Sunshine Matters

I recently attended the U.S. Travel Industry’s Marketing Outlook Forum, held in Little Rock, Arkansas to learn what the experts see on the tourism horizon.  A recent cover of Business Week proclaimed, “The recession is over–good luck surviving the recovery.”  This was also the consensus at the forum. 

Indicators are that we have reached the bottom, but the recovery will be slow.  The most recent figures show continued high unemployment, with the national unemployment rate jumping to 10.2 percent in October from 9.8 percent in September.  This is the largest percentage increase in unemployment since April 1983.  Along with high employment, there is also low consumer confidence, which dropped in October to 47.7 from 53.4 in September.

In the next five years, we can expect to see a new normal as consumers will be reluctant to spend.  This is demonstrated by a recent Gallup poll that shows there is a nearly 50 percent decline in consumers average daily spending.  Driven by fear and necessity, the thrifty consumer has emerged.  Consumers are reevaluating all of their purchases and holding off on large purchases if things seem uncertain.

Declines in travel seem to be bottoming out.  According to Smith Travel Research, hotel demand declines are near the bottom.  For 2009, according to the U.S. Travel Association, U.S. Domestic Leisure visitation is anticipated to be down 2.0 percent, with spending down 5.3 percent; Domestic Business visitation is down 6.2 percent, with spending down 10.9 percent and International visitation is expected to be down 8.2 percent, with spending down 12.9 percent. Total travel is down 4 percent and spending is down 12 percent. 

However, there is some good news.  Domestic Leisure visitation for 2010 is predicted to be up 1.9 percent.  International visitation is expected to be up 2.8 percent, with spending up 4.4 percent.  These are modest gains over a down year.

In Florida, we are experiencing a similar pattern to what is going on nationally.  Quarter Three (July-September) visitation to Florida showed smaller declines than Quarters One and Two, with domestic travel flattening in the third quarter.  Florida year-to-date figures show that visitation to Florida is down 2.3 percent for the first nine months of the year.  While we expect it will be a slow recovery, we continue to focus on Florida’s strengths.