After months of doom and gloom news about major losses in the travel industry, there’s no better time to focus our attention on the light at the end of the recession tunnel.
There are encouraging signs that consumer confidence may be foreshadowing a better year than originally anticipated, which could mean positive news for tourism. According to the U.S. Conference Board, consumer confidence increased considerably in April and May. That confidence is reflected in travelers’ intentions for vacations and business trips in the next 12 months. In November 2008, only 10% of travelers foresaw increasing their travel in the next 12 months compared to the previous 12 months; in April 2009, that figure rose to 21%.
The converse is true as well – the percentage of those planning to decrease travel in the next year compared to the prior year has fallen significantly between November (34%) and April (24%). (Travelocity’s Traveler Confidence Report)
A key factor in this is smart marketing. The travel media’s touted “year of the deal” has certainly helped turn the tide, with decreased airfare and value hotel packages giving wary travelers an offer they can’t refuse. When asked how lower prices would impact travel plans, 25% said lower airfares would allow them to take a trip they had not expected, while 18% said lower hotel rates would allow them to stay at a hotel with higher star rating (Travelocity’s Traveler Confidence Report). Best of all, travel budgets overall are stronger than anticipated. According to Travelocity’s Traveler Confidence Report, two-thirds of respondents report their summer travel budgets will remain the same or increase compared to last year. Of the one-third planning to reduce their budgets, the vast majority will do so by 50% or less.
In California, the picture is looking a little rosier as well. Despite a difficult fourth quarter in 2008, data released in April show that travel spending in California increased 0.9% to $97.6 billion for the year (Dean Runyan Associates). Also, the number of domestic stays was down just 1% in 2008, despite high gas prices in the first half of the year and the economic downfall in September (D. K. Shifflet & Associates). Contributing to this stability is a large and mobile in-state traveling population, which helped boost leisure travel by this segment 6.4% last year (D. K. Shifflet & Associates). The international markets had an even better year in 2008, with overseas visitation to California up 3-5% for the year and international visitor spending in the state up 9.6 percent, according to the U.S. Department of Commerce and Dean Runyan Associates.
Looking forward, 78% of traveling Californians who were surveyed recently by travel research company SMARI said that they intend to take a trip in-state in the next 12 months. This is on par with intentions from a year ago (79%) and is up considerably from fall (71%). It seems that despite economic difficulties in California, residents are becoming more optimistic. California is also a top destination for visitors from other west coast states, and the numbers indicate that travel intentions from these “primary” markets – Arizona, Nevada, Washington, Oregon, Colorado and Utah – are high, with more than half (52%) of those surveyed declaring intentions to visit the Golden State in the next year. This is up a bit from last year (50%) and again up considerably from fall (45%).
Although we are seeing some encouraging trends, it’s important that the travel industry in California and the U.S. not take this for granted, and continue to provide the greatest value possible for consumers by creating “must do” deals and experiences. Destination marketers must also do their best to remind consumers about the benefits of travel, from creating special memories in wonderful places to enhancing health, relationships and productivity. The California Travel and Tourism Commission emphasizes all this in our lifestyle marketing efforts, and our stable funding has put us in the enviable position of being able to continue promoting the state globally via sales, advertising and public relations. While some of our partners have had funding decreases, they continue to leverage our resources (see tourism.visitcalifornia.com), helping us unify and expand our industry voice around the world. We believe it’s important to continue working smarter together to make the light at the end of the tunnel grow brighter and brighter.