What Is The Travel Industry Telling Me?
Travel, like
advertising (which I discussed
yesterday), is a highly discretionary form
of spending for businesses and consumers. This makes sense, since people take
vacations when they are feeling optimistic about their current fiscal situation,
and corporations send their sales people around the world in an effort to drum
up business in anticipation of stronger demand. Conversely, during sour economic
periods, consumers have less money to go on vacation, while businesses cut back
on travel expenses. As a result, travel data can be a useful indicator of
current consumer and corporate attitudes regarding the economy. Recent positive
developments in the travel industry indicate that economy is indeed picking up.
Lodging Bookings
Pegasus Solutions
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PowerRating), a company that
provides hotel room reservation services, with distribution channels that
include tens of thousands of travel agencies and more than 48,000 hotel
properties around the world, recently reported that for the first time in 20
months it booked more reservations on May 6 than it did on Sept 10th, 2001.
Furthermore, the company stated that in May, for the first time this year,
reservations made by traditional travel agents were back up to year-ago levels.
Airlines
This week, several major airlines announced that
the percent of occupied seats on flights increased from year-ago levels.
Specifically, Continental Airlines
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PowerRating) reported that its load factor, or
occupancy rate, was up 2.4 points to 75.9% in May, from the same period one
year ago. Continental’s figures are usually regarded as a good proxy for the US
airline industry as a whole.
Corporate Travel Managers
A recent proprietary survey by a major US
investment bank of corporate travel managers showed a dramatic improvement in
attitudes toward business travel, suggesting that a brighter future lies ahead.
The survey reported that 64% of those surveyed expect an improvement in travel
budgets (vs. 37% in April) while no managers are expecting a deterioration in
budgets (vs. 37% in April).