The economic good news is hard to miss lately—the stock market records, rising housing valuations, full employment, crypto-currency going mainstream (maybe not that one), easy credit and continued low inflation. These items are having real financial and psychological effects on U.S. consumers' spending habits and one specific category stands to benefit right away from it.
The spending impacts of a time like this are displayed in the results of a study released by Moody's Analytics, Visa and Equifax titled "Weighing the Wealth Effect." The wealth effect is a term used to describe the increase in spending due to a perceived increase in one's financial security. This report shows that for every dollar increase in wealth, consumer spending is boosted by three cents.
The good news for any brand tied to the destination, travel and tourism category is according to a breakdown of this study done by USA Today on February 16, this increase affects larger discretionary purchases, such as airlines and hotels, the most for consumers followed by building and hardware, furniture and appliances and general merchandise.
As home values rise, investment and retirement funds increase (even with recent market turbulence). This means consumers see their entire nest egg increase, and their propensity to enjoy it more follows.
This is great news for those working for organizations that manage destination brands, as the research shows they are the brands that reap the most gains from this economic expansion. This includes the previously mentioned airlines and hotels, but we would also include CVBs and DMOs, excursion companies, museums, amusement parks, events, zoos, casinos and other leisure-related activities.
In order to take advantage of this effect, here's what we are recommending to our clients in the destination and tourism category:
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This is the time to dig deep into your CRM to reactivate lapsed customers and find new customers likely to put you into a consideration set of ways to enjoy their increased financial freedom.
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If you understand the geographic weights to your audience, this is the time to market to adjacent geographies that can leverage your core market awareness.
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Use social media and other targeted digital advertising to find "look alike" audiences that you may not be reaching yet but share similar traits with your core customers.
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Now is a great time to evolve traditional tactics, such as media relations, to expand into influencer marketing and other strategies that are more effective for the increasingly digitally proficient traveler.
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Explore tactics you may have been putting off testing and learn from their results.
It has been an exciting time over the past several years to be in the destination and tourism marketing category, as this entire sector has gone through a transformation largely fueled by digital tools and changing consumer behaviors. We have been proud to work with many destination brands—including our newest client, The Pro Football Hall of Fame—and now with the economic expansion, more opportunities exist for brands willing to take advantage during these exciting times.