Hovedtrender for fremtidig reiseetterspørsel

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Martin Lohmann & Ulf Sonntag: Tourism Trends Germany. May 2010

Hovedtrender for fremtidig reiseetterspørsel –The future of Holiday Travel from GermanyMartin Lohmann & Ulf Sonntag

Reiselivskonferansen 2010 "Veksten må komme utenfra"

ColorLine, Kiel6 May 2010

This document is part of a personal presentation and needs additional explanations.

© Martin Lohmannund Ulf Sonntag, Kiel, 2010


This is about “Trends”:Which way to the future?

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What is a trend?

Trends are: possible developments of the future from today‘s perspective,

that are already visible today,and where we do have a good reason that they will continue in the future.

A trend is not a temporary fashion.


► The “Reiseanalyse” (RA) is a yearly (since 1970) representative survey,

► covering holiday travel behaviour, intentions and attitudes of Germans,

► conducted every year with a comparable set of questions and based on a random sample of 7,500 face-to-face interviews.

► Users: tour operators, hotel chains, regional, national and international tourism organisations / ministries and other organisations in the tourism industry.

www.reiseanalyse.de

“Reiseanalyse” (RA): The Survey

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The “Reiseanalyse”www.reiseanalyse.de


A trend needs a beginning.

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Holiday travel propensity:Stable demand on a high level

0

10

20

30

40

50

60

70

80

90

100

1954 64 74 84 94 96 98

2000

2002

2004

2006

2008

2009

%

78%72% 75,7%74%

52%

76%

Basis: population aged 14+; up to 1990 Western Germany onlySource: 1970 onwards: Reiseanalyse; previous years: other


Consumer priorities

54% 54%59%

48%42% 42%

37%34%

50%

16%

Food

Accom

odati

onHea

lth

Holida

y Trip

s

Fashio

n/app

earan

ce Car

Leisu

re

(Pen

sion)

provis

ioning

Commun

icatio

ns/m

edia

Short b

reaks

Population

Holiday-makers 2008

Question: „Here is a list of various items on which people spend money. Which of these are particularly important to you?“Basis: population; holiday-makers in 2008 aged 14+; Source: FUR, RA 2009

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Holiday Trips: we are used to take them…

Basis: population aged 14+; Regular = min. 1 trip p.a. in 2007-09; Occasional = 1 or 2 trips in the last 3 years; infrequent: no trip within the last 3 yearsSource: FUR, RA 1993, 1999, 2004, 2009 & 2010

46%

36%

18%

50%

35%

16%

51%

33%

16%

60%

13%13%

28%

61%

26%

Regular Occasional Infrequent

19921998200320082009


External influences

Tourism demand

DisastersPolicyEconomy

Demographicchange

Technology

Tourism industry Consumer behaviour

ExamplesEconomic crisis

Multi-optionality

Web 2.0

Environment

Climate changeEnergy prices

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External Influences –How to they impact?

External factors may have an impact on tourism demand by affecting the ability to travel (freedom, time, money, fitness) and the motivation to do so.

Consumer Behavior is not a reaction to a single factor but to the whole set of influencing external factors.

In addition it is driven by internal factors (e.g. motives, abilities etc.).

Thus, the impact of a change in a single external factor is limited.


What is the basic situation?

Demand for Holiday Trips in Germany

On a high levelIt’s a priorityIt’s a habitInfluenced by a multitude of factors

Thus: Stability.

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Future Trends ofTourism Demand:

An Evolution.


How to identify a trend?

Taking into consideration:

RA data + calculations + comparisons (other sources) + frame work conditions (as identified by reviewing the literature)

Checking different views within our research team andWorkshops with people from the industry

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At first sight, the long-term trends are not very fancy.

But: They offer great challenges.

The new tourismdoes not come as a revolution!


1. Structural change: new weighting of target groups2. Motives: steady basic needs,

higher expectations 3. Volume: stable, with potential for growth + risks4. Destinations: larger regions have well-defined positions,

leeway for countries/destinations5. Information + decision: new strategies6. Distribution: important role of professionals7. Type of holiday: combine more types in a single holiday8. Duration: shorter9. Seasonality: declining10. Expenditure: higher price consciousness11. Accommodation: higher quality

12. Means of transport: stability with risks

Trends and their consequences

Strong Competition

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1993 2020

63

7375

60

Trend 2020

Num

ber o

f hol

iday

s in

mill

ion

Long-term development: driving forces for demand

66

58

Economic situationPrices

MotivesAttitudes

Demogr. changeGood marketing

Economic situationPrices

War & terrorClimate change

EpidemicsNatural disasters

Bad marketing


Driving forces

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Source: Lohmann & Aderhold: Urlaubstrends 2020 (FUR)

Trends in a framework of drivers

Information overloadInternet/e-com

Sustainability

Security

Differentiation

Price orientation

Climate change

Innovation

Extended product portfolio

Supply Demand

Globalization

Crises, war andterror threats

Pressure of competition

Standardization

Technology

Consumerpower

Demographicchange

Increased price sensitivity

Sense of entitlement

Clever customer

Economy

Trends of tourism demand• Structural change: new weightings of target groups• Motives: steady basic needs,

higher expectations • Volume: Stable, potential for growth + risks• Destinations: larger regions have well-defined positions,

leeway for countries/destinations• Information + decision: new strategies• Distribution: important role of professionals• Type of holiday: combine more types in a single holiday• Duration: shorter• Seasonality: declining• Expenditure: higher price consciousness• Accommodation: higher quality• Means of transport: stability with risks


Tourism in a changingsociety –

The „agequake“

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Growth 1970-1990: through persons aged 20-50;1990-2009: through persons aged 60+

0

20

40

60

80

100

14 - 19 20 - 29 30 - 39 40 - 49 50 - 59 60 - 69 70+

% 2009198919791970

Holiday travel propensity of different age groups 1970 - 2009


Source: FUR, RA 1996 & RA 2006; Destination of main holiday trip in %; n = ca. 1.000

6869Abroad3231Domestic (Germany)

2005 60 - 69 years

199550 - 59 yearsin %

Holiday destination choice for a German cohort 1995 and 2005

Age 55 65

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People (cohorts) when getting older tend to stick to their once learned/acquired behavior patterns.These patterns are a result of previous experiences & life conditions.As these experiences are different for each cohort, the patterns are different, too. Thus, today‘s seniors behave differently from yesterday‘s and tomorrow‘s will be different from today‘s.We have tried to use this „rule“ in order to take a look into the future.

Continuity


69%55%Abroad

31%45%Domestic (Germany) Destination of main holiday trip

7,4 mn.5,2 mn.Number of travelers

77%64%Holiday travel propensity

9,6 mn.8,2 mn.Total of age group

20202007

75-year-olds in the year …

75-year-old = 70- to 80-year-old personsFigures for 2020 are estimated on the basis of the current data of the group aged 57 to 67 yearsSource: FUR, RA 2008

Holidays of future senior citizens

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Volume and structure of holiday takers and holiday trips 2007 and 2020

64,410049,710062,910048,5100total

22,33516,63318,73013,428Seniors(aged 60+)

31,14823,94831,65024,651Middle-agedadults(30 to 59 yrs)

11,0179,21912,62010,421

Adolescentsand youngadults(14 to 29 yrs)

Mio.%Mio.%Mio.%Mio.%

Holiday trips2020*

Holiday takers2020*

Holiday trips2007

Holiday takers2007

* Estimation using the cohort and segment rule on the basis of the RA 2008.Numbers stated for 2020 are examples.


… Continuity Theory of aging states that older adults will maintain the same activities, behaviours etc. as they did in their pre-senior life (cf. Atchley, 1989, 1999).

… is an important factor in explaining the consumer behavior of future senior tourists, but it is not the only one.

In addition we have► New possibilities

(e.g. more „disposable“ time after retirement)► New limitations (e.g. health, fitness)► Frame work conditions in society► Marketing efforts of the tourism industry

Continuity…

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Dresden Neustadt; Dec. 2008 (photo: Martin Lohmann)

Demographic change


Peru, Ausangate region, Aug. 2009 (photo: Lohmann)

Demographic change

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Customer‘s expectations:Informed customer.


Holiday motives 2010

Basis: population aged 14+Motives „very important“Source: FUR, RA 2010

RelaxationRelaxation 69%

Away from routine 67% Recuperation 63%

Free time 57%

New experiencesFun, amusement 60%New Impressions 44%

Travel around 38%Other countries 35%

EnjoymentSun, warmth 66%

Do nothing 56%Spoil myself 31%

SportsGentle sports 32%

Sports 11%

Partner / childrenTime for each other 52%

Children18%

ContactsShare experiences 40%

Acquaintances 36%Flirt / romance 14%

Health / natureExperience nature 58%

Healthy climate 51%Health 36%

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More demanding: every motive becomes more important!

The basic motives of holidays are not going to change within thenext ten years: relaxation, no stress, be free and independent, escape the daily routine and – at the same time – recuperate.

No change of holiday values!

Differentiation of expectations, how to implement these basic motives in a concrete holiday trip.

More experiences, more pleasure. Holidays deliver impressions. Just service is not enough, „unique“ experiences with personal involvement!

More in one holiday: content, velocity, intensity

Experienced traveller: Flexible “how”, inflexible “why”


Distribution: increasing importance of the internet

68%

51%

29%

Internet access use for holiday information use for holiday booking

Jan 01 Jan 03Jan 05 Jan 07Jan 09 Jan 10

75% of persons online are using the internet for holiday information

50% are using the internet for holiday bookings

Source: RA 2010; population

Information and booking: new information technologies affect and change holiday travel planning. Persons regularly using the internet in daily life also use the internet for travel planning. Consequently, traditional means of booking are losing importance.

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Immense offer interchangeable productsneed for information

communication channels and information information overload less time/information

The decision: not a comprehensive search-evaluate-choice process but a good-enough solution- how to get into the consideration set?

When basic needs are fulfilled and under low involvement conditions,price orientation, convenience and experience orientation are getting more important.- how to get the best evaluation compared to the competitors in the consideration set?

Skilled consumer with low involvement- a challenge for marketing


Norway on theGerman holiday market

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+ 3%61%59%Southern Europe

25%

33%

30%

24%

53%

2010

- 4%

+ 8%

+ 8%

+ 8%

+ 19%

Change

44%Germany

31%Non-European Mediterranean

26%Eastern Europe

28%Long-haul

22%Northern Europe

2007Interest in destinations in

Destination trends:

Multi-optionality x [love of one‘s native country + wanderlust]

Basis: population aged 14+, more than one answer possible; source: FUR, RA 2007 & 2010


33%

4%

7%

10%

6%

33%

Germany Mediterranean Alps Scandinavia EasternEurope

Long Haul

1995

2000

2005

2009

Basis: all holiday trips 5+ days

Holiday destinations: Structural overview

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3,8 3,7

3,02,7

3,3 3,33,5 3,5

0

1

2

3

4

95 97 99 01 03 05 07 09

%

Stable level of holiday trips to Scandinavia

Basis: all holiday trips 5+ days


0.147Finland

0.52116Sweden

0.62722Norway

1.14855Denmark

million%

20091995

%

Norway one of the winners within Scandinavia

Basis: all holiday trips to Scandinavia 5+ days

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72%

2,9

5,2

8,6

9,4

14,2

4,3

6,8

11,8

13,3

15,7

Iceland/Greenland

Finland

Sweden

Norway

Denmark

2010

1996

in %

Growing interest for Scandinavia, biggest growth for Norway

+ 11%

+ 42%

+ 37%

+ 31%

+ 48%

Basis: population 14+ years

Interest to visitdestination withinthe next three years


Interest for Norway 4x bigger than experience

Norway last 3 years3.2% (2.1 million)of the German population (aged 14+) have been to Norway on holiday or short holiday in the years 07-09

Norway next 3 years13.3% (8.6 million)of the German population (aged 14+) are "almost definitely planning“ or "generally considering" to spend a (short-) holiday in Norway in the years 2010-2012.

Interest for Norway 4x bigger than experience

space for marketing

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Rising interest for Norway on the German market

8,98,1 7,8 7,6

11,111,9

13,2

2,3 1,7 1,9 2,3 2,8 2,53,2

0

5

10

15

RA 98 RA 00 RA 02 RA 04 RA 06 RA 08 RA 10

%

Interested in Norway next 3 y ears

been to Norway in the past 3 y ears



The interest to travel to Norway is mainly „soft“



14% (1.3 million)‘hard potential’ Norway(“almost definitely planning”)

86% (7.3 million)‘soft potential’ Norway(“generally considering”)

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Most prospective travellers have no recentexperience with Norway



13% (1.1 million)‘potential repeater’ Norway(“interest AND experience”)

87% (7.5 million)‘NEW potential’ Norway(“interest WITH NO experience”)


13,6Scandinavia-Interest 10-12

17,8Norway-Interest 10-12

German population 6,4

Number of potential destinations 2010-2012

broad interest of Norway-Interested in different destinations

fierce competitive situation

Fierce competitive situation of Norway

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72%

678

1011121313

1519

2129

61

SwedenCroatiaGreece

NetherlandsSwitzerland

TurkeyFrance

NorwayDenmark

ItalyAustria

SpainGermany

in %

Prospective Norway guests have been to many countries in the past 3 years

Basis: Persons interested in visiting Norway within the next three years


72%

37424344

4850

5457

6162

6669

100

USATurkey

SwitzerlandFinlandGreeceFranceAustria

ItalySpain

DenmarkSweden

GermanyNorway

in %

Prospective Norway guests are interestedin a lot of destinations beside Norway


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72%

3233

3639

4547

515657

6161

676767

CruiseWinter/Sun

Winter/SnowFamilyRoundActive

CityRelax

ExperienceHoliday Home

NatureSun+Beach

All-InclusiveHoliday Apartment

in %

Prospective Norway guests are interestedin a lot of different kinds of holiday



► Stable demand for Scandinavia – market share 3.5%

► Within Scandinavia, Norway is one of the winners in the past decade

► Interest for Norway in Germany is 4x bigger than the experience ‘space for marketing’

► Norway-Interest and -Experience are growing

► Norway-Interested are mainly ‘soft and new potential’important fact to consider in marketing planning

► Fierce competitive situation for Norway Main competitors are Germany, Scandinavia, Mediterranean

► The kinds of holiday, potential Norway-guests are interested show …CHANCES (holiday homes, nature, experience, action, round)THREATS (AI, sun+beach, winter/sun)

Norway in a good position on the German market, yet in a fierce competition with holiday destinations around the world

Norway on the German market

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Short cruises


Short cruise last 3 yrs1.1% (0.7 million)of the German population (aged 14+) have been on a short cruise in the years 07-09

Short cruise next 3 yrs13.7% (8.9 million)of the German population (aged 14+) are "almost definitely planning“ or "generally considering" to go on a short cruise in the years 2010-2012.

Interest for short cruises 13x bigger than experience (!!)

new segment with huge market potential

Interest for short cruises 13x biggerthan experience

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„Exploding“ interest for short cruises on theGerman market

7,9 8,3 7,78,5

13,7

0,8 0,9 0,4 0,6 1,10

5

10

15

RA 06 RA 07 RA 08 RA 09 RA 10

%

Interested in Short-Cruises next 3 years

been on a Short-Cruise in the past 3 years



13% (1.2 million)‘hard potential’(“almost definitely planning”)

87% (7.7 million)‘soft potential’(“generally considering”)



The interest to go on short cruises is mainly „soft“

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6% (0.5 million)‘potential repeater’(“interest AND experience”)

94% (8.4 million)‘NEW potential’(“interest WITH NO experience”)



Almost all prospective travellers haveno recent experience with short cruises


56% (5.0 million) short cruise and cruise

44% (3.9 million) shortcruise and NO cruise

Cruise potential 2010-2012 total: 9.9 million

Short cruise potential 2010-2012 total: 8.9 million

3.9 million are distinct short cruise potential with no interest in cruises

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28% (2.5 million) short cruise and Norway

29% (2.5 million) Norway and short cruise

72% (6.4 million) shortcruise and NO Norway

Norway potential 2010-2012 total: 8.6 million

Short cruise potential 2010-2012 total: 8.9 million

2.5 million are interested in short cruisesAND Norway

71% (8.1 million) Norwayand NO short cruise


► Growing interest for short cruises

► Big potential – quite little actual demand exciting ‘new’ segment which has yet to find its ‘place’ on the market

► Consequently: almost only ‘soft’ and ‘new’ potential

► Almost half of the potential is not interested in ‘cruises’A big part of the short cruise potential is a quite distinct segment

► Norway and short cruises fit quite well together:interest for each other more as double as high as in population

Short cruises on the German market

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Market perspective 2020


Challenges, opportunities & tasks for the tourism industry management

Trends

Framework dynamics• Climate change• Demographic change• Technological change• others

Tourism industry• Increasing capacities• Strong competition• Professionalisation• Bigger industry units• Standardisation of

products• others

Tourism demand• Volume: stagnation• Structure: new

weighting of target groups• stable motivation• new competences • others

As a result of the market situation:• Consumer power• New information search and

travel decisions patterns• Fragmentation of target groups • High expectations with an

„instant gratification“ attitude• Consumers’ paradox: be different

& meet the standards• Price sensitivity• Flexible consumers• Convenience orientation• others

Source: Lohmann (2009)

Trends as managerial tasks

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► Stable demand for holiday trips in Germany to be expected

► Structural dynamics in a huge but very fragmented market

► Skilled consumers

► Multi-optionality: There is always an alternative for the tourist…

► A lot of potential tourists for Norway(create more awareness in Germany vs. make those, who are interested, realize their plans?)

► Similar situation for Short Cruises

► Norway and short cruises fit quite well together:interest for each other more as double as high as in population

What was it?


Paper & Authors

This paper has been prepared for Reiselivskonferansen 2010 "Veksten må komme utenfra„ in Kiel, 6 May 2010

Martin Lohmann is Professor for Consumer Behaviour with the Leuphana University in Lüneburg, Germany (www.leuphana.de), Visiting Professor at WU Wien (www.wu.ac.at), and Managing Director of N.I.T., the Institute of Tourism Research in Northern Europe in Kiel, Germany (www.nit-kiel.de). He is scientific consultant of FUR (www.fur.de).

Ulf Sonntag is Associate Director and Head of Market Research of N.I.T., the Institute of Tourism Research in Northern Europe in Kiel, Germany (www.nit-kiel.de). He coordinates the research and analyses performances of FUR (www.fur.de).

Contacts:[email protected]@nit-kiel.de

FUR - Forschungsgemeinschaft Urlaub und Reisen e.V.Fleethörn 23; D – 24103 Kiel,www.reiseanalyse.de

Hovedtrender for fremtidig reiseetterspørsel

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