Published on Wednesday, July 16, 2008

Will High Cost of Fuel Deter Group Travel? Quite the Opposite

There’s been a lot of concern about how fuel prices are affecting consumer travel patterns. Summer vacations have been shortened in distance and length of stay, and fuel surcharges, baggage surcharges and overcrowded planes exacerbate the distaste for air travel (U.S. travelers took 41 million FEWER air trips last year). Many marketers are concerned about the impact of high fuel prices on the group travel market. Here’s our take:

Fuel is but one component of a vacation and it affects each sector quite differently. With mom, dad and 2.4 kids, filling up the SUV is an $85 expenditure. Filling up once a day equates to a large chunk of the road-trip vacation budget. Consider this though. While the cost of diesel fuel has skyrocketed in the last year (even more than unleaded), the cost of fuel is amortized over a greater number of passengers. For example, on a 4-day trip, it can now cost an additional $250 to fuel a motorcoach. Divide that by an average of 40 passengers on that trip, and the increase comes to just $6 per person - certainly palatable by today’s standards.

Another factor to consider: Many leisure groups were priced out of big cities as hotel occupancy surged and opportunistic hoteliers kept increasing rates. With big cities soft and rate incentives available, any additional fuel charges can be offset by lower hotel rates negotiated by group organizers.

Finally, in times like this it’s important to let history be our guide. In 2002 and 2003, when many sectors of the market (meetings, conventions, family travel, international inbound) stayed home, leisure groups continued on the road. This sector of the population is less affected by economic issues than others, making it a safe haven for troubled economic times.

An effective group marketing strategy is a critical component to a well-balanced marketing plan in good times and bad. We can help.

Courtesy of grouptravelblog.com

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