2001 PACKAGED TRAVEL IN NORTH AMERICA TRAVELER PROFILE AND ECONOMIC IMPACTS

Transcription

1 00 PACKAGED TRAVEL IN NORTH AMERICA TRAVELER PROFILE AND ECONOMIC IMPACTS November 00 Prepared for National Tour Association

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3 PACKAGED TRAVEL IN NORTH AMERICA TRAVELER PROFILE AND ECONOMIC IMPACTS, 00 November 00 Prepared for National Tour Association Lexington, Kentucky Prepared by Dean Runyan Associates SW th Ave., Suite 0 Portland, Oregon Longwoods International Adelaide Street East Toronto, Ont., Canada MA N..0

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5 Table of Contents EXECUTIVE SUMMARY... iii. INTRODUCTION... Research Methodology... Packaged Travel Follow-up Study.... PACKAGED TRAVEL ECONOMIC IMPACTS... Packaged Travel Incidence... Economic Impacts.... PROFILE OF U.S. PACKAGED TRAVEL MARKET... Overview of U.S. Travel Market... The Packaged Travel Market... 0 Types of Packaged Travel... Packaged Travel Components... Season of Travel... Trip Length... Trip Destinations... Leading Packaged Travel Destinations in the U.S... Leading Packaged Travel Destinations outside the U.S... Packaged Trip Travelers... Demographics of Packaged Travelers... Trip Planning and Booking... Planning Information Sources & Methods... Package Cost and Details... Traveler Satisfaction.... PROFILE OF CANADIAN PACKAGED TRAVELERS... Packaged Travel Market... Packaged Travel Components... Trip Length... Packaged Trip Travelers... Demographics of the Traveler... Trip Planning and Booking...0 Planning Information Sources... Package Cost and Details... Satisfaction... APPENDIX A: EARLY IMPACT OF SEPTEMBER ON 00 TRAVEL PLANS... 0 APPENDIX B: PACKAGED TRAVEL FOLLOW-UP STUDY...0 APPENDIX C: RESEARCH METHODOLOGY... APPENDIX D: ECONOMIC IMPACT METHODOLOGY... APPENDIX E: AVERAGE DAILY EXPENDITURE PER PERSON... Dean Runyan Associates i

6 Preface The 00 Packaged Travel in North America study, prepared for the National Tour Association, offers a comprehensive view of the industry. The second year for this research, it defines packaged travel and the industry in 00 and provides comparisons with 000. This study could not have been completed without the financial contributions of the following industry partners: Tour Magazines Travel Leader Student Youth Travel Association Dean Runyan Associates SW th Avenue, Suite 0 Portland, Oregon info@deanrunyan.com ii Dean Runyan Associates

7 Executive Summary Economic Impacts American and Canadian packaged travelers spent about $ billion for overnight travel to destinations worldwide in 00 an % decline from 000 s $ billion. In 00, North American packaged travelers spent $ billion on trips to destinations within the United States, $ billion for travel to destinations in Mexico, and $. billion for travel to destinations in Canada. An additional $ billion in expenditures were made for trips to destinations outside North America including Europe, the Caribbean, and Asia. The expenditures made by packaged travelers for trips in the U.S. directly supported more than million jobs (both full and part-time) in the travel industry, with total earnings (wages, benefits, and proprietor income) of just over $ billion. The expenditures made by packaged travelers for trips in Canada directly supported,000 jobs (both full and part-time) in the travel industry, with total earnings (wages, benefits, and proprietor income) of over $C billion. Packaged Travel Market A packaged trip was defined as a pre-arranged, pre-paid trip arranged by a travel professional, which included at least two travel elements and that can be purchased for group or independent travel. Residents of the U.S. and Canada took million packaged overnight trips to domestic and international destinations in 00 a significant decline from 000 when million trips were taken. Packaged travel was more developed in Canada than in the U.S., accounting for % of the overall Canadian market and about % of the overall U.S. market in 00 similar to 000. Packaged trip volume in the U.S. declined by % in 00 compared to 000. The primary cause was a substantial drop in packaged business travel, down %. Similar to 000, Touring, Casino, Cruise, Beach, and Theme Park trips were the largest and/or the most developed trip types for packaged travel in 00. Dean Runyan Associates iii

8 Types of Packaged Travel Both independent and group packages were substantial market segments in 00, accounting for % and % of the packaged travel market, respectively similar to 000. A package was designated to be a group package when the traveler reported that his or her immediate travel party (which included the traveler and any immediate travel companions with whom at least some of the travel expenses were shared) traveled as part of a larger group. Contrary to group packaged travel in 000, most groups in 00 did not have prior affiliation (% of the %). Those that did have prior affiliation were typically with a club or church. Packaged Travel Components Most packaged trips included both accommodations and transportation, and at least some meals were generally covered. Other elements especially guide services were more likely to be included on group packaged trips. Packaged trips typically included round-trip transportation between a central point of departure and the trip destination. The types of accommodations used on packaged trips were generally higherend than the overall travel market. Trip Length In both 000 and 00, packaged trips lasted significantly longer than the typical U.S. trip. nights compared to for the U.S. Norm. International packaged trips were significantly longer than domestic trips (. versus. nights). Compared to 000, the length of international packaged trips was the same, while domestic trips tended to be longer in 00 (. versus.). and independent packaged trips were identical in length in 00 (. nights), unlike 000, when group trips were longer (. nights vs..). iv Dean Runyan Associates

9 Packaged Trip Destinations U.S. Packaged Travelers Destinations for packaged trips taken by U.S. travelers differ markedly by type of trip. Cruises were mostly international; Beach and Touring trips were split between international and U.S.; and all other trip types were mostly to U.S. destinations. This pattern was similar in 000. Also similar was packaged travel s prevalence on international trips packaged trips accounted for 0% of all international trips and % of all U.S. trips taken by American adults. Florida (%), Nevada (%), and California (%) were the leading United States destinations for packaged trips in both 000 and 00. Mexico, Canada, and the Bahamas were the top packaged trip destinations outside the United States. Cost of Packaged Travel Overall, the average package costs about $, per travel party an increase of just $ from 000. For U.S. travelers, the average package cost in 00was $,0 a decline of $ from 000. packaged trips were slightly less expensive than group trips in 00 ($, verses $,). For Canadian travelers, the average package cost was $, for independent, versus $, for a group packaged trip. International packages cost more than double domestic ones ($, versus $,0), but were longer (. vs.. nights). Dean Runyan Associates v

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11 . Introduction This, the second year for the profile and economic impacts of packaged travel in North America, provides critical insights into the current market for packaged travel, and presents the changes the market has seen over the previous year. Packaged travel is defined as travel arranged by a professional, including at least two travel elements (for example: transportation and accommodations) for one price. In addition, packaged travel can be either independent or group. The main feature of this research is a comprehensive profile of U.S. and Canadian residents who took a packaged trip during 00. The profile describes types of packaged travel, packaged travel components, travel seasons, trip length, destinations, demographics, indicators of satisfaction, trip activities, and packaged travel costs. The primary audience for this research will generally be travel industry professionals, as well as others who may have research interests in North American packaged travel. The economic impact of packaged travelers is also a primary focus of this study. Packaged travelers make a variety of expenditures through the purchase price of the package, as well as additional expenditures made while traveling on the trip for example: meals, retail items, and recreation-related fees/admissions. Economic impacts include these travel expenditures, as well as the employment and earnings of workers generated by packaged travel. For this research project, Dean Runyan Associates was the prime contractor and served as project manager. Longwoods International assisted with research, took primary responsibility for the consumer survey in the United States and Canada, and contributed significantly to the report preparation. Research Methodology U.S. Market The National Tour Association s Packaged Travel Survey was conducted as part of Longwoods International s Travel USA research program. Travel USA is Longwoods proprietary syndicated research study that measures and profiles the overnight pleasure and business travel habits of American adults. It is a mail panel study, mailed to a statistically representative sample of 0,000 U.S. adults at the end of each quarter (00,000 annually), to ask about their travel in the preceding three months. Because the sample is statistically representative, the results represent the entire U.S. adult population, and are used to project the size and structure of the overall U.S. and packaged overnight travel markets. Dean Runyan Associates

12 The Travel USA study is conducted via the Ipsos-NPD s Insta-Vue Consumer Mail Panel. Questionnaires are mailed to a representative sample of households with accompanying instructions for random respondent selection to ensure a representative sample of individuals years of age and over. Information is collected about each of up to eight trips taken by each respondent in the quarter and includes: the month the trip was started the main destination and other destinations on the same trip the main purpose of trip and whether it was a packaged trip traveler demographics, including place of residence Longwoods trip definition is purposely all-inclusive. A trip is defined as "any journey outside your community that is not part of your normal routine regardless of distance traveled. Destination detail includes all 0 states, selected U.S. cities, selected Canadian provinces and cities, and selected foreign countries and regions. Trip purpose detail is based on Longwoods proprietary occasion-based segmentation model. Brief descriptions are provided on the questionnaire for respondent reference when answering. The purposes or types of pleasure trips include: Visits to Friends and Relatives, Touring, Outdoor, Casino, Beach, Country Resort, City, Cruise, Ski, Theme Park, Special Event, and Combined Business/Pleasure. The types of business trips include Business Meetings, Sales/Service and Conference/Convention/Trade Show. Respondents were also asked whether each trip was a packaged trip, defined as a pre-arranged, pre-paid trip that is arranged by a travel professional and includes at least two travel elements (i.e., accommodations, transportation, attractions, meals, etc.). You can purchase a package for independent or group travel. Canadian Market A syndicated study similar to Travel USA is not available in Canada. Therefore, a custom study was undertaken to determine the incidence of packaged travel. This study was conducted using Ipsos-NPD-Canada s quarterly OmniView Consumer Mail Panel. Questionnaires are mailed to a representative sample of,000 households each quarter (,000 annually), with accompanying instructions for random respondent selection within each household to ensure a representative sample of individuals Dean Runyan Associates

13 years of age and over. Using the same above-specified trip and packaged trip definitions, respondents were asked to report the: total number of pleasure trips taken and number of these that were packaged total number of business trips and number of these that were packaged traveler demographics including place of residence Packaged Travel Follow-Up Study The Packaged Travel Follow-up Study returned to a representative sample of the packaged travelers identified through the Insta-Vue (U.S.) and Omni-View (Canada) screening studies to obtain in-depth information about their packaged trips. Longwoods also conducted a follow-up National Visitor Study, to obtain an in-depth profile of all trips (packaged and unpackaged) taken by American adults. The information collected parallels that of the Packaged Travel Follow-up Study and provides a U.S. Norm s benchmark of comparison. No such normative study is available for the Canadian market. Details of the information collected and the studies sample sizes are contained in Appendix C. Dean Runyan Associates

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15 . Packaged Travel Economic Impacts Packaged travel is a vital component of the overall travel and tourism industry. Residents of North America made extensive purchases of packaged travel products, having purchased more than million overnight trips during 00 compared to million in 000. These purchases were made from a wide variety of businesses, ranging from organized group tour operators to Internet-based travel agents. Packaged Travel Incidence The overall incidence of packaged travel sales during 00, used in particular for this economic analysis, was measured through contacts with the 00,000 households included on the Longwoods U.S. panel; and similarly through contacts with the,000 households in the Canadian panel. A randomly selected adult member of each household was asked whether they had taken a trip during the previous quarter, and if so, whether this was a packaged trip. A packaged trip was defined for the purpose of this study as a pre-arranged, pre-paid trip that is arranged by a travel professional and includes at least two travel elements (i.e., accommodations, transportation, attractions, meals, etc), and that can be purchased for independent or group travel. These incidence findings provide a very useful picture of packaged travel activity in North America. Packaged trip types were similar between U.S. and Canadian residents. In both the U.S. and Canada, touring trips were the most common type of packaged trip. Touring trips include both custom designed independent tours taken by families, couples, single travelers, or small groups, as well as group tours characterized by an assembly of travelers with a common itinerary, common travel date, and who share common transportation. Other popular types of packaged trips include casino, cruise, and business meetings as well as visits with friends or relatives, a common reason for all travel. Packaged beach trips were particularly popular among Canadian residents, and represent destinations such as Florida, Hawaii, California, and the Caribbean. Dean Runyan Associates

16 Overnight Packaged Trips Purchased by U.S. Residents Touring Casino Cruise Visit Friends or Relatives Beach Business Meetings Convention/Conferences Sales/Service Special Event Theme Park City Business/Pleasure Country Resort Outdoors Ski Millions Sources: Longwoods International and Dean Runyan Associates Overnight Packaged Trips Purchased by Canadian Residents Beach Touring Cruise Business/Pleasure Convention/Conferences Business Meetings Casino Country Resort Sales/Service Visit Friends or Relatives Special Event City Theme Park Outdoors Ski Millions Sources: Longwoods International and Dean Runyan Associates Dean Runyan Associates

17 Overnight Packaged Trips by Trip Type Purchased by United States and Canadian Residents, 00 (Millions of Trips) U.S. Canadian Touring Casino Cruise Business Meetings Visit Friends or Relatives Beach Convention/Conferences Special Event Sales/Service Theme Park City Business/Pleasure Country Resort Outdoors Ski Total Dean Runyan Associates

18 Economic Impacts The economic impacts described in this chapter represent the direct impacts associated with purchases of packaged trips, combined with the additional spending made by travelers while on these packaged trips. Economic impacts are presented in terms of expenditures made by U.S. and Canadian packaged travelers, and the employment and earnings generated by these expenditures (see Appendix D for description of methodology). Breakouts for these economic impacts are shown for pleasure and business travel, and for a collection of business types that provide goods and services to the traveling public (i.e., transportation, lodging, eating and drinking, retail and recreation). Expenditures Worldwide Destinations During 00, U.S. and Canadian packaged travelers spent about $ billion for overnight travel to destinations worldwide an % decline from 000, when travelers spent $ billion. While expenditures for trips in the United States fell by $. billion, proportionally, the U.S. captured more of the packaged travel made by U.S. and Canadian residents (0% of all trips vs. % in 000). Expenditures for trips to Canada remained similar between 000 and 00 while trips to Mexico declined by just over $ billion. By far the largest decline was in expenditures for trips outside North America. These expenditures fell by nearly $ billion twofold the U.S decline. Additionally, the proportion of packaged travel made by U.S. and Canadian residents for trips outside North America fell from a third (%) of the in 000, to just over a quarter (%) in 00. Expenditures made by U.S. and Canadian Packaged Travelers by Destination, 000 and 00 Base: Overnight Trips USA. 0. Mexico Canada.... Outside North America Source: Dean Runyan Associates Billions of $US Dean Runyan Associates

19 and Packaged Travelers Expenditures by Destination, 00 Base: Overnight Trips USA 0.. Mexico Canada.... Outside North America Source: Dean Runyan Associates Billions of $US Expenditures made for independent packaged travel by U.S and Canadian residents totaled $ billion (% of all packaged travel) in 00, a decline of nearly $0 billion from 000. The major decline occurred in independent packaged trips outside North America declining nearly $ billion which accounted for 0 percent of the $0 billion overall decline. Base: Overnight Trips Packaged Traveler Expenditures by Destination, 000 and 00 USA..0 Mexico Canada..0.. Outside North America Source: Dean Runyan Associates Billions of $US Dean Runyan Associates

20 Expenditures made for independent packaged travel to U.S and Mexican destinations also declined (by $. and $. billion respectively), while expenditures for independent travel to Canada remained the same compared to 000. packaged travel totaled about $ billion (%of the total package travel market), a decline of $ billion from 000. With a smaller share of the market and a larger absolute decline, group packaged travel was harder-hit by the depressed travel market in 00. Packaged Traveler Expenditures by Destination, 000 and 00 Base: Overnight Trips USA 0.. Mexico Canada.... Outside North America Source: Dean Runyan Associates Billions of $US Like independent packaged travel, the largest decline in expenditures for group packaged travel occurred for trips outside North America a $. billion decline or % of the $ billion overall decline. packaged trip expenditures for Mexican and Canadian trips were similar to 000, while expenditures for group trips to U.S. destinations declined significantly, accounting for the remaining (%) decline, or $ billion. Expenditures U.S. Destinations During 00, U.S. and Canadian packaged travelers spent approximately $. billion for overnight packaged trips to the U.S. -- % less than the $0. billion spent in 000. Three quarters ($. billion) of $. billion was for the purchase of the package, while $ billion was spent on additional purchases (i.e., not included as a part the package). 0 Dean Runyan Associates

21 Travel expenditure impacts broken out by business type show where package providers and travelers tended to allocate their resources. Most packaged trips included transportation and lodging; therefore, packaged travelers made relatively little additional expenditures for these services. Travelers tended to make their additional purchases for eating and drinking, retail, and recreation. Expenditures for a package (excluding any additional purchases) by U.S. and Canadian travelers declined by %, or $. billion in 00 compared to 000. Expenditures for additional purchases declined at a significantly greater rate, down $ billion or % from 000. Thus, while travel was reduced in 00, those who did continue traveling tended to cut back on expenditures not directly related to the package trip itself. Expenditures for Packaged Travel, U.S. Destinations Cost of Package and Additional Expenditures, by Business Type, 00 Base: Overnight Trips Transportation Lodging Cost of Package Additional Expenditures Eating & Drinking. Retail 0. Recreation.. Total Source: Dean Runyan Associates Billions of $US Similar to 000, transportation and lodging establishments received the highest dollar amounts in 00. These business types received nearly two-thirds ($ billion) of packaged travel expenditures, compared to $ billion in 000. Retail and lodging experienced the greatest declines in expenditures from packaged travel in 00, compared to 000 (declining % and % respectively). Recreation was least effected, declining % from 000. Dean Runyan Associates

22 Pleasure and Business Of the $. billion spent for packaged overnight trips to U.S. destinations in 00, over three fourths ($ billion) was spent on packaged pleasure trips. The remaining quarter ($ billion) was spent on packaged business travel. Expenditures made for Packaged Travel, Pleasure and Business Trips U.S. Destinations, by Business Type, 00 Base: Overnight Trips Transportation Lodging.... Pleasure Business Eating & Drinking.. Retail. Recreation 0.. Total Source: Dean Runyan Associates Billions of $US Expenditures for packaged pleasure trips to U.S. destinations increased in 00 by $. billion, or % compared to 000. Expenditures by business type show the majority of this increase (%) occurred in transportation and lodging (primarily package items), while expenditures on eating and drinking, retail, and recreation (primarily additional items) were generally similar to 000 levels. As expenditures for packaged travel to U.S. destinations in 00 declined (by $. billion), expenditures for pleasure packaged travel actually increased (by $. billion); this left packaged business travel as the source of the overall decline. This segment was extremely depressed in 00, losing a third (%) of 000 s expenditures, with an $ billion decline in 00 compared to 000. Dean Runyan Associates

23 Change in Packaged Travel Expenditures, 000 to 00 U.S. Destinations, Billions of Dollars Base: Overnight Trips Total Pleasure Business Billions of $U.S. Source: Dean Runyan Associates Base: Overnight Trips Packaged Travel Expenditures, Pleasure Trips U.S. Destinations, by Business Type, 000 and 00 Transportation Lodging Eating & Drinking Retail Recreation Total Source: Dean Runyan Associates Billions of $US Dean Runyan Associates

24 Expenditures for business packaged travel declined across all business types, and contrary to packaged pleasure travel which saw increases in expenditures for transportation and lodging these were especially hard hit (with declines of % and % respectively). Also hard hit were eating and drinking establishments, which had a % decline in expenditures from business packaged travel. Packaged Travel Expenditures, Business Trips U.S. Destinations, by Business Type, 000 and 00 Base: Overnight Trips Transportation Lodging Eating & Drinking.. Retail. Recreation Total Source: Dean Runyan Associates Billions of $US Employment U.S. Destinations Expenditures made by packaged travelers for trips in the U.S. in 00 produced business receipts (expenditures less taxes) at a variety of travel industry firms, which in turn, generated jobs for both employees and proprietors. During 00, spending for packaged travel to U.S. destinations directly supported more than million jobs (both full and part-time) in the travel industry with total earnings (wages and salary, earned benefits, and proprietor income) of over $ billion. Packaged travel generated jobs in many business types, including: transportation (,00), lodging (,00), eating and drinking (,00), retail (,00) and recreation (0,00). There was a wide variation in changes to employment levels in these various business types between 000 and 00. For example, employment in recreation related to packaged travel in 00 increased by,000 jobs compared to 000, while transportation and retail lost 0,000 jobs. Dean Runyan Associates

25 Employment Generated by Packaged Travel, Pleasure and Business Trips U.S. Destinations, by Business Type, 00 Base: Overnight Trips Transportation Lodging Pleasure Business Eating & Drinking.. Retail.. Recreation. Total Source: Dean Runyan Associates Thousands of Jobs Employment related to business packaged travelers was most effected in 00. In fact, employment related to pleasure packaged travelers increased slightly in 00 (by,000 jobs), while jobs attributable to packaged travel for business trips declined by 00,000. Base: Overnight Trips Employment Generated by Packaged Travel U.S. Destinations, by Business Type, 000 and 00 Transportation Lodging Eating & Drinking Retail 0 Recreation 0 Total,0, Source: Dean Runyan Associates Thousands of Jobs Dean Runyan Associates

26 Compared to 000, both employment and earnings declined significantly. Employment declined by,000 jobs, or %. The majority of the decline (%) came from a loss of jobs in lodging and eating and drinking places. Lodging and eating and drinking establishments are by far the largest industry employers, with eating and drinking providing nearly four of every ten jobs, and lodging providing three of every ten. This reflects the labor-intensive nature of these businesses, as well as their tendency to quickly adjust labor costs to market conditions. Earnings U.S. Destinations During 00, packaged travel to U.S. destinations generated just over $ billion in earnings (wages, benefits, and proprietor income) for employees and business owners who worked in travel related businesses $. billion from pleasure trips and $. billion from business trips. Those working in lodging establishments took in the largest proportion of these earnings $. billion. Employees and proprietors working in eating and drinking establishments earned $. billion, the majority from packaged pleasure trips. Workers in transportation businesses earned $ billion, recreation $. billion and retail $0. billion. Earnings Generated by Packaged Travel U.S. Destinations, by Business Type, 00 Base: Overnight Trips Transportation Lodging Pleasure Business Eating & Drinking. Retail Recreation 0.. Total Billions of $US Dean Runyan Associates

27 Overall, earnings from packaged travel declined by $. billion in 00 compared to 000. Similar to expenditures and employment in 00, this decline was concentrated in earnings related to packaged business travel. This segment declined substantially from $ billion in 000 to $. billion in 00. Conversely, packaged pleasure travel increased by $ billion. Overall, earnings from packaged travel were less affected by the market declines than were expenditures and employment. Earnings in transportation, recreation and retail were unchanged or slightly higher compared to 000, and while earnings in lodging and eating and drinking establishments declined slightly, proportionally, the decline was milder than the expenditure and employment declines might suggest. Base: Overnight Trips Earnings Generated by Packaged Travel U.S. Destinations, by Business Type, 000 and 00 Transportation Lodging Eating & Drinking.. Retail Recreation.. Total Source: Dean Runyan Associates Billions of $US Expenditures Canadian Destinations During 00, Canadians and Americans spent about $C. billion ($US. billion) on overnight packaged trips to Canada. Most of these expenditures ($C. billion) were made for the purchase of packaged trips. An additional $C. billion of expenditures were made for additional purchases while traveling on packaged trips. Dean Runyan Associates

28 Expenditures made for Packaged Travel to Canada Cost of Package & Additional Expenditures made while on Packaged Trip, 00 Base: Overnight Trips Transportation Lodging Cost of Package Additional Expenditures Eating & Drinking 0.. Retail 0. Recreation 0.. Total Source: Dean Runyan Associates Billions of $C Expenditures on trips to Canada increased by % or $C0. billion in 00, compared to 000. Nearly all of this increase came from expenditures on the package cost, versus additional costs, which remained similar. It is interesting to note that while expenditures in Canadian dollars increased in 00 vs. 000 due to the exchange rate when converted to U.S. dollars, expenditures showed a decline. The exchange rate in 00 was very favorable for U.S. travel to Canada, and certainly accounted for some of the increase in overnight packaged trips to this country. The increased expenditures were all in transportation and lodging, which increased by % and %, respectively. Eating and drinking and retail expenditures were unchanged in 00, while recreation declined slightly. This pattern is converse from overnight packaged trips in the U.S. in 00. Pleasure trips accounted for three quarters (%) of the $C. billion in expenditures made by packaged travelers who visited Canada. Similar to the distribution of expenditures made by packaged travelers visiting U.S. destinations, transportation and lodging businesses received nearly two-thirds (%) of packaged travel expenditures. Expenditures made to other businesses included: eating and drinking establishments ($C. billion), recreation ($C. billion), and retail businesses ($C. billion). Dean Runyan Associates

29 Expenditures made for Packaged Travel to Canada by Business Type, 00 (Billions of $C) Base: Overnight Trips Transportation Lodging.... Pleasure Business Eating & Drinking 0.. Retail Recreation 0.. Total Billions of $C Employment and Earnings Canadian Destinations The expenditures made for packaged travel in Canada produced business receipts (expenditures less taxes) at a variety of travel industry firms, which in turn generated jobs for both employees and proprietors. During 00, spending for packaged travel in Canada directly supported,000 jobs (both full and part-time) in the travel industry, with total earnings of over $C billion. Jobs generated by packed travel in Canada increased by,000 from,000 in 000 to,000 in 00. Lodging and eating and drinking establishments were primary employment beneficiaries, with,000 jobs in lodging establishments and,000 jobs at eating and drinking establishments. Additional jobs in other business types included:,000 jobs in recreation,,000 jobs in transportation, and,000 jobs in retail establishments. The entire increase in employment,,000 jobs, was in lodging establishments. For other business types, the employment levels were similar to 000. Dean Runyan Associates

30 Employment Generated by Packaged Travel to Canada By Business Type, 00 Base: Overnight Trips Transportation Lodging. 0.. Pleasure Business Eating & Drinking.. Retail.. Recreation.. Total Source: Dean Runyan Associates Thousands of Jobs During 00, packaged travel to Canada generated just over $C billion in earnings for employees and business owners who worked travel related businesses $C. billion from pleasure trips, and about $C00 million from business trips. Those working in lodging establishments took in the largest proportion of these earnings, $C. billion. Employees and proprietors working in eating and drinking establishments earned $C00 million. Additional earnings were generated in transportation ($C00 million), recreation ($C00 million) and retail establishments ($C00 million). 0 Dean Runyan Associates

31 Base: Overnight Trips Earnings Generated by Packaged Travel to Canada by Type of Business and Trip, 00 (Billions of $C) Transportation Lodging Pleasure Business Eating & Drinking Retail 0 0. Recreation 0 0. Total Source: Dean Runyan Associates Billions of $C Dean Runyan Associates

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33 . Profile of U.S. Packaged Travel Market This section begins with an overview of the total U.S. travel market and then beginning on page 0 provides a detailed report on the U.S. packaged travel market including comparisons to the overall U.S. travel market (U.S. Norm) and overnight trips taken by U.S. adults to domestic and international destinations. The findings are based on Longwoods International s Travel USA consumer research surveys for the 00 travel year. Overview of U.S. Travel Market American adults took. billion overnight trips in 00. Visits to Friends and Relatives (VFR) and Marketable Trips each accounted for 0% of the market. Business Trips accounted for the balance 0%. (Marketable Trips are Pleasure Trips other than VFR. They are so-called because their purpose and destination are discretionary and thus open to marketing influence.) Size of the U.S. Travel Market 00 Overnight Trips Base: Overnight Trips Business Trips 0% Marketable Pleasure Trips 0% Visit Friends/Relatives 0% The. million trips were % fewer than in 000. This overall decline was the net result of growth in VFR offset by declines in Marketable and, especially, Business trips. Dean Runyan Associates

34 U.S. Travel Market Trend 000 to 00 Base: Overnight Trips All Trips - Visit Friends/Relatives Marketable Pleasure - Business Trips Change Business Trips The Business decline began in April 00 and continued through to the end of the year. U.S. Overnight Business Trips by Month 000 and 00 Millions of Trips Total 000 Business Trips = Million Total 00 Business Trips = Million Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Dean Runyan Associates

35 Shown by quarter, the Business Trip decline began in the second quarter and intensified thereafter. U.S. Overnight Business Trips by Quarter 00 and 000 QI QII QIII QIV Millions of Trips This softness in the Business travel market affected Business Meeting and Conference/Convention/Trade Show trips more so than Sales/Service calls. U.S. Overnight Business Trips by Trip Type 000 to 00 Base: Overnight Trips All Business Trips -0 Sales/Service - Conf/Conv/Trade Shows - Meetings Change Dean Runyan Associates

36 Marketable Trips Marketable Trips were soft throughout the year but for the prime summer months of July and August. This is likewise reflected in the quarterly trend where those months favorably impacted on third quarter performance. U.S. Overnight Marketable Trips by Month 000 and 00 Millions of Trips Total 000 Marketable Trips = Million Total 00 Marketable Trips = Million Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec U.S. Overnight Marketable Trips by Quarter 00 and 000 QI QII QIII QIV Millions of Trips Dean Runyan Associates

37 Visit Friends / Relatives (VFR) The higher VFR trip volume in 00 was primarily driven by gains in the last quarter and the months of November and December in particular. U.S. Overnight VFR Trips by Month 000 and 00 0 Total 000 VFR Trips = Million Total 00 VFR Trips = Million Millions of Trips Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec U.S. Overnight VFR Trips by Quarter 00 and 000 QI QII 0 QIII 0 QIV Millions of Trips Dean Runyan Associates

38 Marketable Trip Mix The profile or mix of Marketable Trips in 00 was similar to 000, with individual type importance ranging from Touring at % to Ski trips at %. U.S. Overnight Marketable Trip Mix 00 vs. 000 Base: Overnight Marketable Trips Touring Special Event Outdoors Casino Beach Business/Pleasure City Theme Park Country Resort Cruise Ski Only Ski, Casino, and Beach types trips registered growth in 00 and not enough to offset the declines in all other types. Theme Park and Business/Pleasure were especially weak performers, the latter influenced largely by the double-digit decline in Business travel. U.S. Overnight Marketable Trips by Trip Type 000 to 00 Base: Overnight Trips All Marketable Trips - Ski Casino Beach City Cruise Country Resort Touring Special Event Outdoors Theme Park Business/Pleasure Change Dean Runyan Associates

39 Destination Mix Trips to domestic destinations drive the performance of the overall U.S. travel market accounting for % of total volume, down % in 00. Trips to foreign destinations accounted for a comparatively small % of the market but suffered the greater losses in 00. They were down % overall and down % to destinations off the North American continent. Base: Overnight Trips U.S. Overnight Trips, Destination Mix Domestic Destinations International Destinations Base: Overnight Trips U.S. Market Trends By Destination 000 to 00 All Trips - Domestic Destinations - International Destinations - Intl. ex. Canada/Mexico Change Dean Runyan Associates

40 The Packaged Travel Market A packaged trip was defined for the purpose of this study as a pre-arranged, pre-paid trip that is arranged by a travel professional and includes at least two travel elements (i.e., accommodations, transportation, attractions, meals, etc), and that can be purchased for independent or group travel. Packaged trips captured an.% share of the overall U.S. market in 00 versus.% in 000. Their share was strongest of Marketable trips, followed by Business trips, and finally, VFR. Packaged Trips Share of the U.S. Market- Overnight Packaged Trips Base: Overnight Trips - Packaged Total Trips Visit Friends/Relatives Marketable Trips Business Trips This share decline, coupled with the % decline in the overall U.S. travel market, caused the Packaged Travel market to decline by % to million trips in 00. Base: Overnight Trips - Packaged Market Volume Trends 000 to 00ik All Trips - Visit Friends/Relatives Marketable Pleasure - Business Trips Change 0 Dean Runyan Associates

41 U.S. Overnight Business Packaged Trips by Quarter 00 and 000 QI.. QII.. QIII.. QIV Millions of Trips U.S. Overnight Marketable Packaged Trips by Quarter 00 and 000 QI QII.. QIII.. QIV Millions of Trips Dean Runyan Associates

42 U.S. Overnight VFR Packaged Trips by Quarter 00 and 000 QI QII. QIII. QIV Millions of Trips The softer performance of the packaged travel market reflects the higher importance of the weaker market segments to it, namely Marketable and Business trips (rather than VFR) and of international (rather than domestic) destination trips. Base: Overnight Trips Trip Type Mix Visits to Friends/Relatives 0 Marketable Trips 0 Business Trips 0 Packaged Trips U.S. Norm Dean Runyan Associates

43 Destination Mix Base: Overnight Trips Domestic Destinations (-% Vs. 000) International Destinations (-% Vs. 000) Packaged Trips U.S. Norm Performance by Marketable Trip Type Packaged travel share ranged from % of Cruises to % of Outdoor Trips. Of particular note are packaged travel s: stronger shares of the larger Touring, Casino, and Beach trip types; stronger shares of the smaller Theme Park and Cruise trip types; weaker shares of the larger Special Event and Outdoor trip types. Base: Overnight Trips Packaged Trip Share of the U.S. Market by Trip Type Cruise Theme Park Touring Casino Beach Ski Country Resort City Business Pleasure Special Event Outdoors Dean Runyan Associates

44 These shares generated volumes that made Touring, Casino, Cruise, and Beach the most important individual trip types to packaged travel. Base: Overnight Trips - Marketable Marketable Trip Type Mix Touring Casino Cruise Beach Special Event Theme Park City Business/Pleasure Country Resort Outdoors Ski 0 Packaged Trips U.S. Norm All packaged trip types experienced some year-to-year softness, with relative performance amongst them similar to that seen in overall U.S. trip types U.S. Packaged Trip Trends By Marketable Trip Type 000 to 00 Base: Overnight Trips - Packaged Total Marketable Trips - Ski Beach Casino Cruise Special Event City Country Resort Outdoors Touring Theme Park Business-Pleasure Change Dean Runyan Associates

45 Types of Packaged Travel Both independent and group packages were substantial market segments. and group packages accounted for % and %, respectively of the packaged travel market. The independent majority was especially pronounced among packaged Visits to Friends and Relatives (%). Base: Overnight Trips - Packaged Package Type Mix 00 -> Non-Affiliated - Affiliated 0 0 Total Packaged Trips Marketable Visit Friends/Relatives Business Trips A package was designated to be a group package when the traveler reported that his or her immediate travel party traveled as part of a larger group. An immediate travel party includes the traveler and any immediate travel companions and with whom at least some of the travel expenses were shared The independent package majority was more pronounced on trips to domestic rather than international destinations, as was the importance of affiliated over non-affiliated groups. Dean Runyan Associates

46 Base: Overnight Trips - Packaged Package Type By Destination 00% 0% 0% 0% - Non-Affiliated - Affiliated 0% 0% Domestic International packages were also more common than group packages on all but two trip types. Those two trip types were Touring and Special Event trips. Package Share By Packaged Trip Type Base: Overnight Trips - Packaged Touring Special Event 0 City Cruise Casino Beach Theme Park * Base for other Marketable trip types too small for reporting Dean Runyan Associates

47 As illustrated in the previous chart (Package Type By Destination), affiliated groups accounted for about a quarter of packages to both domestic and international destinations. A group with prior affiliation was one where a member of the immediate travel party had some past connection with the larger travel group. The more typical group affiliations were clubs with shared interest including churches, schools, work, and family reunions. Package Affiliations Base: Overnight Trips - Packaged - with Prior Affiliation Club with shared interest Church group Membership organization School group Bank travel group Family reunion Employee recreation group Alumni group Youth organization Retirement Home Other Domestic and international packages were distinguished, however, by the size of their groups. Domestic groups were larger than international ones (0% vs. % respectively were of 0+ individuals). Base: Overnight Trips - Packaged - Package Size By Destination Under 0 people ,000+ people Domestic International Dean Runyan Associates

48 Packaged Travel Components Most packaged trips, eight-in-ten or more, included both accommodations and transportation. Next most common, half or more, included all or some food. Other components, and especially guide services and sightseeing, were more common on group rather than independent packages. Base: Overnight Trips - Packaged Travel Components Included in Package Accommodations Transportation Guide Services Entertainment All Meals Some Meals Sightseeing Casino Stake Other Activities More about these packaged trip components is reviewed later in the Package Cost and Details section of this report. Season of Travel Packaged travel was fairly prevalent throughout the year. Each quarter accounted for between 0% and % of annual volume, the lowest being the closing quarter of the year. Dean Runyan Associates

49 Season of Travel Base: Overnight Trips January-March April-June July-September 0 October-December 0 U.S. Packaged Trips U.S. Norm and group packages had similar seasonality. Season of Travel By Package Type Base: Overnight Trips - Packaged January-March 0 April-June July-September October-December Notable seasons by Trip Type were: Winter for Ski and Casino trips and the Summer/Early Fall for Beach, Outdoor, Theme Park and Touring, and Country Resort trips. Dean Runyan Associates

50 Base: Overnight Trips - Packaged Touring January-March April-June July-September October-December Casino January-March April-June July-September October-December Cruise January-March April-June July-September October-December Season of Travel By Packaged Trip Type Base: Overnight Trips - Packaged Beach January-March April-June July-September October-December Special Event January-March April-June July-September October-December Theme Park January-March April-June July-September October-December Dean Runyan Associates

51 Season of Travel By Packaged Trip Type Base: Overnight Trips - Packaged City January-March April-June July-September October-December Business/Pleasure January-March April-June July-September October-December Country Resort January-March April-June July-September October-December Base: Overnight Trips - Packaged Outdoor January-March April-June July-September October-December Ski January-March April-June July-September October-December Dean Runyan Associates

52 Trip Length Packaged trips lasted longer than the typical U.S. trip. The average was. nights compared with the.0 night U.S. Norm. The more common lengths in both cases were - and - nights. On a cumulative basis, over half of the packaged trips lasted or more nights. Length of Trip Base: Overnight Trips Night 0 Nights - Nights - Nights Average # of Nights Packaged:. U.S. Norm:.0 - Nights + Nights Packaged Trips U.S. Norm Both independent and group packaged trips were. nights long on average. Length of Trip By Package Type Base: Overnight Trips - Packaged Night 0 Nights - Nights - Nights Average # of Nights :. :. - Nights + Nights Dean Runyan Associates

53 Trip length was driven by trip type and destination. The longest types were Touring and Cruise. The shortest were City and Casino. Length of Trip By Packaged Trip Type Base: Overnight Trips - Packaged Touring Cruise.. Beach Theme Park.. Special Event. City. Casino. 0 Number of Nights (Average) *Base sizes for other Marketable trip types are too small for reporting International trips lasted. nights compared with. for domestic trips. In fact, almost seven-in-ten international trips lasted + nights. Length of Trip By Destination Base: Overnight Trips - Packaged Night 0. Nights - Nights - Nights Average # of Nights Domestic:. International:. - Nights + Nights Domestic International Dean Runyan Associates

54 Trip Destinations Domestic trips accounted for the bulk of the packaged travel market. Eight-in-ten packaged trips (%) were taken to domestic destinations, compared with three-in-ten (0%) to international destinations. (Totals are greater than 00%, because more than one domestic and/or international destination can occur on a single trip.) Packaged travel favors international trips. International trips accounted for 0% of all packaged trips but only % of the overall U.S. travel market. Base: Overnight Trips Destination Mix Domestic Destinations International Destinations Packaged Trips U.S. Norm Destinations for packaged trips differ markedly by type of trip. Cruises were mostly international (% international), Beach and Touring trips were split more closely (- %), and all other types were mostly domestic (only -% international). Dean Runyan Associates

55 Destination by Packaged Trip Type Base: Overnight Trips - Packaged Domestic International Cruise Beach Touring Business/Pleasure Ski Outdoor City Special Event Theme Park Casino Leading Packaged Travel Destinations in the U.S. The leading packaged travel destinations in the United States were Florida, Nevada, and California. Florida and Nevada are far more important to packaged travel than the overall travel market (% vs.% combined). Correspondingly, Las Vegas and Orlando were the leading city destinations in the U.S. Top U.S. Destinations - States Base: Overnight Trips Florida Nevada California New York New Jersey Texas Pennsylvania Hawaii Virginia Packaged Trips U.S. Norms 0 Dean Runyan Associates

56 Top U.S. Destinations - Cities Base: Overnight Trips Las Vegas Orlando Los Angeles Atlantic City New York City Miami Reno Washington D.C. Atlanta New Orleans Chicago Branson MO Nashville San Francisco Packaged Trips U.S. Norms 0 The leading domestic destinations by packaged trip type are presented in the following charts. Base: Overnight Trips - Packaged Top State Destinations Domestic Trips by Trip Type Beach Florida Hawaii South Carolina California Cruise Florida Alaska California Louisiana Dean Runyan Associates

57 Top State Destinations Domestic Trips by Trip Type Base: Overnight Trips - Packaged Theme Park Florida California Casino Nevada New Jersey Mississippi Base: Overnight Trips - Packaged Outdoor California Pennsylvania Texas New York Touring Hawaii New York Florida California Dean Runyan Associates

58 Top State Destinations Domestic Trips by Trip Type Base: Overnight Trips - Packaged Country Resort New York Pennsylvania California South Carolina Business/Pleasure Florida Texas California Nevada Base: Overnight Trips - Packaged Special Event Florida Nevada New York Georgia City Nevada New York Missouri Virginia Dean Runyan Associates