«Consumer and Trade Research in Brazil General Summary April 2010 Table of Contents 1.0 Foreword 1.1 Background 1.2 Objectives 1.3 Research Approach ...»
Consumer and Trade
Research in Brazil
Table of Contents
1.3 Research Approach
1.4 Market Size
1.4.1 Travel Incidence
1.4.2 Market Potential
2.0 Key Findings: Travel Trade
3.0 Key Findings: Consumer
3.1 Travel Characteristics of Past Travellers
3.1.1 Destinations Visited
3.1.2 Trip Planning and Booking Cycle
3.1.3 Inspiration Sources
3.1.4 Booking Method
3.2 Future Long-Haul Travel
3.2.1 Destination Interest
3.2.2 Demographic Profile of Those Interested in Visiting Canada
3.2.3 Perceptions of Canada
3.2.4 Travel activities of past visitors to Canada
3.2.5 Product Preferences
3.2.6 Relevancy of the CTC’s USPs for the Brazilian Market
Conclusions and Recommendations
Brazil, home to 196 million people, is presently the world’s 10th largest economy in terms of GDP. According to The Economist (November 2009), Brazil largely avoided the global economic downturn and its economy is now growing at an annualized rate of 5%. Forecasts vary, but Brazil is predicted to become the world’s fifth largest economy by 2025 overtaking France and Great Britain. São Paulo is also predicted to be the world’s fifth wealthiest city by 2025.
As the economy expanded in recent years, Brazilians’ standard of living has improved, with approximately 20 million people now falling into the affluent middle and upper classes. The lower middle class is also growing quickly. Increased affluence has translated into stronger demand for international travel.
Brazil’s generally positive economic performance in recent years combined with strong economic forecasts has resulted in the Canadian Tourism Commission (CTC) identifying Brazil as an emerging market with considerable potential. In order to effectively position and market Canada to a broader Brazilian travel population and to capture a larger share of volume, the Canadian tourism industry needs to know more about the Brazilian long-haul travel market. To support the industry’s marketing efforts with research-driven strategies, the CTC and its partners - Ontario Tourism Marketing Partnership, Tourism Toronto, and Alberta Tourism Parks and Recreation - commissioned a large-scale assessment of the Brazilian travel market. TNS Canadian Facts and TNS Brazil conducted this research on behalf of the partner group between September and December, 2009.
Specifically, the objectives of this research were to:
• Determine the incidence of long-haul travel from Brazil and, perhaps more importantly, the size of the potential market for Canada;
• Determine the demographics, socio-cultural characteristics, travel motivations, and future travel interests of existing and potential Brazilian long-haul pleasure travellers (Please note that EQ segmentation has not yet been conducted for Brazil);
• Examine Brazilians’ perception of overall price / value issues related to Canada’s experiential tourism offer;
• Explore Brazilians’ attitudes towards pricing of tour package components in Canada and competing destinations;
• Determine trip planning and booking patterns including the use of travel agents and online booking tools;
• Explore consumers’ preferences for tour or Fully Independent Travel (FIT);
• Determine Brazilians’ perceptions of Canada as a travel destination, reasons for travel to Canada; product / experience preferences, and barriers to travel; and,
• Measure Canada’s image overall and as a vacation destination.
The research in Brazil consisted of three components:
Phase 1: Focus Groups with Brazilians: six sessions with long-haul travellers and intenders comprised the first stage of the research program. The focus groups explored travel habits and desires as well as attitudes and perceptions about Canada as a travel destination. Insights from this phase were used to guide Phase 2 (travel trade interviews) and Phase 3 (quantitative research with Brazilian travellers / intenders). Focus groups were conducted in September 2009 across the cities, ages, and past travel experience outlined in the table below.
Phase 2: In-depth Interviews with the Brazilian Travel Trade: Twenty interviews were conducted in-person or over the telephone with key influencers in the Brazilian travel trade during October 2009. The primary purpose was to gather the travel trade’s views on the Brazilian market and to identify opportunities for Canada.
Phase 3: Quantitative Survey with Brazilians: a large-scale quantitative survey was
conducted in six cities across Brazil in two parts:
i) Determine the incidence of past long-haul travel and measure future intent to travel among the Brazil population between the ages of 18-64 years and with the means to travel. This is referred to as the Travel Incidence Survey in this summary; and, ii) Gather in-depth information on current Brazilian long-haul travellers and future intenders. This is referred to as the In-Depth Survey. To gain additional insights from previous visitors to Canada, an oversample was also conducted.
To overcome the limitations of descriptive univariate data, several multivariate techniques were employed in the survey to identify travel motivators, perceptions of Canada and competing
destinations, etc. Techniques included:
• Discrete Choice Modeling (DCM): an indirect way to measure how certain trip features impact Brazilians’ trip planning decisions. From respondent selections, it is possible to understand which elements weigh more heavily in Brazilian long-haul travellers’ choice of destinations.
• Gap Analyses: calculate the gap between the derived importance of attributes that impact destination selection and the performance of that attribute on a per country basis.
Results are plotted on a scatterplot split into four quadrants showing which attributes need to be promoted, maintained, monitored or fixed on a per country basis.
• Attributable Effects: is used to identify the positive and negative impact of a variable on a dependent variable. Those variables with high positive impact are worth improving while 2 | Consumer and Trade Research in Brazil the variables with high negative impact represent attributes that need to be closely monitored for failures. The technique is used to determine which products and experiences are drivers of interest in visiting Canada and competing destinations.
• TURF Analyses: was used to determine which, if any, of the CTC’s Unique Selling Propositions (USPs) resonate with Brazilian long-haul travellers. TURF, an acronym for Total Unduplicated Reach and Frequency, identifies which combination of USPs in a communications piece will best enable the branding message to reach the maximum number of target travellers.
1.4 Market Size
Brazilians currently make 2.8 million long-haul trips annually, making the market tiny by global standards. Still, double-digit growth in recent years and strong economic forecasts makes the market alluring. The United States has traditionally held the largest share of the Brazilian travel market (approximately 30%). The Brazilian travel market to Canada has grown an average of 9% annually since 2001 and is presently estimated to contribute $104 million to the Canadian economy. Despite attracting increasing volume from Brazil in recent years, Canada currently captures less than 3% of the long-haul market (approximately 72,000 Brazilians per annum).
As noted earlier, the initial stage of the quantitative survey, the Travel Incidence Survey, was designed to determine incidence of long-haul travel among Brazilians. Travel incidence is a combined measure of past long-haul pleasure travel experience and future pleasure travel intentions.
Six key Brazilian cities were included in the study. The cities included in the study were chosen because of their large populations, relative concentration of wealth, and geographic representation. Combined, the six cities are home to 83.9 million Brazilians over 18 years (45% of the country’s population).
Cities Known For Population (18+)
Brazilian society is stratified into socio-economic groups. A calculation was built into the survey to ensure only those with the economic means to travel (socio-economic Class C1 and above) completed the survey.
4 | Consumer and Trade Research in Brazil The questions the CTC typically uses to determine travel incidence were employed in this
study. They are:
How many times have you taken a pleasure trip of four or more nights with at least one night in paid accommodation outside of South America in the past three years, that is, since October 2006?
Those who indicated one or more trips meeting these criteria are considered Past Travellers.
In the next two years, that is, before October 2011, how likely is it that you will take a pleasure trip outside of South America of four or more nights with at least one night in paid accommodation? The response options are definitely, very likely, neither likely nor unlikely, not very likely, not at all likely.
Those who answer definitely or very likely are considered Intenders.
1.4.2 Market Potential The proportion of Past Travellers found in the Travel Incidence Survey is then applied to the total adult population falling into socio-economic C1 and above to calculate an estimate of the size of the current traveller market. The process is repeated to determine the Intenders proportion. The two proportions are combined to determine travel incidence and estimate the size of the potential long-haul travel market.
In the Brazilian context, the size of the Intenders market is far larger than the Past Travellers market. We have provided a further break-down to show the relative size of the Intenders market who definitely plan to travel (Conservative) versus those who are definitely or very likely to travel (Traditional) in order to narrow this definition to the more serious future travellers.
Canadian Tourism Commission | 5
2.0 Key Findings: Travel Trade A total of 20 interviews were conducted with key members of the Brazilian travel trade to explore issues affecting the trade, investigate perceptions of Canada, uncover effective marketing strategies employed by competing destinations, and identify potential roles and expectations of the CTC.
The travel trade confirmed that the Brazilian long-haul market has grown considerably in recent years fueled by growing affluence and desire to see the world. However, the trade highlighted the fragility of the long-haul market and its dependence on strong exchange rates and economic conditions. There was mention of unique programs to boost long-haul travel such as flexible payment terms for flights. The Brazilian trade travel believes their role is changing as travellers increasingly turn to the Internet to research and book trips. While consumers appear to still be booking long-haul travel through the travel trade presently, Internet use is growing in Brazil and online booking behaviour will likely follow the pattern of other more developed countries.
The trade confirmed the dominance of the United States in the long-haul travel market, both as a first-time and repeat destination. However, they agreed that while the typical Brazilian traveller will return to the US many times, primarily for shopping and entertainment experiences, there is a desire for cultural experiences. Currently, Europe dominates the cultural tourism market.
The trade feels Brazilians’ horizons are broadening and there is increased demand for less mainstream destinations and activities. Destinations such as Dubai are aggressively pursuing the Brazilian market with well-supported and innovative marketing campaigns. The trade does not currently view Canada as an active player in the Brazilian market.
Canada is currently perceived as difficult destination to sell due to Brazilians’ lack of knowledge about what the country has to offer, limited and expensive flights, and a cumbersome visa process. However, many travel trade representatives familiar with Canada feel the country does have much to offer Brazilian travellers with one noting that Canada has “all the modern conveniences of the US plus the sophistication of Europe.” Regarding the role of the CTC, the Brazilian trade is eager to learn more about Canada. They felt travel agent education programs were lacking and noted this was a role for the CTC to assume. They also encouraged the CTC to make a long-term commitment to Brazil.
6 | Consumer and Trade Research in Brazil
3.0 Key Findings: Consumer The following section highlights findings from the In-Depth Survey which was designed to gather detailed trip behaviour and planning information from i) past long-haul travellers who had taken a qualifying trip (hereafter called Past Travellers) and ii) Intenders (intending to take a future long-haul trip).
3.1 Travel Characteristics of Past Travellers This section presents data from Brazilians with previous long-haul travel experience.
3.1.1 Destinations Visited Recent travel data confirms the dominance of the United States with 29% of past travellers having visited the US in the preceding three years. European destinations collectively drew a substantial number of Brazilians with five countries (Germany, Portugal, Spain, Italy and France) each attracting a larger share than Canada which emerged in seventh spot.
3.1.2 Trip Planning and Booking Cycle