Ralf Garrison – Mountain Travel: Preparing for opportunity in 2011
January 2, 2011
Last month we outlined three cautions to keep on your radar for 2011: the economy, weather and transportation. Classified as “macro-level” considerations, these overarching conditions are for the most part, out of your control. So what can you do to succeed this next year? Luckily, there are some important factors that will be critical to successfully navigating 2011 that you can be aware of, plan for and pro-act to. For resort destinations, these include:
>The need to be nimble and data-driven
>Effectively targeting consumers
>Impacts of the changing real estate market
I believe those who are forewarned are forearmed, and here are my thoughts about not only what to expect in terms of the impacts of resort real estate and courting a new consumer, but how you can actively begin to strategize now for roadblocks that are sure to come in 2011.
We know the economy and market conditions are likely to continue to be uncertain and volatile; tough to plan for and hard to anticipate. Successful businesses need to be on their toes, nimble and ready to seize opportunities and defend against threats. The classic business analysis process “SWOT” requires that “strengths” be identified and turned into “opportunities” while “weaknesses” are quickly noted and the resulting “threats” defended against. It fails to point out, though, that in a flat market every winner creates a loser, and the difference between the two is the speed in which this process occurs and is acted upon.
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In order to be the early bird in this market-share war, you have to be the first to know. How? By using accurate data to evaluate your success. You can (and should) be measuring your return across all channels, from converting leads on your website to gauging the effectiveness of a campaign’s impact on occupancy levels. You also can (and should) have comprehensive market intelligence outlining economic trends impacting consumers, spending and travel. And you can (and should) be comparing yourself to your competitors. It’s the survival of the fittest out there, and the ones able to adapt and engage today’s consumer will be the ones who remain, which brings us to my next point:
In the past many consumers thought of travel as a birthright. The reality of the recession is that consumers have fundamentally changed. Evolving in response to the economy, rising unemployment and (for the lucky ones) smaller paychecks, this “shift to thrift” has created consumers for whom travel is less of a birthright and more of a luxury. We’re living in a buyers’ market where saving is stylish and everyone’s on the hunt for a deal. Not only that, but consumers today have more choices than ever, primarily powered by the immediacy and transparency delivered by technology like social networks and mobile computing platforms.
Travelers today shop, buy and think differently. Are you treating them differently? How are you communicating with potential customers? Messages are instant and channels are everywhere, but the fundamentals of marketing (and the limits of our budgets) remind us to focus our efforts on the influencers. Who are they for you, and how will you reach them?
Prices and products are also more transparent than ever. Especially as real estate fails to provide the push it used to for resort revenue, you must be communicating the value of your product. Price is king in a buyers’ market, but discounting isn’t the only way to win. I’ve talked about the idea of “more or less, soon or later” as the new target marketing mix. Look for places where can you add value instead of decreasing price. Can you change the timing of your offers to address smaller booking windows and different types of consumers?
The intersection of a sunken real estate market with resort communities is the elephant in the room for travel destinations around the world … and not likely to rebound soon. For the sake of brevity here, let’s just focus on the resulting consequence to destination tourism. Tourism and real estate are the traditional pistons driving a resort area’s economic engine. When one of these falters, the economic focus must shift for the destination to maintain itself, and the economic burden has fallen squarely onto the back of destination tourism.
Secondly, the burst of the real estate bubble has created a glut of luxury products. Conceived at the peak of demand a few years ago, the lag in construction time has resulted in excessive supply when there is little to no need. Additionally, second-home owners who used to count on appreciation to justify ownership are now looking for rental revenue, further adding to the supply of available rentals. As they do, many are searching for the most efficient (read: cost-effective) way possible to put their units to work, thus contributing to the further proliferation of the “rent by owner” or “gray market” phenomenon. Instead of approaching traditional property management sites, the perception of several second-homeowners is that the best bang for their buck comes in the form of online entities like HomeAway or VRBO. This shift is catalyzing unprecedented disintermediation in the property management world.
These are just a few of the roadblocks we all must be prepared to face in 2011. If luck is preparation meeting opportunity, then with some strategizing and recognition of challenges like these, you will begin to be able to take advantage of the opportunities that are sure to come along.
Ralf Garrison is the founder and director of the Advisory Group, which provides marketing services to destination resorts around the country, owning and operating the Mountain Travel Research Program (MTRiP) and the Mountain Travel Symposium. You can contact Ralf at email@example.com.
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