Biz travel catching up to leisure
The business travel market has been outperforming the leisure side for two years, but the gap is beginning to narrow, says a study by ITG Investment Research.
“The pickup in business is starting to level off,” said Matthew Jacob, a senior leisure analyst.
Business travel during the summer is usually slow. So while the study shows that slowdown, there are questions whether business travel performance later will improve.
Leisure travel is clearly picking up. But Jacob cautioned that leisure’s improvement will depend on the avoidance of a double-dip recession.
In different segments of the market:
—“Cruise is very strong as of late,” Jacob said, noting that the Caribbean is performing well, and so are exotic destinations.
—Europe, however, continues to drag. “Europe is weaker than you’d think, but the bright side is everything else is better than you think,” he said. Jacob said Europe cruising has been hit by concerns about traveling in the Middle East and Africa.
—In both the cruise and lodging sectors, ITG has found, the upper ends of the market are performing better than the middle and lower ends. “People migrated down over the last few years, and now they are paying up because the prices are not as high as they were,” Jacob said.
—In the cruise sector, that is evident with the strength of exotic cruises and Alaska sailings, which were weak during the recession and are now picking up.
—Within lodging, ITG found that high-end chains have enjoyed particularly strong year-over-year increases in average daily rate relative to midscale and economy chains in recent months, with luxury leading the pack.
By David Wilkening
David
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