As 2001 drew to a close, travel catalogers were suffering the double whammy of a lackluster economy and the post-Sept. 11 fear of flying, not to mention the conflict in the Middle East. These events sent the $584 billion travel industry reeling and prompted travel mailers to scale back their expectations and revise their marketing strategies.
Berkeley, CA-based Backroads, for instance, postponed a walking trips catalog that had been slated for November, says vice president of marketing Massimo Prioreschi. El Cerrito, CA-based Mountain Travel Sobek mailed fewer catalogs to prospects and is using a smaller catalog format, says marketing manager Robyn Gorman. And Waterbury, VT-based Country Walkers began using e-mail promotions in October to drum up last-minute business, says president Bob Ellsasser.
While business picked up for many travel catalogers during the first quarter of 2002, it’s not likely to make up for the sales shortfall during the fourth quarter of 2001. But the consensus among marketers contacted is that they’re weathering a bad situation that could have been much worse.
Strong bookings before September
Prior to September, a number of travel marketers were reporting strong bookings, notes Lee Witcher, vice president of Database Marketing Concepts, a Boston-based consultancy with several travel catalog clients. The key travel audience is affluent consumers ages 50-plus, “people who are a little more resistant to economic fluctuations,” he says.
Sales were right on plan for Country Walkers and up 6% for Backroads until Sept. 11. Toronto-based Butterfield & Robinson was “headed toward another record year,” says public relations director Cari Gray. Media, PA-based Idyll Ltd. had been ahead of plan prior to Sept. 11, says president Hal Taussig — but like so many other marketers, it saw a sharp decline after. Two months after the tragedy, Taussig says, “compared with last year’s bookings, we were down 33%.”
Indeed, after the terrorist attacks, “there isn’t anyone in the travel business who didn’t suffer,” says Country Walkers’ Ellsasser. It wasn’t just that consumers stopped planning trips — they canceled vacations they had already booked. “We extended credits and refunds to hundreds of people,” Ellsasser says. “We were fortunate that we were financially sound and able to do that.”
After the September tragedy, Backroads temporarily abandoned its regular cancellation policy (a sliding cancellation fee based on how far ahead the trip is canceled, with no refund if a trip is canceled 14 or fewer days prior to the departure date). It also gave customers the option of postponing fall travel until 2002. “Many took us up on this offer, which affected our sales, as did travelers’ reluctance to book,” Prioreschi says.
Money ‘down the drain’
To make matters worse, travel marketers usually mail their annual master catalogs in September, consultant Witcher says: “Most mailers had dropped within two weeks of Sept. 11, and that caused a real hardship.”
Backroads got lucky. “Our main 2002 catalog was scheduled to drop on Sept. 15,” Prioreschi says. “We postponed the drop date until mid-October.” The company reduced the quantity of the 60,000-piece mailing by 40%, targeting only its “most promising” past guests; the balance of the copies mailed in February to customers and prospects.
Washington-based Smithsonian Study Tours was about to mail 80,000 copies of its International Tours title within days of Sept. 11, says the catalog’s program manager, Amy Kotkin. Like Backroads, it was able to hold off on the mailing, dropping 40,000 copies to its best customers in October and the remaining 40,000 in January.
Country Walkers dropped 130,000 catalogs to its house file in mid-September as planned, Ellsasser says. But the cataloger’s main problem was two inserts in the October issues of Gourmet and Condé Nast Traveler magazines that, understandably, did not pull well. “We might as well have flushed $100,000 down the drain,” Ellsasser says. The cataloger was able to pull an October insert in The New Yorker, running it this past February instead.
Taking new tacks
Although many mailers reduced circulation of their annual full-line books once they realized that the catalogs would not perform to expectations,“we did not listen to pundits who said to stop mailing or marketing,” Ellsasser says.
Country Walkers started its seven-month mailing program on schedule in November. Over the course of the program, the cataloger typically prospects to about 1 million consumers by sending postcards to qualify or, in some cases, requalify people interested in receiving the catalog. “The only thing we backed down on was one mailing we usually do between Christmas and New Year’s,” Ellsasser says. “We held that until early January.”
Backroads took several new measures to stimulate sales this year, including cross-promotions with travel partners, Prioreschi says. For instance, the company produced a cobranded catalog for its North American trips with Tre Laghe, an Italian company that specializes in hiking trips. The catalog, which displayed both companies’ logos on the cover, mailed in March only to Tre Laghe customers.
Backroads also created a six-panel poster mailing promoting its European “triple crown” destinations (Provence, the Loire Valley, and Tuscany) rather than its full line of European destinations. The cataloger was scheduled to drop 50,000 copies of the cobranded piece in March.
Butterfield & Robinson turned to e-mail marketing, Gray says: “We’ve increased the quality and the quantity of our e-mail pitches.” Indeed, inexpensive mechanisms, such as e-mails and postcards offering discounts, were “the promotions of choice” late last fall, says Witcher. “Most had booking deadlines associated with the promotions, and some saw a spike in bookings in December.” Both Backroads and Idyll reported that December business was up over the previous year.
Country Walkers tried e-mail marketing to promote one of its new destinations: Bhutan (a small country southwest of Nepal bordered by China and India). “We did an e-mail promotion for the trip in November; we sold out within two weeks for trips in March and April,” Ellsasser says.
The road ahead
Since consumers typically book trips six months in advance of departure, January is a key time of year for travel catalogers. This year, “travel mailers saw a pretty good January and February — about on par with 2001 levels,” says Witcher.
Smithsonian Study Tours reports that sales this past January and February exceeded those for the first two months of 2001. But that’s likely because it delayed fall mailings and because customers had been holding back on booking throughout the fall, Kotkin says. Besides, she adds, “there’s no way to make up for having your entire fall mailing season knocked out.”
As of early March, Idyll’s prebookings were down 22% from those for the same period of 2001, and Taussig doesn’t expect sales to catch up later this year. The company, which specializes in renting vacation apartments in Western Europe rather than offering group tours, is counting on pent-up demand to make 2003 a banner year. In the company’s 27 years of business, “2003 could be our biggest year, because nobody went on trips in 2002,” Taussig says.
At press time Backroads was well ahead of its post-Sept. 11 reforecast, Prioreschi says, with North American trips up and overseas travel down. At this point, he notes, “I’m hoping for 2002 to be only in the single digits below last year — that would make me happy.”
For Country Walkers, the overall lackluster travel market has actually created opportunities in the form of low airfares. The cataloger, which offers overseas hiking trips, does not include airfare in its tours. “So all it takes is a good air deal [to entice customers], and the airlines are doing a great job of that now,” Ellsasser says.
Not that he expects the company to do gangbusters in 2002. “Overall we’ll probably have more guests this year than last year,” Ellsasser predicts, “but won’t see the kind of 20%-plus growth we normally do year over year.” This year Country Walkers is probably looking at marginal growth — less than 10%. “But we’re still having a good year,” he adds. “We’re very lucky.”
What Would Motivate Concerned Consumers to Travel?
Among consumers surveyed who were not planning leisure trips within the next six months
| Better economic conditions | 30% |
| Hotel discounts and offers | 25% |
| Airline discounts | 22% |
| Discounts to travel in home state | 21% |
| Tax credits or deductions for personal travel | 19% |
| Improved airline/airport security | 15% |
| Source: Travel Industry Association of America Travel Confidence Survey, February 2002 | |
Whither Traveling Consumers?
In the wake of the Sept. 11 terrorist attacks and the subsequent war on terrorism, it’s no surprise that many consumers reconsidered taking overseas vacations.
Waterbury, VT-based marketer Country Walkers saw a 10% drop in its Europe/Asia/Africa business following Sept. 11. According to president Bob Ellsasser, “That business has shifted to the Americas [Canada and South America] but not to the U.S.”
Berkeley, CA-based Backroads initially saw a surge in North American bookings, “as travelers seemed more comfortable vacationing closer to home,” says vice president of marketing Massimo Prioreschi. In response, Backroads delayed the launch of some new trips in sensitive regions such as Nepal and India, and canceled some fall departures to Bali and Turkey.
By year’s end, Prioreschi says, European sales had rebounded somewhat and continued on par with bookings to North American destinations. The bad news: “European sales normally outpace North America by about two to one at this time of year,” he says.
Database Marketing Concepts, a Boston-based catalog consultancy, surveyed its travel catalog clients shortly after Sept. 11 and found that North American destinations had picked up over the previous year, while European business was down, says vice president Lee Witcher. Europe has picked up in the first quarter of 2002, however. And of course, “Middle Eastern destinations have dropped off dramatically.”
Then again, some travel catalogers aren’t seeing a shift in destination preferences based on safety. At Media, PA-based Idyll Ltd., for instance, “Switzerland is usually one of our biggest programs — and it’s often thought of as a safe haven,” notes catalog president Hal Taussig. “But that business is a little slow right now.”
Cari Gray, public relations director for Toronto-based Butterfield & Robinson, says that while customers are shying away from Muslim countries such as Egypt and Turkey, “they are comfortable with Europe, Vietnam, and South America.”
Nor are Butterfield customers pinching pennies by taking shorter or less expensive trips. “Those who are traveling are going for it,” Gray says. “Our Amalfi walking trip, among our most expensive, is sold out.”
— MD