The Minority Home Based Business Report
Finding the best home based business for entrepreneurs
BUSINESS FEATURE: OWNING AN ONLINE TRAVEL AGENCY, THE BEST HOME BASED BUSINESS FOR MINORITIES
MINORITY TRAVELERS: A LARGE AND GROWING MARKET
WASHINGTON, DC -- A new report on minority travelers released by the Travel Industry Association of America (TIA) found a significant increase in travel over the past three years by minority Americans including African-American, Hispanic-American and Asian-American travelers. The figures are included in a new report called The Minority Traveler, which is based on a survey of 300,000 American households conducted in 2002. According to the report, Hispanic travel volume increased 20 percent from 2000 to 2002 (from 64.1 million to 77.1 million person-trips). Asian-American travel volume increased 10 percent (from 30 million to 33.1 million person-trips) and African-American travel volume increased four percent (from 72.2 million to 75.2 million person-trips). These increases are considerably higher than the two percent growth in U.S. travel overall over the same period. "These growth rates show that our industry has been very assertive in its efforts to market to minority travelers," said William S. Norman, President and CEO of the Travel Industry Association of America. "Every sector of our industry - hotels, theme parks, city visitor bureaus - has begun to reach out to the minority traveler through targeted advertising, minority travel guides and special ethnic promotions and I think we are seeing the results." In 2002, minority travelers generated approximately 18 percent of all person-trips taken in the U.S. but they generated 19 percent of domestic travel expenditures. Domestic expenditures by minority travelers totaled about $90 billion in 2002. While there are many similarities in travel behaviors between Hispanic, African-American and Asian-American travelers and overall U.S. travelers, there are some key differences. TIA’s report found that minority travelers in general are more likely than average to include a rental car as their primary mode of transportation, attend cultural events or festivals, participate in nightlife activities and gamble as a form of recreation.
FACTS ABOUT MINORITY TRAVELERS
Hispanic Travel
One in seven (15%) Hispanic person-trips include air transportation. Rental cars are used as the primary mode of transportation by seven percent of Hispanic travelers - more than twice as much as overall travel (3%). • On one in seven (15%) trips, Hispanic households spend $1,000 or more, not including transportation to the destination. • Spending time with family is important to Hispanic travelers, with 33 percent of Hispanic trips including three or more people from the same household, compared to the average U.S. trip (25%). One third (33%) of trips by Hispanic households include children under 18 years old. • Of 11 common trip activities, shopping is the favorite activity for Hispanics (34% of person-trips), followed by outdoor recreation (16%), visiting theme or amusement parks (14%), visiting historical places or museums (13%), and going to beaches (13%).
African-American Travel
African-Americans are much more likely to travel to destinations throughout the southern census divisions, specifically to the South Atlantic (37% of person-trips), West South Central (15%), and East South Central (13%) divisions. • About one tenth (9%) of all African-Americans travel includes a rental car as a primary mode of transportation. One in seven (14%) African-American person-trips include air transportation. • On one in ten trips (10%), African-American households spend $1,000 or more, excluding transportation to the destination. • Half (51%) of African-American trips are made by adults traveling alone or with someone outside their household. About one in four (26%) trips taken by African-American households include children under 18 years old. • Aside from shopping (41% of person-trips), other popular activities on African-American trips are nightlife or dancing (13%), visiting historical places or museums (12%), attending cultural events or festivals (12%), visiting theme or amusement parks (12%), and gambling (12%).
Asian-American Travel
A large share (28%) of Asian-American person-trips include air transportation. Five percent of Asian-American person-trips involve the use of a rental car as a primary mode of transportation. • On one in seven (15%) trips, Asian-American traveling households spend $1,000 or more, not including transportation to the destination. • Half (50%) of Asian-American trips are made by adults traveling alone or with someone outside their household. One in five (22%) Asian-American household trips include children under 18 years old. • Shopping is the favorite activity of Asian-American travelers, accounting for four in ten (39%) of person-trips. The next most popular trip activities are visiting historical places or museums (16%), pursuing outdoor recreation (14%), attending cultural events or festivals (13%), and gambling (12%). • A large share (46%) of Asian-American trips are generated by single, never married households.
TIA is the national, non-profit organization representing all components of the $645 billion travel industry. TIA's mission is to represent the whole of the U.S. travel industry to promote and facilitate increased travel to and within the United States. TIA is the national, non-profit organization representing all components of the $645 billion travel industry. TIA's mission is to represent the whole of the U.S. travel industry to promote and facilitate increased travel to and within the United States
ONLINE TRAVEL SALES TO BOOM
The online travel market is divided into two segments: leisure/unmanaged business travel and managed business travel (also known as corporate travel). The online booking behavior of unmanaged business travelers is indistinguishable from leisure travelers. Employees of the millions of small- and medium-sized corporations in the U.S. use the same websites as leisure travelers to book their business travel. Thus these two groups of buyers are treated as one customer segment. eMarketer estimates that U.S. online sales of leisure and unmanaged business travel reached a total of $65 billion last year that the total will grow to $122 billion by 2009, a near doubling of the market in just four years.
eMarketer's forecast takes into account macroeconomic indicators, historical trends in online travel sales and historical and projected trends in overall retail ecommerce. Estimates of online travel spending in the U.S. are bound to vary from source to source, given the differences in how the market is defined. The estimates from comScore and PhoCusWright are for both leisure and unmanaged business travel sales, the same definition used by eMarketer.
The 2005 estimates from these three firms are close, falling within $4.5 billion. Forrester's estimate for 2005 would be higher if it included unmanaged business travel sales. Conversely, Jupiter's estimate, which appears to include managed business travel sales, would obviously be lower if these sales were excluded. Where all the research firms agree is in their estimates that annual sales growth was around 20 percent in 2004 and 2005, and that it will drop off into the teens during 2006 and 2007.
http://www.hotelmarketing.com
ONLINE TRAVEL BOOKINGS INCREASE AT THE EXPENSE OF TELEPHONE RESERVATIONS
New York City -- Preliminary data released at TravelCom 2006 by the Travel Industry Association of America (TIA) and D.K. Shifflet & Associates Ltd. show that last year, for the first time, more trips were booked online than by any other method. In 2005, 19 percent of all U.S. resident travelers traveled by common carrier (includes plane, train, bus, ship). Transportation reservations for more than one-third of these travelers were made online (35%), an increase of 25 percent the year before. The next most common method was calling transportation carrier 800 telephone numbers, but such usage was down 16 percent from 2004. Travel agents assisted 4 percent of all travelers who made transportation reservations in 2005, similar to 2004 (5%). Accommodation bookings followed a similar pattern. One-quarter of travelers who booked accommodation reservations did so online in 2005 (24%), up 9 percent from the year before. Hotel chain websites were used most often to make internet reservations, followed by other online booking services (such as online travel agencies). Nearly as many travelers booking lodging reservations used chain 800 telephone numbers, but this was down 5 percent from 2004. The largest share of travelers making reservations made them directly with the property, but this also declined in frequency compared to the prior year. Four percent of travelers used a travel agent to book accommodations in 2005, similar to 2004 (5%). Suzanne D. Cook, Senior Vice President of Research at the Travel Industry Association of America, believes this information is an important bellwether for all facets of the industry. She says, “TIA is pleased to join our partner, DK Shifflet & Associates, in providing such detailed information on the way travelers actually book their trips. Increasing use of the Internet to make travel reservations fits with other trends we’ve been monitoring, and helps alert the industry to some of the changes that are yet to come.” Douglas Shifflet, President and CEO of D.K. Shifflet & Associates Ltd., noted that “The acceleration in Internet booking further demonstrates Americans’ comfort with technology that allows them to more directly understand and control their travel choices.” He further states, “The TIA/DKS&A partnership is a great step forward in utilizing the large monthly DIRECTIONS® surveys to identify travel trends that dramatically impact the travel business and convey that information to our industry with one clear voice.” Trips booked online involve significantly higher spending on average ($754, excluding the cost of transportation) than trips booked offline ($406) or with no advance booking ($219). Internet-booked trips also entail more activities (2.3 on average) than do trips booked offline (1.7 activities) or with no advance bookings (1.5). The average age of travelers who book trips online is 44 – similar to the age of travelers who booked offline (45) or did not book at all (43), but younger than those who booked through a travel agent (49). A full report on travelers’ booking behavior will be available in the Fall of 2006.
The above information was obtained through TIA’s TravelScope/DIRECTIONS® survey as well as the DIRECTIONS® survey by DKS&A. These surveys provide detailed trip and traveler characteristics through their mail and Internet sample of more than 150,000+ trips reported by a representative sample of traveling U.S. households annually, and are available on a brand and state/city destination level. Trips are considered any journey of 50 miles or more, one-way, away from home or a journey that involved an overnight stay.
For almost 25 years, D.K. Shifflet & Associates Ltd., a leading travel research firm, has provided the most complete consumer-based travel data on U.S. citizens and their travel worldwide. DKS&A’s DIRECTIONS® Travel Intelligence SystemSM collects detailed monthly travel data on more than 150,000 trips annually collected from a representative sample of US households.
4 REASONS FOR MINORITIES TO PURCHASE AN ONLINE TRAVEL BUSINESS
1. It is very inexpensive: $500 initial fee and $49 per month for the online travel business . Other franchises cost thousands of dollars.
2. Quick return on investment: It should not take long to recoup the initial $500 investment.
3. Minorities have a captive audience: Minorities in the United States have the cultural glue of language, food, music and country origination that binds them. Moreover, they tend to have a larger extended family and in large metropolitan areas minorities tend to travel because thier family resides outside of that metropolitan area.
4. Business loyalty: Travelocity, Orbitz and Priceline are faceless unfamiliar entities, whereas the minority online travel business owner shares the same cultural indentity with the potential client and sometimes language barriers make it easier for the potential client to do business with the minority online business owner. Minorities, more than the majority, tend to do business with people they know or with whom that share the same cultural identity.
5. Win Win Situation: If the business does not flourish as expected the minority online business owner still recieves the travel industry courtesies, discounted prices and tax savings of being self employed. He or she can potentially make every vacation a tax write off.
Therefore, the online travel business is the logical low risk, potentially high return choice for minorities interested in a home based business.
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