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Caribbean Can Take Advantage Of Sharp Decline In U.S. Outbound Travel
Still Wary Of Economy, Combat In Iraq, And SARS, U.S. Travelers Sticking Close To Home
By EVELYN GUADALUPE-FAJARDO
July 24, 2003
The lingering military conflict in Iraq, the ongoing threat of terrorism, severe acute respiratory syndrome (SARS), and anti-American sentiments abroad have made Americans less inclined to travel far from home, which has opened a window of opportunity for Caribbean tourism, said Sarita Skidmore, principal of Menlo Consulting Group.
Menlo Consulting conducts a TravelStyles study of international travelers that emphasizes psychographics: learning their values, motivations, expectations, and objectives and how they evolve.
Look out for Europe
Although one-third of all U.S. outbound travelers visit the Caribbean, the regions growth rate has remained flat. The pattern for its traditional competitors, mainly Mexico and Hawaii, is similarly flat.
Travel to Europe, on the other hand, surpassed travel to the Caribbean in 1999 and 2000, largely due to an increase in flight capacity and low rates.
However, experts indicate that trend is reversing. The recent downturn is indicative of a slump in international tourism to the Middle East and key European gateway cities following 9/11.
Cruise lines: Friend or foe?
Caribbean hoteliers are convinced the cruise industry is a direct competitor. The Caribbean accounts for 50% of the global cruise market.
"Cruising is a double-edged sword. It is clearly drawing from land and resort vacations," Skidmore said. "On the bright side, cruising can bring in new blood."
Menlo Consulting research shows that 22% of cruise travelers in the Caribbean have returned to vacation at a destination they first visited while cruising. The biggest challenge on the horizon is homeland cruising, which will resonate with Americans who prefer to stay close to home.
According to recent leisure trends, U.S. travelers have a heightened preference for domestic travel. Another important trend is that U.S. travelers would rather take several three- to five-day trips per year than one 15-day trip, which clearly favors the Caribbean over more distant destinations and, within the Caribbean, those islands closest to the U.S. mainland.
More families traveling together
One particularly positive trend for the Caribbean is the growth rate of international family travel is accelerating. After 9/11, many Americans re-examined their priorities and decided that spending time with family was more important than spending time at work. The Caribbean is becoming a favorite destination for families. Approximately 45% of U.S. outbound leisure travelers with children under 18 in 2001 brought them along on their last Caribbean vacation, compared with 35% who traveled with their children in 1999.
Weak economy is biggest deterrent
Skidmore says the key factor affecting international travel, which actually predates 9/11, is the sluggish economy, as seen in the highest unemployment rate in nine years and plummeting consumer confidence.
Menlo Consulting conducted a survey of U.S. international travelers and found that some travelers are in a holding pattern, not doing much travel. Others are opting for domestic travel. In fact, near-to-home summer travel is doing quite well. Many destinations are playing the patriotism card with promotions and messages.
Other, hardier consumers have weighed the risks and rewards of travel and are getting on with their lives. They are continuing to travel because they cant resist a deal, feel as safe traveling abroad as at home, or simply refuse to be intimidated.
Caribbean depends on travel agents
The most significant change in travel relates to the distribution system. The use of travel agents is declining: 52% of all U.S. outbound travelers used a travel agent on their last international trip, down from 60% in 1997. The Caribbean continues to depend heavily on agents: 70% of those who visited the Caribbean on their most recent trip used an agent.
Travel agents are important in choosing hotels; more than eight in 10 Caribbean travelers likely to use an agent would ask their advice on where to stay. In contrast, only three in 10 ask an agent where to go.
Internet travel booking, however, is on the rise. The Internet is an ideal vehicle for showcasing hotels. "It is particularly good news for independent hoteliers that the number of Caribbean travelers searching the Web for a place to stay is increasing substantially," Skidmore said.
Between 1999 and 2001, the use of the Internet in connection with Caribbean travel nearly doubled from 26% to 43%, while the use of the Internet by land-based Caribbean travelers to arrange accommodations more than tripled.
The short-term future for the Caribbean looks promising, said Skidmore. Its proximity to the U.S., good value, and travelers familiarity with the region are positives. Also in the Caribbeans favor is that Europe is becoming much more expensive and Canada and Asia were hit hard by SARS.
However, there will be increasing competition from U.S. destinations. The U.S. travel industry has coalesced since 9/11; tourism as a sector is stronger than it has ever been. State legislatures realize the importance of tourism to their economies and will continue to promote it though budgets might be tight.
Nevertheless, interest in the Caribbean is comparatively strong: 62% of all U.S. outbound travelers have a very strong interest in visiting. The figure is higher among those who visited previously, indicating their satisfaction with the experience. Overall, though, interest in visiting the region has been declining.
The opportunities for the Caribbean far outweigh the challenges, but to realize them the region must invest more to market and position itself. Americans are generally unaware of the variety and diversity the Caribbean has to offer.
"The region has done a good job of marketing itself; now each island must focus on differentiating itself," Skidmore said. "This approach should help to reverse the declining interest and make the individual islands more appealing for land visits."
This Caribbean Business article appears courtesy of Casiano Communications.