As the tourism industry has catered to Hispanics, the market has grown. Now comes the business segment.
Travel agent Ruben Arenas has a good reason to target Hispanic customers: Travel among them is booming. According to a survey by the Travel Industry Association (TIA), Hispanic travel increased 11 percent between 1997 and 1999, the latest figures available. Overall travel, on the other hand, grew by just 1 percent during the same period.
Mr. Arenas, CEO of Arenas Travel in South Gate, California, specializes in business travel for Hispanics. He also knows something about growth. In five years, Arenas Travel has gone from start-up status to rank number 258 on the HISPANIC BUSINESS 500, with revenues of $14.7 million.
Currently, Hispanic company-related travel accounts for nearly 80 percent of those revenues. "I feel comfortable with that," says Mr. Arenas. "The Los Angeles area has more than 400,000 Hispanic companies. If I could get even 10 percent of [their business] my revenues would grow tremendously." Hispanic individuals and families account for nearly all of the remaining 20 percent of his company's revenue, he adds.
The latest round of Census data indicates more growth ahead for the market. First, growth in the number of Hispanic-owned businesses is nearly double the national average, and those companies are concentrated in large metropolitan travel hubs (see "Implications of the Economic Census," June). Revenue growth among Hispanic companies, as well as rising purchasing power, means that Hispanics have more money for both business and pleasure travel (see "Hispanic Purchasing Power Takes Off," June).
The personal travel market for Hispanics shows growth potential, too. According to the TIA survey, Hispanic travelers are much more likely than general market customers to take their children along on trips and to include theme parks in their vacation plans. Each month, the proportion of Hispanic households taking trips averages 27 percent. California has the greatest number of Hispanic travelers.
The increase in Hispanic travel stems in part from better marketing, industry experts believe. "In the 1990s, every sector of the travel industry – hotels, theme parks, city visitor bureaus – reached out to the minority traveler through targeted advertising, minority travel guides, and special ethnic promotions, and we are seeing the results," says William Norman, president of the TIA. Industry infrastructure, such as trained Spanish-speaking travel agents and tour operators, also developed in tandem with the market during the 1990s.
In the coming decade, the Internet looms as the largest trend in the travel industry, but the Hispanic market poses a special challenge in going online. Arenas Travel, for example, hasn't yet made a strong push to woo customers online. The agency's Web site (www.arenastravel.com) provides users with electronic airline reservation forms and links to rent autos, book flights, and reserve hotel rooms. "I haven't put much effort into the Web yet because, based on my experience and feedback from my salespeople, most of our customers who use the Web like to compare air and hotel prices online before calling us," says Mr. Arenas. The agency then tries to find cheaper fares and room rates to keep customers coming back.
The Internet poses a potential threat to specialized travel agencies, such as Arenas, that pioneered the Hispanic market. The TIA reports that nearly two-thirds of the 90 million people who traveled last year used the Web to help plan their trips, up 13 percent from the previous year. Frequent travelers are more likely to use the Internet. "We are seeing significant changes in consumer preference, with online travel planning being used more often in place of travel agents and the telephone," says Andrea Stueve, director of consumer research for the TIA.
Given that long-term trend, Mr. Arenas plans to upgrade his company's Web site eventually. To his existing offices in Los Angeles, Portland, Miami, and Guadalajara, he plans to add a storefront in Chicago by the end of this year, and another in Mexico City in 2002. Strategically, he remains focused on high-touch, rather than high-tech, service. For now, he says, many Hispanics prefer the personal comfort of talking face-to-face with a Spanish-speaking travel agent.
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