News of the economy falling into a recession has been the talk in the media lately, however, the travel industry—both advisors and the traveler—remains confident with their projections for the next year.
During The American Society of Travel Advisors’ (ASTA) Global Conference, held at the Diplomat Resort in Hollywood, ASTA released its study regarding the travel community’s feelings on the economy for the year ahead. Though Wall Street might be hinting at signs of recession looming, travelers don’t seem too worried about the future—depending who you ask.
The findings from its annual study, “How America Travels” sponsored by Carnival Corporation & plc, highlight insights into the travel economy including a travel spending outlook.
The recent headlines have been filled with mentions of a possible future recession in the realm, however, the study’s findings reveal that the perception of the overall economy compared to that of the travel economy differs. Both the traveler and the travel advisor share similar views on how the economy will play out in 2020.
“The timing of this study provides us a unique snapshot during a critical crossroads in our U.S. economy. The future outlook of our overall economy remains in question—for both the advisor and the traveler, and rightly so. This is a time in our history where, more than ever, the future is uncertain,” said Zane Kerby, president and CEO of the American Society of Travel Advisors. “But when it comes to leisure travel, travel advisors have their fingers on the pulse of the traveling public’s discretionary spending—historic, current and future. While no one can predict the future, advisor assessment is a key economic indicator providing significant insight. From this study we learned that the traveler and the travel advisor agree; even if a recession does occur the travel economy will continue to grow.”
Looking Ahead to 2020
When it comes to travel advisors, 32 percent feel the overall economy will be better in 12 months than what it is now, 20 percent feel the economy will be worse. Though this shows an overall positive view, some are weary of a potential softening economy.
Travelers are even more confident about the overall economy, with 41 percent believing the economy will be better in 12 months. However, similar to what the advisors feel, 21 percent of travelers feel it will be worse. Though these stats also indicate that though the overall view of the economy among travelers is positive, many consumers are expressing concerns.
Although travel advisors have some concern about the economic future, most are confident that they’ve padded their business against an economic downturn. Though 20 percent of advisors think the overall economy will be worse in the next year, the concern doesn’t translate into how they feel about the future financial success of their business. A minimal 7 percent of travel advisors expressed concerns for their business feeling it will be worse off next year, however half—exactly 50 percent—think their business will be better.
“Despite concerns on the horizon both travelers and travel advisors remain bullish in their economic outlook,” added Kerby. “Reflecting travelers’ optimism for the future, more people (81 percent) anticipate traveling in the next 12 months than actually did so last year. Combine this with the fact that advisors are also expecting better returns next year…there is good news in this study for everyone.”
The Traveler Outlook
According to the survey, travelers who plan to use a travel advisor for their travels are expecting to take more trips in 2020 on average—about 3.6 trips—when compared to those travelers who do not plan to use a travel advisor for their trips—about 2.5 trips. In addition, travelers who have used a travel advisor in the past reported spending more ($3,505) on their last trip than those who didn’t.
Another positive sign is that travelers expect to spend more on their next trip ($2,335) than they did on their last vacation. Considering that these travelers are also expecting to take an average of 2.9 trips in the next 12 months, advisors can expect travelers to spend an estimated $6,722 over the next year—that’s a 10 percent increase in the last 12 months.
The study also indicated that men and women varied in their opinion regarding the future economy—50 percent of men feel the economy will be better in the next 12 months, while 31 percent of women shared this view. However, 58 percent of men and 51 percent of women feel their personal financial situation will be better off next year. This falls in line with the findings that men plan to take more trips than women (2.6 versus 2.0), and men are also expecting to spend more on their next vacation than women are ($2,759 versus $1,290).
The margin of error for this study is +/- 3.0 percent for information on travel advisors; the margin of error for traveler insight is +/- 2.2 percent.