Negative economic factors ranging from high
consumer debt levels to subprime home mortgage troubles are not
expected to significantly impact demand for leisure and business
travel, according to the Travel Industry Association, which is
projecting "moderate growth" over the next year.
quite confident and interested in travel," said Suzanne Cook, the
TIA's senior vice president of research. "We have seen some
declines in consumer confidence but not much to worry
expenditures should be up close to 6% in 2007, Cook said. A 5.2%
increase is projected for 2008.
spending, including domestic and inbound travel, is expected to
reach $777 billion in 2008, compared with the $739 billion
projected for 2007.
Cook provided the
travel forecast for the rest of 2007 and 2008 during a conference
call with the media from the TIA's annual Marketing Outlook Forum
in Charlotte, N.C. More than 600 travel industry executives
attended the two and half-day forum which focused on marketing and
While the rising
cost of fuel and other consumer goods is placing "more pressures on
consumer spending," Cook said, economists attending the forum
indicated that they "don't expect consumers to retrench or that the
economy will go into a recession any time soon."
That's one reason
the TIA is projecting "moderate growth in all travel segments this
year and next," Cook said. By comparison, travel growth was viewed
as "slow" over the past year-and-a-half.
"We are now
forecasting travel volume will be up about one-and-a-half percent
this year," as well as in 2008, Cook said.
segment, which has remained strong for several years, is once again
expected to outpace business travel. "Leisure travel is up 19%
since 2000, while business travel has been essentially flat," Cook
said. "In fact, business travel in the U.S. peaked in
One factor keeping
business travel from declining, Cook said, is the meetings and
travelers are relying on technology to connect with customers and
clients, Cook said they nevertheless were traveling for meetings
and educational events. The Outlook forum, for example, had a
"We think people
will travel [for meetings and conventions]," Cook said. "On the
transient side, we think the difficulties of traveling, plus the
new technology that [has created] other options to business travel
have made it a harder environment in the business travel
She added that the
weak U.S. dollar relative to the euro has bolstered inbound travel
from Europe. "However, we are still 11% below the level we were in
2000 in the overseas market," Cook said. Airlines and hotel are
both posting solid gains, she said.
contact reporter Michael Milligan, send e-mail to [email protected].