Hispanic Travel Industry, New Opportunities
Travel among U.S. Hispanics for the longest time was defined by "VFR" activity,
to use industry parlance. While visiting friends and relatives remains
a big part of the Latino travel segment, the emergence of the Hispanic
business traveler has some companies changing their tune when it comes
to their advertising messages, according to a report published by Hispanic
The travel industry has grand opportunities for growth by approaching Hispanics with the right messages. Yet some head-scratching may be seen among those seeking long-term trends about the potential growth explosion in the travel sector from the nation's Spanish-speaking population.
For one, airlines are just getting started with pitching Latinos on business travel. Among the hotels earmarking the most dollars for Hispanic media are budget lodging brands - and not those most-associated with a resort destination. At the same time, outreach through traditional advertising targeting Latino consumers has been scant from cruise lines.
Activity from car rental companies remains mixed. Travel agencies - both online and in the brick-and-mortar form - are extremely limited in their Hispanic outreach. Tour companies offering anything in Spanish have focused their efforts almost entirely on Spaniards and Latin American travelers.
Anecdotal Evidence.- How Hispanics have emerged as a potentially enormous group of leisure and business travelers has been discussed by agencies and their clients. But hard numbers on the shifting nature of the Latino traveler are hard to come by.
The Travel Industry Association's most recent study on the Latino traveler was conducted in 2003. According to the group, a follow-up report was never commenced because of "a funding issue;" the 2003 study was sponsored, TIA spokesperson Cathy Keefe says.
Today, monitoring the Hispanic traveler's buying habits would be a major endeavor, requiring lots of research. "You can't track Hispanic travel activity unless you go directly to the source," says Elsa Cristobal, who operates a Miami-based travel agency. That being said, Cristobal has a fairly good gauge of what many of her Latino customers are booking.
"We see a big growth trend with the high-affluent Hispanic," she notes. "With this group, Europe is the No. 1 destination of choice." Meanwhile, Costa Rica has "fizzled out," with many taking a "been there, done that" mentality to the Central American nation's rich natural attractions, Cristobal says.
For those travelers seeking the most value in their trips, cruises remain highly popular. "This has been the case for the last six years or so," Cristobal notes. "It really is because of the value. You can get seven days on a ship for $1,300, and that includes food."
In regard to the Latino business traveler, potential for overall activity increases at not only airlines but "component" categories such as hotels and car rental agencies, is anticipated. But it is the airlines that have been the most forward-thinking in regard to advertising messages targeting Hispanics.
"Airlines know who travels with them, so we have seen the opportunity to target both the leisure traveler and the business traveler," says Roberto Orcí, president of Los Angeles-based Acento, the U.S. Hispanic agency of record for Alaska Airlines.
"We tend to attract people in all segments, and there is a big overlap between the leisure and business traveler in the Hispanic market," Orcí notes. Alaska has campaigns that are aimed at both types of travelers. The airline's regional activity, which includes bigger hubs across its footprint, is focused on radio advertisements in Seattle, Northern California and Southern California. Print and outdoor messages are also in the mix. In reaching the casual Alaska customer, the message has been centered on the theme "we speak your language."
Orcí explains, "When you think of traveling to Mexico, you don't really think of traveling on Alaska Airlines." But Alaska has made considerable headway in recent years with Hispanics across the Pacific Coast by expanding awareness of its Mexican routes. The airline in 2007 allocated 12 percent of its advertising budget to Spanish-language efforts, and bilingual signage was added to its check-in and arrival areas at Los Angeles International Airport - all events tied to Acento's May 2007 win of creative and strategic planning duties for Alaska.
Thanks to its presence in Mexico, Orcí expects Alaska's advertising activity in the U.S. Hispanic market to go nowhere else but up. "They clearly see the reality of the market, and the demographics," Orcí says of the largely Mexican Hispanic population seen across the West Coast. "It's impossible to do business in the western U.S. and ignore the Hispanic market."
That includes placing Alaska spots targeting the Latino business traveler in-between innings on the Spanish-language feed of Seattle Mariners baseball games. Orcí points out that the next step for Alaska is to create an overall theme and tagline to further entice Hispanic flyers and both are already in the works.
New 'Destinos' Emerge At American.- At American Airlines, a wave of advertising introduced in November 2007 seeks to tap into the emerging market for Hispanic business travel. The "Destino" campaign, developed by U.S. Hispanic agency Zubi Advertising, illustrates a significant shift from the emotional, family-focused creative of years past (HMW Archives 11/19/2007. American Changes The Tone).
For Zubi COO Joe Zubizarreta, luring business travelers to American will assist the airline as it continues to lure Latino leisure travelers that may be wary of a trip for financial reasons. "The tourist dollars are all based on the state of the economy," he says. "It's disposable income, or in many cases it is vacation money that is set aside and just doesn't go as far as it used to."
As a result, many Americans - including Hispanics - are scaling back or altogether abandoning travel plans in 2008. "The airline industry is very much dependent on the state of the U.S. economy ... and we all know the state that that is in."
Miami travel agent Cristobal has also noticed a slowdown in leisure travel from those customers not in the highest income echelons. But, she adds, things are still moving for the travel industry. And that's good news for Zubizarreta, with respect to the American account - the airline's budget has been relatively flat despite its continued profit losses.
"We have seen an upsurge in domestic business travel among Hispanics," says Zubizarreta, who hypothesizes that the "Hispanic mentality of achieving more and getting ahead" has helped with the increased activity. "They don't consider business travel a chore - they see it as a way of advancing."
Key print vehicles have been the focus for that segment of the marketplace. Otherwise, television remains the predominant communication tool, with much of the effort put toward attracting the holiday crowd. "You need the visual appeal of destinations and those places that are near or dear to your heart," Zubizarreta says. But the internet - along with print ads - is now a big part of the media mix for American.
A competitive environment, with efforts from JetBlue certainly being eyed cautiously by American, has helped in even adding some below-the-line activity to American's efforts. In New York, unique outdoor and moving vehicle advertisements target Spanish-speaking consumers.
In late March, weaving American into the fabric of Hispanic life took shape as it became the official airline of Major League Soccer, the MLS Cup, the MLS All-Star Game and the SuperLiga tournament, all thanks to a sponsorship agreement with Soccer United Marketing. Other promotional and marketing opportunities for American include on-site advertising, television advertising on Fox Soccer Channel and Fox Sports en Español and in-game promotional opportunities.
"It's about trying to find ways of engaging the consumer in an environment that they are more comfortable in," Cristina Castro, the carrier's manager of advertising for the U.S. Hispanic and Latin American markets, says of the grass-roots initiatives.
Solid Commitment.- Several other domestic carriers are active in the U.S. Hispanic market. But the target customer varies depending on the airline.
Continental Airlines has emerged in recent years as a significant carrier to destinations in Latin America. Its current efforts are the first from Conill Advertising since its October 2007 selection by the airline as its U.S. Hispanic agency of record (HMW Archives 10/1/2007. Continental Taps Latino Shop). Work is set to include print, out-of-home, radio, television and interactive advertising. Media duties went to 42 Degrees at MediaVest in December 2007. Bromley Communications had been handling Continental on a full service basis until last autumn.
Spirit Airlines, based in Fort Lauderdale, has seen limited activity in targeting U.S. Hispanics, using mainly spot television and spot radio (HMW Archives 1/17/2008. Industry Snapshot: Airlines). The airline has emerged as a major service provider to destinations in Puerto Rico, the Dominican Republic and Central America.
But by far the biggest investor in U.S. Hispanic media has been Southwest. The discount air carrier has enjoyed a strong relationship with Dieste Harmel & Partners for a decade.
"They have been one of the most consistent and smartest advertisers out there, in an environment where you see the Hispanic pendulum going in and out of the industry," says Roberto Siewczynski, group account director for Dieste in charge of the Southwest account.
Siewczynski points out that Hispanics, in particular, respond positively when an interpersonal relationship with a business is formed. Along with slightly irreverent and humorous ads, Southwest continues to far outpace its competitors in regard to total ad dollars allocated to Spanish-language advertisers. According to Nielsen Monitor-Plus, the four Hispanic television networks enjoyed $11.8 million from Southwest over the first three quarters of 2007.
Television continues to play an important role for the airline. Siewczynski says new work targeting the Latino leisure traveler - featuring the tagline "Siéntete libre de andar por el país" - breaks the week of May 5th. The commercials will appear nationally.
While network television continues to dominate Southwest's media buying efforts - handled by Camelot Communications - the airline is looking at Hispanic radio and the internet as other areas for reaching Spanish-speaking travelers in the U.S.
Along with American, Southwest has a fully integrated online booking system for Spanish-language web surfers - branded as "Vamonos." Launched several years ago, Siewczynski believes this is central to Southwest's overall plan for Latino market growth.
"When you think about the online space, it is not about the impression of the banner," says Siewczynski. "It is the opportunity to get the traveler to embrace the brand and create the dialogue with the customer."
Lodging Industry Slow To Lure Latinos.- Where airlines have made considerable efforts to lure the Latino leisure and business traveler, the lodging industry has continued to place its focus on traditional, family-oriented messages in its Spanish-language advertising. But those efforts, for the most part, have been absent from some of the more upscale hotel chains and resort brands.
According to Nielsen Monitor-Plus, the largest investors in traditional U.S. Hispanic media in 2007 were Accor SA, whose properties include budget hotel chains Motel 6 and Red Roof Inn, and InterContinental Hotels Group (IHG) - the parent of such well-known mid-level brands as Holiday Inn, Holiday Inn Express and Crowne Plaza.
Of the three IHG brands, Holiday Inn and Holiday Inn Express have been the most active in the U.S. Hispanic market. In May 2007, a series of light-hearted television commercials focusing on family fun debuted on a regional basis (HMW Archives 6/11/2007. A Hotelier's Ad Campaign That Gets Right To The Point). In all, the spots represented a $1.5 million investment in local Spanish-language television in 2007.
For Holiday Inn Express, two 15-second ads were created. The creative was produced in Buenos Aires for al Punto Advertising, which has handled IHG's U.S. Hispanic efforts since March 2004 (HMW Archives 3/8/2004. Make Your Bed).
"When we launched Holiday Inn to the Hispanic market in 2004, it was the first effort from a national chain of hotels to target the market outside of off-again, on-again magazine ads," says Peggy Goff, president of al Punto. "Holiday Inn has been meaningful and consistent with its Hispanic advertising."
The television spots presently air in the top five Hispanic DMAs, as well as on a national Hispanic cable network. According to Goff, both Holiday Inn and Holiday Inn Express target Hispanic leisure travelers. The difference - Holiday Inn is for those on a long-term stay, while Holiday Inn Express is more for those on a short-term stay.
Targeting the Latino business travel hasn't been explored, mainly because it's such a small sliver of the overall Hispanic segment. Goff cites a Forrester Research study that shows 15 percent of the Hispanic population - which is 15 percent of the overall population - as active business travelers.
Meanwhile, Latino travelers slightly overindex non-Latino travelers when it comes to leisure travel and those that book online. Therefore, plans are in the works for internet advertising for 2009, Goff says. According to the Forrester study, 33 percent of Latinos booked their leisure travel online in 2007. That compares to 32 percent for the non-Latino population.
"Online bookings on the Latino section of the Holiday Inn website doubled between 2006 and 2007," Goff notes. Yet Goff also says the Latino who goes online to visit the hotels' website still calls the chain's toll-free number to find out where the hotel is located and what's nearby.
As far as Holiday Inn's competition, Goff is at a loss for words when asked why other brands aren't investing in Spanish-language advertising.
"I can't explain why the Hispanic index is so high, yet you don't see significant activity," she says. "It's a category that really hasn't awakened yet to the opportunity. The bottom line is Hispanic leisure travel is growing."
Aside from the Holiday Inn television work, only a limited amount of Hispanic outreach has been seen from the more mid-level hotel brand. Luxury brands have been largely absent. The Choice Hotels group, which operates nine popular hotel chains - Comfort Inn and Suites, Quality Inn, Sleep Inn, Clarion, Cambria Suites, Mainstay Suites, Suburban, Econo Lodge and Rodeway Inn - placed $685,600 into magazine advertisements during 2007. Of its remaining budget, all $4,300 went to a small spot television-based effort.
Wyndham Worldwide Corp., which controls such brands as Baymont Inns & Suites, Days Inn, Howard Johnson's, Ramada, Super 8, and Travelodge, in addition to the signature Wyndham brand, placed $451,800 into national Hispanic magazines and $168,250 into spot television.
While the activity of many of these brands is scant, Hispanics now more than ever are familiar with them. Says Goff, "When we did our first national tracker, with well over 1,000 respondents, the Hispanic traveler could name only five hotel brands. Now they can name 17. We know that the competition is waking up."
Narrow Lane For Cars And Cruises.- Other travel component categories have not seen the amount of advertising activity as airlines and hotels. For car rental companies, highly limited activity in Spanish-language media has been seen since the early 2006 buyout of Hertz by private equity firms.
In 2007, Hertz and Avis/Budget - the No. 1 and No. 2 investors in the Hispanic market - placed a total $134,400 in advertising. For Hertz, $64,550 went to national magazines. Avis/Budget opted to place $67,000 in spot radio.
Even more limited activity has been seen in the U.S. Hispanic market from cruise lines - despite the popularity of sea travel among Latinos on both coasts. Royal Caribbean has been the most visible in regard to Spanish-language activity - and its recent decision to have The Vidal Partnership handle Hispanic creative, media buying and planning means the company is poised to further expand its efforts (HMW Archives 12/17/2007. Royal Caribbean Win Includes A Hispanic Shop).
Above- and below-the-line initiatives are planned for the second quarter of 2008, Oswald Méndez, director of integrated marketing at Vidal, said in a December 2007 interview. Other cruise lines, including Carnival and Norwegian Cruise Lines, continue to do little if any active pitches to Spanish-preferred Hispanics.
Meanwhile, online travel agencies have remained quiet on the Latino advertising front. Yet there's much potential. In a focus group conducted in spring 2007 by Horowitz Associates that involved unacculturated Hispanics who mainly used only Spanish-language media, a high level of usage of travel web sites such as Orbitz and Travelocity was seen (HMW Archives 6/25/2007. Broadband Growth Spurt Continues In U.S. Hispanic Households). However Orbitz does not have a Spanish-language option. Neither does Travelocity. Or Expedia.
For online activity in Spanish, going directly to the airline, car rental company, hotel chain or cruise line continues to be the main in-language route.
Mexico Lindo y Querido.- Travel to Mexico is an integral part of the entire Hispanic travel segment, and major initiatives for both non-Latinos and Latinos have been seen as of late.
Aside from Alaska Airlines and Continental Airlines, Mexicana Airlines and AeroMéxico have each seen their advertising dollars rise as competition heats up between multiple airlines serving the same routes (HMW Archives 1/17/2008. Industry Snapshot: Airlines).
Perhaps the biggest push for travel to Mexico by Hispanics and non-Hispanics alike involves the Mexican Tourism Bureau. Last fall, the bureau selected Machado García-Serra Communications (MGS) to launch a multimedia promotion (HMW Archives 9/24/2007. MGS Goes To Work On Mexico Tourism).
Manny Machado, CEO of MGS, says the current media strategies on promoting the sights of Mexico target affluent consumers - both Latino and non-Latino. "Among U.S. Hispanic affluent audiences, our strategies reach Spanish-dominant, bilingual and English-dominant consumers."
Spanish-language media represents 10 percent of the total activity, notes Machado. But he's quick to point out that additional Hispanic audience outreach will come from English-language media. "We look at behavior among the target audience and layer the media strategies accordingly," he says.
National and local television activity is paired with print, out-of-home and online advertising during key months, says Machado, adding that typical trip planning cycles play a role in media selection and when a campaign is launched.
What of Hispanics that are not Mexican that may be pitched on a vacation to the nation? According to Machado, a "fusion of cultures in the U.S. impacted by Hispanics" has taken place. Marketers are leveraging this appeal among non-Latinos. "We are trying to attract Hispanics and non-Latinos that travel to Europe to consider Mexico as a destination that, in addition to the diverse experience, offers superior service. In today's economy Mexico becomes an excellent alternative."
Spanish Speakers Turn To Tours.- Travel to Latin American destinations remains an important component of Hispanic vacations and business trips. But domestic activity has taken a noticeable turn upward among those booking flights and hotels in Spanish. The quest for Spanish-language tours has also been a part of the vacation process for many Hispanics.
"Hispanics don't travel domestically enough," says Cristobal, the Miami travel agent. "There are not many tour operators that offer Spanish-language escorted tours. Yet Hispanic travelers don't want English. They are more comfortable in Spanish."
Tour operator Globus had offered Spanish-language guided excursions until quietly ending the option last year. "They were not our specialty," says Melanie Gravdal, a company spokesperson.
But websites tied to the tourism and convention bureaus in several large American cities are turning to the internet to educate Hispanic travelers about what's to see and explore. Seattle's city government has a section in Spanish that includes images and maps of local sights and Seattle's sports teams.
Other cities are lacking. San Francisco's official visitors' guide offers a section on gay travel, along with highly detailed information on what's of interest to travelers. None of the information is in Spanish - or any language other than English, for that matter.
"We should have a Spanish-language website. It's certainly on our wish list," says Angela Jackson, of the San Francisco Convention and Visitors Bureau. "But as we're a nonprofit we don't have the budget. We all realize it's a very important market, but it's expensive to put together."
The official tourism site for Washington, DC has no Spanish-language offerings. But Chris Gieckel, of the non-profit Destination DC, says the website is fairly new and information in Spanish is on the way. Plans also call for a detailed visitors guide for Spanish speakers. At present, Spanish-language maps with brief information on hotels, restaurants and attractions are available.
And despite a massive multimedia non-Latino promotional effort, the City of New York's outreach to Spanish-speaking tourists has been indirect. For those that wish to "descubra Nueva York," a link transports Hispanic web surfers to "Pasaporte WADO con Willie Colón" - a channel hosted by the legendary Salsero. Features include an overview of the Five Boroughs, Things To Do, Itineraries and transit information that includes getting to and from the airport - as well as a link to the MTA's subway and bus maps.
Although limited in scope, the domestic developments are a good sign
that domestic travel now sees U.S. Hispanics as an important group to
appeal to. Says Cristobal, "We live in a country that is filled
with Latinos who are sophisticated but find that it's difficult to share
a trip in English with those more comfortable with Spanish."
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