Gas Prices Fuel Action from Destination Marketers

Head of Research and Insights
Published 4/26/12
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As a warm winter transitioned to a warm spring, gas prices in the U.S. topped the $4.00 mark in many locations, with predictions it would reach $5.00 a gallon this summer. Motorists certainly noticed. With prices stabilizing, and even dropping in some areas, now is a good time for destination marketers to ensure their marketing plans are ready for the next time there is a spike.

The latest State of the American Traveler research, a major bi-annual study conducted by Destination Analysts and sponsored by Miles for six years now, looks at the reasons why travelers choose to travel, and just as important, why they choose not to.

In the January 2012 study, 46% indicated they would reduce their future travel due to high gas prices. Future increases at the pump, will likely drive this number past the 50% threshold we saw in 2008–2009, and for a brief period last summer. A small percentage of travel will be deferred or even cancelled, but many more travelers will simply look to change their travel plans. This was evident in the summer of 2008, when gas hit similar price levels. 

Speed and flexibility is increasingly critical in successful tourism marketing, and the impact of gas prices will test the ability of destinations to respond. Marketing plans, which in the age of digital marketing should always be a “living document,” need to be reviewed and updated.

During these challenges, marketing opportunities destinations should consider include:

  1. Focus on Closer Drive Markets: Shifting some marketing resources to closer drive markets is an obvious first step. Though moving traditional media spend can be difficult, one advantage of digital channels is the ability to quickly update and recalibrate your marketing. Make sure you review your marketing message, creative, including web landing pages, content and calls to action to ensure it will resonate with new target markets. 
  2. Reinforce Local Visitor Business: Locals are often overlooked but are always an important part of your visitor industry. More than 40% of all destination selections by American travelers are based in part on “Friends and Family." They can influence out-of-town visitors to still visit, and initiatives such as “Staycation” promotions or “Locals Deals” can fill gaps left by any decline in longer haul travelers. Social media, an increasingly critical part of marketing, is of even greater importance in reaching and influencing locals. 
  3. Build High-End Travel: Not surprisingly, more affluent travelers are less impacted by cost factors such as the price of gas. They also indicate that distance is no barrier in their decision on where to travel. They are motivated primarily by factors such as uniqueness, arts and cultural experiences, and climate. Brush off your marketing plans into segments such as luxury/spa, golf and arts/cultural events. 
  4. Boost Efforts on International Travel: Visitor numbers and spending both show a strong growth in many international markets. International visitors typically are impacted less by movement in gas prices. Visitors planning their “dream” US vacation are less likely to change or defer plans based on relatively small changes to what can be expensive overall trips. Review your international marketing plans and consider direct-to-consumer online marketing to complement your trade activities. 

Finally, it is not inconceivable that gas prices may spike more dramatically on news from the Middle East or some other interruption of supply. For this more drastic situation, have a backup plan to “double down” on the areas outlined above.