Although the outlook on the world economy is uncertain, travel remains a strong segment.
The U.S. Travel Association’s Marketing Outlook Forum, held Oct. 27 and 28 in Fort Worth, Texas, highlighted many positives in terms of the state of the hospitality industry, but it seems the jury is still out concerning the sluggish U.S. economy.
“Consumers are living through a time when things seem unsettled as never before,” said speaker J. Walker Smith, executive chairman of The Futures Company consultancy, adding that although people are “more depressed than ever, they’re still buying more iPhones than ever before,” making a case that consumers continue to spend money in the down economy.
The latest hotel trending numbers, presented by Steve Hood, senior vice president of research for major hospitality industry consultancy Smith Travel Research, pointed to greatly improved fortunes for hotel operators, especially in the high-end segment.
“We’re in a period of low growth, which is good for the industry,” Hood said. “Demand is at record levels, group ADR [average daily rate] is coming back, and the numbers are looking good.”
Indeed, September year-to-date numbers registered demand up 5.3 percent from the same period in 2010, with hotel revenue leaping a healthy 9.1 percent, occupancy rising to 62 percent (from 59 percent), ADR at $101 (from $98) and RevPAR (revenue per available room) rising to $63 (from $58).
Group occupancy, Hood said, was up above 2010 levels but still below the high-water mark set in 2007-2008.
“We’re optimistic that in the fall we’ll be getting back to those ’07-’08 levels,” he said.
While the overall economy remains listless—especially in the manufacturing and construction sectors—the hospitality industry is flexing its muscles as a major job creator, according to Roger Dow, president and CEO of the U.S. Travel Association.
“Travel seems to be moving in the right direction, despite all of the ongoing chaos [in the economy],” Dow said, adding that the travel industry added close to 200,000 jobs, which represented one in 10 of all jobs created—1.5 times more jobs than in any other sector of the economy.
Adam Sacks, managing director of consultancy Tourism Economics, said he believed the U.S. economy is far from recovery, however, and he expects significant struggles for the next two years, followed by stabilization.
