Highlights from the Michigan Travel Market Survey:

A Lucrative Market Segment for the Michigan Tourism Industry: 'Package Travelers'

Contributors: Asli D. A. Tasci, Azlizam Aziz, and Donald F. Holecek, Ph.D.
 
Package travel has been a significant factor in the expansion of mass tourism markets to both domestic and international destinations in the post-war era. However, there are contradicting views of the current significance of package travel. Some postulate that package travel has been declining because of changing tourist preferences towards more individualized and independent travel experiences while others report that package travel supports an increasing number of jobs, generates an increasing amount of income, and has a considerable economic impact in the U. S.

To determine the characteristics the U.S. Midwestern resident package travel segment, between 1996 and 1998, the Travel, Tourism & Recreation Resource Center at MSU asked people if they traveled on a package during their most recent pleasure trip. In the table below, package and nonpackage segments are compared in terms of demographic characteristics, past travel patterns, and last trip characteristics such as trip planning and decision making, activity choices, travel purpose, travel party make-up, travel time, spending, and choices of lodging and transportation. The chi-square and t-test were employed to determine the statistical significance of the differences between the two groups of travelers. Click HERE for information on the methodology of this survey.

For the three year period, about 12% of respondents indicated that they had purchased a package on their most recent trip. They are more likely to be retired and typically have senior citizens in their households but no young children. Package travelers are also likely to be active travelers, participating in more activities on average, with the most striking differences being “nightlife” and “casino gaming”. Package travelers begin to plan their trips on average much earlier than nonpackage travelers, and they are far more likely to use a travel agent. Package travelers are more likely to use air or bus transportation. They are far more likely to stay overnight in a hotel/motel or on a boat/ship. Summer is the most popular travel season for both groups, but winter is the second most popular travel season for package travelers while it is the least popular for the nonpackage travelers. Finally, package travelers are important to the commercial lodging and cruise industries due to their greater mean trip expenditures on lodging.

The Midwestern package segment is a lucrative market segment. Destinations that target this potentially lucrative market segment must develop attractive package tour products and strategies to market them effectively. This requires cooperation across a broad range of travel service providers and destination marketing organizations, especially travel agents. With travel agents’ income sources in decline, this is a good time for introducing new domestic travel packages for travel agents to market to their customers.
 
Highlights of statistically significant variables of potential use in distinguishing package from nonpackage travelers:

Variables	Package (N=841)	NonPackage (N=5,468)
Employment (%)a *
Full-Time	61.3	63.6
Retired	17.2	13.6
Student	4.0	3.7
Homemaker	4.6	5.3
Annual income (Median $31K)a *
Above	84.4	79.9
Below	15.6	20.1
Pre-school child in the household (Yes %)a *	11.3	14.5
Senior citizen in the household (Yes %)a *	22.9	19.3
Type of activities participated (Yes %)a
Nightlife*	65.1	38.0
Visit a museum or hall of fame*	33.3	25.2
Visit a historic site*	51.4	38.0
Explore a small city or town*	65.0	54.8
Dine at a unique restaurant*	71.5	58.0
Visit some other type of attraction*	69.8	56.2
Shopping*	75.6	61.8
Casino gambling*	30.2	9.9
Outdoor recreation activities*	65.1	57.0
Number of activities participated (0) b *	6.5	5.2
Planning period (days; (0)b *	173.4	85.3
Travel arrangements made by travel agent (Yes %)a *	63.4	13.2
Vacation on last trip (Yes %)a *	91.5	73.0
Primary purpose of trip was recreation (%)a *	70.0	46.8
Number of people in the travel party (0)b *	4.8	2.6
Mode of transportation (%)c	50.5	18.8
Airplane	50.5	18.8
Motorcoach / bus	7.6	1.8
Season of the trip (%)a *
Winter	24.8	17.3
Summer	31.1	38.8
Number of nights spent away (nights ; (0)b *	7.7	6.6
Type of lodging (%)c
Hotel / motel	71.4	44.5
Boat / ship	8.0	0.4
Total spending on lodging ($;0)b *	754.5	317.8