Research conducted as part of International Luxury Travel Market 2008 revealed that 62 per cent of the world’s luxury travel buyers and providers had seen a fall in forward bookings in the final quarter of 2008 over the same period last year.
Even so, they remain confident that recession will slow growth rather than stop it in its tracks, with 62 per cent saying the industry – which has grown by 10 per cent year on year for the past five years – will continue to grow albeit at a slower rate.
They will combat recession by focusing on marketing and building the skills of front line staff. More than three quarters (77 per cent) say they will increase or maintain their marketing spend and 91 per cent believe that they will increase or maintain their spend on staff training and development. Eighty seven per cent will dedicate marketing budgets to opening up new markets although most – 76 per cent – won’t reduce their spend in traditional markets in order to do so.
Electronic channels will become increasingly significant, with 63 per cent saying they’ll favour them above more traditional media.
Though 73 per cent of respondents say they’ll seek operating cost reductions, they won’t do so at the expense of staff. 56 per cent will maintain staffing levels while one fifth (20 per cent) will recruit more. Forty per cent will spend more on staff training and development, while 51 per cent will maintain their spend.
“It’s clear our audience is squaring up for a fight to hang on to market share and secure any growth opportunities that occur,” said ILTM exhibition director, Christina Wood.
“And they’ll do so by investing in marketing and building skills. Online channels will be favoured, not because they offer a price advantage over traditional media, but because they allow closer, more intimate relationships with consumers, whose decisions are increasingly influenced by participation in online social networks.
“ And networking is very much the name of the game; within the industry, events that offer face-to-face, relationship building contact between buyers and providers will be preferred.”
The panel that debated the research findings during the ILTM Future Forum offered the following tips for fighting the recession:
Accept the volatility of the current economic climate – plan ahead but be prepared to re-forecast and adjust strategy in real time.
Continue to communicate, using marketing budget to maintain brand presence as well as support sales.
Focus on personal relationships – with consumers and channel partners alike – with one-on-one marketing, transparent pricing and 100 per cent service commitment.
Cut costs by reducing bureaucracy – not by compromising service performance.
ILTM 2009 takes place from December 7 to 10, at the same venue, the Palais des Congres, Cannes.