Wednesday, May 14

North Americans just have to travel

(Originally published in TOURISM)

Despite the many flight cancellations in April, the slowing economy, rising gas prices and the weak dollar, Americans appear to be sticking to their summer vacation plans and business travellers are still being sent around the globe, write Susan Stellin in The New York Times. The only change from last summer is the new emphasis on finding ways to cut costs.

"Leisure travel is kind of like food and rent -- it's considered an essential cost within a relevant range," said Bjorn Hanson, who follows the hospitality industry for PricewaterhouseCoopers.

By many measures, the number of people traveling set records in 2007, and those figures are holding steady so far this year. Travel agents and industry analysts report robust bookings for US domestic, international and business travel, but Hanson says companies have cut back so much since 2000 that there is not much fat left to trim.

"If you decide two days before a travel date and can't find a reservation, travel just doesn't happen," Hanson said.

It turns out that demand for travel is less influenced by the overall economy and airport struggles than all kinds of factors not easily measured -- like how much snow is on the ground, where grandpa and grandma live, and even whether a favorite football team is doing well.

Although the airlines are struggling with skyrocketing fuel prices, aging planes and calls for tighter regulation, one bright spot for the industry is that passengers are still filling up seats and booking flights.

"We're concerned about a recession, but probably more in the second half of the year," said John Heimlich, chief economist for the Air Transport Association, pointing out that airlines have not announced widespread fare sales.

"That to me is always a sign of an effort to stimulate traffic -- and we haven't seen a lot of that," he said. Nor have hotels been doing much discounting.

These efforts include encouraging employees to book tickets earlier for lower fares, requiring them to choose flights based on price rather than departure time or reining in spending on meals.

But most corporate travel managers pointed out that in a global economy, companies cannot afford to keep employees at home, even when air travel is frustrating.

It is also possible that certain inconveniences are overstated, like the effect of gas prices on summer driving trips. Despite not knowing where the price of oil is going to go or the roller coaster stock market, I think people are very committed to family time, vacation time and multigenerational travel," said Jennifer Wilson-Buttigieg, co-president of Valerie Wilson Travel, an agency based in New York City. "They're still going to go."
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