Economy

Tourism Industry Still Dealing With Cautious Consumers

by Lydia Saad

More Americans say they will spend less, not more, in 2010 on vacations

PRINCETON, NJ -- While half of Americans foresee no change in their travel spending in 2010 compared to 2009, a larger proportion plan to spend less in the coming year than say they will spend more. That deficit is particularly high relative to air travel and hotel stays. However, even the percentage of Americans saying they will spend less on vacations in general exceeds those saying they will spend more by a slight margin, 27% vs. 22%.

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In addition to broad changes in vacation spending, nearly 3 out of 10 Americans -- 29% -- plan to spend less on airline flights specifically in 2010 than they did in 2009, while 16% say they will spend more, and about half say they will spend about the same. The same pattern is seen for hotel stays, with 30% planning to spend less and 16% planning to spend more.

According to the recent USA Today/Gallup poll conducted Dec. 11-13, there is little variation in Americans' 2010 travel spending intentions according to household income. All income groups -- ranging from those earning $75,000 or more, to those earning less than $30,000 -- plan to spend less rather than more in each travel area.

Some meaningful differences are evident by age, with young adults expressing the greatest likelihood of increasing their travel expenditures. This is seen most clearly when asked about spending on vacations in general, as this is the one area where a higher percentage of those aged 18 to 34 plan to spend more rather than less (30% vs. 25%). By contrast, adults 35 to 54 and 55 and older are more likely to say they will spend less in each area, not more.

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The spending intentions of young adults are a bit less robust relative to airline travel and hotel stays than they are for vacations. Roughly equal percentages plan to spend more rather than less on airline travel (24% and 25% respectively), while a slightly higher percentage plan to spend less rather than more on hotel stays (29% vs. 22%). Still, the spending intentions of young adults are greater than those of older adults in all three areas.

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Bottom Line

With economic gloom still pervasive across the U.S., it may be no surprise that when Americans are asked to look ahead to their vacation, airline ticket, and hotel spending next year, they are at least slightly more likely to say they will be spending less than they spent this year rather than more.

These findings somewhat mirror data from the same poll showing 15% of Americans plan to travel over the holidays this year without taking steps to significantly cut back on costs, while 20% are either not travelling or reducing their holiday travel costs because of the economy.

Consumer attitudes about their overall travel spending in 2010 may differ from how they ultimately behave. Indeed, the latest government report on travel and tourism reports a significant rebound in U.S. travel spending in the third quarter of 2009 compared to the same period a year ago, reflecting increases in both business and leisure travel. This coincides with an increase in the U.S. gross domestic product more generally and is likely to extend through the fourth quarter. If so, the current data may simply, but importantly, indicate that Americans remain vigilant about their spending and therefore that airlines, hotels, and resorts must continue pushing major discounts and package deals in order to attract consumers' travel dollars.

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Survey Methods

Results are based on telephone interviews with 1,025 national adults, aged 18 and older, conducted Dec. 11-13, 2009. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±4 percentage points.

Interviews are conducted with respondents on land-line telephones (for respondents with a land-line telephone) and cellular phones (for respondents who are cell-phone only).

In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

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