Vecchio, Claudia

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University of Massachusetts AmherstScholarWorks@UMass AmherstTravel and Tourism Research Association:Advancing Tourism Research Globally 2015 Marketing Outlook Forum - Outlook for 2016International Marketplace: What's Happening inthe Face of the Strong US Dollar?Claudia VecchioNevada Department of Tourism and Cultural AffairsFollow this and additional works at: https://scholarworks.umass.edu/ttraThis Event is brought to you for free and open access by ScholarWorks@UMass Amherst. It has been accepted for inclusion in Travel and TourismResearch Association: Advancing Tourism Research Globally by an authorized administrator of ScholarWorks@UMass Amherst. For moreinformation, please contact scholarworks@library.umass.edu.Vecchio, Claudia, "International Marketplace: What's Happening in the Face of the Strong US Dollar?" (2016). Travel and TourismResearch Association: Advancing Tourism Research Globally. 13.https://scholarworks.umass.edu/ttra/2015marketing/Proceedings/13IMPORTANCE OF INTERNATIONAL TRAVEL TO NEVADA  19% of all visitors to Las Vegas (2014) 12% of all visitors to Nevada (2014) Top inbound markets v  Canada v  Mexico v  United Kingdom v  Australia  v  Japan v  Brazil v  Germany v  China   NEVADA REPRESENTATION v  Canada v  Mexico v  United Kingdom v  Germany v  France v  Brazil v  China v  Australia v  South Korea v  India    CURRENT IMPACT OF EXCHANGE RATE ON NEVADA  •  Impact seen in retail.  Major mass market shopping malls have seen drops in sales of products that have normally been sold to international visitors.      •  Many of the operators that sell Las Vegas have seen a drop in sales.  For the more mature markets, like Canada and Mexico, some of the drop from the operators has also been the loss to the OTAs.      •  The UK continues to be strong as the Sterling has been one of the few currencies not to be affected by the strong US dollar.   But, as the Euro as dropped, travel throughout Europe has become a bigger draw for the UK traveler.  CURRENT IMPACT OF EXCHANGE RATE ON NEVADA •  Brazil v  Major operators down by 5% v  Smaller operators down more than 33% •  Australia v  2015 2% decline – not peak travel time •  Mexico v  Not changing plans v  Nearby, higher demo traveler •  Top tier/luxury will continue to travel. •  Travel in the DNA of younger people – shorter trips, lower expenditure, will still travel. GLOBAL INSIGHT  The outlook for world growth continues to be revised downward  In addition to a strong U.S. Dollar: •  Brazil is in its worst recession of a generation. •  Latin America / Caribbean market growth is less than 2%. •  Canada has been in a recession. •  China’s economy has cooled from multiple years of double-digit growth. •  China clamped down on corruption, government travel. •  Euro Area growth is improving, but not as fast as might be expected. The Australian dollar at $0.70; could reach $0.60 by Spring 2016. REALITY •  The exchange rate just one of several factors influencing travel decisions •  Global economic, social, political elements interrelated •  U.S. is just one destination    PSYCHOLOGY OF UNCERTAINTY  •  Uncertainty = Fear •  Fear deters travel •  Alleviate fear to increase travel •  Value of government/quasi government DMOs •  Create opportunities/programs that reduce financial anxiety  •  Build trust •  Commit to a long-term investment   DESTINATION BRAND ADVANTAGE v  Create a resilient brand  v  Diversify portfolio v  Target messaging v  Convey (the right) value v  Anticipate correction v  Prepare for what’s next CREATE A RESILIENT BRAND •  A strong brand  v  Insulates from threat of competition v  Highlight bucket list-ability v  Cut through the clutter v  Increase demand •  A PR-driven approach  v  Provides education foundation v  Cost effective v  Reaches many audiences with pinpoint messaging •  Develop an authentic, but pliable brand, understand breaking points DIVERSIFY PORTFOLIO •  A foot-print in multiple countries helps to hedge shifts in demands from any particular country.  •  The power of partnerships v  State tourism offices v  DMOs v  Regional consortiums v  U.S. Commercial Services – new program for smaller destinations  TARGET MESSAGING •  Simplify •  Assess experiential attributes •  Develop salient messages for each country   •  Ensure consistent sales and marketing messages •  Incorporate the right messages for the most impactful media channels  CONVEY VALUE •  Know your market •  Showcase monetary and organic value – illustrate real value against competitors. •  Avoid broad pricing cuts •  Tout ADR, overall price vs competitors •  Develop/highlight commissions paid to operators/agents •  VIP, special offerings – extraordinary experience •  Reward loyalty ANTICIPATE CORRECTION •  Travel patterns will stabilize when the exchange rate stabilizes.  PREPARE FOR WHAT’S NEXT •  Monitor fluctuations in consumer decisions – across all applicable consumer categories  •  Expect the next •  Use research to amalgamate issues, impact •  Create a plan  

International Marketplace: What\u27s Happening in the Face of the Strong US Dollar?

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International Marketplace: What\u27s Happening in the Face of the Strong US Dollar?

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