1. The New Normal in Tourism Understanding the Post Recession Customer Diane Wieland, Director Cape May County Department of Tourism dwieland@co.cape-may.nj.us Cape May County Tourism Conference May 4, 2011

2. There is little hope the pre-recession spending habits will return any time soon.  Travel consumers’ habits are shifting by the hour. Travel planners are looking to minimize risk; if they are not confident you can produce what they want, they’ll find another business that can. There are no “do-overs” in vacation.  Post-recession vacationers are looking to save money out of necessity—not desire.  At the top of the vacation “deal maker” list, in line with cost and value, is the vacation “experience.”  In today’s high stress, two-income, over scheduled families, vacations are still looked upon as a right rather than a luxury.

3.  Cost, value and “experience” top the vacation list of wants.  What was considered a great deal pre-recession could be totally off the table today.  Many are rethinking their definition of product value, taking into consideration the cross between price and luxury.  Bargain shopping has become sport among consumers and when it comes to vacation planning, its “open season”. This is a trend not a fad.  Just because they always came does not mean they will continue, especially if they can get the same experience elsewhere. It’s a jungle out there!!!

4.  Value is King. Pricing, Convenience & Vacation Experiences reign supreme.  There is a breaking point for each consumer; higher rates are not the answer to increased profits.  Buying decisions will be measured to determine the difference between what they want, what they need and what they can afford.  More than 90% of today’s vacation planners are using the Internet to get information. Are you driving your customers to your website? Is your website updated? Can reservations be booked?  Shopping in general is less impulsive and more disciplined. Debit vs. Credit  Expect that your customer is working with a smaller budget and looking for larger than life vacation experiences.  The top three concerns heard by travel show employees in 2011 include, pricing, parking and minimum night stays.

5. It’s not all bad news.  Tourism in Cape May County was up 5.4% in 2010. Indicators point to 2011 showing more growth.  73% of 2010 visitors said their vacation plans to Cape May County have not changed for 2011.  78% of our customers return each year.  For visitors and Second Homeowners, it is the quality of life in Cape May County that brings them back year after year.  Visitors to Cape May County rank their vacation experience as ‘above average’  98% feel safe while on vacation in Cape May County.  99% would recommend a Jersey Cape vacation to family and friends.

6. The French Connection Cape May County Department of Tourism made a concerted effort in 1968 to market in Canada. That investment continues to pay off today as Canadian travelers have grown to become our fourth largest visitor market.  Nearly one half million Canadians came to NJ in 2010. An estimated 70% of them come to Cape May County.  The Canadian dollar is trading at $1.05, the best rate in 40 years, making a vacation to the Jersey Cape a huge value.  The average stay for Canadians is 10 days.  The per person expenditures for Canadians is higher than US visitors due to extended stay.  Canadians come for the beach and outdoor activities, but love to shop.

7. In 2010 Cape May County generated $5.27 Billion Second in the State after Atlantic County Accommodations$2.867 Billion Food$1.066 Billion Entertainment$454 Million Retail$841 Million Transportation$42 Million Cape May County reached new heights statewide, rental income was up, generating a record $1.07 billion in 2010. Spending in NJ was flat in 2010 and visitation was up, Cape May County bucked that trend in 2010. Data provided by Vantage Strategy for Department of State, Division of Travel and Tourism

8. Cape May County performed quite well during the recession and helped offset the loses in other areas. Cape May County’s rental property utilization in 2010 increased rental income by $100 million to a record $1.07 billion. Leisure trips to New Jersey were up 7.3%, business travel decreased by 9.1%, group meetings were also weak. Ken McGill, EVP Vantage Strategy, Inc. $2.877 Billion $841 million $1.066 Billion $454 million $42 million Vantage Strategy, Inc.

9.  ranked second in the state in generating tourism expenditures  generated 15% of total state tourism spending  generated 24% of all statewide accommodation expenditures  generated 14% of all statewide food/restaurant expenditures  Entertainment expenditures generated in Cape May County are the highest in the State @$454 million, representing 11.5% of the total.  $70.2 million was generated in Occupancy Taxes in 2010; Cape May County generated 24% or $16.85 million.  If tourism didn’t exist, each NJ household would pay $1,367 more in taxes to maintain current tax receipts.  30 million people live within a tank of gas away.

10.  74% of survey respondents said their vacation plans to the Jersey Cape had not changed.  1 in 5 (21%) visitors to Cape May County indicated they will spend less on vacation in 2011.  When asked if the recession had impacted their vacation plans, 55% said NO; 45% said YES.  4 in 10 (39%) of the 45% that indicated the recession would impact their vacation didn’t know exactly how. Wild Card scenario.  20% will vacation closer to home.  14% will look for coupons or other cost savers.  6% will eat fewer meals out.  5% will take more day trips.

11. 72% of visitors to Cape May County come from outside of New Jersey  New Jersey28%  Pennsylvania21%  New York13%  Canada (PQ)11%  Maryland/DC/VA9%  All Other US States18%

12.  78% are return visitors (1 in 5 are new to the county)  39% or 4 in 10 stay 7 days or longer.  60% of the vacation decision makers are women.  63% travel with traditional family (spouse and children).  50% take 2 vacations annually.  86% went to the beach.  78% went to the boardwalk.  75% went shopping.  85% participated in activities outside of the resort they were staying.  53% are between the ages of 35 – 55.  50% have an annual hhi between $75k - $150k.  37% have been coming for 20+ years; 32% for 1-5 years.

13.  47% or $1.07 Billion of statewide of rental income is generated in Cape May County.  There are 48,335 seasonal homes in Cape May County.  The second homeowner spends on average $250 more per visit than the visitor.  56% of all second homeowners are from Pennsylvania.  54% of second homeowners use their property for a vacation home only.  41% use their second home for vacation and rental purposes.  1 in 4 travel with grandchildren.  76% are age 55+  46% have annual hhi between $75k - $150k.