Travelers to spend and travel less in 2009

From all indications, the travel sector is going to shrink during 2009 as the economy goes from bad to worse. Already, we’re seeing that travel searches on Google are down 20% on last year and hotel rooms are standing empty. Ryanair in the UK is feverishly running sales for flights to make up for a Q4 loss for the first time. On top of that, travel companies are lowering their package prices to fill already-paid-for rooms and flights.

The American traveler dilemma


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Some new figures from the Maritz Research Hospitality Group shows that a quarter of Americans will be cutting down on leisure travel and about 1 in 10 will pretty much stop traveling completely this year. 1 in 3 will cut down on hotel stays, which seems to be confirmed by hotels cutting their rates recently.

Americans are also curbing eating out and entertainment, which bodes ill for both tourism and entertainment companies everywhere.

One effect is that we may see more discounts on package deals, as Rick Garlick or Maritz points out:

“While it is not uncommon for hotels, airlines, and rental cars to offer discounts on collective services, this may now be extended to include restaurants and entertainment,” Garlick said. “With travelers looking to take a step down in the class of hotel or restaurant they choose, higher classes of hotels and restaurants have an even greater possibility of losing share to lower-priced competitors and will need to make significant adjustments.”

Certainly, airlines are already offering better deals for travelers. The current trend is to offer discount codes through their marketing channels, meaning savvy travelers can get better deals directly with the airline than from a consolidator site like CheapTickets.com or Kayak.com.

And British travelers are hurting even worse...

The UK is the worst hit market in this recession, and UK travelers are becoming cautious with their money. The Good Business consultancy recently released a survey showing nearly half of all travelers are cutting back this year. Giles Gibbons, founder and CEO of Good Business, said:

“With less money in their pockets it seems many holidaymakers plan to look for cheaper alternatives in the UK this year. Some might see this as good news from an environmental perspective, with reductions in things like flights. However the social impact on foreign holiday destinations, many of which depend on tourism for employment and investment, could be devastating.”

Another trend in the UK is for more local vacations, which can only be bad news for travel companies in southern Europe and the budget airlines. This is partly driven by the weak British Sterling, which has lost value against the Euro and US Dollar.

On the flip side, Expedia.com has seen a strong increase in French travelers booking vacations in the UK because all of a sudden London and other destinations look pretty cheap to them. And for others from the Euro-zone as well. Ironically, it may mean that UK hotels and other tourist business do pretty brisk business and keep their prices up... causing that vacation at home to be at least as expensive as a jaunt to the South of France!

The outlook for tourism in 2009

Overall, I think we can look forward to some great deals for those that can spare the money during the recession, and some more travel company bankruptcies as well. So, make sure you have a good travel insurance policy, which includes cancellations because of travel provider business cessation. This year looks to be the worst in a very long time.

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Last updated by Jack on 06 February, 2009 in Travel News.

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