TIA Forecasts Modest Decline in Leisure Travel

The Travel Industry Association released its annual travel forecast, which said that while the travel industry will continue to face challenges through 2009 and in some segments through 2010, leisure travel will sustain the industry while business travel retrenches.

However, the search for value is greater than ever, and travelers will cut back –shortening trips, downscaling the level of hotels they choose and perhaps switch to lower-cost destinations.

Despite current economic conditions and lagging consumer confidence, the forecast shows that leisure travel volume remains stable for 2008 (down 0.2 percent) and is expected to decline modestly in 2009 (down 1.3 percent).

According to the latest travelhorizons.com survey co-authored by TIA and Ypartnership, seven out of 10 (71 percent) respondents intend to take an overnight trip of 50 miles or more from home during the next six months. Nearly half (48 percent) of all respondents stated they were not planning any changes to their future travel plans as result of the recent turmoil in the financial markets.

The outlook for business travel is more challenging, with a 3.7 percent decline in volume projected for 2008 and another 2.7 percent decline forecast for 2009, according to TIA’s annual travel forecast. Companies are making decisions to scale back in the current environment and business travel is no exception. Business, meeting and convention travel volume is expected to begin to recover in 2010, increasing 2 percent.

Three of the six factors that determine the TSI are up –the perceived safety of travel, the perceived quality of service and the perceived affordability. Three measures are down, a major one being the perceived time available.

Although overseas travel to the United States still has not returned to pre-9/11 levels, recent increases in international travel have cushioned the blow of declining domestic travel. This is not expected to hold true in 2009.