Consumers nervous, cutting back according to reports
Travel demand is almost always a good predictor of what’s to come for the overall economy. It’s like the canary in the coal mine. When consumers and big companies start to feel nervous about future prospects, travel is usually one of the first things to get cut (or reduced) from the family or corporate budget.
So while employment and overall economic numbers still look like it’s full steam ahead for the U.S. economy, the travel industry may be starting to feel a light recessionary chill. Some examples:
Recommended Video”We have had 100‐plus straight months of travel expansion in the U.S., and there are now parts of the world that are just starting to join the travel revolution…But despite these positive factors, I see increasing and worrying signs about where worldwide demand is headed and evidence that suggests the U.S. is poised for a slowdown across every travel category” writes Clayton Reid, the CEO of MMGY Global, a giant marketing and communications firm in the travel space.
MMGY’s research shows an overall decline in demand for travel over the last two years, with a lot more travelers citing sensitivity to pricing as the reason for cutting back. It finds that business travel demand is currently a little stronger than leisure demand, which is propping up airfares and hotel rates, but that is also expected to decline in 2020. With economies outside the U.S. going soft, fewer travelers will be headed to big American gateway cities like New York or San Francisco, pushing down demand.
Reid wrote, “According to The Wall Street Journal, 49% of economists predict a global recession late this year. Yes, that’s only half of those polled, so the optimist in me wants to believe the other 51%. The problem: Half of the 51% think a recession is still coming in 2020, and, by the way, in 2007, only 44% of economists thought we were headed for a recession that came just months later.”
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