|Travel Industry Trends Update
While the turnaround may be around the corner, most of the travel industry is still feeling the negative impacts of the recession. Ironically, some recreation activities, such as camping, are enjoying a revival after a long period of decline and recreation visits to National Parks are up.
Today, the Labor Department issued its May unemployment report, which was significantly better than expected. Employers cut 345,000 jobs in May, the fewest since September. Signs of the turnaround also come from the Conference Board’s Consumer Confidence Index, which increased 17 points to its highest level in eight months in May. The director of the Board’s research arm concluded that “the worst is behind us”. Nonetheless, the official unemployment rate reached 9.4%, a 25 year record. Economists predict two more quarters of negative GDP, which is taking its toll on the travel industry. Consumer spending contracted in March and April as consumers’ savings rate increased and unemployment rose. Even spending among upper income Americans declined.
Data from various surveys confirm that more than half of leisure travelers altered their plans this year in response to the economic climate. About two-thirds (or 32% of those with summer travel plans) cancelled trips. A Harris Poll found 65% of Americans are still planning travel but many will take different types of trips and reduce spending. As predicted at the America Outdoors Association conference, value propositions are most attractive to travelers in this market. In the lodging sector, luxury properties are down more than value oriented properties, according the Smith Travel Research. Trends show that travelers are staying closer to home and taking advantage of lower gas prices to drive to destinations. One unexpected impact is that many travelers have seized upon “special offers” to trade up, according to agents for American Express and Expedia.
Inbound international travel has been impacted more than domestic travel. Swine flu fears are reported to have had a major impact on some Asian markets. Florida reported a 13% decline in inbound international travelers.
The Air Transport Association (ATA) reports passenger enplanements on U.S. airlines down 6.3% and revenues down 18% in April as compared to the same month in 2008. Even though airfares are relatively inexpensive now compared to last year, many cruise lines customers are driving to their departure ports because of the costs. To spur demand, some cruise lines are offering job-loss insurance, which enables customers to cancel at any time up until their cruise departs if they become unemployed.
Some hard numbers from various industry segments when compared to last year at this time.
YTD compared to 2008 YTD
Air Traffic Passenger Enplanements (Domestic) -10.6
Air Transport Association
Room Revenue Lodging -13.6
Smith Travel Research
National Park Service
Overnight Stays -8.1
Recreation visits 11.2%
There are some bright spots in outdoor recreation. Forest Service campground reservations are up 20% according to the agency’s Washington office. Some RV Parks are reporting strong bookings. The National Park Service is reporting an increase in recreation visits although overnight stays are off. Outfitters near metro areas with inexpensive day trips are reporting good business. The “Staycation” concept seems to have taken hold for many travelers. Outfitters in some unique economic environments with relatively low unemployment and drive-in markets are doing well. AOA’s surveys show that day trips are doing significantly better than multi-day trips. Outfitters in rural areas dependent upon fly-in business and longer trips are doing the worst, according to our surveys. Even some multi-day trip outfitters who book at 90% capacity or greater in most years, including last year, report that reservations are down 30% this year when compared to 2008. For these outfitters, the current business climate is unprecedented.
One positive sign in the outfitting industry is that vendors are reporting an uptick in orders after a weak winter and spring. That may mean some segments of the industry are bouncing back with last minute buying decisions from consumers, a trend that the U.S. Travel Association reports is the norm throughout the travel industry.
Secretary Salazar recently announced that the Parks which normally charge admission fees will host three free weekends this summer. NPS is soliciting and publishing concessioner and outfitter activities and special offers on these weekends and at other times throughout the summer.
From the NPS Website:
America’s Best Idea – the national parks – gets even better this summer with three fee-free weekends at more than 100 national parks that usually charge entrance fees*.
Mark your calendars for fee-free weekends this summer:
• June 20-21, 2009 (Father’s Day weekend)
• July 18-19, 2009
• August 15-16, 2009
To take advantage of this promotion, if you have special offers that you want to make during this period NPS will put them on their site. NPS will promote special offers as well as regular activities and services. Trips, activities and events promoted must be in National Parks under a contract, CUA or permit will be posted on the site. The NPS page promoting concessioner activities can be found at http://www.nps.gov/pub_aff/parks2009/concessions.htm
To get your special offers or regular activities posted on the site send a description of your trips and photos to firstname.lastname@example.org
Our thanks to NPS for helping boost Park visits.
Saturday, June 13th is National Get Outdoors Day. Events include rock wall climbing, mountain biking, disc golf, fishing derbies, boating and much more! To participate and promote an event to attract new users to outdoor activities go to www.nationalgetoutdoorsday.org!