Ailing economy impacting US travel market
The uncertain economy is leading some Americans to cut back on vacations and at the same time companies are cooling their travel budgets in developments that could have far-reaching impacts on the US travel market.
Fifty-five percent of those polled said they would “cut back on discretionary expenses like eating out and vacations,” according to the GfK Roper Reports’ random telephone survey of 1,005 adults conducted earlier this month.
“Hotels, car-rental agencies and restaurants, which along with airlines employ roughly 4% of US workers, will also feel the pinch,†says the AP.
Travel bookings so far are holding up. But corporate travel managers are taking a more active role in keeping on-the-road spending in check by measures such as increasingly asking employees to provide economic rationale for their trips.
At the same time, airlines facing rising fuel costs are increasing fares. Business- and first-class fares went up by 12.4% during the first half of February compared with last year, according to Sabre Travel Networks. Economy fares climbed 6.2%.
Airport rental-car rates have jumped at least 20% each week this month compared with a year ago, according to Abrams Consulting Group. And hotel room rates jumped 5.9% last year, according to Smith Travel Research.
The GfK Roper survey also found that consumer confidence is low, with only 10% saying it’s a “good time to buy” the things they want and need, while 44% said it’s a good time to wait. This is the lowest level of confidence recorded in this periodic survey since September 2001.
An earlier survey from GfK Roper Reports on 2007 vacation trends found that longer vacations increased slightly in popularity last year.
The survey found that 25% of travelers preferred taking one long vacation in 2007 over several shorter trips, up from 21% in 2005.
Another survey conducted on behalf of AIG Travel Guard found that Americans are still planning to travel in 2008, but may be altering their trips to cut costs.
A recent nationwide survey of over 300 American travelers who booked at least one leisure trip in 2007, conducted by RUF Strategic Solutions on behalf of AIG Travel Guard, found that, in spite of the weak economy, 72% of those polled said that they are not cutting back on the amount of leisure trips they are taking in 2008.
More than half or 53% said they are not planning to cut back on the quality or length of their trips this year.
While many American travelers are not cutting back on the amount of trips they plan to take, the survey found that almost half of travelers polled do plan to alter the quality of leisure trips they are planning for 2008 in an effort to save money.
Twenty-two percent of those polled, for example, say they plan to eat at less expensive restaurants, followed by 17.2% who say they will travel closer to home.
Report by David Wilkening
David
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