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Welcome to 2019: American Traveler Sentiment Weakens

Complete results from our January The State of the American Traveler survey will be released in February.  As an early sneak peak, this post looks at domestic traveler sentiment and what may be early signs of a softening leisure market.

The new year has started with undertones of considerable uncertainty. While economic indicators had remained strong for much of the past year, talk of a slowdown now is in the wind. Sluggish growth, trade wars, higher interest rates, inverted yield curves, political gridlock and government shutdowns are all part of the conversation. We are currently experiencing what may be early signs of a pessimistic shift in the collective traveler psyche, as our latest sentiment tracking survey point toward a potential weakening of the domestic leisure travel market.

Every quarter, Destination Analysts ask a representative sample of 2,000 American leisure travelers about their travel plans for the upcoming year. In the most recent survey wave, the percent of travelers who said they expect to travel more in the next 12 months decreased. Only 33.4 percent said they would be taking more trips, compared to 37.0 percent one year earlier. As this data typically has a seasonal pattern, comparing past January waves is likely to be the best point of reference. The chart below shows how travel expectations have dipped significantly below performance levels seen in the past two years.

 

 

 

 

 

 

 

 

 

 

 

 

 

This moderate degree of pessimism seen in trip expectations also extends to future travel spending. When asked if they expect to spend more in the upcoming year on leisure travel, only 32.2 percent of American leisure travelers said that they would be beefing up their expenditures. This is down from 36.5 percent one year ago.

 

 

 

 

 

 

 

 

 

 

 

 

 

Travel volume and spending expectations have indeed softened, but potentially more unsettling is a drop in the general sentiment of how important leisure travel is as a budgetary item. Once a year, we ask how much priority travelers intend to place on leisure travel as they allocate their family budgets. At this time last year, nearly two-thirds of American leisure travelers (65.3%) said that leisure travel would be at least a “somewhat high priority.” This year, the corresponding figure has sharply dropped to 59.6 percent. The chart below shows the results from this year.

 

 

 

 

 

 

 

 

 

 

 

 

So, what’s the bottom line? It may be too early to tell. As we move further into 2019, we expect that the domestic leisure market will likely remain robust, however a significant downside potential exists. With uncertainty on so many fronts, we’ll hold our breath and hope for a positive outcome.

Americans are Ready to Travel

According to our latest national survey, American leisure travel expectations hit a new high in October.  While travel expectations have been on a positive, stable trajectory for years now, our Fall The State of the American Traveler national tracking survey recorded a strong upward surge in expectations for leisure travel in the upcoming year.  This optimism is shown by a record 37.4 percent of Americans saying they expect to travel more for leisure in the next year, up from 32.2 percent just 3 months earlier. Leisure travel spending expectations are also similarly high, signaling that prospects for continued growth in this segment are strong.

The table below shows the proportion of American leisure travelers who (in the next 12 months) expect to travel more, less and the same as they did in the most recent 12-month period.  The results show strong current traveler optimism.

Travel Optimism Soars
(Percent of all leisure travelers)

Meanwhile, future travel sentiment across the country is slightly uneven, with residents of the coasts showing the highest levels of optimism for travel in the upcoming year.  40.2 percent of residents of the Pacific Coast region expect to travel more in the upcoming year, while 36.7 percent of travelers living in the Northeast and 38.9 percent in the Southeast expect to increase the number of trips they will take in the next year.  Future travel expectations in the central areas of the country are marginally lower.

Travel Optimism: by Region
(Percent of regional residents expecting to travel more in the next 12 months)

 

 

Much of this current optimism is being generated by younger travelers.  The charts below show the most recent survey’s data broken out by generation.  As is typically the case, younger travelers show the highest propensities to be planning more travel in the upcoming 12 months.  Nearly two thirds (57.9%) of Millennials currently say they will travel more in the next 12 months.  By comparison, only one quarter of Baby Boomers (26.8%) are planning to bump up the number of trips they will take in the next year.  For Millennials, these are big changes from what was seen this summer.  In our July survey, only 51.4 percent of Millennials said they were planning to take more trips.  The older generations have shown much smaller growth rates between the two most recent survey waves.  It seems clear that growth leisure travel volume in 2017 may depend on the younger generation’s ability to live out these high expectations.

Travel Optimism: by Generation
(Percent of Americans by generation expecting to travel more in the next 12 months)

 

For more detail, download the latest summary report here.
Destination Analysts

American Travel Optimism Soars

The State of the American TravelerTM – April Update

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If you’ve been paying attention, you’ll know that the U.S. economy has been throwing off some seriously mixed signals during the early part of this year. The bull market turns into a bear, then reverses itself. First quarter GDP growth weakens, but now seems likely to be revised upward; with many economists now seeing the second half of the year as one of strong growth. Long troublesome exchange rates flip, possibly even hitting an inflection point where the dollar may become a boost to exports. Meanwhile, recent data shows the domestic service sector expanded in April as new orders and employment both jumped.

Whatever happens during the rest of the year, we know that ours is a consumer driven economy. Consumers account for more than 70 percent of spending, and in the moment are surprisingly bullish about their future leisure travel. Our April The State of the American TravelerTM survey shows travelers cheerful mood is clearly ongoing. Our survey tracks traveler intent to travel and spend in the upcoming year. Both measures reached historic levels this month. The chart below show this enthusiasm, as more travelers are planning to take a greater number of trips in the upcoming year.

Travel Optimism Grows to Record Levels
(% of American Leisure Travelers Expecting to Take More Trips in the next 12 Months)1

Not only are American travelers planning to travel more, they’re ready to spend.  As the chart below shows, spending expectations are also sky high.  More than one third (35.5%) of travelers expect to spend more in the upcoming year than they did in the last one–yet another record.

Travel Spending Expectations Up
(% of American Leisure Travelers Expecting to Spend More on Leisure Travel in the next 12 Months)

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As we move into the peak of summer travel season, this optimism bodes very well for the travel industry.  Mixed economic signals or not, American travelers seem primed for an excellent season of exploring our many great destinations.