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Vacation Nation

Travel Slows but still Grows

The ups and downs of the national economy are enough to put many people on edge about their personal financial well-being, but even during uncertain times, Americans tend to keep travel near the top of their spending priorities. Even when they’re feeling less than flush, people will often try to work a vacation into their game plans.

A “vacation confidence index” published by Allianz Travel Insurance and based on surveys taken just ahead of the recent summer travel season indicated that while fewer Americans would vacation in 2016 than in the previous year, those who did make travel plans expected to spend at least 10 percent more than they spent in ’15. Summer vacation spending was headed for the $90 billion mark, according to the survey, up five percent from the previous year.

In a similar vein, occupancy at U.S. hotels dipped slightly this past spring, according to industry reports, but room rates rose, as did total revenue per available room.

“On an absolute basis, the hotel industry is actually quite strong,” says Patrick Mayrock, senior research director at Tennessee-based Smith Travel Research.

A May 2016 analysis for the U.S. Travel Association showed that growth in overall travel volume, as measured by individual trips involving a hotel stay or air travel, has been growing at a slower pace than in the recent past, but has expanded nonetheless. In fact, the association’s “index of current travel” showed that the travel industry has racked up more than six consecutive years of growth.

This has occurred despite the fact that inbound travel to the U.S. from other countries slowed – a trend that the analyst predicts will continue in the near term, in part due to the U.S. dollar relative to other currencies. Another factor that could have a dampening impact could be Great Britain’s vote to leave the European Union, analysts add.

Along with a decline in international travel to the United States, many corporations have cut back on business travel in recent years, and analysts say such travel likely will remain subdued at least through the end of 2016.

Despite the sluggish pace of business and international travel growth, “leading” indicators, which hint at future trends, point to short-term growth of about 1.5 percent in overall U.S. travel volume, supported by strength in the domestic leisure travel market.

“American leisure travelers, who account for 60 percent of travel spending in the U.S., will likely continue their role as engines of growth for the industry,” says David Huether, the travel association’s senior vice president of research. It’s a prediction that bodes well for the tourism industry in New Orleans.

Leisure travelers – meaning those who visit for recreational or other purposes unrelated to business, including conventions – are a crucial component of the local tourism market, constituting nearly half of all visitors to the city.

A recent analysis by the Hospitality Research Center at the University of New Orleans showed that the total number of visitors to New Orleans hit 9.8 million in 2015, and the center predicts that the total will grow at a rate of about 4 percent during the next several years.

Total spending by visitors, which hit a record of $7.1 billion during 2015, will grow by about 5 percent annually as it climbs to $8.4 billion by ’19, the center projects.

By nearly every measure, total visits in the “leisure travel” category will continue to grow through the next three years, according to UNO’s research. But more palpable signs of strength in the hospitality sector are emanating from the local airport.

Officials at Louis Armstrong New Orleans International Airport reported hitting a new traffic record by serving more than 1 million passengers in May 2016, recording a jump of more than 10 percent from a year earlier. Aviation Director Iftikhar Ahmad says the strength of the local market has caught the attention of airlines, and they’re looking to expand local service.

Ahmad says that increasing affordability of air travel, fueled by growth in discount carriers, is helping to boost air traffic. “This along with the addition of several new destinations this year, has contributed to the significant growth of travel at the airport,” he says.

Airlines that have announced new service in New Orleans recently include:

• Spirit Airlines, which added daily flights to Atlanta and Los Angeles from New Orleans;

• Allegiant Air, which began flights to Jacksonville, Florida, and new seasonal nonstops to Tulsa, Oklahoma;

• Frontier Airlines, which added service to Philadelphia and Orlando;

• Seasonal service by Branson AirExpress to Branson, Missouri;

• Daily nonstop service to Fort Lauderdale by JetBlue; and

• Twice weekly, seasonal nonstops between New Orleans and Frankfurt, Germany by Condor, slated to begin in May 2017.


The airport now offers nonstop flights to 54 destinations on 15 airlines, Ahmad says.

The figures show that, even as potential business and international visitors keep a tighter grip on their travel budgets, those who like visiting New Orleans just for the fun of it are likely to keep the local hospitality sector percolating.


Rooms at the ready
The strength in local tourism has helped fuel growth in New Orleans’ hotel room inventory. Along with a Four Seasons hotel planned for the former World Trade Center building, new local inns opened recently or slated for construction in the city include:

AC Hotel by Marriott
Ace Hotel
Aloft Hotel
Cambria Suites
Hyatt House New
Orleans/Downtown
Jung Hotel
Joie de Vivre Hotel
Moxy by Marriott (2)
The Pythian
Spring Hill Suites
Virgin Hotel

 

 

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