ARE BRIGHTER DAYS AHEAD?

It’s safe to say that just about every travel service enterprise is eager to hear some good news about what is likely to happen to demand in the months ahead. And the results of our February travelhorizons^TM survey (co-authored every 90 days with the U.S. Travel Association) provide some encouragement, although I wouldn’t retrieve the punch bowl just yet.

According to the results of our February 2010 wave (a nationally representative sample of 2,251 U.S. households conducted February 4 – 12, 2010), 56% of U.S. adults expect to take at least one trip primarily for leisure purposes during the next six months, a 7-point decline from the percentage that expressed the same intention precisely one year prior. This expected incidence of leisure travel translates into an estimated 127 million U.S. adults who will take at least one leisure trip between February and July, 2010, half of whom expect no change in the amount of money they are likely to spend for leisure travel services this year versus last. One out of four (24%) expects to "spend more" on those trips, roughly the same percentage as those who expect to "spend less" (26%). Although stated leisure travel intentions are down, demand for leisure travel services remains elastic, thus travel service suppliers who develop and implement attractive promotional strategies will undoubtedly be rewarded for their creativity as consumers continue to demand excellent value for their travel dollars this summer.

On a more encouraging note, one out of seven (15%) of adults is planning at least one business trip during the next six months, up 2-points from the percentage recorded one year earlier. This augers well for the long-awaited recovery of demand for business travel services, although pricing power will probably remain elusive for months to come.

On an equally encouraging note, the Traveler Sentiment Index^TM, a derivative of six individual measures of perceptions that affect travel, has remained essentially unchanged since October of 2009. It now stands at 91.0 (compared to the baseline of 100 established during the first calendar quarter of 2007) versus 90.5 last fall (2009). Of the six components from which the index is derived, two reflected sizable gains over the previous 90 days: "money available for travel" and "time available for travel." "Interest in travel" and "perceived affordability of travel" both declined slightly. The most significant change was in the "perceived safety of travel," declining from 93.8 in October 2009 to 84.8 in February 2010. This is presumably due to lingering anxiety about the recent "Christmas Bomber" incident that occurred in Detroit and related concerns about the effectiveness of existing (U.S.) airport security procedures.

Traveler Sentiment Index^TM
March 2007 – February 2010

Source: Ypartnership/U.S. Travel Association travelhorizons^TM, February 2010

Although it’s premature to declare we’re out of the woods yet, these results suggest that the most difficult months may be behind us, and that the horizon line is about to improve.

For more information on travelhorizons^TM please visit the Publications section of www.ypartnership.com.

This entry was posted on Thursday, February 25th, 2010 at 11:00 am. | Category: Market Intelligence | You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.