Maximizing Tourism Marketing Investments A Canadian Perspective

Transcription

1 Maximizing Tourism Marketing Investments A Canadian Perspective

2 Understanding the potential of markets Economics: GDP; Inflation; Unemployment; Employment; Disposable Income; Private Consumption; Consumer Confidence; Trade - Imports; Exchange Rate - Sensitivity; Tourism: Travel Volumes; Travel Receipts; Average Spending; # of Nights; Trip Purpose; Air Access; Seasonality; Pure Pleasure Travel Target Population; Outbound Travel; Market Share;

3 Definitions Market Portfolio Analysis (MPA): Model that rate & rank markets against their relative market potential; Market Investment Model (MIM): Model that allocates optimal resource investments by market against relative market conditions.

4 What is the Market Portfolio Analysis - MPA? A rating system that objectively evaluates the potential & performance of markets (23) & ranks them in three tier subsets; provides a platform to: rank markets based on their respective market potential; flexibility to apply the model to a subset of markets; assist in prioritization of marketing investments; evaluates the potential of emerging/developing markets.

5 What is the MPA? A relative weighted index based on three main drivers of importance: 1: Size How big is the market? 2: Performance How have they performed in the last 5 years? 3: Potential What are indicators of future performance?

6 What is rated? Size: Overnight receipts; Receipts per person-night; Overnight person-trips; Direct air seat capacity; Target population level: years old.

7 What is rated? Performance: over the last five years Net change in receipts; Net change in overnight person-trips; Average partnership ratio; Net change in long-haul outbound travel; Net change in market share;

8 What is rated? Potential: Receipts potential; Net Pleasure travel volume; Overnight trips in shoulder season; Potential with primary competition;

9 What is rated? Frame C Potential (Continued): Direct Air seat capacity potential following year; Net change in the projection of real GDP over the next five years; Net change in the projection of real GDP/capita over the next five years; Net change in the projection of the population for the 25 to 64 year old range over the next five years.

10 MPA - Tier 1 Results UK UK UK UK UK Japan Japan Japan Japan Mexico Mexico S Korea Australia Australia China Germany Mexico Mexico Mexico Japan France Australia S Korea China Australia Australia China China S Korea S Korea China Germany France France France S Korea France Germany Germany Germany29.55 Weakening Strengthening

11 MPA - Tier 2 Results Netherlands Netherlands Netherlands Italy Switzerland SE Asia Switzerland Italy Switzerland Scandinavia Scandinavia Scandinavia Taiwan Hong Kong Hong Kong SE Asia SE Asia Italy Hong Kong Taiwan Taiwan 9.63 Weakening Strengthening

12 MPA - Tier 3 Results Belgium Austria India Spain India Spain India Brazil Brazil Austria Belgium Russia Russia Russia Belgium Brazil Spain Austria Argentina Argentina Argentina 2.48 Weakening Strengthening

13 Complementary Models MPA MIM Comparative Model 18 Measures/3 drivers 1 year of data Subjective Weights Market potential Tier Ranking Comparative Model 34 Measures/8 drivers 10 years of data Objective Weights Investment Allocations

14 What is the MIM? A model with a structured and measurable methodology to identify, validate and optimize marketing resource allocations for a subset of markets.

15 How did we approach it? Market Drivers 1. Attractiveness; 2. Growth; 3. Opportunity; 4. Receptivity; 5. Accessibility; 6. Prosperity; 7. Affordability; 8. Competitiveness;

16 How did we approach it? Market Attractiveness: Economic Factors: Employment GDP per Capita Sensitivity to Exchange rates Disposable Income as a % of GDP.

17 How did we approach it? Market Attractiveness: Tourism Measures: Target Population Long haul Inbound Volume Long haul Inbound Spending Market Share Average Spending per night Travel expense as a % of Disposable Income.

18 How did we approach it? Developed a weighted quantitative matrix; The weights are derived statistically for each measure & market driver & for each market;

19 What does it look like? UK Return x Attractiveness x 01EC001 01EC002 01EC003 01EC004 01TS005 Measures Employment Per Capita GDP Elasticity of Inbound Travel to Exchange Rates Disposable Income as a % of GDP Target Population x x Tot Rev r-square $ 566 year , , $ 641 year , , $ 687 year , , $ 824 year , , $ 883 year , , $ 1,074 year , , $ 1,026 year , , $ 993 year , , $ 945 year , , $ 1,279 year , ,

20 How did we approach it? Developed a conversion matrix that converted weighted scores by market to an investment level by market.

21 2005 MIM Results 2006 Actual Budget 2005 MIM Results 2007 Budget Allocations % % % U.S. Total. 57.3% 38.2% 51.6% Europe/LA 23.5% 31.4% 25.0% UK 10.7% 11.4% 10.6% France 5.0% 6.3% 4.7% Germany 4.9% 3.0% 4.4% Mexico 2.8% 10.71% 5.3% Asia/Pacific 19.2% 30.5% 21.1% Japan 14.2% 9.3% 13.2% S Korea 1.5% 6.0% 2.6% China 1.4% 7.5% 2.4% Australia 2.1% 7.0% 3.0%

22 Thank You