Travel and the Economy
The other day I was surfing through classified advertising on the web. I was looking to answer three basic questions:
1. What will an average family or travel group expect to pay for a 5 day/4 night vacation?
2. What will they actually spend?
3. What value do they expect to receive from the experience?
At present, the news media drones on about the sad state of our economy and an out of control unemployment rate of 9.5% (in some parts of the country 15%) and how we are in for a least two more very grim years before our economy recovers. But, somehow the travel industry has not experienced the same downturn.
Travel Industry Growth
According to the latest Tourism Satellite Accounting (TSA) research, world travel and tourism generated close to $8 trillion in 2008, and is expected to rise to approximately $15 trillion over the next ten years while supporting 297 million jobs and 10.5% of global GDP by 2018 (travelindustrywire.com). For any industry this is stellar performance.
Of course the bottom line reason for this success is people still want to “get out of Dodge” and are willing to pay for it. “How much?” and “Why?” were two of the questions that took me to the classifieds.
Back To My Research
In my two-hour surf through the travel classifieds, I found several discount vacations in a major destination from $700 to $1000. The prices were for the hotel stay only. Food and travel were extra and could realistically be expected to double that price. So the price of this 5 day/4 night getaway could easily be between $2000 and $2500. But, then I came across something that was even more interesting and rooted in my third question.
At first read, the three questions seemed to be in order of priority. We would assume that a family or travel group would first come up with a budget and then plan a vacation. Let’s find a place in a scenic location away from home. We can cook our own meals to save money. Our budget is based on what we can afford, now what can we get? And the second assumption is the vacation will realistically go over budget by an anticipated percentage. These are fair assumptions, but those assumptions go right out the window when seduced by the entertainment vacation.
An entertainment vacation is a destination vacation to any of the world famous destinations, i.e. theme parks, Las Vegas casinos, International cruises, and the like. Because most families believe the shared experience of going to Disney World is so much greater, they are willing to double, even triple the expense. The stay in a hotel and eat meals in restaurants, even drive a rental car if they flew to the destination. The entertainment vacation promises a lifetime memory that a mundane trip to the beach can’t.
But wait… there’s more!
A secondary discovery on my journey through the classified ads was the large listings of time share vacations for sale. The selling point of this type of vacation was individual ownership of a particular place and time in the year when you could get away. But, these listings were offering the timeshare for sometimes half of the original purchase price. The primary reason for selling was, “I am no longer using it.” There is an apparent shift in vacation value… from being together to experiencing something entertaining together. That shift is the reason the travel industry is experiencing near exponential growth.
If an entertainment vacation could cost the same or less than that trip to the beach, would you do it? The answer to the question is obvious. Of course! If you could save 75% on an entertainment vacation, and 50% on the restaurant meals, would you book it? Again… of course! Because the vacation value of the shared experience is high and the cost is the same or maybe even a little lower.
The Travel and Vacation Package
Over the past fifteen years, several companies are now offering travel and vacation packages that combine the best of both worlds… high value experiences with low cost. These packages are different from a travel agency booking. The package offers a series of discount travel cards and certificates that allow you to book resorts, theme parks, cruises, hotels, campsites, restaurants, and more for 50%-75% off. These are not travel clubs with monthly or annual fees. These packages are offered for a one time price, usually less than the cost of a typical week long vacation. The package usually contains the equivalent of thirty or more vacations, including restaurant discounts, that never expire. Some of them are even transferable. Usually a package will include several bonus vacations that can be given away. Often hotel rooms and condo rentals can be had for the cost of the room tax. While some results may vary, with a travel package the charge for a $200 per night room could be as little as $25 a night… an incredible bargain.
Vacation and travel packages can be found on the internet, but be warned, what I’ve written about is not a package from a travel agency for a one time vacation. These packages come offered by an association of business people who have negotiated the package through several travel vendors. The business association is NOT a seller of travel and therefore is not licensed to sell travel. What is sold is travel and travel related discount packages that provide discounted access to many travel and travel related companies.
These vacation and travel packages are by far the best in travel value and the shared vacation experience.