference

What’s unique and refreshing about Eye for Travel Conferences is that they engage delegates with success stories from leading and emerging brands within the travel industry. By bringing these companies up on stage to expose their tactics and business plans via live presentations and feedback sessions, travel marketers are able to learn from these leaders as they lay out their strategies of success. Where the show is short on thesis and hypothesis, it’s big on actionable business plans that are being implemented with success. The next Eye for Travel’s Distribution Summit is set for October 1-2 at Caesar’s Palace in Las Vegas. Learn more by visiting http://www.eyefortravel.com.

After last year’s successful theme “Braving the Long Tail” and “Travel 2.0 Confronts the Establishment” the year before, we will yet again cast a Hollywood-sized spotlight on new milestones in travel planning as well as the ensuing impact on customer experience.

A phrase popularized by Sebastian Junger in his book of the same name, a perfect storm is formed when several events occur simultaneously, which, taken individually, would be far less powerful than the result of their combination. Unlike the meteorological kind, today’s digital perfect storm is strengthened by new rounds of intense innovation giving rise to a positive, advancing force holding great promise for travel, tourism and hospitality.

Excellent leadership in our industry is defined by those who actually fuel the storm, and in turn their own cause, by aligning their businesses with the contributing forces. This is the whole point of the “perfect storm” metaphor. As with prior travel industry transformations, aggressors will seize the moment by riding the waves, catching the wind and rising with the tide; they represent our marketplace change agents. Laggards, on the other hand, will batten down the hatches, head for the hills and assess damages afterwards. New winners and losers will emerge once again.

Center Stage at The PhoCusWright Conference is dedicated to unlocking potential by recognizing the interplay of new forces in the marketplace. This event will embody how all types of travel, tourism and hospitality companies—young and old, large and small, East and West—can differentiate themselves. The speakers will cast their own spotlights as well, bringing a boardroom (not IT) perspective on how leadership can actually fuel the storm by aligning their businesses with the contributing forces.

I encourage you to secure your registration to Center Stage at The PhoCusWright Conference (November 19-20) to emerge from this perfect storm not only intact, but as a winner.