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Outlook for U.S. Travel Suzanne D. Cook, Ph.D. Senior Vice President of Research U.S. Travel Association. Background. We’re in a recession that just won’t quit Sharp deterioration in labor market - 5.7 million jobs lost since start of recession in December ‘07
Outlook for U.S. Travel Suzanne D. Cook, Ph.D. Senior Vice President of Research U.S. Travel Association
Background • We’re in a recession that just won’t quit • Sharp deterioration in labor market - 5.7 million jobs lost since start of recession in December ‘07 • Unemployment rate now at 8.9 percent; forecasted to peak at 10.2 percent in Q1 2010 • Household and corporate retrenchment • Economy will remain weak; recovery expected to begin in late 2009
Consumer Confidence posts gains but still near record low 54.9 1985 = 100 Source: The Conference Board
Leisure Travel Trends • In decline since Q3 ‘08 • Travel still viewed as a “right” • Shorter, closer-to-home trips • Quest for values and deals • Trading down, not out
Business Travel – The Weakest Link • $244 billion in expenditures • 2.4 million jobs • $39 billion in federal, state and local tax revenues
Business Travel Trends • 93% of companies implementing cost-cutting measures • 87% of companies plan to spend less on business travel this year - focusing more on revenue generating travel rather than education or incentives • 51% of business travel decision-makers report declines in business travel
Domestic and International Enplanements (Percent change Q1 ‘09/Q1 ‘08) Domestic International Total Source: Air Transport Association
Lodging Industry Forecast 2000 Smith Travel Research, Inc.
Leisure travel intentions* increase over same point last year * Percent of U.S. adults intending to take leisure trip in next six months Source: U.S. Travel Association/YPartnership travelhorizons™
Traveler Sentiment IndexTM (TSI) Improving 100 93.0 90.2 • Interest • Time Available • Money Available • Affordability • Service Quality • Safety of Travel 89.1 78.2 March 2007 = 100 Source: U.S. Travel Association/YPartnership Travelhorizons™
Traveler Sentiment Affordability Index on the RisePerceived affordability of travel rises… March 2007 = 100 Source: U.S. Travel/YPartnership Travelhorizons™
Reflects reality of smaller increases or declines in travel-related costs (Percent change YTD through March 2009/2008) Food away from home Recreation Airfares Lodging Motor Fuel Source: U.S. Travel Association – Travel Price Index
Gas prices down from $4.00+, but are beginning to rise Source: AAA Daily Fuel Gauge Report www.aaa.org
Money Available for Travel Index on Par with April 2008 86.8 March 2007 = 100 Source: U.S. Travel/YPartnership Travelhorizons™
Summer Domestic Leisure Travel2001 – 2009F Millions of person-trips Source: U.S. Travel Association
Trend in International Visitors to U.S. (2005-2010 forecast) Arrivals in Millions Sources: U.S. Department of Commerce, ITA, Office of Travel & Tourism Industries; Secretaria de Turismo (Mexico); Statistics Canada & Tourism Economics
Summary – 2009 Visitation Forecast Domestic Leisure Domestic Business International -2.5% -5.8% - 8.9% (International) -6.9% (Overseas) Source: U.S. Travel Association’ and Tourism Economics
Summary – 2009 Spending Forecast Total Domestic International -8.1% -8.8% -12.9%
Save the Date October 26-28, 2009 - Little Rock, Arkansas