As we cruise into Thanksgiving week and the holiday season, travel professionals can take comfort in, and give thanks for, a travel economy that is looking pretty good.
The data for international travel by U.S. citizens tells a big part of the story. Through August, the Commerce Department reported that 47 million Americans traveled internationally, a solid 9.7% increase over the same period of 2013.
As usual, travel to nearby Canada and Mexico accounted for much of the gain, but overseas travel was also up substantially, showing a 6.5% increase, to 21.5 million travelers, for the first eight months.
Coupled with strong gains for inbound travel, which rose 7.9% through July, the result is showing up nicely on suppliers' bottom lines.
The U.S. airline industry, for example, is putting up numbers like we've never seen before. The Big Three plus Southwest have pulled in over $100 billion in revenue during the first three quarters, generating after-tax net income of $5.6 billion.
And the trend is global. IATA estimated that worldwide airline traffic was up 6% through September and that the world's airlines will end the year with an $18 billion net profit.
The hotel industry is also in hyperdrive. Despite steadily increasing room rates, occupancy levels are approaching a 30-year high, reports PricewaterhouseCoopers. It also is projecting that the average occupancy rate will hit 64.9% next year, even in the face of a 6.2% increase in average daily rates.
Just about everywhere we look in travel, the numbers are good:
• The Global Business Travel Association is projecting that 2014 will end with a 6.8% increase in business travel spending, followed by a 5.7% increase in 2015.
• The big three cruise companies boosted Q3 earnings by amounts ranging from 18% to 34%.
• Employment in travel-related hospitality sectors now accounts for 8 million jobs, an all-time high.
And there are signs that travel agents are sharing in the bounty. ARC's latest report shows that agency air sales, including taxes and fees, are up 4.5% for the first 10 months of the year at $78 billion, a six-year high.
ASTA agents, surveyed about their midyear outlook, overwhelmingly reported that 2014 would be as good or better than 2013, with a higher profit margin.
These positive signs reflect upward trends in the U.S. economy as a whole.
• Against the backdrop of stagnation in Europe and a recession in Japan, U.S. gross domestic product rose 3.5% in the third quarter.
• Inflation isn't happening.
• Unemployment has been trending down and fell to 5.8% in October, a six-year low.
• Fuel prices continue to fall, as well, with regular unleaded now pumping at under $2.90 a gallon, a five-year low. That reflects a drop in crude oil prices to $79 a barrel or less, quite a comedown from what was thought to be "the new normal" of $100 just a few years ago.
• Consumer confidence rose 5.5 points in October, while the Expectation Index, reflecting consumers' optimism about the next six months, rose a robust 8.6 points.
Yes, some of these numbers could be higher, and we would have liked to see some of them sooner, but they're here now, and they are helping to give the travel industry a good year and a platform for future growth, despite an alarming number of hot spots around the world where travel is challenged by war, political unrest, intolerance, crime and disease.
On balance, however, thanks.