S9903

/

TRAVEL r' ESOTA AND THE SUNBELT:

!XAii!NAT!QN OF TWO

IN T?R ABILIW TO TRACK MlNMI j8 SNOWBIRD POPULATION AND

PROVIDE REGIONAL TOURISM MARKETING INFORMATION

May, 1999

Produced by: Linda Limback, Manager of Research Art Adiarte, Industrial Economist The Minnesota Office of Tourism Department of Trade and Economic Development

and

Dr. Will Craig, Director Renata Polaskova, Research Assistant Center for Urban and Regional Affairs University of Minnesota

Funding from hs University ofMimie^ota OILI'IILI fui TiaiuvuilaliLH Studies CURAftESbURCECOLLECtlONl

Center for Urban and Regtond Affaln University of Minnesota 330 Humphrey Center Introduction

Background

The Center for Urban and Regional Affairs (CURA), University of Minnesota, through a grant from the Center for Transportation Studies, began a research project to investigate various data sources for their ability to provide a regular estimate of Minnesota's Snowbirds population. Snowbirds are people in their mature stage of life (over 50 years of age) who leave their northern state residences during the winter for an extended vacation in Sunbelt states but return to their northern residences for the rest of the year. In a previous study, CURA found that the Snowbirds phenomenon had unexpected impacts, such as shifting economic activity from Minnesota communities to southern states and depleting the volunteer labor pool in their home communities. Other studies have shown that, despite the infusion of new dollars into Sunbelt communities, Snowbirds can have unexpected negative effects on the host communities. These communities must provide housing, health care and infrastructure that is only used a few months of the year. In some communities the cost of the infrastructure investment may actually outweigh the positive benefits of travel related economic impact of these seasonal visitors. As the mature population increases, the Snowbird phenomena is expected to increase also. The primary purpose of this study is to identify and evaluate available data sources that might be used to measure and track Minnesota's Snowbird population so that the impacts of Snowbirds travel can be better assessed.

CURA approached the Minnesota Office of Tourism to see if it knew of any data sets that may help. The Minnesota Office of Tourism was a subscriber to the U.S. Travel Data Center's TravelScope national travel survey, one of the largest national travel surveys conducted in the U.S. The Office of Tourism volunteered the TravelScope database, a large on-going travel survey database, as a data source. It offered to partner with CURA and its part of the partnership included obtaining authorization from the TravelScope administrator to use the database for this purpose and by providing the statistical runs on the TravelScope database to produce the reports needed. The Office of Tourism asked CURA to expand the project to look at the seasonal "balance of travel" between Minnesota and Sunbelt states. The Office of Tourism suspected that Minnesota had a travel deficit with many Sunbelt states. Travel deficit, in this context, is when the number of trips taken by Minnesotans traveling out to a particular area is greater than the number of trips taken by residents of that area coming to Minnesota. The Office of Tourism felt that a closer look at the travel flow between the Sunbelt region and Minnesota may lead to new marketing strategies. The Office of Tourism was interested in identifying factors that contribute to the travel deficit. Did the winter trips taken by Minnesotans to warm climate outnumber the trips of Sunbelt residents to Minnesota? Did any particular Sunbelt state offer good market potential for Minnesota vacations? Both organizations felt that the statistical reports needed to examine the Snowbirds population would also provide much of the data needed to make a preliminary assessment of the travel flow between Sunbelt states and Minnesota. But the ability of the data to help determine market potential or isolate the Minnesota Snowbirds population was unknown.

Coincidently, just as this project was to begin, results from a new travel survey, this time one within the public domain, became available. This new smvey, American Travel Survey (ATS), was also a promising candidate and potential backup ifTravelScope was not available in the future. The ATS was conducted in 1995 by the U.S. Census Bureau for the Department of Transportation. Reports from it were just beginning to be released and made available to the public. Both CURA and the Minnesota Office of Tourism felt that an examination limited to TravelScope and the ATS would give a sufficient indication of whether any current travel survey could be used to provide the desired information. The goals of the study were expanded to include a broad level comparison of the Minnesota specific data tables from these two surveys as a reliability check on their output. If results compared favorably, either data source could be used in the future.

Before TravelScope or the ATS were examined, a thorough library search was performed to identify other likely candidates. Library data bases available at the University of Minnesota through the Lumina library system were searched. In addition, CAB abstracts, a subscription library data base that has a travel and tourism index, and the Minnesota Department of Transportation's transportation abstracts database were also searched. These searches found few studies that addressed any issues concerning the Snowbirds segment of the population and no sources addressing the balance of travel between northern and southern states. The searches turned up no other likely sets of data, outside the ones that had already been identified, that might help quantify and track this group of people.

TravelScope was chosen as the database from which the most variables and data tables would be run because it has a relatively simple structure and the Office of Tourism could produce targeted statistical runs displaying either results for survey respondents or results extrapolated to the total population for each variable. This job would be more difficult using the ATS. The Bureau of Transportation Statistics had produced a number of tabulated reports using the data and made them publically available on the web. Their limitation for this study is that they provide extrapolated values only. After reviewing the sample selection process for both surveys, it was decided that results from TravelScope would provide a confidence level quite similar to that of the results from the ATS. For this combination of reasons, TravelScope was selected to use for the in-depth tabulations.

Comparison of Methodology: American Travel Survey and TravelScope

TravelScope and the ATS use quite different methodologies, sample selection and survey administration processes, and trip definitions. Understanding these differences is important when comparing results because the technical aspects of survey research are the key to what is measured and how accurately that measurement reflects a population.

The first survey, 1995 ATS (ATS) was conducted by the U.S. Census Bureau for the Bureau of Transportation Statistics of the U.S. Department of Transportation to meet a need for interstate travel flow data. The focus of the survey is on long distance travel between population centers within a framework of transportation. The Bureau plans to repeat the survey every five years to measure trends in long distance travel but the threat of budget cuts could jeopardize that effort. ATS was primarily a phone survey with advance contact and a personal follow up visit to non- respondents. The survey consisted of four detailed interviews conducted approximately every three months from April 1995 to March 1996. The survey population, a sample size of 80,000, was selected in two stages. In the first stage, the nation was divided into geographic units. Three hundred and fourteen of these were automatically included in the geographic areas from which a fixed size sample of households would be drawn. Demographic and economic characteristics of the remaining areas were analyzed and results were used to group the areas into 415 stratums. Then one sampling area from each stratum was selected by its ability to reflect the population of the area of each state not akeady covered by the 314 geographic units. Stage two involved selecting a representative sample population from the targeted geographic areas.

The ATS survey instrument collected destination data on each long distance trip taken by anyone in the household, as well as data on household demographics, trip^and travel party characteristics and transportation variables. These same households were interviewed every three months to capture information on all of the trips anyone in the household took during the year. The siu-vey achieved about an 85% response rate with the highest level of response during the first quarter of surveying and continual drop off in the other three quarters . Although a copy of the raw data from ATS was obtained m case it was needed for this project, the Bureau of Transportation Statistics had already performed many statistical runs and made these reports available to the public on its web site: www.bts.gov/proerams/ats/. The ATS data tables used in this report were obtained from the web site. The data tables contain only extrapolated results and do not report number of respondents for any of the tabulated results.

TravelScope is the other national travel survey that this project examined. It is primarily used as a travel and tourism monitor with statistically reliability of±J% nationally and lower on a state level. It is conducted by a survey research firm. National Family Opinion Research, Inc., but designed and coordinated by the U. S. Travel Data Center's division of the Travel Industry of America for a 21 member cooperative group of states and community convention and visitor bureaus. The results of a short travel questionnaire are merged with other demographic, psychographic and consumer behavior data on households included in National Family Opinion's other databases. The Minnesota Office of Tourism, as one of the member states of the cooperative, receives the raw data on a quarterly basis. All data tables from TravelScope data were run by the Minnesota Office of Tourism from the raw data files using extrapolation and weighting methods built into TravelScope. The number of respondents for each variable was included in the data runs. TravelScope is not in the public domain. The Minnesota Office of Tourism has obtained permission from TravelScope's manager at U.S. Travel Data Center to use the data for this study.

TravelScope is a household panel study ofpre-recruited households. Like ATS, households are selected and replaced in a manner to represent the demographics of the population. Recruited households agree to be surveyed on an on-going basis about a number of subjects. TravelScope surveys about 20,000 different households each month and obtains about a 70% response rate. TravelScope selects a fresh sample of 20,000 households each month and rotates through the population of households on its panel about every 14 months. It records only those trips taken in the previous month in order to maximize recall ability. Every year, TravelScope samples over 240,000 different households but it samples only 20,000 each month. The sampling method used by TravelScope differs considerably from ATS's which tracks each long distance trip for its 80,000 household over a year.

In addition to methodology, one other important difference between ATS and TravelScope is in their definition of a long distance trip. TravelScope defines a trip as each time a person travels away from home for at least 50 miles one-way and/or spends an overnight. This definition allows TravelScope to capture intrastate trips taken by residents of small size states like Rhode Island and Delaware. In ATS, a trip is defined as "each time a person goes to a place at least 100 miles from home and returns". Both surveys exclude trips taken by work crews, active military personnel and regular work and school commutes. Thus, in ATS, a trip must be twice the distance as the minimum trip distance in TravelScope and would not include any of TravelScope's short ovemights that are under 50 miles away from home.

To verify the reliability of the travel surveys, a cursory comparison of a few broad variables was to be performed. If these variables showed similar values, the project would next compare broad level variables for Minnesota. The variables for comparison were selected from the pre-tabulated ATS reports which were available on the web site. Because the two surveys asked somewhat different, yet, analogous, questions the Office of Tourism performed statistical runs on the TravelScope database selecting the conditions which would make the TravelScope results as comparable as possible to ATS results. In addition, these tabulations were analyzed to look at leisure travel flow between Minnesota and Sunbelt states and explore the potential of these national travel surveys to help assess the market potential of the Sunbelt states as a Minnesota leisure travel destination.

Definition: Sno-wbird

The definition of a Snowbird applied to this project was a person in the mature age group, defined as 50 years or older who had left Minnesota for at least continuous 4 weeks to visit a Sunbelt state(s) during the winter.

Definition: Sunbelt States

Alabama Florida Nevada South Carolina Arizona Georgia New Mexico Tennessee Arkansas Hawaii North Carolina Texas California Louisiana Oklahoma Utah Mississippi

The Snowbirds population, which may comprise somewhere in the range of 1.5% to 3% of the Minnesota population depending on narrowness of definition, is small in comparison to the estimated 70% of Minnesota households that take a trip for business, pleasure or personal reasons each year. Would one of these large national travel surveys provide a sample large enough that it could be used as a measurement tool for Snowbirds? If not, how large of a sample would be needed to provide reliable tracking of Minnesota's Snowbirds?

Definition: Person Trip

A trip taken by an individual. (For example, if three people from same household go on a trip together, the trip is counted as three person trips, one for each person.)

TravelScope and American Travel Survey - National Level Comparison

For 1995, both TravelScope and ATS reported a total of about 1 billion person trips taken by residents within the U.S. - 918,540,000 person trips and 1,001,319,000 person trips respectively. These data sources differ by less than 10% and are within a reasonable range for statistical error. But contrary to expectations, TravelScope, the survey with the broader definition of a trip, estimates 9% fewer trips than ATS where, by definition, minimum distance for a trip was twice the distance (100 miles one way as opposed to 50 miles one way) of a trip as defined by TravelScope. The ATS definition was also more restrictive by requiring an overnight stay. Sampling, extrapolation methods, statistical weighting factors, data screening, respondent interpretation and outlier limits are some of the possible factors for the difference. Further comparison of variables was needed to find out whether this difference is a matter of scale rather than factors intrinsic to survey design.

TravelScope and ATS also produce similar results for the time of the year that the travel occurs. The following table shows the distribution of trips by quarter:

PROPORTION OF ALL LONG DISTANCE TRIPS IN THE U.S. BY QUARTER

TravelScope ATS 1st Quarter 18% 20% 2nd Quarter 26% 26% 3rd Quarter 32% 30% 4th Quarter 24% 25%

Most national travel surveys identify and measure why people are traveling. The travel purpose categories that are in common use tend to be similar for most travel surveys but there are no set standards within the field of travel research. TravelScope and ATS main purpose categories are similar but not identical. The following table shows the categories used by both surveys and diagrams how the categories were aggregated to make a comparison possible for this study. Comparison of Travel Surveys by Primary Purpose Categories

TravelScope ATS

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Frequency runs from TravelScope and the ATS on the main purpose variable produce results that compare favorably. According to both data bases, ahnost two of every three trips are taken for pleasure, and over one in five for business. TravelScope measures "Visiting Friend and Relatives (VFR)" 9 percentage points higher than ATS and "Business" by 7 percentage points lower than ATS. (Note that ATS estimates the confidence level of its data at ± 10% while TravelScope

Comparison of Results for Total Travel To & Through U.S. -1995 Purpose of Trip TravelScop* AT8

Vl»iting FriendWRelathw Leisure Businesa Peraonal/Other

estimates its at J: 5%.)

The data sets also compare favorably for most of the subcategories, excq)t for "entertainment". ATS measures entertainment as 6% of trips while TravelScope measures it at 17%. A plausible explanation for fBis difference is that ATS offers its respondents more leisure purpose categories (i.e. sightseeing and resVrelaxation) than TravelScope, thereby drawing some respondents away from the entertainment category and toward one of the other two other categories.

TABLE OF LEISURE PURPOSE SUB-CATEGOmES

TravelScope ATS

Outdoor Recreation 11.2% 6.5% Entertainment 16.8% 5.9% Rest and Relaxation N/A 11.5% Sightseeing N/A 4.3%

Mode of Transportation

Two travel modes dominate U.S. travel, Personal Use Vehicle and Airplane. TravelScope and ATS differ in the proportion of travel attributed to these categories by about 5 percentage points. TravelScope produces a lower estimation of the proportion of trips taken in Personal Use Vehicles and higher for Airplane. Although the difference falls within ATS's bounds of 90% confidence level, they suggest an area for which further investigation might prove helpful.

Comparison of Results for Total Travel to and Through U.S. Mode of Transportation TravelScope ATS

Personal Use Vehicle B Airplane Q Other

Comparison of Surveys for Other Common Travel Measurements

TravelScope and ATS compare favorably on a number of other variables at the national level. Both surveys record similar length of trips with TravelScope's mean trip length estimated at 3.6 nights and ATS's at 4 nights. Other pleasure travel research has shown a strong correlation between trip distance and duration. Because TravelScope includes trips that are'under 100 miles one way, a shorter mean trip duration would be expected. Both surveys are in agreement that the mean size of a travel party is 2 people per trip and both measure day trips to about 20% - 25% of total trips. Minnesota State Level Comparison of Survey Results

Minnesota contains under 2% of the U.S. population. The high costs of survey research prohibit most national level surveys from drawing a sample large enough to provide accurate results on the state level, except in the case of a few high population states. ATS designed a complex sampling process where the sample size drawn from each state, regardless of size, is quite similar. This sample design intends to measure the flows of travel between states, regardless of the size of the state, with relative accuracy. TravelScope focuses on drawing a large quantity of households, over 220,000 per year. The precise impacts of these major differences between the surveys on resulting travel estimates are not obvious. For this project it was felt that if TravelScope compares favorably to ATS on broad state level variables, results from either will have greater credibility and either could be used in the future to follow trends. Because ATS estimated 9% more trips than TravelScope on a national level, higher results are also expected from ATS on the state level. TravelScope reports that there were 21.4 million trips to and though Minnesota in 1995. These estimates are 12% lower than the 24.8 million person trips registered by ATS. The comparison is consistent with expectations, but the results of the comparison of trip purpose show a greater than 5% difference between each of the categories. TravelScope measures a higher proportion of trips to visit fhends and relatives and business travel, and lower for personal and leisure purposes.

Comparison of Travel To & Through Minnesota -1995 Purpoae of Travel TnvelScopa AT8

VWUng Frianda/Ratativ Q Bu«ln— The proportion of travel by mode of transport also differs by~more than 5% between these two surveys. TravelScope measures 6% greater air travel and 8% less personal vehicle travel than ATS.

Comparison of Travel To & Through Minnesota -1995 Mod* ofTnnaportatton Twltcopa AT8

PanonlVNd* D ouw The time ofyearbreakdowns, just like the national level ones, are similar.

Comparison of Travel To & Through Minnesota -1995 Time of Y—r TmvlScop* AT8

2nd0tr Q 3fd0tr B 4th0tr

TravelScope and ATS show greater divergence at the state level, at least for the Minnesota test, than at the national. The selection of households to sample and the extrapolation of these responses is probably a major factor. It is beyond the scope of this paper to explore the reason for differences and may be a good project for future research.

Summary of Comparison of TravelScope to American Travel Survey

For the purpose of this study, results of comparable tabulations from TravelScope and the ATS diverge sufficiently on the state level basis to conclude that these surveys cannot be used interchangeably to measure trends on a state level basis. The differences, generally within the ± 10% confidence level, appear to be large enough to warrant this conclusion. Without understanding the causes behind these dissimilarities that might enable methods of adjustment, comparing variables from one smvey to the other to understand travel trends would be misleading and produce inaccurate results.

Can TravelScope Reliably Identify Minnesota Snowbirds?

To examine TravelScope's ability to produce reliable estimates of the Snowbirds population in Minnesota, the most recent year of winter data, fourth quarter 1996 and first quarter 1997, was merged to form a six month period spanning the winter season. Travel has been continuously growing and the most recent winter would provide the largest data set of trips for this part of the study. To begin this phase of the study, the frequency of mention for each Sunbelt state was counted using the condition that the survey respondents must live in Minnesota and must have taken any kind of pleasure trip to any of the predefined Sunbelt states. Because TravelScope respondents could check up to three states for each trip, a number ofnon-Sunbelt states were reported in the list because respondents had spent time in other states as well as one of our Sunbelt states. These states were eliminated from our count. Sunbelt states were destinations for 108 winter trips taken by Minnesotans but, because multiple states can be included in a trip, Sunbelt states received 131 mentions as one of the states of destination for the trips. The sample size looked high enough to examine the next criteria, age. We found a total sample of 44 households in the over 50 age group. Although this sample is not as high as expected, the analysis continued by examining the next key variable. The sample size found that the final criteria, length of stay, eliminated the possibility of using TravelScope as an indicator of the Snowbirds population in Minnesota. The sample population contained only one household that spent over 30 days away from home. It contained only 5 households that had spent over three weeks away.

Minnesota Snowbird Vacationers Sample Size Total Trip Duration 100

1-7 Day 8-14 Day 26 Day 27 Day 28 Day 31 Day Length of Trip

In reviewing data and methodology from the 1989 CURA snowbird study, these results are not surprising. Using a more stringent age requirement of 60 years or older, CURA found that 9% and 16% of this age group traveled out of state for 5 or more weeks during the winter. The low estimate reflects Snowbirds who left for at least 5 continuous weeks while the higher one, 16%, reflects 5 or more weeks ofnon-continuous travel. Currently the 60+ age group comprises about 16.4% of Minnesota's population. To get an appropriate sample size ofSnowbirds from the general population so that the sampling error would be within the ± 5% range, 20,000 Minnesota households would need to be surveyed. Using the less stringent definition of age that was used for this report, 50+ years old, 12,500 households would need to by surveyed.

This exercise demonstrates that TravelScope cannot be used as a tool to estimate the number of Minnesota's Snowbirds. But the results from the tabulations that were examined from this exercise identified a different issue, a source of leakage in Minnesota's regional travel flow. Minnesotans traveling to Sunbelt states in the winter far outnumber their Southern peers who take summer vacations to Minnesota. Minnesotans going to Sunbelt destinations were not really Snowbirds in the strict sense. Rather they were predominantly middle aged, employed residents of the Metro area who took week-long Sunbelt vacations to escape winter.

Escaping from Winter: Minnesotans Vacationing in the Sunbelt

Minnesotans take about 1.4 million person trips to and through Sunbelt states in, the winter. Florida is their top destination, with Nevada, California and Arizona close behind. MN Snowbirds Traveling to Sun States Winter 1997-1998

Florida Nevada Califormia Arizona Texas Tennessee -S New Mexico (0 ^ North Carolina ^ Alabama /3 Oklahoma South Carolina Louisiana Georgia Utah Arkansas Mississippi

10 15 20 25 % of Total Travelers

Shopping dominates the activities list with 48% of the travel involving a shopping outing. Historical places/museums and Beaches tie for second with 30%, suggesting two distinct

Minnesota Snowbird Vacationers Travel Related Activities - 50%

40% -}

30%

20%

10%

Nan State Park I Amu»em«nt P»rk» I Shopping I Beache* I Sporting Event I Other HidoncSif Cultural Event* Outdoor Activitra Nightlifa/Dancing Golf/Tannit/Skiina Gambling population segments: the older baby boomers/matures who tend to take fewer beach vacations and families with children who seek beaches out. In fact, working older couples and retired couples together account for a quarter of the trips taken. Young parents and middle-aged parents combined account for another third.

Minnesota Snowbird Vacationers Life Stage 20%

15%

10%

0% Young Slngto* I OldwSlnglN I Wortdng Old« Coupto I Young Pannt I OktorPuwrt Roommt— MMdtoSlnflto* YoungCoupto Rtlnd Oktor Coupln MMdtoPwNlt

Ahnost half the winter trips taken to Sunbelt states are to visit Mends and relatives. This is a common type of vacation for young and middle-aged parents traveling with children. It gives them the social support they need to enjoy their vacations and saves on costs. One of every four Sunbelt trips taken by Minnesotans is taken primarily for entertainment. Nevada is the major

Minnesota Snowbird Vacationers Purpoae of Trip

beneficiary. Surprisingly, only 3% of the total trips are taken with outdoor recreation as the primary purpose. Minnesotans head South in the winter to enjoy the beach, the cultural attractions and have a great time. Even though these states offer the good outdoor weather conditions, few Minnesotans take these trips for outdoor recreation. They primarily want to visit and be entertained.

Three out of four Minnesotans fly to the Sunbelt, not wasting extra days from their week long vacation (average 6.4 days) to get there or risking bad weather on the way. Only 20% drive to warmer states in the winter. Most of these Minnesotans (84%) take only one sun destination vacation per winter. As a group, Minnesotans taking winter vacations in Sunbelt states are highly educated. About 50% of the women and 58% of the men having college degrees or better, and have high incomes, with over half in the over $60,000 year bracket.

About half the Minnesota population lives in the Minneapolis-St. Paul Metro area and it is these Metro area residents who have a far greater tendency to take Sunbelt vacation. Close to 70% of the Sunbelt vacations taken by Minnesotans are taken by Metro area residents. These Metro area Sunbelt vacationers differ from the non-Metro area vacationers in a number of ways. Metro residents have a greater tendency to travel by air (84% vs. 63%, respectively). A greater proportion of Metro area residents go to Sunbelt states seeking entertainment than Greater Minnesota residents (30% vs. 18%, respectively). And a greater proportion of Metro area vacationers than Greater Minnesotans take more than one trip (20% vs. 7%, respectively) to these states. Metro area Sunbelt vacationers also are better educated (66% of male head of households have college degrees vs. 41%) and have higher housetiold incomes (62% over $60,000 vs. 36%) than their Greater Minnesota peers.

The differences between Metro areas and Greater Minnesota residents who take Sunbelt vacations is not surprising. These differences mirror the demographics of the populations. Nor is it surprising that the greatest number ofMinnesotan who take Sunbelt vacation are from the Metro area. Metro area residents have easy access to an airport with scheduled flights to the Sunbelt states. In addition, the cost ofairfare from the Metro area to these states is considerably lower than the cost from Greater Minnesota cities.

Balance of Travel: Sunbelt Travel to Minnesota in Summer Compared to Minnesotans Leaving Minnesota in the Winter.

Minnesota, along with about 30 other states, frequently experiences a negative balance of travel in any given year when measured as the ratio ofMmnesotans traveling to other states compared to residents of other states coming into Minnesota. There are a number of reasons for this. First and foremost it is because Minriesotans are Minnesota's most loyal vacationers and the balance of travel calculation does not take into account Minnesotans who travel within their own state. But another factor is that Minnesota is primarily a "drive" destination. This limits the number of people taking vacations in Minnesota in two ways. One is location. Minnesota's out-of-state vacation market does not include any large population centers within an easy drive radius (3-4 hours). The second is the shift from long (1-2 week) vacations to "short get- aways". This trend is a result of more women joining the work force causing family vacation schedules to become more difficult to coordinate. An examination of the balance of travel between Minnesota and Sunbelt states may provide information that helps Minnesota improve its position.

Residents of Sunbelt states take about 978,000 person trips to Minnesota during the summer quarters of the year. These trips fall 30% short of the 1,378,000 trips taken by Minnesota residents out of Minnesota in the winter, accounting for a travel deficit of 400,000 trips. When measured by state, Minnesota gains significantly from Texas but loses much travel to Nevada and Florida.

Balance of Travel MN Snowbirds Vs. Sunbetl Visitors Coming

50

Sunbelten Coming Snowbinte

Minnesotans spend on average 4.81 days on their Sunbelt trips and travel in parties of approximately 2.39 people. Average expenditures per trip are $647.44 for the entire travel group which calculates to $56.33 per person per night. Current Sunbelt vacation travel to Minnesota is low in comparison. Sunbelters spend an average of $433.63 per trip or $26.28 per person per night. They stay longer, at 5.81 days, and travel in larger parties of about 2.84 people. There are a number of factors that account for the difference. Sunbelters are visiting friends and relatives at a rate 30% higher than Minnesota Snowbirds and seldom have to pay costs for lodging while Minnesota Snowbirds vacationers have a greater tendency to stay in hotels and motels on their winter vacations.

Another factor seems to be a flaw in how the TravelScope survey instrument collects expenditure information for a trip by air. Most of the Minnesotans going south in the winter are also flying. Because TravelScope does not include a separate box to collect transportation expenditures, many respondents are probably including airfare (and possibly other transportation fares not spent at the destination) in their expenditure total under the expenditure column. These fares would get attributed to the destination state rather than the state where the airfare was purchased. The results from the comparison of expenditures in this study seem too large to be caused only by the costs of lodging and provide evidence that the airfare Minnesotans pay to Minnesota travel agents may be recorded as Sunbelt expenditures. This issue is currently being examined by the survey administrators.

Summer Sunbelt Visitors to Minnesota Minnesota, with-its mild summer climate, should have as much to offer Sunbelt residents who are faced with relentless heat as the Sunbelt states have to offer Minnesotans in the winter. But Minnesota has not yet penetrated the entertainment and outdoor recreation market segments of the Sunbelt travel market.

Which Sunbelt Markets Hold Best Promise for Minnesota Vacations?

Five Sunbelt states, Arizona, California, Florida, Georgia and Texas, were selected for a close up view in order to examine the market potential they hold for Minnesota vacations. Arizona, California, Florida and Texas were selected because they were the top destinations for Minnesota Sunbelt vacations during 1997. Georgia was added to the list because it has a single, fast growing, large urban population center, Atlanta, which would be an easy, efficient target for broadcast advertising media. Also, it has a hub airport which provides many direct flights. Statistical runs were performed to investigate the nature of vacation travel for each of these states to find the best match for Minnesota vacations. For each of these states, out-of-state pleasure vacations lasting at least one week were examined. These runs excluded trips taken to visit fhends and relatives because these trips are less likely to be influenced by marketing. The 1997 TravelScope data set did not produce an adequate state level sample size for these five states when these selection criteria was applied, so three years (1995-1997) ofTravelScope data were combined for this analysis. Combining data sets in such a manner would give a broad picture of out-of-state vacations for residents of the selected states.

Among the five selected states, California provides the largest market for out of state leisure travel with about 6 million person trips over the three year period of 1995 to 1997. Califomians take three times the number of out of state trips than do residents of Arizona (1.3 million), Florida (1.8) and Georgia (2.4 million) and 35% more than Texans (3.8 million). Califomians also have a greater tendency to fly to their out of state destinations, with a full 50% of these trips by air. Tendency to travel by air is an important characteristic in evaluating distant markets for Minnesota vacations. Over the last five years, the duration ofthe average pleasure trip hovered around 3 days. In the statistical runs for this report, we selected longer vacations by excluding trips of less than 6 days. Even with this exclusion, the average duration of the longer out-of-state vacation trips taken by residents of these five states averaged only 8 days, quite short when one- way drive time from these states to Minnesota is two to three days. California, Arizona, Florida and Texas residents travel by air more than the national norm and they also have large travel markets quite receptive to the idea of flying into their vacation destination.

MODE OF TRAVEL BY STATE Personal Vehicle Airplane Other

Arizona 45% 39% 15% California 33% 50% 17% Florida 37% 47% 16% Georgia 72% 19% 9% Texas 53% 28% 20% These five states have summer climates hot enough that Minnesota's summer would offer great relief, a marketing strong point. Vacations for residents of these states, except Florida, cluster in the summer months (June - August), when Minnesota's climate is at its best. Georgia has the highest proportion of summer outbound vacationers with about 70% of its out of state pleasure trips taken during the summer. Floridians, on the other hand, take only 36% of their outbound trips during the summer. Florida residents may be more receptive to shoulder season vacations than the residents of other states. An important factor in why Floridians take a greater portion of their out-of-state vacations off-season is that its out-of-state vacationers tend to be retired, with almost 35% of vacationing male head of the households retired compared to 30% in Arizona, 25% in Texas, 22% in California and only 20% in Georgia.

Out Of State Vacations By Season

500 0 Summer (Jun-Aug) Fall (Sept-Nov) Winter (Dec-Feb) Spring (Mar-May)

Arizona California Q Florida B Georgia HI Texaa

One in five of Minnesota's traditional pleasure visitors from the North Central Census Region come to Minnesota for outdoor recreation. Looking at only the non-fhend/relative leisure trips to Minnesota, outdoor recreation trips prevail over entertainment trips by 3 to 2. Minnesota has a long history as an outdoor recreation destination with its woods, water and wilderness environment. But Minnesota is no longer only outdoor recreation. The opening of the Mali of America in 1992 was a catalyst for Minnesota's growth as airurban vacation destination. Natural resource based vacations continue to flourish but Minnesota is now a regional entertainment destination.

The current Metro area entertainment product places Minnesota in a far better position to market to the long distance vacationers who seek entertainment. For the Arizona market, the Metro area may be the primary product to promote because five of every six trip taken are for entertainment. Similar ratios are also found in Florida and Georgia. Although California and Texas vacationers also seek entertainment in high proportion to Minnesota's traditional visitors, they also provide the best opportunities for outdoor recreation destinations. Other studies have shown that there is only a small overlap between the entertainment and outdoor recreation segments of the vacation market. Thus, promotional messages are most effective if they are focused on one or the other. Advertising messages to Arizona residents in particular should concentrate on city scenes, nightlife, urban attractions and shopping. PRIMARY PURPOSE OF VACATION TRIPS

Entertainment Outdoor Rec

Arizona 78% 22% California 60% 40% Florida 61% 39% Georgia 65% 35% Texas 59% 41%

Long distance vacationers from the other four states might respond to both a Metro entertainment promotion and an outdoor recreation one. Because there is a difference between the entertainment and outdoor recreation segments targeting each with a tailored message should prove more effective than an equal mix of outdoor recreation and urban vacation images within one message.

In both educational level and income, the out-of-state vacationers from the selected Sunbelt states run higher then Minnesota's traditional vacationers. Pleasure travelers, in general, tend to have higher education levels than the population norm. Currently 42% of the male head of households from the North Central Census region who vacation in Minnesota have 4 year college degrees while 47% of this Georgian vacation population and 60% of the Califomians have four year degrees. Previous reports by the U.S. Travel Data Center using TravelScope have shown that vacationers with higher education levels tend to enjoy culture, the arts, history, soft adventure and wilderness experiences.

These vacationing Sunbelt households also have higher incomes than those of Minnesota's traditional vacationers, ranging from a low in Florida with 44% of the out-of-state traveling households earning over $60,000 and a high in California with 63% over $60,000. Today, only 34% of Minnesota's traditional visitors have incomes as high. Ability to afford a Minnesota vacation, even with the cost ofairfare, is not an issue for these markets.

Shopping and outdoor recreation dominate the activities that Minnesota's traditional visitors do while in the state. These activities in combination comprise about half the total activity responses for a Minnesota vacation. In the five selected states, only Texans participate in outdoor recreation to a degree comparable to Minnesota's traditional vacationers. Califomians are the next best market for outdoor recreation activities. It is interesting that many ofout-of- state vacations taken by residents of the five Sunbelt states include a visit to a state or national park. Minnesota offers many premier parks, yet state and national park visits do not register as high a demand from Minnesota's traditional tourists. This is probably because Minnesota, with its lakes and wilderness, offers so many opportunities to experience nature and enjoy scenic beauty that its visitors can do so without necessarily going to state and national parks. When marketing, Minnesota should keep in mind that many of America's vacationers may expect state and national parks to be the focal point for a nature experience. Showcasing some of Minnesota's premier parks may be the best way to reach this audience. What Sunbelters do on Vacation Vs. MN's Traditional Tourists 30%

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California D Florida 13 T«xa« B MINNESOTA

Continuation-What Sunbelters Do on Vacation Vs. MN's Trad. Tourists 25%

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Arizona Calltbmla EU Florida QaofBla Tax— B MINNESOTA

From the data available through TravelScope, Texas appears to offer very good prospects as a vacation market for Greater Minnesota. Out-of-state vacationers from Texas frequently travel by plane and have a high demand for outdoor recreation. Many Texans ah-eady come to Minnesota to visit fhends and relatives. Texas has a climate hot enough that a Minnesota vacation may be enticing. In a web-published report from ATS on travel flow between Metro areas, Dallas appears as one of the areas akeady supplying Minneapolis-St Paul with a sizable number of visitors. It is easier to expand an existing market than to develop an entirely new one and Texans already show arunterest in Minnesota.

California and Florida also appear to have potential for Minnesota vacations. Again, both states have vacation markets ab-eady using airlines for much of their travel. Califomians, like Texans, also take many outdoor recreation trips. In both of these markets, Minnesota's state and national parks may be a good focal point to introduce them to the scenic beauty of Greater Minnesota while the Mall of America could be combined with Metro attractions and museums to create an urban package with appeal. Florida offers a great potential for shoulder season vacations with its high retired population. Although Minnesota does not rank as a top destination for current travel by residents of these states, Minnesota does show up as one of the minor destination states.

Arizona and Georgia seem to hold less promise. Their current out-of-state vacationers show less interest in the kind of activities that current vacationers enjoy when they come to Minnesota. Georgia, especially, may be a difficult market for Minnesota vacations. Current Georgia vacationers who take out-of-state vacations tend to travel by car. They also tend to visit other nearby Southern states rather than traveling great distances. In 1997, TravelScope captured no leisure trips (excluding trips to visit fhend and relatives) to Minnesota from residents of either Arizona or Georgia.

What Type of People Are the Out-of-State Sunbelt Vacationers

There are a number of different ways to categorize households so they can be better understood from a life style perspective. Some are based on a household member's response to questions on value and life style preferences. People with similar values and lifestyles tend to live in the same areas. By understanding the values and life styles of current travelers, census tract regions that have the same value and lifestyles can be targeted in a marketing campaign. Also, research and marketing ideas are widely available, suggesting strategies on how to target specific value and lifestyle markets. National Family Opinion (NFO), the research company that conducts the TravelScope survey, uses Claritas's PRIZM system of value and lifestyle clusters in identifying households in its panel. PRIZM factor analysis uses the broad categories of social class, including household composition, mobility, ethnicity, urbanization and housing type, to produce 15 broad social classifications with 62 subsets of basic neighborhood types. The broad social categories and short descriptions for the most prevalent types of vacationing households in these five states are:

Elite Suburbs - high income, education, investments; Concentrated in major Metro areas 2 City - middle income; middle density edge cities and smaller cities Urban Uptown - the second most affluent group, executive and professional; Metro areas Affluential - upper middle-income in suburbs of major metro areas Landed Gentry - 4th most affluent group; multi-income families with kids; outside Metro Country Families -mid-scale affluence; lower living costs, industrial and agrarian Rustic Living- lower-middle incomes; remote towns

The out-of-state Sunbelt vacationers are predominantly a metropolitan mid to upper income population. The most prevalent life style groups for Arizona, Califomian, Florida and Texas are Elite Suburbs, 2nd City Society, Urban Uptown and the Affluentials. These states have few out- of-state vacationers in the rural groups. Georgia's out-of-state travelers, on the other hand, are predominantly rural. They cluster in the groups Landed Gentry, Country Families, Rustic Living and Elite Suburbs.

Sun States Pleasure Travel in U.S. (1995-1997) 25%

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0% 2nd City Soclaty I Th» AffluTrtrr I 2nd City CTifn I InnT Suburb* I Working Town* I Country Pamlll— Elite Suburtoa Urban Uptown Landed Omrtry Urban MIdacato RuaUo Uvlng Exurban Blu— OthT 3 Type*

Arizona California F-] Florida WA Georgia Texaa

*0ther 3 types; 2nd City Blues, Urban Cores, and Heartlanders

Market implications of this profile of Sunbelters again point toward a need for a promotional campaign that would build two images of Minnesota, one as an entertainment center and the other as a wilderness area with soft adventure, comfortable amenities and beautiful state parks. The message needs to be directed at a professional, educated, metropolitan audience. The message might also need to find an approach that gently mitigates the subtle but prevalent historical rift between the North and the South. For most of the states in our study, the rift is more cultural than political. Among these states, Georgia maintains some level of Confederate identity, which presents a barrier to marketing efforts by Northern states. But Georgia also holds the least potential for Minnesota vacation products. The other four states have unique histories, quite separate from most of the south and pride themselves on having strong, independent traditions. Playing on Minnesota's own independent spirit may be a good way to link Minnesota to these states on an emotional basis. The message should primarily appeal to an adult market because these households tend to travel without children.

The image building campaign needs to be timed so it peaks in mid-spring just as the weather is getting hot in the Sunbelt states. A direct mail campaign targeted to the value and life style zip codes from metro areas in the Sunbelt state could be coordinated with the image campaign and be conducted to generate sales leads and provide interested residents with more information. Because of the distance, airline information and pricing, including Northwest Airline's new airfares to greater Minnesota communities, should be prominently included in the response piece. The Dallas area may be a good test market for summer products. A Florida area might prove good for promotions directed at shoulder seasons. The Minnesota Office of Tourism's Statewide Guide would be an appropriate response piece (if airline information could be included) for a population that is relatively unfamiliar with Minnesota's travel products. A third tier to this promotional idea would be to develop two types of packages, a city sights type and a lakes and wilderness one. These packages could include the elements of fly, drive, lodging, attractions and shopping for the city packages and fly, drive, lodging, fishing, boats, golf and soft adventure combinations for the outdoors. The packages would be best if they followed the direct mail response piece by a week. Because these states are relatively new to the Minnesota vacation market, three waves of information, the first of which builds Minnesota image and an emotional attachment, the second as a call to action for more information, and the final which provides the audience with specific packages or product offering, might move the potential vacationer closer to a decision. Marketing strategies need to keep in mind that these states are distant and relatively unfamiliar markets. Creating image takes years. New destinations are generally held in mind for some time before they move up in rank and an action is made to plan a vacation to a new destination.

Implications for Minnesota's Transportation Sector

Transportation is the key to developing a Sunbelt vacation market in Minnesota. First, airfares to Minnesota destinations must be competitive with the ones that Sunbelters currently are purchasing for their out-of-state vacations. If it's less expensive to fly to another vacation destination that offers a somewhat comparable experience, few will consider Minnesota. Secondly, the Minnesota tourism industry needs to develop vacation packages that make travel to a new destination as easy as to a familiar one. Airfare, lodging and car rental or shuttle service need to be packaged in a way that creates an attractive product offering, a stress free, seamless journey and at a good price. Once a visitor is here, the Minnesota tourism industry will need to extend a warm welcome and provide sufficient interpretation and guidance so new guests can fully participate and enjoy their experience without having the in-depth knowledge of what to do and see that many of Minnesota's traditional vacationers have. Finally, Sunbelt markets will take time, effort and money to develop. Promotional efforts and advertising are essential to creating awareness of Minnesota's vacation products.

Summary

The ATS and TravelScope databases compare favorably when examining broad variables on the national level. However, they do not hold as favorable a comparison for state-level Minnesota data. Neither TravelScope or ATS can provide a measurement of Minnesota's snowbird population because the sample size of the long duration vacations that Minnesotans take in the winter to Sunbelt states is not high enough to provide reliable results. But the TravelScope database, sometimes by combining a few years of data, offers a good data set for examining flow of travel, isolating travel imbalances and looking at market potential. The ATS would probably offer many of the same benefits if the raw data were to be used so that targeted tabulations could be produced. One advantage ofTravelScope as a tool for market research is its linkage to values and life style and other marketing information. Thus, a large national travel survey, especially one that links to other types of market information, offers a power tool for travel marketing.