Five Ways the Economic Downturn Has Affected the Travel Industry
Almost every industry has been affected by the economic downturn. The travel industry has been adversely affected by the struggling economy because it often relies on people taking vacations and spending money that is not necessary for everyday life. Businesses are also cutting back on corporate travel. Some of the ways the travel industry has been affected by the economic downturn include fewer business travelers, a decrease in motel rentals and an increase in companies using technology to conduct business.
1. Decrease in Hotel Bookings
Most travelers, especially families, are cutting luxuries like motel rooms out of their budget to make room for necessities like food and gas. Getting an easy online payday loan can help families have the cash they need to travel and spend time together.
According to Bjorn Hanson, associate professor at the Tisch Center for Hospitality, Tourism and Sports Management at NYU, cancellations of reservations made at full-service hotels have increased as much as 50% in recent months. Corporations canceling conventions and large company meetings have had a significant impact on these businesses.
Many hotel and motel chains are marketing to travel discount programs to get customers. Some hotels and motels are trying to appeal to government travelers who use per-diem allowances to fund their travel.
2. Airline Fare Stabilization
Even with rising fuel prices, most airlines aren’t raising prices to the levels they would be at if the economy was on stable ground. Rick Seaney, owner of airline fare tracking web site Farecompare.com, reports that there is a general consensus in the airline industry that they have raised airfare prices as much as the market can stand.
Most people are traveling much less than they used to and airlines understand that raising fare prices will likely make passengers travel even less. According to the New York Times, there was an average drop of 9.47 percent in the number of miles traveled by domestic passengers on major airlines from September 2007 to September 2008 and airline traffic hasn’t improved much since then.
3. More ‘Staycations’
Among people who are traveling, many are staying close to home. There have been marked increases in domestic travel versus international travel. A poll conducted by Harris Interactive showed about 34 percent of the people polled are planning to stretch their vacation dollars by staying close to home. Others vacationers are saving money by sharing costs of travel with other families or friends.
Declines in the value of the U.S. dollar is another reason for U.S. travelers to stay close to home. Travelers in countries around the world are commonly vacationing within their own continent, but international travel is much less popular than in recent years. Saving money is important to most travelers and using coupons and negotiating deals is much easier for travelers in their home country or with companies who speak their native language. Driving is also becoming a more popular way to travel than flying because it is less expensive for groups traveling together.
4. Increased Use of Coupons and Discounts
According to a recent study by Inmar, a company that tracks promotion trends and coupons, Americans cashed in about 27 percent more coupons in 2009 than the previous year. Ever since the economy began its sharp decline, everyone seems to be looking for a deal.
There are many discounts available to travelers. Some of the most popular organizations that people belong to, such as AARP and AAA, offer discounts on hotel rooms, rental cars and other travel expenses. Technology makes it easy to compare rates from different companies and make sure you are getting the best price on your trip.
Modes of transportation aren’t the only thing travelers find coupons for. Many use discounts on admission to theme parks, museums, and other attractions. Even restaurants offer buy-one-get-one-free deals or free meals for children or seniors. Even souvenirs can be found on sale.
5. Increased Use of Technology
Many companies are cutting back on nonessential travel to save money. It is popular for companies to use computer and mobile phone technology to conduct virtual meetings instead of paying for employees to travel long distances to meet face to face. Web cam technology is often used in corporate business to allow business people to see and hear their colleagues when they communicate. Many costs can be eliminated when using technology, such as catering, motel rooms and transportation expenses.
Technology also allows many people to work from home. Many companies are offering a telecommuting option to their employees. Working in an office at home can be just as productive than working in an office. Employers can rent smaller office spaces when many employees work from home. They also may have fewer energy costs. Employees benefit because they can be more flexible and have to pay fewer transportation costs.
The Travel Industry Has Likely Been Changed Forever
Many changes in the travel industry, such as the increased use of technology, will likely be permanent to some degree. International travel will likely increase as the global economy gains strength and the U.S. dollar increases in value. Airline fares may increase slightly as travelers begin taking to the sky in large numbers again.
Travelers want to get the most for their money and are finding ways to meet their travel needs even at times when they have less disposable income. Coupons are readily available for travel and most other products and services and saving money is likely to remain a high priority for travelers in the future. Travel has definitely changed in recent years, but the industry continues to change and adapt with market demand.