How to entice back US tourists

With 4.5 million visitors a year worth £4.2 billion, the UK tourism industry is missing America, but when can we expect them to return, and how will we entice them back? International market expert, Simon O’Flynn, argues that we should forget America as a whole, believing it’s the individual states that hold the answers for the UK inbound industry.

It may surprise, but online search demand for US domestic vacations was higher at the end of May than during the peak trading period, pre-coronavirus. Try dropping ‘Florida Vacation’ into Google Trends and you’ll see a rapid spike following the trough in April and early May. Two aspects stood out for me, the first being an illustration on how rapidly US consumer behaviours can turn positive. Second, and of more importance, by using the data to dig a little deeper to understand the context you’ll see quite marked regional variations by individual state and how this will likely influence travel’s return. For me, getting clarity on your customers by trading at a local and more personal level is how to make a difference as travel restarts.

What we don’t have as yet is the clear, unambiguous ‘open’ sign for our UK sector. It’s not just the 14-day UK quarantine on a market that averages 6 nights here, there’s still an advisory notice against all nonessential international travel for US residents. However, transatlantic air routes are returning, and of equal importance, domestic air routes into those transatlantic hubs are rebuilding. Some of the key supply side blockages are improving. But what about the actual customers from the UK’s largest volume and revenue earning source market?

Just being open again doesn’t mean that consumer behaviour is sure to follow, as this is also driven by rebuilding our relevance, clearly understanding who is the new customer, timing, and building these into a new trading model. If you’ve taken a generic approach before, I don’t think you’ll capitalise at the restart. To me, thinking more local in the US is the way forward.

More now than ever before, we have to make the UK more relevant and visible. Competition for travel dollars is as much against restarting US domestic and short haul markets as it is against other European destinations. 2020 is a key US election year with the President, every seat in Congress, 35 of 100 in the Senate plus numerous State and local seats up for re-election. The pressure is there to restart local tourism economies and employment first. With US media news this week starting to point to localised re-increases in covid rates in certain US states, I can see this becoming more pronounced. If it’s not in their own interests, I can’t see the commercial world fully stepping in here to promote the UK as a destination and so the responsibility will fall back on national and local tourism bodies. But these bodies have dozens of source markets to consider. I hope they support the one that offers nearly £1,000 per head average spend.

I’ve specialised in the international market for 10 years and I’ve often heard industry describe the US market as vast and valuable, where even a small market share would be enormous. With a population five times that of the UK and higher in destination spending power, this might be mathematically correct, yet it assumes that demand and consumer preferences are the same across the US. They are not. There are marked differences across the 50 states, not least in culture, beliefs, holidays, affluence, time zones or influencing media channels. Failing to be crystal clear on acquisition economics, proposition, audience or relying on the same nationwide marketing toolsets that work in the UK can see you burn through budgets quickly for little return. With five times the population this bit can happen to you five times faster. The power is in thinking more locally, building robust audience groupings and nimbly adapting to results. This can be done using homogenous state groupings and trading each with a relentless focus on hard data against their own mini P&Ls. Whilst more complex, it can lower investment risk and costs and gives an ability to benchmark and move rapidly against events. This approach puts you more in control of understanding what works and who your new customers are.

This is not to ignore a multichannel distribution plan, or that you can control your own higher funnel intention building and leave the transaction to others. OTAs or wholesalers can give broad reach with any risk limited to the supply they’re given. It’s similar too with traditional tour operators or retailers, and many may have passed through their demand curves for this year or are not quick to setup a new supply partnership. Yet, what they won’t all give is early insight and data on your customers, nor are they all universally great at cross selling attractions and sightseeing well before travel. Indeed, many are content with just the flight and hotel. To me that’s a missed opportunity, as US travellers are more adept in seeking to fully experience their destination.

So when is the right time to start focusing on the US?

We’re already well into the typically late stages of the US to UK demand curve but allowing for a two-month lead time from consideration and booking stages to travel, a late summer season is very ambitious but still feasible. In normal times, I’ve seen September into October often eclipsing volumes in July and August through offering a better value-for-money option, as hotel and air prices decrease and peak crowds thin out. Yet for this to happen we need to be planning and prepping now.

However, this will bring a distinct customer type, few families or larger groups, maybe more VFR, and I’d argue more single centre than multi-centre travel beyond the UK if there isn’t clarity in customers’ minds about cross border travel amongst other European countries. Perhaps now this is an opportunity to keep more onward travel within the UK?