OUTLINE
• Overview of industry – global and national – 2015-16 • 2015 Michigan tourism year-in-review • 2016 Michigan tourism forecast
The Pure Michigan Governor’s Conference on Tourism April 17-19, Lansing, MI
Dr. Sarah Nicholls and Dr. Dan McCole Department of Community Sustainability Michigan State University 1 2
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
TOURISM INDUSTRY ON THE GLOBAL LEVEL (UNWTO)
• International arrivals up 4.4% in 2015 (to 1.18 billion) • Compared to projected increase of 3-4%
Increases By Region:
• Americas +5% • Asia & Pacific +5% • Europe +5% • Middle East +3% • Africa - 3%
3 Source: UNWTO 4
Michigan Tourism Outlook 20162011 Michigan State University, Department of CSUS Michigan Tourism Outlook 2015 Michigan State University, Department of CSUS
TOURISM INDUSTRY ON THE GLOBAL LEVEL (UNWTO) TOURISM INDUSTRY ON THE GLOBAL LEVEL (UNWTO)
• 6th consecutive year of above-average growth Forecast for 2016 • “Demand was robust overall, although results were • International tourism arrivals projected to increase by more mixed than usual across destinations. Three 3.5% to 4.5% major factors directed tourism flows in 2015: the unusually strong exchange rate fluctuations, the • “The projection reflects sustained growth in an decline in the price of oil and other commodities, which increasingly dynamic global tourism market, though at increased disposable income in importing countries but a somewhat more moderate pace of growth than in the weakened tourism demand in exporters, as well as past six years.” increased concern about safety and security.” • Detailed receipts data will be published in April 2016
Source: UNWTO 5 Source: UNWTO 6
Michigan Tourism Outlook 2015 Michigan State University, Department of CSUS Michigan Tourism Outlook 2015 Michigan State University, Department of CSUS
1 CHANGE IN TOP 10 INBOUND INTERNATIONAL MARKETS TOURISM INDUSTRY ON THE NATIONAL LEVEL 2015 vs. 2014 (through June)
• International visits to the US in 2015 up 4% over 2014 (thru June) Country % Change in Visitors • Outbound international travel from US up 7% (full yr) CANADA (10.3 million) -6 ~ 55% of visitors − Reflects strength of the US dollar MEXICO +8 • 2015 was the 27th consecutive year that the travel and tourism UNITED KINGDOM (2.1 million) +14 industry generated a balance of trade surplus in the US JAPAN +2 PR CHINA (EXCL. HK) +18 BRAZIL +5 GERMANY +14 SOUTH KOREA +20 FRANCE +4 AUSTRALIA +11 Sources: US Dept. of Commerce 7 Source: U.S. Dept. of Commerce 8
Michigan Tourism Outlook 2015 Michigan State University, Department of CSUS Michigan Tourism Outlook 2015 Michigan State University, Department of CSUS
TOURISM INDUSTRY ON THE NATIONAL LEVEL THEMES AT USTA’S 2016 DESTINATION CAPITOL HILL
• “Attendees will urge Congress to embrace policies that are pro- growth, pro-competition and pro-traveler. Top-of-mind issues include: restoring choices to the over-consolidated U.S. airline sector; modernizing air and surface transportation infrastructure to keep pace with demand; and ensuring the U.S. remains a welcoming destination for overseas visitors while maintaining strong national security.”
“At no cost to taxpayers, Brand USA continues to successfully operate as a public-private partnership to promote travel to America from around the world. Through its efforts, we bring nearly $200 billion in spending by travelers from other countries, which strengthens our balance of trade and helps reduce our deficit. It's a policy that works, and must be maintained for years to come.” 9 Source: U.S. Travel Association (USTA) 10
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2015 Michigan State University, Department of CSUS
MICHIGAN TOURISM: A LOOK BACK AT THE YEAR 2015
• Weather • Consumer confidence • Hotel data • CVB taxes and assessments • Visits to attractions • Transportation measures − Gas prices, traffic counts, bridge crossings, airplane passengers
11 12
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
2 MICHIGAN TOURISM INDUSTRY INDICATORS: MICHIGAN TOURISM INDUSTRY INDICATORS: AVERAGE TEMPERATURES BY SEASON TOTAL PRECIPITATION BY SEASON
57.2% 85.0%
2015 vs. 2014 45% 2015 vs. 2014 2015 vs. Normal 75%
2015 vs. normal
50% 24.9% 32.7% 19.4% 20% 13.3% 10.4% 25% 8.4% 0.5% 0% -0.1% Percentage Percentage change -5% -1.3% -0.5% Percentage change Percentage -5.6% -9.0% -14.6% -11.8% -25% -28.2% -26.1% -20.5% -33.3% -30% -50% Winter '14-'15 Spring '15 Summer '15 Fall '15 Winter '15-'16 Winter '14-'15 Spring '15 Summer '15 Fall '15 Winter '15-'16
Spring: March, April, May Fall: September, October, November Spring: March, April, May Fall: September, October, November Summer: June, July, August Winter: December, January, February Summer: June, July, August Winter: December, January, February
Source: Midwestern Regional Climate Center. 13 Source: Midwestern Regional Climate Center. 14
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
MICHIGAN TOURISM INDUSTRY INDICATORS: MICHIGAN TOURISM INDUSTRY INDICATORS: 2015 v. 2014 WEATHER BY MONTH 2015 v. NORMAL WEATHER BY MONTH
115% Precipitation 75% Precipitation 90%
Temperature 50% Temperature
65% 25% 40% 0% 15%
-25%
-10%
Percentage change Percentage change Percentage
-35% -50%
-60% -75% Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Annual Changes: Annual Changes: Temp. + 0.7% Source: Midwestern Regional Climate Center. Source: Midwestern Regional Climate Center. Precip. – 13.1% Temp. + 7.6% Precip. – 3.6% 15 16
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
MICHIGAN TOURISM INDUSTRY INDICATORS: HOTEL OCCUPANCY: US/MICHIGAN/DETROIT 2015 v. 2014 CONSUMER CONFIDENCE INDEX 2000-2015
70% Detroit 66.6% Michigan 65.8% 30% US 65% 63.7%
65.6%
60.3%
20% 60% 60.1%
55%
Percentage change Percentage 10% Occupancy Rate Rate (%) Occupancy
50% 0% th Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Michigan 34 (↔) Detroit 23rd of top 25 (↔) 45% Average Annual Score: 2014 – 87, 2015 – 98 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: The Conference Board Annual Change: + 12.73% 17 Source: Smith Travel Research. 18
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
3 HOTEL OCCUPANCY IN THE US AND MIDWEST: MICHIGAN TOURISM INDUSTRY INDICATORS 2015 AND CHANGE IN 2015 v. 2014 2015 v. 2014 HOTEL DATA
65.6% Occupancy ADR RevPAR 1.7% 65.6% $120.01 $78.67 USA (+1.7%) (+4.4%) (+6.3%) 60.1% $97.09 $58.32 57.3% Michigan 1.3% (+2.3%) (+5.8%) (+8.2%) 60.1% 2.3% 65.8% $94.14 $61.91 Detroit (+1.0%) (+5.5%) (+6.6%)
Michigan exhibited the 19th Detroit exhibited the 17th 65.9% 60.4% 60.5% 1.2% 2.3% 1.0% Source: largest improvement in year- largest improvement in year- Smith end occupancy of all US end occupancy of the 25 Travel Research. states in 2015 largest US markets in 2015
19 Source: Smith Travel Research. 20
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
MICHIGAN TOURISM INDUSTRY INDICATORS 2009–2015 HOTEL DATA HOTEL AVERAGE DAILY RATE IN THE US AND MIDWEST: 2015 AND CHANGE IN 2015 v. 2014 Occupancy ADR RevPAR 2009 -8.0% -5.2% -12.8% 2010 +10.2% -1.5% +8.5% $120.01 4.4% Michigan 2011 +6.9% +3.0% +10.0% 2012 +3.0% +3.9% +7.1%
2013 +1.7% +4.5% +6.3% $99.39 2014 +2.3% +5.1% +7.5% 5.3% $97.09 2015 +2.3 % +5.8% +8.2% 5.8% 2009 -12.8% -9.8% -21.4% 2010 +14.2% -5.2% +8.2%
$93.58 Detroit $126.36 $91.39 2011 +10.2% +2.9% +13.4% 5.2% 3.6% Source: 5.6% Smith Travel 2012 +3.3% +3.7% +7.1% Research. 2013 +1.2% +5.8% +7.0%
21 2014 +4.0% +5.9% +10.0% 22
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook2015 2016 +1.0% +5.5% Michigan State University,+6.6% Department of CSUS
MICHIGAN TOURISM INDUSTRY INDICATORS: 2015 v. 2014 MICHIGAN TOURISM INDUSTRY INDICATORS: PERCENT CHANGE IN ASSESSMENTS AND PROPERTIES 2015 v. 2014 VISITS River Raisin National 0% 10% 20% 30% 40% 50% Battlefield Park + 97.4%
10% 37.0% Pictured Rocks National Lakeshore 8.4% 8.5% 8.2% 7.2% 28.3% Isle Royale National Park 19.7%
All MI National Parks 5% 18.5% Great Lakes Maritime Heritage Center
1.9% 13.3% MI State Parks Lodging Reservation Nights 0.9% 0.5% 12.2% Belle Isle Visits (Q4 Only) 0% CVBs (Properties) Responding: -0.1% 10.1% Sleeping Bear Dunes National Lakeshore
Assessments Percentagechange Mackinac Historic State Parks UP: 4 (302), NLP: 12 (382), # of Properties 9.1% SLP: 17 (678). -5% 7.9% Michigan State Parks Harbor Reservation Nights U.P. N.L.P. S.L.P. Statewide 5.9% The Henry Ford 4.9% All U.S. National Park Service Sites * EXCLUDES effects of increases in assessment rates * Percentage change
Sources: MI DNR; MI DNR State Historic Parks; US Source: 2016 Dept. of CSUS Survey of Assessments n = 33 23 National Park Service, The Henry Ford, NOAA. * new listings always welcome! * 24
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
4 MICHIGAN TOURISM INDUSTRY INDICATORS: MICHIGAN HIGHWAY TRAFFIC COUNTS 2015 v. 2014 GAS PRICES YEAR-TO-YEAR CHANGE
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
20% 2006
10% 2007
0% 2008
-10% 2009 -20% 2010
Percentage change Percentage -30% 2011
-40% 2012
-50% 2013 Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
2014 Average PPG in MI: 2014 $3.42, 2015 $2.48 2015 Source: AAA Michigan. Annual Change: – 27.4% 25 Source: Michigan Department of Transportation. 26
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
MICHIGAN TOURISM INDUSTRY INDICATORS: MICHIGAN TOURISM INDUSTRY INDICATORS: 2015 v. 2014 TRAFFIC 2015 v. 2014 STATEWIDE AND TOURISM TRAFFIC
15% 15% Statewide Traffic Counts
Tourism Traffic Counts
10% 10%
5% 5%
Percentage change Percentage change
0% 0% Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Annual Change: Annual Change: + 3.3% Statewide + 3.3%, Tourism + 6.2% Source: Michigan Department of Transportation. 27 Source: Michigan Department of Transportation. 28
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
MICHIGAN TOURISM INDUSTRY INDICATORS: MACKINAC BRIDGE TRAFFIC COUNTS 2015 v. 2014 WELCOME CENTERS YEAR-TO-YEAR CHANGE
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 30% 2006
25% 2007
20%
2008
15% 2009
10% 2010
Percentage change 5% 2011
0% 2012
-5% 2013 Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec 2014
Annual Change: + 4.6% 2015
Source: Michigan Department of Transportation. 29 30 Source: Mackinac Bridge Authority.
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
5 MICHIGAN TOURISM INDUSTRY INDICATORS: 2015 v. 2014 MACKINAC BRIDGE TRAFFIC COUNTS MONTHLY MACKINAC BRIDGE CROSSINGS YEAR-TO-YEAR CHANGE
20% Count % from Count % from Year Year (million) prev. year (million) prev. year 15% 1996 4.625 + 1.5% 2006 4.133 - 2.4% 1997 4.626 0.0% 2007 4.054 - 1.9% 10% 1998 4.891 + 5.7% 2008 3.696 - 8.9%
5% 1999 4.836 - 1.1% 2009 3.877 + 4.9%
2000 4.756 - 1.7% 2010 3.948 + 1.8% Percentage Percentage change 0% 2001 4.676 - 1.7% 2011 3.728 - 5.6% 2002 4.733 + 1.2% 2012 3.737 + 0.2% -5% 2003 4.529 - 4.3% 2013 3.696 - 1.1% Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec 2004 4.427 - 2.2% 2014 3.645 - 1.4% Annual Change: 2005 4.236 - 4.3% 2015 3.914 + 7.4% + 7.4% Source: Mackinac Bridge Authority. 31 Source: Mackinac Bridge Authority. 32
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
TRENDS IN TRAFFIC COUNTS TRENDS IN TRAFFIC COUNTS ON MICHIGAN BRIDGES ON SELECTED MICHIGAN BRIDGES 2015 v. 2014 TRAFFIC
7 Effect of exchange rate:
10% 1/1/15 CAN$1 = US86c 7.4% 7.1% 6 7.0% 1/1/16 CAN$1 = US72c 5% 5 Decline of 16.3%
0%
4 -5% -3.3% -4.8% -10% 3Millions -10.5% Cars Only Mackinac Bridge -15%
2 change Percentage Blue Water Bridge All Traffic -15.4% Ambassador Bridge -20% -20.6% 1 Detroit-Windsor Tunnel -21.9% International Bridge -25% Mackinac Bridge Ambassador Bridge Detroit-Windsor Blue Water Bridge International Bridge
0 Tunnel
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1988 Despite strong numbers overall, need to Source: Mackinac Bridge Authority; Blue Water Bridge Authority, MDOT, Public Border Operators Association (PBOA). Source: Public Border Operators Association (PBOA) http://www.bwba.org/trafficstats_e.html 33 recognise regional and seasonal variations 34
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
MICHIGAN TOURISM INDUSTRY INDICATORS: 2015 v. 2014 SUMMARY OF MICHIGAN TOURISM INDUSTRY PERCENT CHANGE IN TOTAL AIRPLANE PASSENGERS 2015 v. 2014 INDICATORS • Weather: 2015 was drier (-13.1%) and warmer (+7.6%) than 10% 2014 – but winters poor and summer average, Sept. good
• Consumer confidence: up 12.7%
5.8% • Hotel indicators: occupancy up 2.3%, ADR up 5.8%
5% 4.5% • Sales and use tax: no data
2.8% 2.8% 2.9% • Assessments: up 8.2% Percentagechange • Visits to attractions: up, most in double digits • Gas prices: down 27% 0% U.P. N.L.P. S.L.P. Metro Detroit Statewide • Travel activity (as measured by traffic): − statewide traffic counts up 3.3% − Mack. Bridge up 7.4%, int’nal bridges down Source: Michigan Department of Transportation 35 − DTW traffic up 2.8% 36
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2014 Michigan State University, Department of CSUS
6 Factors That Impact Our Forecast
• Last year’s results • Economic indicators • Tourism trends • Pure Michigan activity • CVB projections • National forecasts • Misc. issues • Forecast Advisory Team discussion
37 38
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
The Forecast Advisory Team HOW ACCURATE WERE MSU’S PROJECTIONS FOR MICHIGAN TOURISM IN 2015?
2015 Participants in 2016 Meeting: Projected Actual by MSU data • Dr. Don Holecek • Dr. Sarah Nicholls Travel prices + 3% +2.3 % • Brian Lawson • Michael O’Callaghan • Dave Lorenz • Tracy Padot Travel volume + 1.5% + 3.3% • Dr. Dan McCole • Dr. Annie Rummel Travel spending • Dr. George Moroz • Bill Sheffer + 2.5% ?*
*The Michigan Department of Treasury data is our most important indicator of tourism spending. In 2015, the department changed its classification system from SIC to NAICS. This is the only year that will be impacted.
39 Source: MSU Department of CSUS; Michigan Department of Transportation; 40 Michigan Department of Treasury; Bureau of Labor Statistics.
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GROWTH OF REAL GDP - UNITED STATES
6 5 4 2.9 3.0 2.2 2.8 3 2.1 2.2 2.1 2.2 2.3 1.8 2 0.4 1 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016p 2017p Percentage -1 -2 -3 Economic Indicators -2.6 -4 p = projected Ability to spend on travel
Willingness to spend on travel 41 Source: RSQE - University of Michigan. 42 Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
7 Stock Markets Currency Exchange Rates Per $1 U.S.
April 16 April 16 % change 2015 2016 from 2015 Recent % Change Record Canadian $ 1.25 1.28 2.4% Low 2015 2016 From High Mar 2009 2015 Euro .94 .89 -5.3% Dow Pound (UK) .68 .71 4.4% 18,312 6,547 18,105 17,897 -1.2% Jones (May ’15) Peso (Mexico) 15.29 17.47 14.3% Nasdaq 5,218 1,267 5,007 4,938 -1.4% Yen (Japan) 119.40 109.16 -8.6% (July ’15) Yuan (China) 6.10 6.48 6.2% S&P 500 2,130 677 2,104 2,080 -1.2% Real (Brazil) 3.06 3.49 14.1% (May ‘15)
FRB Broad Index 115.98 119.97 3.4% (April 15, 2015) (April, 6 2016)
Source: http://finance.yahoo.com/ 43 Source: Currencies - www.oanda.com; Federal Reserve Bank. 44
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
Exchange rate could dampen international travel from some countries Oh, Canada…
Respondents: Int’l travelers likely to take an int’l trip in next 12 months But … Indicated they were unlikely to choose the USA as a destination
Q: Why is the U.S. not a likely destination for you in the the next 12 months? A: The currency exchange rate is unfavorable
Source: Brand USA 45 46
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
National Transportation and Tourism Office 2016 Forecast U.S. Unemployment Current Reading: China: 17% increase in visitation 5.0%
However…
Canada: 8% decrease
Which is more Mar 2011 Mar 2016 important to you? Source: NTTO, 2015 47 Source: The Bureau of Labor Statistics; TradingEconomics.com 48
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
8 Michigan Unemployment People quitting their jobs is a good sign…
Source: Michigan Department of Labor & Economic Growth 49 50
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
Comerica Banks U.S. Consumer Sentiment Michigan Economic Activity Index
Apr Current 2015: Reading: 95.9 90.7
Jan/09 Jan/16
Source: University of Michigan; TradingEconomics.com 51 Source: Comerica Banks 52
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
Home prices have increased since recession lows (but not to pre-recession bubble levels)
Housing
53 Source: Trading Economics; Standard & Poor’s 54
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
9 Home Ownership Decreasing Michigan Housing Prices (currently below historic average)
Historic Average
Source: Zillow 55 Source: Trading Economics; US Census Bureau 56
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
Especially among young adults… One reason…
57 58
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
A slide from the 2014 Tourism Outlook…
Gas Prices
59 60
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
10 Gasoline Prices
Tourism Indicators Source: GasBuddy.com 61 62
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
Tourism Still Outperforming Overall Economy This is not typical…
63 64
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Air travel especially… Traveller Sentiment Index Feb 2016: 120
65 Source: MMGY Global 66
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
11 Summary of the Economy (Changes from 2015) Summary of Economy
GDP • Slightly weaker than last year, but not by much Stock Markets (essentially unchanged)
Unemployment • As it relates to tourism, nothing in the economy points to a downturn in ability and willingness to Consumer Confidence spend Strength of Dollar Green = good for tourism • Demand for travel remains high Housing Red = Bad for tourism Michigan Economic Activity 67 68
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
2012: They’re coming!
Millennials Trends Impacting Tourism 69 70
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They’re Here….
71 Source: Pew Research Center, 2015 72
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
12 Older Travelers Spending Less at the High End Spending among travelers over age 55
A 30.7% Decrease [VAL UE] [VAL UE]
2014 2015 73 Source: Travel Weekly - Consumer Trends Study, 2015 74
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
Increase in Older Travelers Spending Less (This group typically spends the most on travel) …Millennials plan to spend % of travelers 55+ who spent less 10% more on travel in 2015 than $1,000 for travel
2014: 6% While Baby Boomers and Matures each 2015: 23% only plan to spend 1% more
However...
Source: Travel Weekly - Consumer Trends Study, 2015 75 Source: MMGY Portrait of American Travelers , 2015 76
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
Millennials Travel More Than Any Other What motivates Millennials to Generation travel? 86% • 4.7 Business trips per year 67% 66% • 4.3 Leisure trips per year • Spend $200 billion on travel… 44% 24% …but haven’t yet reached their
peak earning years Experiencing Local Meeting Partying Shopping New Cultures Foods New People
Source: Travel Weekly - Consumer Trends Study, 2015 77 Source: Topdeck Travel, 2015 78 Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
13 Millennials want a good value, but 66% of Millennials value that doesn’t mean they’re cheap. unique experiences when Coming of age during the “Great Recession,” they learned to look for deals, traveling (compared to 50% but… from other generations) They have expensive tastes
Source: Deloitte Traveler Loyalty Study, 2014 79 80
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Shared economy (peer-to-peer) travel Raise your hand if… by Generation … in the last day, you… − used Facebook? − used Instagram? − used Twitter? − used Snapchat? − sent or received more than 10 texts? − used an emoji or emoticon? … in the last year, you… − used Uber? − took a selfie? … you no longer have a landline phone at your home? … you have a tattoo? Source: Destination Analysts, 2015 81 82
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You might be a Millennial… Millennials sometimes get a bad rap…
but the rest of us seem to have willingly adopted parts of their lifestyle…
83 84
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14 Though it hasn’t always been easy…
Speaking of Smartphones…
85 86
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How widely used are smartphones? How widely used are smartphones?
Usage is even higher among demographics that tend to travel the most (e.g., higher educational attainment and income). 64% 64% 54% 54% 35% 27% 35% 27%
All Adults All Adults Ages 50-64 Ages 65+ All Adults All Adults Ages 50-64 Ages 65+ 2011 2015 2011 2015 Source: BrightLocal Consumer Review Survey, 2015 87 Source: BrightLocal Consumer Review Survey, 2015 88
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Smartphone owners feelings about Where smartphones are used? their smartphones
% for each choice At home Leash Freedom In a car or public transit
Distracting Connecting At work Waiting in line Annoying Helpful At a community place
Financial burden Worth the cost Walking from place to place Exercising
Source: Pew Research Center, 2015 89 Source: Pew Research Center, 2015 90
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15 Primary Reasons Travelers Use Devices Used to Plan Trip Before Travel Smartphones 3 2.7 2.5 2.5
2 1.8 1.4 1.5 1.2
1
0.5
0 Desktop/Laptop Smart Phone Tablet Telephone Calls Other Average Mean (4 point importance scale) 92
Source: USTA, 2015 91 Source: McCole & McRoberts, 2015 92
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
Devices Used to Book or Reserve What does your website look Travel like on a smartphone? 2.5
2 1.9 1.8 1.5 1.5 1.5 1.1
1
0.5
0 Desktop/Laptop Smart Phone Telephone Calls Tablet Other Average Mean (4 point importance scale) 93
Source: McCole & McRoberts, 2015 93 94
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
75% of American adults use 97% of American adults use smartphones for social smartphones to text networking Yeah, but that’s mostly millennials, right? Yeah, but that’s mostly millennials, right?
55% of Americans 50+ use smartphones 92% of Americans 50+ use smartphones to text for social networking 95 96
Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
16 What is the # 1 thing Americans have trouble doing without their smartphones? Can visitors find you?
Getting If not, get listed (for free) on directions/finding an visitors’ GPS maps:
address https://mapsconnect.apple.com/
http://www.google.com/+/business/
97 98
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Online Review Sites
99 10 0 Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
Do you read online reviews to determine Online reviews have become a major whether a local business is a good business? part of consumer decisions
29% % who answered “NO” 24%
15% 12% 8% 88% have read online reviews to determine the 2011 2012 2013 2014 2015 quality of a business
Source: BrightLocal Consumer Review Survey, 2015 10 Source: Nielsen Global Study, 2014 10 1 2 Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
17 Most Trusted Sources of Information When Making Purchase Decisions 71% of Millennials typically share their opinion of a product because they think other consumers will value the input
Source: International Data Corporation - Consumer Trust Survey, 2015 10 10 3 4 Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
U.S. Consumers… But negative reviews matter too…
88% trust online reviews as 68% trust much as opinions personal posted recommendatio ns online 72% say positive reviews make them trust businesses more Source: Nielsen Global Study, 2014 10 Source: Nielsen Global Study, 2014 10 5 6 Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
Increasing Influence of Review Websites Most Influential Resources When Booking a on Travelers’ Choices Vacation
Review websites, online forums, etc.
Travel Operator Website
Recommendations from Friends and families
Travel agent website
Newspaper articles and advertising
Visit to a Travel Agent Shop
Visit to a tour operator shop
Content on social media
None of these
Don’t know/not applicable 10 Source: Deloitte, 2014 10 7 8 Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
18 Why access social media while traveling? Dan’s Hotel
(148 reviews)
“Incredible service, great rooms and friendly owner.”
Book Now?
72% will take action after reading a positive review
Source: Nielsen Global Study, 2014 10 Source: USTA, TNS, 2014 11 9 0 Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
Primary Motivation for Sharing Travel Experience on Social Media
Forecasts
Source: USTA, TNS, 2014 111 11 2 Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
STR U.S. Hotel/Motel Forecast What do CVBs Think Will Happen to Room Assessments? (CVB Survey Results)
2015 2015 2016 Projections Actual Projections
Upper Peninsula +3.0% +8.4% +3.5%
Northern Lower P. +2.9% +7.2% +3.2%
Southern Lower P. +3.0 +8.5% +5.0
Source: Smith Travel Research 11 11 3 4 Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
19 USTA FORECAST FOR U.S. TRAVEL IN 2016
Domestic Domestic International Domestic International Leisure Business Visitors Spending Spending* Volume Volume
1.4% 2.1% 3.3%
4.1% 4.5%
*Excluding International Airfares MSU’s 2016 Forecast
Source: United States Travel Association (Annual Travel Forecast) 11 11 5 6 Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
MSU GROWTH PROJECTIONS FOR MICHIGAN TOURISM IN 2016 THE WILD CARDS
• Weather! • Sharp spike in gas prices • U.S. markets/economy Travel prices +3% Lodging and restaurant price changes / 2 • War / terrorism
Travel volume +3% Traffic counts
Travel spending +5% Lodging sales and use tax collections
11 11 7 8 Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
CONTACT INFORMATION
Dr. Sarah Nicholls ([email protected])
Dr. Dan McCole ([email protected])
Department of Community Sustainability Michigan State University 480 Wilson Road Rm. 131 East Lansing, MI 48824-1222 Phone: 517-353-5190 Fax: 517-353-8994 www.csus.msu.edu
11 9 Michigan Tourism Outlook 2016 Michigan State University, Department of CSUS
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