Motella's Predictions for 2009

There is no doubt that this year is going to be challenging. You know a condition is serious when it is given an acronym - in this case: GFC - the Global Financial Crisis!

We have seen this cycle happen before and we predict that it will be a difficult winter; however as New Zealand exits the depths of the winter-blues, we believe that the economy will improve in time for the 2009 summer season.

Motels that are well located, have reinvested, offer a good quality product and friendly, professional service will always do well. Others will struggle, but it will not be as bad as the naysayers' predict.

Here are our 16 predictions for 2009:

1. Some Travel Agencies will go bust. New Zealand high street travel agencies have had a period of upheaval and consolidation over the last few years. Overseas travel has always been the most lucrative for travel agencies, however there are signs that this source of revenue will decline as Kiwis defer overseas holidays. The Internet will continue to bypass traditional travel agencies and will be used with greater gusto by consumers to sniff out deals. There has been some recent growth in domestic corporate business, however clipping the ticket on domestic travel has always been high maintenance with low returns. It will be difficult for travel agencies to sustain profitability with the decline of higher yielding overseas travel and their increasing reliance on domestic corporate travel. Moteliers should be vigilant in managing credit control with travel agencies and only deal with those that are bonded with TAANZ.
2. Some airlines will go bust. The profitability of many airlines has always been questionable. Expect to see more casualties of offshore based airline companies with consequences that may ripple over to New Zealand.
3. Some motels will go bust. Sadly there will be a few casualties in the motel industry in 2009. The lack of re-investment and focus on quality will finally catch up with some leased motel businesses.
   
4. Environmentalism. The Tourism Industry and environmentalism appear to have been on a collision course for some time. 2009 will be the year that Tourism Trade Associations will need to make a stand and choose between environmental rhetoric or the economic sustainability of the small businesses they represent. The threat of an imposition of green taxation and compliance for all businesses will continue in 2009.
5. 100% Pure NZ. Expect to see a "freshening and reinvigorating" of the brand. There will be a subtle move away from reliance on solely marketing natural landscapes.
   
6. Qualmark NZ Ltd. Expect some fireworks as Qualmark attempts to re-qualify its compulsive environmental conditions embedded into its quality benchmarking system in the Serviced and Self Contained sector. Qualmark will allow the Motel Association of NZ (MANZ) token lip service; however will proceed as planned with their predetermined Dark Green Agenda.
7. Ministry of Tourism. A review of services will identify duplication in services provided by Tourism NZ, Ministry of Foreign Affairs and Trade, and New Zealand Trade and Enterprise. Expect these entities to be tweaked and some services amalgamated.
   
8. Tourism NZ will need to qualify its expenditure line by line alongside other government entities. Individual marketing campaigns, staffing levels and overseas offices will need to demonstrate an acceptable ROI to the New Zealand taxpayer. Expect some reshuffling of roles and budgets. Also expect a nil or at best a token increase in the tourism budget.
   
9. Domestic travel growth. People will still travel in 2009. There is an opportunity to build on the AA's domestic tourism campaign as consumers seek domestic deals and shorter trips to enable them to enjoy the travel and breaks without the long-haul price tag. Commercial travel will be static in 2009, as most companies realise that they must continue putting reps on the road to maintain sales. Motels may become more favourable to corporate travellers as they are perceived to offer more value than hotels.
   
10. Local Government. Moteliers that have faced the brunt of local rate increases will be following closely further reviews on the performance of local government. These findings will qualify rationalisation of council operations and the introduction of private enterprise.
    
11. Bed Tax. This bogey will not die and will be raised from "left field" again this year.
12. Consolidation in the online travel industry will continue. Smaller under performing players in the market place will be swallowed up at never to be repeated bargain prices.
13. 2009 will not be the year of mobile for the travel industry: The hype will not live up to expectation. The introduction of mobile travel sites will be delayed due to opportunity costs. For the consumer it takes too many clicks for browsing and making an on-line purchase. Maybe we will have to wait to at least 2010 for any significant movement here.
14. The return of the last minute model. The last minute model of selling inventory online seemed to plateau in 2008. This methodology will make a comeback in 2009 lead by demand from hotels and apartments that will be dumping distressed inventory.
15. The rise of online reservations. In spite of guest nights remaining largely static over 2009, online reservations will continue to rise.
    
16. The rise of Social Media Social Media will slowly evolve into a more mainstream method of marketing for the accommodation industry.

Have we missed anything out?