Professional Documents
Culture Documents
US Outbound Market Research
US Outbound Market Research
List of Tables
Table 1: US GDP Growth Forecasts 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Table 3: US Outbound Journeys Made from 2008-2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Table 5: Summary Table of Key US Outbound Consumer Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Table 6: Vital Statistics for Group Y2 – Consuming on Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Table 7: Top Destinations in Last Three Years for Group Y2 – Consuming on Credit by Percentage of Segment
Travelling and Highest Indexing Countries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Table 8: Vital Statistics for Group F2 – Secure in Suburbia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Table 9: Top Destinations for Group F2 – Secure in Suburbia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Table 10: Vital Statistics for Group M2 – Affluent Empty Nests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Table 11: Top Destinations for Group M2 – Affluent Empty Nests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Table 12: Vital Statistics for Group Y1 – City Slickers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Table 13: Top Destinations for Group Y1 – City Slickers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Table 14: Top Destinations for Group F1 – Flush Families. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Table 15: Vital Statistics for Group F1 – Flush Families. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Table 16: Top Destinations in Last Three Years for Group M1 – Golden Globetrotters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Table 17: Vital Statistics for Group M1 – Golden Globetrotters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Table 18: Popularity of Travel-Related Websites by SimilarWeb (US only) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Table 19: OTA and Metasearch Sites Advising US Travellers by Index Score. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Table 20: Mobile Attitudes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Table 21: Interest in Mobile Advertising. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Table 23: Social Networking Attitudes and Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Table 24: Table 24: Percentage Change in Real Consumption Expenditures by Category 2011-2014. . . . . . . . . . . . . . . 58
Introduction
1.1 The US Economy of 1.4% Morgan Stanley was at the lower end of the
forecast scale (Morgan Stanley 2016). The World Bank
1.1.1 Gross Domestic Product (GDP) with an estimate of 2.8% was the highest (World Bank,
Since the Great Recession hit in 2008 the US economy 2016). This gives a consensus forecast of just over 2%
has been one of the fastest- growing developed econo- GDP growth in 2016. Overall, this would be a continua-
mies. On average, the US economy has grown 0.5% tion of annual growth rates over the last four years and
faster than the IMF’s grouping of advanced economies would see the US continue to outperform the majority
from 2011 to 2014 and it has broadly continued its of developed economies on current forecasts.
strong performance into 2015 (IMF, 2016). Although
there were some signs of weakness towards the end of Taking everything into account, opinion regarding
2015, 2016 is forecast to see continued growth. growth and economic stability has been more pessi-
mistic at the start of 2016 than in 2015, reflecting a
GDP growth in 2016 is expected to be solid, if unspec- higher risk environment. US business confidence survey
tacular. As detailed in Figure 1, with a growth estimate results have trended downwards throughout 2015 and
Figure 1: US Historical GDP Growth 2011-2015 and Forecast Range for 2016
3%
2.50%
2%
1.50%
1%
0.50%
0%
2011 2012 2013 2014 2015 2016 (F)
Sources: IMF, 2016; Barclays, 2016; Deutsche Bank, 2016; EIU, 2016; Morgan Stanley 2016; World Bank 2016; OECD 2016a
Note: Bottom forecast is Morgan Stanley (1.4%), middle (most likely) forecast (2.24%) is an average of the forecasts in Table 1, top forecast is World
Bank (2.8%)
Economist
Deutsche Morgan World
Barclays Intelligence IMF OECD Average
Bank Stanley Bank
Unit
Sources: IMF, 2016; Barclays, 2016; Deutsche Bank, 2016; EIU, 2016; Morgan Stanley, 2016; World Bank, 2016; OECD, 2016
11%
10%
9%
8%
7%
6%
5%
4%
Oct-11
Oct-14
Jul-11
Jul-14
Apr-11
Apr-14
Jan-11
Jan-14
Jul-12
Jul-13
Jul-15
Jul-10
Oct-12
Oct-13
Oct-15
Oct-10
Apr-12
Apr-13
Apr-15
Apr-16
Apr-10
Jan-12
Jan-13
Jan-15
Jan-16
Jan-10
have shown little sign of improvement as of early 2016. tighter labor market, which will help drive wage growth
There are global risks emanating from Chinese debt and and therefore discretionary spending rates.
Eurozone stability issues, as well as domestic risk from
the forthcoming presidential election. However, the US 1.1.3 Interest and Exchange Rates
should continue on a path of growth throughout the The US has experienced an historically unprecedented
year, helping to increase US discretionary spending and period of low interest rates. After the recession,
outbound travel. rates were held within a range of 0% to 0.25%. Huge
anticipation preceded the US Federal Reserve decision
1.1.2 Unemployment to increase rates, which was consistently put off until
The US is currently enjoying the best jobs creation December 2015. Rates were increased by 0.25% to a
record of the last two decades. This has driven base rate of 0.25-0.5%. This did not appear to affect the
unemployment down. It has fallen from a high of 10% US economy negatively and in fact signalled confidence
in late 2009 to a current level of 4.7% (see Figure 2; from the Federal Reserve in the US economy’s health.
United States Bureau of Labor Statistics, 2016a.) This It also led to a peak in the value of the dollar against a
level is beginning to approach some of the strongest basket of major currencies (see Figure 3).
periods of US economic performance in recent years,
with unemployment falling to levels slightly above The issue of further rate rises has become the subject of
those seen at the turn of the Millennium and the considerable conjecture. In 2015 the expectation was of
pre-recession period. The ultimate effect of this will multiple and consistent rises but confidence has been
likely be highly positive for outbound travel. Not only hit by volatility in the global economy. Nonetheless, the
does employment at the current level mean a higher Federal Reserve can take heart from the low unemploy-
number of potential travel consumers, but it creates a ment rates and growing paychecks in the US. The
100
95
90
85
80
75
2014-06-06
2014-07-06
2014-08-06
2014-09-06
2014-10-06
2014-11-06
2014-12-06
2015-01-06
2015-02-06
2015-03-06
2015-04-06
2015-05-06
2015-06-06
2015-07-06
2015-08-06
2015-09-06
2015-10-06
2015-11-06
2015-12-06
2016-01-06
2016-02-06
2016-03-06
Source: Federal Reserve Bank of St Louis, 2016
101.5
101
100.5
100
99.5
99
98.5
n OECD Average Consumer Confidence n US Consumer Confidence
98
2014-01
2014-11
2015-01
2015-11
2016-01
2014-03
2014-05
2014-07
2014-09
2015-03
2015-05
2015-07
2015-09
2016-03
2016-05
100
95
90
85
80
75
70
65
60
55
50
01/01/11
01/05/11
01/09/11
01/01/14
01/05/14
01/09/14
01/01/08
01/05/08
01/09/08
01/01/09
01/05/09
01/09/09
01/01/10
01/05/10
01/09/10
01/01/12
01/05/12
01/09/12
01/01/13
01/05/13
01/09/13
01/01/15
01/05/15
01/09/15
01/01/16
01/05/16
Source: University of Michigan, 2016
question is whether it can temper some of the caution average and above all points from the recession in 2008
it has shown thus far regarding the global economy until November 2014.
and push ahead. It would perhaps be beneficial for the
Federal Reserve to raise rates in order to give itself more This trend is supported by the University of Michigan
room to maneuver in the event of another downturn. Index of Consumer Sentiment. It saw a big uptick in the
May 2016 figures, which brings the index to just shy of
Increasing interest rates are important to the travel the highest points in 2015 and reverses the losses seen
industry not only for credit purposes but also for thus far in 2016. We can therefore expect a relatively
exchange rates. Expectations of an increase in interest robust consumer outlook in the near-term, which is
rates and the eventual act of raising them tend to critical to travel and leisure spending. Higher consumer
increase the value of a currency. As seen in Figure 3, the confidence indicates growth in personal consumption
dollar has fallen since a high point at the start of the expenditures. It is also worth noting that household
year as expectations of a rate increase have receded. spending is also the primary driver for current US
However, this decline should not go much further and economic growth.
the dollar should retain purchasing power. Weaknesses
remain in Britain, China, the Eurozone and Japan – and 1.2.2 Household Wealth and Discretionary
all three are experiencing weakening, or looking to Spending
weaken, their currencies in the remainder of 2016. US In real terms, US households have faced an extended
payroll data has continued to be strong, inflation is period of stagnating incomes. Major declines followed
rising and this is driving expectations of another rate 2007 as the recession broke and have yet to recover.
rise in the middle of this year. Indeed, US household income peaked in 1999 at just
under USD58,000 in 2014-dollar value terms. In 2014,
income stood at USD53,657 per household (Federal
1.2 The US Household Reserve Bank of St Louis, 2016). Although this represents
2% growth from the post-recession trough of 2012, it
1.2.1 Consumer Confidence does not present the strongest picture for the health
According to data from the Organization for Economic of the average US household and its growth in the
Co-operation and Development (OECD), US consumer near-term.
confidence has fallen from a high point in late
2014-early 2015 but it still remains within positive Furthermore, it is higher income groupings that have
territory, indicating growth in consumer spending. experienced the largest increases in both real and
Indeed, it continues to be higher than the OECD nominal income since 2008. According to the US
60000
58000
56000
54000
52000
50000
48000
n US median household income (USD)
46000
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
Source: Federal Reserve Bank of St Louis, 2016
Note: Dollar values in 2014 CPI-U-RS Adjusted Dollars
USD 120,000
USD 100,000
USD 80,000
USD 60,000
USD 40,000
USD 20,000
USD 0-
Young (Under 35) Working Years Pre-Retirement Retired (65+)
(35-54) (55-64)
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
Note: Median household income derived from IXI data are higher than US government data as it includes a variety of additional assets
35
n Vacation Days Taken n Vacation Days Offered
30
25
20
15
10
5
0
USA
South Korea
Malaysia
Thailand
Japan
Mexico
Singapore
Canada
Hong Kong
India
New Zealand
Australia
Ireland
Netherlands
Austria
Italy
Norway
Sweden
UK
Denmark
Brazil
Finland
France
Germany
Spain
UAE
140,000,000
120,000,000
100,000,000
80,000,000
60,000,000
40,000,000
20,000,000
0
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
12%
n YoY Percentage change
10%
8%
6%
4%
2%
0%
2009 2010 2011 2012 2013 2014 2015
-2%
-4%
-6%
2008 63.6
2009 61.5 -3.3%
2010 60.3 -2.0%
2011 58.7 -2.7%
2012 60.7 3.4%
2013 61.9 2.0%
2014 68.2 10.2%
2015 73.5 7.7%
Source: ITA National Travel & Tourism Office, 2016
tendency to work hard at the expense of play, there is 2.4 When and Where Do They Go?
clearly still a great deal of untapped potential growth
for this market. 2.4.1 Key Travel Months
US international travel peaks strongly over the summer
We should see more of this potential materialize months, reaching its highest point in July. This month
throughout 2016. As mentioned in Chapter 1, the sees 75% more outbound journeys than the lowest
US economic conditions appear solid and the dollar month, February. Additional seasonal peaks can be
should retain strength. US consumers are becoming seen in March and December, which can be attributed
more inclined to international travel, even though to spring break and the holidays, encompassing
median income growth remains somewhat sluggish. Thanksgiving and Christmas (ITA National Travel &
Furthermore, a greater number of companies are Tourism Office, 2016). It would appear from this that
recognizing the importance of employee leave and Americans continue to travel in a structured and highly
hopefully this should go some way to rectifying the seasonal manner, which makes it easier for the travel
American stigma of taking vacation time. For more on industry to market to, and plan for, the US outbound
the future of the US consumer see Chapter 5. consumer.
Figure 12: Key International Travel Periods by Month (Percentage Share of Average from 2011-2015)
12%
10%
8%
6%
4%
2%
0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: ITA National Travel & Tourism Office, 2016
Canada Europe
18.3% 18.0%
Caribbean
10.5%
Asia
Mexico 6.9%
35.8% South America
2.7%
Central America
Oceania 3.9%
Africa Middle East 0.9%
0.6% 2.6%
30,000,000
n Europe n Caribbean n Asia n South America n Central America
n Oceania n Middle East n Africa n Mexico n Canada
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
0
2011 2012 2013 2014 2015
Source: ITA National Travel & Tourism Office, 2016
Figure 15: US Outbound Travel - Top 10 Countries Visited in Last Three Years
5%
4.5%
4%
3.5%
3%
2.5%
2%
1.5%
1%
0.5%
0%
a
a
ce
ic
ico
y
ly
d
as
ds
d
aic
an
an
bl
Ita
an
na
m
an
ex
pu
rm
m
gl
ha
Fr
Ca
Isl
M
Ja
En
Re
Ge
Ba
an
n
be
ica
rib
in
m
Ca
Do
r
he
Ot
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
Figure 16: Number of Journeys Outside the Contiguous United States in the Last Three Years by Percentage of Income
Group Taking Journeys
25%
n Low (Under $50k) n Moderate ($50k - $100k) n High ($100k - $200k) n Elite ($200k+)
20%
15%
10%
5%
0%
1 2 3 4 5+
Number of Journeys
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
600
Higher income,
high foreign travel
HIGH
500
400
Median Income (IXI)
300
Moderate income,
200 high foreign travel
Lower income,
low foreign travel
LOW
100
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
Note: Y- and x-axis scales are based on a relative index score
The good news for travel is the strength of Millennials This bodes well as it suggests that Millennials are
within this market despite lower household income and engaged with travel and interested in heading to inter-
wealth levels. We can see that those aged under 35 have national destinations to a greater degree than previous
a remarkably strong performance in both the number generations. What is holding them back is their current
of journeys and length of journey. In the number of limited earning power. In terms of the overall number
journeys taken in the last three years, Millennials have of journeys taken abroad in the last three years, they
the highest percentage of respondents who have taken are still travelling at rates similar to, or above, older age
one journey in the last three years, and second highest groups. As they come into their prime earning years it is
in those undertaking four journeys. They also rate highly likely that they will increase their quantity and length of
in terms of length of journey, leading in the categories journeys (for more see Chapter 5).
one to two day trips and those over 30 days, while also
coming second for three to seven day visits.
12%
10%
8%
6%
4%
2%
0%
1 2 3 4 5+
Number of Journeys
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
16%
n Young (Under 35) n Working Years (35-54) n Pre-Retirement (55-64) n Retired (65+)
14%
12%
10%
8%
6%
4%
2%
0%
1 to 2 days 3 to 7 days 8 to 14 days 30+ days
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
The broader trends we have explored thus far give These core groupings can then provide a more rounded
an overview of the US outbound consumer in 2016. picture of the different types of US international travel-
However, marketers need to be able to identify and ling consumers in 2016. In this chapter we will focus
address consumers at a much more specific level in the on demographic, income and location information for
digital age. IXI Services and EyeforTravel have therefore these groups alongside their travel preferences. It is this
worked together to create and analyze core groupings data we have used to group consumers together into
of US travellers that vacation abroad at, or above, the these segments.
average.
They are presented from the group that travels with
The groups are drawn from the 71 segments in IXI’s lesser frequency to destinations outside the contiguous
Economic Cohorts household types which have been US to the most frequent segment of travellers. This is
appended to the GfK MRI Doublebase Survey of the derived from the percentage of the segment that has
American Consumer. The segments are created using reported foreign travel in the last three years.
a variety of consumer demographic and economic
data to organize and classify all US consumers. When IXI Services also classifies its segments through indexing
appended to the GfK MRI survey, the marketer can to more accurately represent their behaviors. This is done
analyze incidence or usage rates by segment. One part by taking the category in question and comparing it
of this is foreign travel, which is shown across all the to the US average. An index score above 100 indicates
Economic Cohorts segments in Figure 20. The bar chart that the group engages more than the US average. For
shows a wide variance for international travel in the past example, 4.7% of all respondents have visited Mexico
three years from a low of only 7% in segment D18 to a in the past 3 years. However, 8.4% (Percent) of F1: Flush
high of 57% in segment P71 as compared to the overall Families had done so, a rate that is 1.77 (Index) times
average of 24% for all survey respondents. greater than the national norm, producing a score of 177.
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
Age ranges and Percentage of household living with children aged 0-17
7%
6%
5%
4%
3%
2%
1%
0%
Mexico
Bahamas
Canada
Jamaica
Dominican Republic
France
England
Central America
Cayman Islands
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
n 1 week or less before traveling n Less than 3 months, but more than 1 week before traveling
n 3-6 months before traveling n More than 6 months before traveling
Y2: Consuming on Credit
M2: Affluent Empty Nests
F2: Secure in Suburbia
M1: Golden Globetrotters
Y1: City Slickers
F1: Flush Families
0% 20% 40% 60% 80% 100%
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
Consuming on Credit members book later than other valuable than the US average and located in the
segments, particularly for last minute bookings. Of suburbs. However, they remain very price-conscious
those who reported their lead times, 5.3% booked their and tend towards less adventurous vacation behaviors.
trip with a week or less to go (see Figure 22). When This segment can be reached online and is responsive
they are making these bookings, they are not detail or to price-oriented marketing.
research-oriented. They do not rank particularly highly
for travel research, and they had the highest percentage 27% - Percentage of Secure in Suburbia
agreeing with the statement “packaged deals are great, households that have travelled outside the
because I don’t have to plan out the details too much” contiguous US in the last three years
(68.1%). They are aware of their pattern and have the
highest proportion agreeing that they tend to make 3.2.2 Demographic and Income Data
impulse purchases (44.7%). This type of behavior leads While this group is not the wealthiest, they manage
them to have the highest proportion who could be their finances carefully and they tend to have a secure
classified as “Swayable Shopaholics” (34.4%). As they are lifestyle. Three quarters of this group are married and all
also open to digital advertising (see Chapter 4), they live as families with their children. Secure in Suburbia
are, therefore, a great segment to reach with time-and households are the least likely to live in a major metro
context-sensitive advertising. area out of our groups, with a third choosing the
traditional American family retreat of exurbia (suburbs
As noted before, this segment has the lowest median beyond the suburbs) and small towns. Aside from our
income and is constrained by this. They are the least two older groups, with their high proportions of retirees,
likely to want to pay more for high-quality items (36.9% this group has the lowest rate of employment, with
disagreed with the idea of paying more for a quality nearly a quarter of household members not working.
item). Therefore, travel brands should orient advertising This is likely to be reflective of the burden of childcare,
around enticing offers, particularly strong packaged and lessens their potential disposable income.
offers in destinations near the US.
Secure in Suburbia households are prudent with their
finances, putting a lower proportion of their overall
3.2 Group F2 – Secure in Suburbia income(s) towards discretionary spending than any
other group apart from Group M2: Affluent Empty
3.2.1 Segment Overview Nests. They tend to be more focused on savings than
Group F2, Secure in Suburbia households are estab- other comparable groups. They are also more likely to
lished, middle-aged with families and they are relatively be motivated by deals and actively try to seek value
conservative in behavior. They live a comfortable from their spending.
existence, largely owning homes, which are more
Percent of households living with 100% Median discretionary spending per $45,090
children aged 0-17 household:
(US average - 35%):
Percent living in major metros (top 50% Predominant Net Worth $150k-$500k
25 CBSAs, 40% of US population): (largest % of households): (54%)
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
7%
6%
5%
4%
3%
2%
1%
0%
Mexico
Canada
Bahamas
Jamaica
Dominican Republic
Italy
England
Puerto Rico
Central America
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
Percent living in major metros (top 43% Predominant Net Worth $250k-$1MM
25 CBSAs, 40% of US population): (largest % of households): (62%)
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
5%
4.5%
4%
3.5%
3%
2.5%
2%
1.5%
1%
0.5%
0%
Mexico
Canada
Italy
France
Bahamas
England
Spain/Portugal
Germany
Jamaica
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
extended families. Most of their children have left home As noted above this group is traditional in its outlook.
and had children of their own, with 61% of respondents This crosses over into their shopping and travel
reporting that they were a grandparent or great behaviors. Also Section 3.3.2 notes that this group is
grandparent of a child under 18. Although the marriage careful with its income and is more predisposed to
rate seems low given the generation and situation of save. However, this should not be mistaken for a lack
this segment, a large part of this can be attributed to of income or unwillingness to spend it with regards to
the fact that 17% of respondents are widowed. travel. The group indexes highly for spending on foreign
vacations, coming behind our two richest groups. It
3.3.3 Travel Behaviors is noticeable that they index highly for spending on
Table 11: Top Destinations for Group M2 – Affluent Empty foreign vacations of USD8,000 or more, the highest
Nests option available in the survey. They could be said to be
punching above their weight, considering their relative
Mexico 4.5% disposable income and propensity to spend carefully.
This trend also sees them travelling at an above average
Canada 3.7% rate to Europe, normally quite an expensive destination
for US consumers.
Other Caribbean Islands 3.3%
In terms of what they want in a vacation, Affluent Empty
Italy 2.8% Nests are looking for relatively low energy vacations,
both in terms of the booking process and when
France 2.5% travelling. They were easily the least likely to agree with
the statement “I frequently choose active vacations with
Bahamas 2.1%
lots to do” (47.4%) and index at the bottom for activities
England 2.1% engaged in when on vacation. They also agreed least to
the statement “traveling to foreign places is a great way
Spain/Portugal 1.8% for me to learn about other cultures” (70.4% agreed with
the statement vs. 80.3% for the highest group).
Germany 1.8%
They are the most likely to favor group travel, reporting
Jamaica 1.7% the highest percentage agreeing that “group tours
are fun and a good way to meet people” (51.9%), the
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey
of the American Consumer)
www.eyefortravel.com US OUTBOUND TRAVEL IN 2016 | 32
SEGMENTS
KEY US OUTBOUND CONSUMER
most likely to report a preference for guided tours over points below Y1, City Slickers. Conversely, 29.7% fell in
traveling independently (38.8%), and are the largest the category “take me away please”, the highest of all
group fitting into the GfK MRI vacation classification of segments.
“Tour Groupies” (31%).
This, alongside their distrust of online sources of 3.4 Group Y1 – City Slickers
information and booking, leads them to favor booking
through people rather than digital routes. They comfort- 3.4.1 Segment Overview
ably index at the bottom for being advised about Group Y1, or City Slickers, are urbane, connected and
their travel plans by an Online Travel Agent (OTA) and endowed with a high disposable income. They are in
price comparison (metasearch) sites and at the top for many ways the archetype of the Millennial generation,
“traditional” media (TV, newspapers, radio, etc.). Similarly, being adventurous, active and engaged digitally.
when asked about the logistics of travel planning They are interested in taking vacations to destinations
they were the least likely to agree that they were their beyond those chosen by the typical American traveller.
“own travel agent” at 28.9%, nearly 21 percentage Indeed, it could be argued that this group would travel
Percent living in major metros (top 60% Predominant Net Worth $150k-$750k
25 CBSAs, 40% of US population): (largest % of households): (53%)
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
8%
7%
6%
5%
4%
3%
2%
1%
0%
Mexico
Canada
Bahamas
Italy
France
Jamaica
Germany
England
Central America
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
Mexico
Canada
Bahamas
France
Italy
England
Jamaica
Germany
Dominican Republic
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
Figure 27: Top Destinations in Last Three Years for Group M1 – Golden Globetrotters
8%
7%
6%
5%
4%
3%
2%
1%
0%
Mexico
Italy
Canada
France
England
Spain/Portugal
Germany
South America
Bahamas
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
As we can see above, there is a huge amount of insight part of this can be put down to generational differ-
that can be gained from segmenting consumers and ences, although considering this only from that angle
looking into their travel habits. However, the power of would not take into account many important variations.
data extends beyond this. Segmentation can give us A more nuanced picture is important to consider when
insight into further behavioral patterns through which trying to create effective marketing strategies. The
marketing can be targeted. Media consumption, device rising cost of acquisition makes accurate targeting that
usage, vacation research channels, shopping habits, improves the chances of a booking critical. A key part
leisure activities, and advertising preferences can all of this is the devices consumers use and the media that
be obtained and analysed to help improve marketing they visit.
effectiveness. In this chapter we discuss these topics
and beyond to find out how to better reach and sell to 4.1.1 Device Usage
the US outbound consumer. EyeforTravel was further Device usage is largely driven by generational bounda-
helped by expert opinion from IXI and a case study ries but it is also closely related to wealth and education,
from WESTA who have used data insights to help create although all these factors do relate to each other. To
uplifts in their revenue. paraphrase, the most likely members of the US popula-
tion to own devices are young, college-educated,
wealthy individuals, who are also the most engaged
4.1 Technology Usage and Media with the possibility of international travel.
Consumption
Overall the most popular devices continue to be
The US consumer is not a single entity, and there are desktops or laptops. 73% of US adults currently
wide variations in their media-viewing patterns and the own one according to a 2015 Pew Research poll.
devices they use to access information. A significant Smartphones are close behind, at 68%, and given
100%
n Smartphone ownership n Desktop/laptop ownership n Tablet ownership
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
<USD30,000 USD30-49,999 USD50-74,999 USD75,000+
100%
n Smartphone ownership n Desktop/laptop ownership n Tablet ownership
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Less than high school High school Some college College and above
their popularity among younger age groups should Given the demonstrable link between education and
soon overtake desktops/laptops. Tablets had a strong income, Figures 29 and 30 match each other extremely
showing in the survey, with 45% of US adults owning a closely. Naturally, device ownership falls across all
device (Pew Research Center, 2016). types as income and education levels decline. It is
nonetheless remarkable in an age when internet access
Breaking this down further, we can see that smart- is so critical that for laptop/desktop ownership there is a
phone usage declines throughout age groups. Tablet huge 61 percentage points between holders of at least
ownership, on the other hand, peaks in the 30-49 age a college education and those lacking a high school
bracket. This may be a potential sign of future usage diploma. There is a market saturation point after around
patterns, as it could indicate that tablet ownership has 90% ownership in the population, as can be seen by
peaked as younger demographics stick to usage of their the similarity between desktop/laptop ownership in the
smartphones and phablets. highest income brackets (Pew Research Center, 2016).
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
F1: Flush Y1: City F2: Secure in Y2: M1: Golden M2: Affluent
Families Slickers Suburbia Consuming Globetrotters Empty Nests
on Credit
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
The importance of age as a more important variable relative incomes. Indeed, Consuming on Credit also had
than wealth for smartphone usage is further reinforced the highest rate of respondents reporting that they did
by results from IXI Services and GfK MRI regarding our not own a TV as well (see Figure 32), marking them out
segments. As we can see in Figure 31 the number of as an unusual group. This indicates how the behaviors
respondents reporting that they access the internet of a segment can be more complex than those
through smartphones remains fairly consistent in identified by considering of a single data point, like age
younger and middle-aged segments. It falls slightly for or generation.
Secure in Suburbia and Consuming on Credit due to
lower household income, before a more substantial fall When it comes to consumption of television, we see the
for our oldest two segments, down to a low point of pattern exactly reverse. Our two oldest groups consume
42% for Affluent Empty Nests. the most television, followed by Consuming on Credit.
Groups with high online engagement then become
4.1.2 Media consumption more likely to not have or use a TV, nor to trust it. They
In terms of media consumption, the dynamics of are also less likely to be heavy watchers of TV. There
income and age continue to define patterns between is a -0.93 (inverse) correlation between heavy users of
our groups. There is high variation between the television and heavy users of internet services. Similarly,
different groups, meaning that marketing approaches lower internet use matches relatively closely to higher
should be tailored accordingly. use of magazines and newspapers.
As can be expected the highest rates of non-internet This demonstrates the division of leisure times and
users are among Affluent Empty Nests. More than a how people are substituting these traditional media
quarter of this group reported that they do not use the sources directly for internet services. However, this is
internet at all. All other groups report a significantly likely to mean they are using similar services offering
higher rate of usage than this but usage continues to consumable media, either in video or text format, but
be affected by age and income. Golden Globetrotters through digital means rather than using completely
are the next most likely to be non-users of the internet different services. If we then plot non-use of television
followed by Consuming on Credit and Secure in against YouTube we can see that there is a correlation
Suburbia. Despite both of these latter two groups (Figure 34). As more respondents do not use television,
having high overall online engagement in areas like the percentage of the group reporting that they had
shopping and social media, 9.8% and 8.3% report a visited YouTube increases. While this is concerning news
lack of internet access, respectively. We can credit the for television executives, it does mean an expansion of
performance of these latter two groups to their lower digital advertising possibilities for marketers, which can
US Average
0% 10% 20% 30% 40% 50% 60% 70%
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
n Y1: City Slickers n F2: Secure in Suburbia n F1: Flush Families n Y2: Consuming on Credit
n M1: Golden Globetrotters n M2: Affluent Empty Nests n US average
50%
40%
30%
20%
10%
0%
Internet TV
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
n Non-user of TV n YouTube
Y2: Consuming on Credit
US Average
0% 10% 20% 30% 40% 50% 60% 70%
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
Table 18: Popularity of Travel-Related Websites by by respondents to the Doublebase survey as the most
SimilarWeb (US only) popular web domain for vacation research and advice.
Once we consider all of Expedia’s subsidiaries the
1 Tripadvisor.com brand’s strength is reinforced and explains its aggressive
acquisition of competitors, giving it a dominant position
2 within the US market. Travelocity, Orbitz, and Hotels.
Airbnb.com
com are all Expedia properties. Priceline comes out
less well in SimilarWeb’s rankings than Expedia, but it
3 Expedia.com still remains respectably represented with Kayak and
Priceline.com sitting in positions 6 and 9.
4 Southwest.com
What we see is that TripAdvisor has a much lower rating
5 Aa.com than in the SimilarWeb rankings, with approximately
just under half as many respondents reporting that
6 Kayak.com they were advised by TripAdvisor than Expedia across
the groups and the wider US population. However, if
7 Delta.com we dig a little deeper, then the difference between
these two datasets seems easier to understand. Going
8 United.com into SimilarWeb’s data, Expedia has a noticeably
lower estimated bounce rate and time on site when
9 Priceline.com compared to TripAdvisor. Expedia has a bounce rate
of 35% and a time on site of 11 minutes 11 seconds
10 versus 53% and 3 minutes 42 seconds for TripAdvisor
Booking.com
(SimilarWeb, 2016). Therefore, in terms of US consumer
Source: SimilarWeb, 2016 behavior this is likely to mean that users are briefly
checking TripAdvisor to check properties they have
already selected, and they are less likely to use
TripAdvisor as a direct booking route. They are conse-
In our data there was a similar pattern for Online quently less likely to remember it and report it to the
Travel Agencies and metasearch companies but subtle survey as advising their vacation choices.
differences in some other results. As can be seen in
Table 19, the dominance of the Expedia and Priceline There is broadly analogous behavior across the
web domains continues. Expedia was easily identified different sites in terms of the proportion of usage for
F1: Flush F2: Secure in M1: Golden M2: Affluent Y2: Consuming
Y1: City Slickers
Families Suburbia Globetrotters Empty Nests on Credit
Expedia.com 210 147 163 87 185 122
Hotels.com 209 147 147 73 182 136
Hotwire.com 196 133 149 76 190 139
Kayak.com 184 129 200 80 229 129
Orbitz.com 203 132 183 95 177 126
Priceline.com 188 133 141 90 196 133
Travelocity.com 201 124 173 106 154 118
Travelzoo.com: 191 129 169 111 178 100
TripAdvisor.com 232 130 210 85 200 119
Yahoo! Travel 138 117 161 111 128 127
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
each segment. Expedia and its domains have a near specific campaigns, the marketer could even re-group
stranglehold on the US market, so travel brands need the segments to examine international travel and online
to work with it to sell inventory, although Priceline also booking preference, with a greater focus on the latter
remains important. However, there are chances to tailor when crafting new treatment groups. In this regard
inventory and marketing spend to the different web syndicated segmentation, like IXI’s Economic Cohorts,
domains. Using an index scoring system to allocate can provide flexibility.
frequency of behavior it is possible to see where
marketing programs may want to focus (see Table 19). 4.1.3 Advertising Attitudes
For example, the two biggest spending segments (Flush Within the broad groups outlined in this white paper we
Families and Golden Globetrotters) index highly for their can already see some critical fault lines developing. This
use of TripAdvisor, reflecting their interest in booking continues into their attitudes to advertising, in particular
high-quality accommodations. Affluent Empty Nests mobile advertising. While one segment may be very
on the other hand have a unique profile that is much open to being actively reached via mobile advertising,
more likely to use Travelocity, Travelzoo or Yahoo! Travel. others may quickly assume a negative opinion of a
It is therefore worth creating specific marketing plans brand if they are reached in this way, particularly if
and budgets depending on the group or groups. For unsolicited.
Mobile
Mobile Attitudes Mobile Mobile If I Mobile
Disconnected Ad &
Segments App-Happy Must Minimalists
App-Happy
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
Fortunately, there is a clear pattern amongst our groups across a multichannel environment. Lena Bourgeois, IXI
that can be seen in Figures 35 and 36 and used for Services’ vice president, consumer market group, gives
more accurate targeting. The leaders in their preference the example of a travel brand working primarily in hospi-
for mobile advertising are Consuming on Credit and tality: “Traditionally they operated exclusively in direct
Secure in Suburbia segments, with City Slickers not far mail with call centers. The response rates were reason-
behind. Flush Families prefer to undertake independent able but not that great, and they spent a lot of money
research and so rank further down but still above the on direct mail. Then they decided to redo their webpage
two oldest groups, who are the least engaged by so that instead of calling a person could visit to learn
mobile advertising. about the products and then be able to call for more
support or service. Eventually consumers would be able
All four of these groups are relatively open to receiving to buy a vacation package online. Then they decided to
location-based coupons to their mobiles at around 40% proceed in a more multi-channel manner. Consumers
of the population in all. With regard to their interest would be sent a piece in the mail to get their attention.
in less targeted information about deals and new They would then be reminded of the direct mail with
products or services interest is lower across the board an email redirecting them to the website. The response
and more varied. Nearly a quarter of Secure in Suburbia rates went up significantly from pure direct mail to an
consumers are interested in both of these compared to email and direct mail combo. The cost of the email
around 1 in 6 Flush Families. This falls to a low of 1 in 10 campaign was a fraction of the direct mail campaign, so
Golden Globetrotters (Figure 36). the incremental spend to get that significant increase
was small compared to return on investment. Multi-
The pattern is largely the same in Figure 35, although channel programs can be really effective.”
in this case Consuming on Credit moves into the top
spot just ahead of Secure in Suburbia households. In terms of digital marketing, clearly the top performing
Here 28% and 25%, respectively, operate within apps Secure in Suburbia and Consuming on Credit groups
and are happy to be reached by mobile advertising. should be prioritized for mobile advertising. They are the
For both groups, as well as City Slickers, more than most engaged with apps, so in-app push notifications
50% of respondents are classified as being ‘app-happy’. should be employed. These are also likely to perform best
This falls away in the remaining groups to a low of if they are relevant to the user’s location. The messaging
76% of Affluent Empty Nests less interested in mobile however should be altered between the groups. We
interaction. know that Secure in Suburbia consumers are focused
on bargains and deals, so aggressive offers are likely to
Combining this data allows brands to better tailor their perform better as will new product launches, especially
marketing communications to help optimize results if they offer an exclusive discount. Consuming on Credit
n Agree with the statement: “I like to receive coupons on my cell phone that are based on my location”
n Agree with the statement: ”Advertising on mobile phones provides me with useful information about bargains”
n Agree with the statement: “Advertising on mobile phones provides me with useful information about new
products and services”
M2: Affluent Empty Nests
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
on the other hand often makes impulse purchases, with marketing to which they have actively chosen to sign
less planning and books closer to the vacation. An ideal up and it may be better to focus on mobile web efforts
mobile marketing campaign for them would push an rather than apps for these segments. The mature groups
attractively-priced last minute, all-inclusive package to are unlikely to respond to mobile marketing. Here the
the Caribbean, for example. focus for any online marketing should be in desktop
formats as the majority of these households still do use
For other segments, City Slickers and Flush Families, desktops or laptops, even if they are less engaged.
they are less engaged but still interested. As tech-savvy
groups, they are more likely to respond to mobile
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
Social Social
Social
Social Networking: Networking:
Networking:
Networking: Rated receiving Rated showing
Rated finding out
Rated finding exclusive offers, support for my
about products
local information coupons or favorite compa-
and services
important or very other discounts nies or brands
important or very
important important or very important or very
important
important important
Y2: Consuming on
42.6% 28.4% 26.8% 22.9%
Credit
Y1: City Slickers 41.8% 26.7% 25.2% 20.6%
F2: Secure in
41.4% 26.3% 27.2% 20.9%
Suburbia
F1: Flush Families 41.1% 23.3% 23.4% 17.8%
M1: Golden
33.6% 20.8% 17.7% 12.1%
Globetrotters
M2: Affluent Empty
28.9% 17.3% 14.7% 10.6%
Nests
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
Figure 39: US Outbound Segments’ Propensity to Share and Connect with Brands
n Agreed with statement: “I like to connect with brands through social-networking sites”
n Agreed with statement: ”I like to share my opinions about products and services by posting reviews and
ratings online”
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
Figure 40: Agreed with statement: “When I learn about a great vacation, I typically recommend it to people I know”
78%
76%
74%
72%
70%
68%
66%
64%
62%
60%
58%
F1: Flush Y1: City F2: Secure in Y2: Consuming M1: Golden M2: Affluent
Families Slickers Suburbia on Credit Globetrotters Empty Nests
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
Figure 42: Membership of a Hotel Rewards Program Plotted Against Frequency of International Travel
60% l IXI cohort
Percentage of cohort belonging to a
50%
hotel rewards program
40%
30%
20%
10%
0%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Rate of foreign travel in last three years
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
Note: Each bubble represents a segment from the IXI Economic Cohorts database
60%
Percentage of cohort belonging to a
l IXI cohort
50%
frequent flyer programme
40%
30%
20%
10%
0%
0% 10% 20% 30% 40% 50% 60%
Rate of foreign travel in last three years
Source: 2016 IXI Economic Cohorts / GfK MRI (2015 Doublebase Survey of the American Consumer)
Note: Each bubble represents a segment from the IXI Economic Cohorts database
billion (EyeforTravel, 2015). Similarly, Marriott CEO Arne help to engender membership as well as give people
Sorenson, upon tying up a merger between his group the aforementioned nudge towards purchasing their
and Starwood said: “[The cost saving from the merger] product. In summary the loyalty program is not dead.
doesn’t even get to what we can do on the revenue
side with stronger loyalty programs by combining these
with a broader distribution …. I think the most impor- 4.3 Ancillary Revenue Opportunities
tant thing for us to succeed at is the loyalty program
(CNBC, 2016).” And to come full circle, Starwood allows One of the key areas for revenue growth for major travel
members of its loyalty program to earn and spend brands in the next few years will be ancillary revenues.
points at Caesars hotels and casinos. Both airlines and hotels are under intense price
pressure from the symmetry of information provided
If correctly applied and well managed, reward programs by major online booking sources and metasearch sites.
can also work according to their original intention, Consumers can see and compare prices with greater
helping to nudge the customer to choose the brand ease than ever before and as a result downward price
with which they have an account. It is unlikely to be pressure on headline rates has increased.
the only deciding factor but may well help when
consumers are faced with closely matched products. Ancillary sales offer a potential counter to this effect for
travel suppliers. They offer one of the strongest oppor-
In addition, segmentation frameworks like the one tunities to make the most out of growing consumer
used within this white paper can be easily appended travel budgets, while not damaging the relationship
to loyalty program members. They can then enable the with the customer or reducing the probability of
marketer to connect to third party data – like the GfK securing a booking. Alternatively, travel suppliers can
MRI survey used here – to find look-alike segments so throw in ancillaries to win the war to grab the initial
a travel company can increase its reach and marketing booking. By offering add-ons as incentives, they
effectiveness (see Section 4.4). can also keep pricing agreements in place while still
leveraging ancillaries to increase own-brand bookings.
Although there is some general dissatisfaction within
the public regarding reward and loyalty programs, Like booking and travel preferences, segmentation can
travel brands should work hard to make their offerings be used to help maximize this effect and consequently
practical, worthwhile and convenient to counter this revenue. Ancillaries should be built into targeting
and to boost their Return on Investment (ROI). This will opportunities both in the research and booking phases
In 2016, the US traveller appears to be in good health, While it may be too early to call such a trend, there does
with a consistent period of growth now leaving the indeed appear to be evidence of greater allocation of
sluggish post-recession years behind. Outbound spending towards travel and tourism, although any call
journey numbers are up by 25.6% over their 2011 on ‘peak stuff’ is probably premature. FFigure 44 uses
low point (ITA National Travel & Tourism Office, 2016). US government data to plot the percentage changes in
Furthermore, as noted in Chapter 1, there are some very spending of the US consumer with 2011 as a constant
strong signs for 2016. However, are we experiencing a base point. Overall household spending rose by just
broader attitude change to outbound travel? Are we under 6% across the period. As can be seen in the
going to see sustained growth? How will technology graph, spending on international travel outpaced all
and consumer information change the landscape? other major categories, growing by 21.13% in the four
years (although it should be noted other sub-categories
rose by a higher amount). Similarly, spending on
5.1 A Trend for More Travel? recreation categories grew by 16.25%. This is in stark
contrast to spending on clothing, which fell behind
As seen in Chapter 1, Americans are not generally the overall rate of spending growth at 3.8% (US Bureau
known for taking vacation time, nor for travelling abroad of Economic Analysis, 2016a). Overall, the US Tourism
when compared to people in many developed econo- Satellite account also records that spending on tourism
mies. However, there is a growing body of evidence goods and services by US consumers is 15.79% higher
that we are seeing a change in their attitudes about than in 2011 (US Bureau of Economic Analysis, 2016b),
international destinations. As already noted, passport demonstrating strong growth overall, but particularly
numbers have increased dramatically in the last thirty in international travel. This appears to support the
years to include nearly half the population and a record hypothesis that US consumers are moving towards
number of outbound journeys are now being made. allocating more discretionary spending on experiences
Nonetheless, it took until 2014 for international travel and travel in particular.
to recover and exceed pre-recession levels. So, is there
a genuine appetite for travel or are we just seeing a What is also notable is that this rate of growth in
post-recession rebound? In this section we will examine spending on tourism comes during a time of low to
the data behind outbound travel growth and forecast no growth in real incomes over the same period (see
the medium-term outlook for US outbound journeys. Section 1.2.2). This suggests that consumers are willing
to put aside more disposable income on travel spending
5.1.1 Consumer Attitudes as a proportion of their overall income – pointing to a
Much has been written about the movement towards greater interest and engagement with travel.
greater ‘experiential’ spending and the possibility of
developed economies reaching ‘peak stuff’ (where Furthermore, as can be seen by our key travel groups,
consumers reduce spending on physical goods). Travel younger people have a high presence despite their
would be one of, if not the core, beneficiary of such a household wealth being lower than other age groups.
change in spending patterns. However, is there any data This suggests that as these segments move towards
to corroborate these claims? their peak earning potential, they will travel more, and
further afield, than their parents and grandparents. In
25%
20%
15%
10%
5%
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Percentage change
2011 2012 2013 2014
2011-2014
Household consumption expenditures 9987.9 10119.3 10291 10570.3 5.83%
Foreign travel by U.S. residents 102.7 111.8 115.3 124.4 21.13%
Recreation 964.9 1022 1069.2 1121.7 16.25%
Furnishings, household equipment, and 451.4 467.9 489.7 516.1 14.33%
routine household maintenance
Communication 257.9 269.4 276.1 293.6 13.84%
Transportation 880.5 905.1 933.3 967.8 9.91%
Food services and accommodations 625.3 641.5 651.5 671.1 7.32%
Health 2078.5 2120.7 2155.4 2229.2 7.25%
Other goods and services 694.2 702.6 708.4 721.1 3.87%
Clothing, footwear, and related services 350.2 353.6 358.1 363.5 3.80%
Housing, utilities, and fuels 1946.5 1944.6 1955.5 1978.6 1.65%
Food and beverages purchased for 795.1 795.7 803.4 807.5 1.56%
off-premises consumption
Financial services and insurance 747.2 706.4 713.9 722.9 -3.25%
Education 233.7 228.9 225.7 225.1 -3.68%
United States Census Bureau, 2016b; United States Bureau of Economic Analysis, 2016; Federal Reserve Bank of St Louis, 2016
Note: All Figures are constant in 2009 chained dollars and percentage increases use 2011 as a constant
Conclusion
US consumers may not be known for international Empty Nests and Golden Globetrotters – share many
travel but its sheer size leaves it as the second largest similarities on the surface. They are both wealthy and
outbound tourism market in the world, after China. In in or nearing retirement. However, considering them
2016, it looks like this position will be strengthened. as a whole would be a mistake as their journey to a
Despite stagnating median incomes, which is of course booking and their vacation preferences are distinct.
a concern, Americans are travelling more and spending Golden Globetrotters are much more likely to research
more while doing so. Indeed, if patterns illustrated in and book online. They want culturally enriching
this paper continue and the US is able to avoid reces- vacations spent in well-appointed accommodation.
sion, then travel spending should continue to grow Affluent Empty Nests are more comfortable being
substantially above other types of consumer spending reached through analog means. They have relatively
over the next few years. low faith in the internet and like low-activity vacations,
often travelling in tour groups, and staying in cheaper
While this spending power as yet remains concentrated hotels. Using these nuances, they can be reached far
in the hands of older generations, as Millennials and more effectively with advertising in the right place
younger generations progress to more comfortable that displays the right product at the best point in the
career positions and incomes, it is likely they will travel purchase cycle. “Ideally you want to be reaching the
more and further afield than preceding age cohorts. consumer group with the same message, the same
offer, the same attributes across multiple channels,”
A key question will be whether the US, alongside emphasizes IXI’s Mancini, “so that they see it in the
other developed economies, can work to solve the newspaper, they see it on the billboards, they see it on
productivity and median income crisis that is holding TV channels and digital channels.” Failing to recognize
back further growth in the consumer profile and their the importance of segmentation would mean misspent
spending capacity. However, for the coming year wage advertising budgets and sales lost, not to mention
growth appears solid, as does job creation, which will miscommunication of messages.
help bolster confidence and the expansion of travel and
leisure spending. Although we have looked at broad patterns of behavior
that cannot account for everyone, better under-
In terms of reaching this strong and thriving market, standing consumer behavior dramatically increases
there is an over-abundance of data to help travel brands the probability of securing a booking and continuing
reach consumers and ride this wave. What we have that relationship into further ancillary revenue, good
presented here is merely the broad picture of the US feedback or return bookings. What EyeforTravel and our
outbound consumer. Each of the consumer groups partner on this paper, IXI Services, have presented is just
presented in this white paper consists of up to eight one potential data layer using aggregated consumer
further segments, all of which can be re-configured economics and credit insights. In total, there are a host
based on market need, brand and campaign. Just how of possible data streams, including:
detailed a travel brand wants to be is limited only by
1. Proprietary customer data
their data horizons and creativity.
2. Loyalty program data
This detail is critical to effective operations for a travel
3. Sales funnel and consumer browser data
brand. For example, our two oldest groups – Affluent
IXI Services, a division of Equifax, offers marketing EyeforTravel has worked with IXI Services to analyze this
solutions modelled from multiple sources, including a data. This was done by taking the data at an aggregated
proprietary database of over $14 trillion in anonymous, level across the 71 Economic Cohorts segments and
direct-measured™ consumer investable assets provided also by creating groups consisting of multiple cohorts.
from a network of leading banks, credit unions, The cohorts in each grouping were put together due
securities, and insurance firms. to similarities in their economic, demographic, and
location data. The six core groupings analyzed in this
IXI Services combines this foundation of measured report consisted of the following Economic Cohorts
wealth, comprising over 45% of all U.S. invested segments:
assets, with additional proprietary financial measures
of estimated income, spending, aggregated credit, IXI Services appends Economic Cohorts segments to
demographics and more to give a more comprehensive the Gfk MRI 2015 Doublebase Survey of the American
picture of the household wallet. Consumer to develop profiles for thousands of
consumer behaviors. The fielded surveys for these
These insights are applied in scoring and segmentation profile data was collected across four waves of the GfK
tools, digital measurement and targeting options, MRI survey fielding covering time periods from March
and real-time online analysis. IXI Services marketing 2013 through May 2015.
solutions can be used for marketing purposes only and
not for a firm offer of credit (non-FCRA applications).
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