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HMC2 – Case Studies

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Veronica Williams, hmc²
Jim Fong, Diagnostics Plus

Study Background:

hmc², in conjunction with Diagnostics Plus, has undertaken a market research effort in order to become the definitive resource for information on Gen Y’s opinions about—and, in keeping, influence on—travel and tourism decision making. The goal of this proprietary study is to create a knowledge base beyond the recognized industry metrics—a deep dive into the additional influences driving family vacation choices. Additionally, this study looked to review technology’s role in adding dimension to the decision-making process.

Of Note:
The term “Generation Y” first appeared in an August 1993 Ad Age editorial to describe those children born between 1981–1995. It has since morphed into a slightly broader age definition, with Gen Y used to denote children of the Baby Boomers. A hallmark of Gen Y is a standard of communicating more through technology than in person.

Abstract:
Historically, the hospitality industry has predominantly catered to the primary decision maker of the household. For families, this means the parent. Some research has shown that the female head-of-household is the most influential party in the vacation-planning process—but what about the influence of children and young adults in the process? While vacation destinations and businesses dependent on travel and tourism have strategically developed niche or specialty programs to address the needs of young people, marketing has not kept pace.

hmc² and Diagnostics Plus have partnered to better understand the influence of young people in the vacation-planning process, as well as to gain key insights into their communication and technology habits, all of which are critical to informing strategy for travel and tourism marketers.
This research is considered groundbreaking as there is little published on the subject, specifically as it pertains to gender differences among young people regarding communication, technology, and vacation planning.

Objective:
Young people are proving intrinsic to the vacation-planning process as:

• current vacation influencers
• potential vacation decision makers
• future vacation decision makers

Accordingly, this study will strive to understand the opinions of young people and their influence
across the vacation-planning process.

Methodology:
hmc² and Diagnostics Plus sponsored a study, interviewing 1,822 individuals in the age range of 14 to 27 (as of Oct. 2007), and who are online and regularly participating in social networking sites such as Facebook, MySpace, Bebo and others. The study took place during October 2007, using a service that aggregated over two-dozen social networking sites. Among this age population, hmc² and Diagnostics Plus strove to ferret out sub age differences, and gender differences, impact on influence, as well as how each segment relies on technology and tools of communication. Participation in the study was incentivized via virtual or electronic premiums, such as ring tones, music downloads, or other gifts.

Overall, those who participated in the study considered themselves more cutting edge and are technology adopters; online activities and social networks are considered a regular and consistent activity for them.

For this research, three major segments within Generation Y were defined:

• High school age (HS), 14 to 17 years of age.
• College age (CA), 18 to 22 years of age.
• Young adult (YA), 23 to 27 years of age.

KEY FINDINGS: Do They Influence Travel?
Many young people surveyed travel with their parents. About one in four young adults still travels with their parents.

Young people play a major role in vacation-planning choices. Figure 3 shows that, of those who still travel with their parents, many still influence or make the destination decision. While influence remains high for the 18-to-22 and 23-to-27 age ranges, the percentage of these segments that still travel with their parents is less, 72% and 20% respectively overall.

Friends are the most influential source of information. Figure 4 demonstrates how essential it is to create high levels of customer satisfaction, so that positive word-of-mouth can occur. The hotel or resort’s Web site, as well as honest reviews, are also critical. While brochures remain important, traditional media, such as magazines, television, and radio, are less influential but have slightly more influence with males.

Resort activities’ sway varies based on both age and gender. Research conducted inquired about the importance of 19 different vacation/resort activities. Figure 5 shows the top-line results: Across all age categories, having a pool/hot tub is consistent, while amusement parks lose their luster as young people move through Generation Y.

Additionally, a more marked difference between the genders appears as age increases.

As females become older, interest in sightseeing and museums increases, but interest in active sports decreases, such as outdoor, snow, and water sports, as well as service activities and even spa treatments.

Veronica Williams is the president of hmc², located in Stowe, Vermont. With deep experience on both the client and agency side, Veronica now leads the marketing firm of hmc² in its focus on helping clients improve the way they position and market their companies. She began her career in the marketing group of the American Skiing Company, moving quickly through ASC’s ranks to the advanced position of marketing director at Sugarbush Resort. While there, her integral involvement in team building, sales, promotions, and public relations helped crystallize the resort as a preeminent Vermont destination. More importantly, Veronica honed her talent for maximizing return on investment (ROI) that she now brings to all hmc² clients. In addition to steering hmc² key accounts, she provides ongoing strategic insight and direction for diverse agency projects and also manages its business affairs.

Veronica can be reached at 802-253-7141, ext 227 or veronica@hmcstowe.com.

Jim Fong is the president of Diagnostics Plus, a research firm located in State College, Pennsylvania. Prior to becoming president of the company, he served as vice president of sales and marketing for the firm and, prior to that, was director of marketing research and planning at Penn State University. He teaches graduate and undergraduate courses at Penn State University and Duquesne University. He has also held market research positions at a number of research and advertising companies. He holds an MBA, MS and a BS from the University of Vermont.

Jim can be reached at 814-234-2344 ext225 or jfong@diagnosticsplus.com.

Copyright hmc² and Diagnostics Plus, November 2007. All rights reserved.
No part of this document should be reproduced without permission from the authors.