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Restaurant Industry Trends
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Sunday June 11th, 2006 |
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TIA Forecasts Summer Leisure Travel Essentially Flat In 2006
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Historically high fuel prices are expected to have a negative impact on summer travel and are accompanied by broader economic concerns for many Americans. |
The Travel Industry Association of America (TIA) forecasts travel volume growth of less than 1 percent this year amid relatively soft travel intentions. According to TIA's Summer 2006 Forecast, Americans will take 325.6 million leisure person-trips during June, July and August 2006. A person-trip is one person traveling 50+ miles, one-way, away from home.
'I am concerned about a number of economic indicators with gasoline prices and the pocket-book impact they're having leading the way,' said Dr. Suzanne Cook, senior vice president of Research for the Travel Industry Association of America. 'We've had gasoline prices jump up for the summer travel season before and weathered it but there are additional factors to be considered this year.'
Dr. Cook explained that gasoline prices of $3.00 per gallon could be the 'tipping point' for many Americans. For example, it is the point at which 10 percent of travelers say they would seriously consider canceling a trip. Between $3.00 and $3.24 per gallon, an additional 26 percent would seriously consider canceling a trip. While the higher cost of gasoline this year will add only about $30 - $50 to the cost of the typical vacation, that alone does not account for the possible impacts on travel spending decisions from the week-to-week costs of keeping their gas tanks full prior to a vacation. Cook added that gas prices further complicate the picture because they threaten to fuel inflation and undermine economic growth and consumer confidence more generally.
Americans expect to stay away an average of 6 nights on their longest pleasure trip. Travelers plan to spend an average of $1,033 on their longest pleasure trip this summer, essentially unchanged from the summer of 2005 ($1,019). However, they will have to economize in some areas to compensate for higher hotel room rates and airline fares in addition to higher gas costs.
SUMMER 2006 HIGHLIGHTS
• Expect a reverse of last summer's travel pattern-Gas prices should cause weaker demand early this summer but demand will grow stronger as the summer wears on and travelers get used to high gasoline prices. (This assumes that gas prices have stabilized and may even decline over the summer and that there are no more gas price surprises, or other events.)
• Continuing past trends, air travel and hotel demand will rise even as hotel room rates and air fares go up.
• Forty percent of travelers plan to take children or grandchildren on their longest trip.
• The top three activities planned by summer travelers are visiting friends and relatives (55%), going to a beach or lake (38%) and visiting small towns or rural areas (27%).
• Rounding out the top planned summer travel activities are: visiting cities/urban areas (21%), visiting national or state parks (20%), visiting historic sites (20%), camping, hiking or climbing (16%), fishing (15%), attending a family reunion (14%), visiting a theme/amusement park (15%), visiting a museum (14%), and going to a casino (14%).
• Five percent of summer travelers plan to use an RV, while 6 percent intend to enjoy an all-inclusive resort. And 6 percent say they plan to take a cruise.
• International travel to the U.S. will continue to rise as declines in the value of the dollar make the U.S. an international travel bargain and as airlines more vigorously pursue international markets and add capacity.
SUMMER TRAVEL GAS PRICE FACT SHEET
• Recent gasoline price increases will have an impact beyond the estimated $30-$50 in additional costs for gas on the typical vacation. Those impacts include consumers feeling pinched by weekly gas costs while they are contemplating and booking a vacation and also by possible declines in consumer confidence caused by substantially higher gas prices.
• When asked specifically about ways they might economize, 71 percent said would use one or more of tactics suggested. The largest number said they would look to economize on food purchases (52%). This could benefit fast-food chains and family restaurants. Other areas where they would attempt to economize are - in order - accommodations, activities, and last, transportation. Almost one-third (31%) are looking for what they perceive to be more economical destinations - 22 percent said they would shorten their trip.
• Twenty-six percent of those planning to travel less or not at all this summer cite gas prices as the reason versus 18% last summer. There is also growing concern about personal finances - 24 percent cite this concern this summer vs. 17 percent last summer.
• Auto travel (88 percent of leisure travel) will be sluggish - and probably closer to home. Destinations near major population centers, as well as those offering creative incentives and new things to see and do could benefit.
• Gas prices are attributed as a major factor behind the recent decline in consumer sentiment reported by the University of Michigan and the growing numbers of Americans, according to a Gallup poll, who fear the economy is beginning to sour.
• GDP was up a very robust 4.8 percent in the first quarter, as consumer spending surged, but Global Insight expects this to slow to 3.2 percent in the second quarter and 2.6 percent in the third. April retail sales data also show a slowdown in spending and we expect consumer spending to continue to slow in the coming months.
TIA is the national, non-profit organization representing all components of the $645 billion travel industry. TIA's mission is to represent the whole of the U.S. travel industry to promote and facilitate increased travel to and within the United States.
(Data based on TIA/Synovate Voice of the Traveler Survey)
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| Travel Industry Association |
Contact Information:
1100 New York Avenue, NW, Suite 450, Washington, DC 20005-3934,
Tel. 202.408.8422
Fax 202.408.1255
Click for Website
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| TIA is the national, non-profit organization representing all components of the $537 billion travel industry. TIA's mission is to represent the whole of the U.S. travel industry to promote and facilitate increased travel to and within the United States. |
| More Travel Industry Association Items |
| TIA President And CEO Roger Dow Testifies On Western Hemisphere Travel Initiative |
| Travel Prices Increase 4.3 Percent In March |
| Online Travel Bookings Increase At The Expense Of Telephone Reservations |
| Global Summit Affirms Need for National Travel and Tourism Policy |
| Travel Industry Performance Mixed in February |
| Top U.S. Attractions in 2006 |
| Ninety-Two Percent of Travelers Taking Summer Vacation in 2006 |
| High Gas Prices Slow Growth of Memorial Day Travel This Year, Says Auto Club |
| Average Travel Costs Up 8% To 36% This Summer |
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