Record Summer Travel Predicted, Agents Beat Back Tax Challenge

Record Summer Travel Forecast
U.S. travelers plan to hit the road in record numbers this summer despite lingering concerns about the cost, safety and satisfaction of travel experiences, according to the latest travelhorizons survey. Conducted by MMGY Global, the survey polled 2,300 U.S. adults. It found that 70% plan to take at least one leisure trip between now and October, compared to 65% in March of 2007, which was before the country went into a recession.

The survey also found a sharp decline in Americans’ perception of the safety of travel, presumably the result of events such as the Boston Marathon bombing, the host of cruise liner accidents and safety issues with Boeing’s new Dreamliner.

The survey’s tracking of changes in customer satisfaction with suppliers revealed the highest drop for airlines. The survey measures customer sentiment in points. Score aboves 100 mean the current perception is more positive than negative compared to a benchmark measure recorded in 2007.

Satisfaction with airlines dropped by eight points from 95.5 points in February 2013 to 87.5 in April. April scores for cruise lines, at 119.6 points; car rental companies, at 114.4 points, and lodging companies, at 112.2 points, all remained with three points of their respective February 2013 scores.

Agents Help Defeat $12 Million Tax Hike on Commissions
Washington state’s travel agents—including both ASTA and NACTA members—played a key role in defeating a proposal to eliminate a lower tax rate on agent commissions. The move will save the state’s agents an estimated $11.7 million in taxes between 2013 and 2015. Through phone calls, face-to-face conversations and emails, including more than 280 messages sent through ASTA’s online grassroots site, the agency community helped kill the proposal.

Since the 1970s, Washington agents and tour operators have paid a reduced state business and occupancy tax rate of .275% on parts of their income. The rate applies only to agents’ commission income; their other earnings are taxed at the general service rate of 1.5%. The preferential rate took effect in 1975 to reflect the fact that much of agents’ bookings are for interstate travel which, under federal law, states are not allowed to tax directly.

The Washington House of Representatives had included a plan to roll back the lower tax rate in its version of the proposed state budget. That would have required agents to pay the full general service rate of 1.5 % on commission income.  (Agents have rallied successfully in a number of states to defeat tax proposals. See: Travel Agency Sales Tax Thwarted in Three States.)

From Go-Getters to Trend Setters
Virtuoso’s seventh annual Travel Dreams survey identified five travel personalities, based on responses from nearly 8,000 readers of the luxury agency network’s Virtuoso Life magazine.
The personalities include:

•    Go-Getters – active, adventurous travelers who want to see and do it all

•    Connoisseurs – who like the best of the best and whose interests include food and wine, art and architecture

•    Classic Travelers – loyal to the places they love, they are repeat travelers to their favorite destinations

•    Relaxionists – who travel to get away from it all and want to relax, restore and rejuvenate

•    Trendsetters – who are all about what’s new and what’s next; early adopters of emerging destinations.

You’re Not Alone
“Nearly every industry that has relied on information asymmetry – where the business had access to data that customers could not access – has been disrupted: travel agents, stock brokers, car sales, and others.” – Jay Baer, author, Youtility: Why Smart Marketing Is About Help Not Hype

Going Mobile
A “bring your own device” trend is reshaping the way travelers access content and services, according to research by uSamp and Smith Micro Software. The companies surveyed U.S. smartphone and tablet users to find that 55% of travelers in 2013 are very likely to book a hotel because of its availability of mobile content and services. That’s up from 43% in 2012.

In other findings, 82% of cruiser passengers said they want access to content anywhere, compared to 69% last year. Fifty-eight percent of travelers now bring tablets with them, up from 37%. While in 2012, 10% of travelers didn’t bring any devices at all with them, this year all respondents said they traveled with at least one device – 95% with a mobile phone, 78% with a laptop and 55% with a tablet.