The past year was one of historic milestones, record successes and new frontiers for California’s travel and tourism industry. As the Golden State’s international footprint continues to expand, Visit California’s marketing efforts are reaching further and deeper into global markets than ever, inspiring more audiences around the world to Dream Big.
“Around the World” is a three-part series recapping Visit California’s efforts on the international front from the past fiscal year, highlighting additional points for consideration as we look to strategic considerations for FY17/18 and beyond. More updates regarding strategy, activations and conditions in these global markets are forthcoming throughout the year. In the meantime, consider this your international market update CliffsNotes!
THE AMERICAS & AUSTRALIA
The Americas are home to California’s two top international markets, Mexico and Canada, along with one that remains primed with enormous potential for growth in Brazil. Down Under, Australia’s arrivals have been on a steady ascent through the last decade and counting, making it one of the Golden State’s most consistent and burgeoning markets in the Southern Hemisphere.
Welcoming more than 635,000 visitors and an annual spend of over $1 billion in 2016, California has benefited from 10 years of sustained growth and record arrivals from Australia.
While California enjoys a robust 43.9 percent market share of U.S. travel from Down Under, Australia has become a high-priority market for the rest of the nation due to flight expansion and additional factors. California’s domestic competition is growing, and it’s growing quickly — more than 35 American destinations now have in-market representation, which is triple the number from just three years ago.
Despite a weakening dollar, intent to travel internationally has remained steady among Australians while shifting to an interest in "value for money” holidays as a result of the exchange rate. On the positive side, the expansion of nonstop flights has made California more affordable, presenting an opportunity to target the family market as well as a broader range of income demographics.
The Challenges: Competition in the U.S. and the exchange rate.
The Opportunities: Promoting only-in-California experiences; a new interest in wellness, fitness and spirituality experiences; more affordable flights opening family travel and broadening the range of target income demographics.
Marketing Tip: Use engaging video content and imagery to cut through the clutter.
Brazil is a promising opportunity market for California. The Golden State currently has only 9.6 percent of the total U.S. visitation, and the market is still poised for massive growth despite the recent triple-whammy of political, economic and health crises.
Brazil’s economic crisis has stabilized over the past year, and 66 percent of the country’s 210 million citizens intend to travel abroad in the next two years. This is a high spending market in general — with only 189,000 visitors to California in 2016, the spend still reached an impressive $410 million.
The super affluent have been less impacted by the financial crisis, and as a result, Visit California has been focused on this specific segment while continuing to show long-term commitment to the market through expanded marketing investment. In terms of marketing, social and digital is where it’s at: More than 120 million Brazilians are connected and highly engaged on social platforms.
The Challenges: Economic instability, the popularity of the East Coast and limited direct flights.
The Opportunities: California’s entertainment and culinary experiences are very popular with Brazilians; the outdoor and wellness segments are growing; the super affluent have not been affected by the economic crisis and are highly receptive to what’s cool in California.
Marketing Tip: Brazilians use social media more than any other international market; Facebook and Instagram are the two most popular platforms to reach Brazilian travelers.
Even with the Canadian dollar struggling over the past 18 months, 1.6 million Canadians spent over $2 billion in California last year. Ample airlift makes getting to California easy for the state’s neighbors to the north with 5,500 daily nonstop seats.
That said, the current political climate is definitely having an impact on intent to visit the U.S. It’s critical that California conveys a welcoming message and highlights economic value so that Canadians know that not only is their business welcome, but their dollars can go very far here. Multigenerational travel is on the upswing, as is family travel, which was up 5 percent last year.
The Challenges: Unwelcoming perception due to current U.S. administration; value of Canadian dollar declining; and Canadians opting to stay within their borders for country’s 150th birthday.
The Opportunities: Millennial and family travel segments are growing; nature, culture and good food are key interests; the luxury market is ripe with opportunity.
Marketing Tip: Create a sense of urgency to give Canadian travelers a motivation to visit “right now” to counter the “wait and see” sentiment.
While eight million Mexicans visit California each year, Visit California’s marketing activity is focused specifically on attracting the well-educated, affluent consumers who can afford to travel by air — essentially 13 percent of the 130 million total Mexican population.
Last year, 550,000 Mexican visitors arrived by air, spending $596 million. Notably, a 6.2 percent decline is forecast for this year, and contentious political rhetoric certainly contributed to this drop. That said, Visit California remains optimistic that attention to promoting a welcoming message will help to counter this drop.
Mexicans have more opportunities for long weekend travel, as summer school holiday periods are shortened to just five weeks, and close proximity makes California easily accessible for shorter trips.
The Challenges: The Trump administration’s travel and immigration policies.
The Opportunities: The Cross Border Xpress (CBX) opening a new gateway via the Tijuana border crossing; the Open Skies agreement will bring in new airlift and connections; key motivators will continue to be family fun, shopping and theme parks.
Marketing Tip: Seventy percent of the most desirable business is coming from Mexico City, making it a great place to focus efforts.