Erin Francis-Cummings

The Off-season Leisure Travel Outlook

Travel Outlook for Q1 2015: Low Gas Prices, Fatter Wallets and a Counter-balancing Airfare Effect

As travel moves into the depths of the off-season, our industry is poised for a stronger than normal performance.  Conditions are ripe for increased travel volume and spending this winter.  Driven by an improving labor market and sharply lower gasoline prices and the very significant bump this will provide to consumers’ pocketbooks, travelers will be hitting the roads.  Airfares, however, are not moving in this positive direction, which will counter balance to a limited degree the positive gas price-fueled momentum.


Destination marketers should be thrilled.  Fatter wallets and lower gas prices are here (at least for now), which is excellent news for all of us working to lure leisure travelers and their dollars to our communities, attractions, parks and states.

Why?  When Americans travel for leisure, they mostly do it by car.  Our biannual The State of the American TravelerTM Survey consistently shows that nearly 80 percent of leisure travel is done by car.  When gas prices rise we typically see expectations for future travel drop.  Conversely, when gas prices are low, expectations for future travel tend to rise.  It’s a solid, immutable relationship.

The chart below shows recent changes in weekly U.S. retail gasoline prices (all grades in dollars per gallon).  The positive direction is clear and the implications for travel are obvious.  The average price we pay at the pump is down by nearly one dollar since June. The cost of gas dropped to a nationwide average of $2.82 a gallon from as high as $3.71 in June.  This is a national average and in certain markets prices are even lower.

Average Weekly U.S. Retail Gasoline Prices

(All grades in dollars per gallon)


Source: U.S. Energy Information Administration

As we move deeper into the off season, not only will travel by car be cheaper, travelers will feel wealthier.  Economists talk of something called the Wealth Effect, referring to the tendency on the part of consumers to spend more when they feel wealthier or more financially secure.   We’re likely to see this come into play in the next few months.  Analysts suggest that the average American household will save nearly $1,100 a year if petroleum stays at these levels.   A $1,100 average bump in disposable income is very significant and most of it will be spent on things like travel.

The good news about gasoline prices presents itself to an enthusiastic traveling public already feeling fewer and fewer constraints on their ability to travel.  Our research shows that in recent years, fewer travelers are seeing gasoline prices and their personal financial situations causing them to cut back on their leisure travels.  The table below (from last summer’s State of the American Traveler report) shows that even when gas prices peaked last summer the proportion of travelers who felt gasoline was keeping them from traveling was in steep decline.  In July 2011, more than half (53.6%) of Americans said gas prices were keeping them off the roads, this metric reached a new 32.4 percent last July.  We’ll be excited to see where this stands when we field the survey again in three weeks.  It will likely be much lower given the gas price trends we have discussed.

reasons blogpost

Further, a growing share of travelers report that concerns about their personal financial situations are also consistently improving.  The table above shows that far fewer Americans now feel their financial situation is keeping them from traveling than just a couple of years ago.  Add stronger labor market conditions and the aforementioned $1,100 gasoline price income bump to their pocketbooks, and conditions for improved travel industry results seem rock solid.

Improving Employment Situation

As we move into the off season, we also see significant recent improvements in labor market conditions, which is key to consumer (traveler) confidence.  The American economy added a massive 321,000 jobs last month, as the nationwide unemployment rate remained at 5.8 percent.  This marks the most robust burst in job gains in several years, and comes alongside upward revisions of 44,000 more jobs added in September and October than previously estimated.  Overall, it looks like 2014 will be the strongest year for hiring since 1999, with average monthly additions to the labor force of over 240,000 jobs.

Airfares Buck the Trend and Airline Profits Soar

A slight downside to our bright outlook for the offseason is in air travel.   Anyone who has recently traveled by air has seen the shift toward full planes and crowded boarding areas.  Sadly, long gone are the days of comfort where we spread out and took the middle seat and didn’t share an arm rest.  Unfortunately, long gone too are the days where travelers benefited from commodity price fluctuations like decreasing jet fuel prices.

Competition is Good.  Consolidation is Bad.

This counter intuitive situation in the marketplace for air travel is powered by the slew of airline mergers in recent years, allowing these companies significant power in manipulating their capacity and prices.  More market power by the airlines doesn’t work in the best interests of travelers–and fares paid by the two million daily American air travelers tell a striking story.   Airfares have not fallen of late despite the downward fall in jet fuel prices that have accompanied those seen in gasoline.

Over the past 12 months, jet fuel prices domestically have dropped about 11%, according to the International Air Transport Association.  However, airfares have not responded to decreasing fuel costs, actually going up 0.2% this year.  Looking at the somewhat longer term, average U.S. domestic airfares bottomed out over five years ago, and have been rising since. Airfare has steadily increased in recent years, growing 10.7 percent in the past five years, according to an Associated Press analysis.

Travelers, however much they’ve lost through reduced competition in the air industry, are nothing if they aren’t resilient.  Despite changes resulting in steadily increasing ticket prices, our research shows that the degree to which airfares are getting in the way of travel is stable and even slightly improving.  Since January 2010, the proportion of American leisure travelers cutting back on travel due to high airfare has fallen slightly from 32 percent (in July 2011) to 24 percent last summer.  It appears that travelers may have adjusted to the marketplace and worked expectations for higher airfares into our budgeting and travel decision making.

Fortunately, too, for the destination marketing industry, fewer than 20 percent of ALL leisure trips are taken by air.   The outlook for leisure travel as we move into the new year is very positive.  I’m excited to field our next The State of the American Traveler survey in a few weeks to test these waters and see if travelers are feeling the optimism that I expect.

Readers can check back soon for the next The State of the American Traveler study or sign up here for the report that I’ll release in a mid January.

Destination Analysts

Bratton Speaks at National Park Service on Marketing to Millennial Travelers

The Generation of Yes and America’s Greatest Idea

America’s National Parks are indeed our country’s greatest idea, but they face a serious challenge in attracting a new generation of digitally-oriented visitors.  Attracting a more youthful audience is both a challenge and a great opportunity for the National Park Service.  When it comes to travel, the millennial generation (those born between roughly between 1980 and the mid 2000s) is called the “Generation of Yes” by our team due to their extraordinary interest in visiting all types of travel destinations and unbridled enthusiasm for living of life full of diverse travel experiences.  However they may pay lip-service to the importance of adding natural experiences to their travel resume. Many Millennials are still uncomfortable with the disconnection from their networks they associate with outdoor experiences.  They also hold a strong general preference for big city travel experiences over rural ones in nature. 

Our founder, David Bratton, spoke yesterday to a group of National Parks decision makers and stakeholders at an event held at the U.S. Department of Interior in Washington, DC.  Bratton encouraged the audience to aggressively market its assets in order to elevate awareness among younger Americans. He discussed the importance of positioning the park experience in line with the travel experiences most desired by the young generation (bucket list fulfillment, bragging rights, high energy excitement and self-improvement).

A livestream recording of the event can be seen here.


Nature is Important. Being Disconnected is Scary.

Millennial travelers show interest in the extraordinary array of travel experiences offered by the National Parks.  Data collected in Destination Analysts biannual The State of the American Traveler Study paint a picture of a generation that fully appreciates the great outdoors.  When asked if quiet, peaceful destinations are typically the “best vacation spots,” the vast majority (80%) express agreement.   Similarly, more than 60 percent of Millennials agree that experiencing nature away from urban areas is an important part of their leisure travels.  Despite this positive overall sense, the generation shows marked discomfort with being disconnected, even on vacations.  Bratton shared a quote from a recent in-depth interview he conducted that captures the feeling of many in the generation.  Referring to Millennials, one participant said, “We may say we love the great outdoors, but being disconnected is a little scary.”

The State of the American Traveler sheds further light on this phenomenon.  When asked if they were deprived of the ability to text and check email for one week while on vacation, fully 71 percent of Millennials say they would feel “Very uncomfortable.”  By comparison, only one third of Baby Boomers felt similarly.



The Challenge:  Attracting Millennials in a Competitive World

Where the rubber really hits the road for the National Parks is with its competition.  Bratton showed that the generation’s travel expectations are extremely high and the competitive set faced by destinations like parks is not only domestic, but worldwide.  These younger Americans already travel more than their older counterparts, they show much high propensities to travel by plane (less by car) and are about twice as likely to take an international leisure trip.  This is not good news for parks that historically have relied on the traditional road trip for many of its visitor arrivals.  Additionally, the Millennial generation shows a general preference for the excitement of urban destinations over rural destinations.  When asked in The State of the American Traveler Study if they generally prefer big city travel experiences to rural ones like National Parks, the majority agreed that they tend toward urban the experiences.   The chart below illustrates this finding and highlights the competition faced by our parks.

Prefer Urban


Keys for Marketing to Millennials

In this environment of extreme competition, how can the Park Service reach young travelers?  Bratton suggested the following three general guidelines:

Stress Value:  The Millennial generation has not yet reached the peak of its earnings potential.  It also has not fully reached the life stage where its members enjoy the buying power benefits of dual income status.  Highlighting the value proposition of visiting the National Parks is clearly a winning strategy.

Embrace Their Need for Connectivity:  Bratton argued that Millennials’ strong desire to be connected to their networks is not only healthy, it is integral to their identities.   Purists who think that connectivity and the National Parks experience are somehow incompatible should rethink.  It is simply not something that can be ignored by those marketing travel to National Parks.  The community should emphasize experiences that generate bragging rights and allow these young travelers to envision exciting, active experiences with their friends and relatives. Bratton said, “While a baby boomer may dream of going off alone into the Sequoias like John Muir to commune with God, this imagery just isn’t going to appeal to younger travelers.”

Go Digital:  These digital natives require a highly-tailored digital approach that is both somewhat avant-garde and easy to consume.  Bratton said, “Young people of any generation can smell cool,” and encouraged the audience to think about positioning the parks experience in a way the generation finds hip, comfortable and exciting.  Making online content easy to access and consumer-friendly is also critical for a generation “well known for its lack of patience for poorly designed digital interfaces.”

Bratton’s full PowerPoint presentation can be downloaded here.

Visit our friends at the National Parks Hospitality Association to learn more about efforts to market our National Parks.

Destination Analysts

Fun with Infographics: The Millennial Generation and New Travel Technologies

If you have any doubt that the Millennial Generation is the driving force behind the adoption of new technologies in travel industry, take a look at our latest State of the American Traveler infographic. It’s interesting to note, too, that Millennials use more traditional information sources at similar rates as their older counterparts.




Source: State of the American Traveler, July 2014. Destination Analysts, Inc.

David Bratton Discusses The State of the American Traveler

Bratton Speaks at Pennsylvania Tourism Forum

Americans are showing strong levels of optimism for leisure travel in the upcoming year. Yet, we have not fully recovered from the effects of the 2008 financial crisis and recession. Levels of expected (as well as actual) leisure travel are reserved compared to the period immediately before the crisis. On a positive note, however, it is clear that we’ve moved out of our strong post-recession desire for discounts and special offers, with traveler interest in these sharply diminishing in recent years.

In his recent keynote address to the Pennsylvania Association on Travel and Tourism (PATT) in Lancaster, Destination Analysts Founder and Managing Director David Bratton briefed the industry on the current state of leisure traveler sentiment. In his speech, Bratton presented results from Destination Analysts’ bi-annual The State of The American Traveler Survey. This comprehensive survey is the nation’s first and longest running tracking study of American leisure travel sentiment conducted exclusively for the destination marketing industry. Collected every six months from a representative sample of 2,000 domestic leisure travelers, the survey illustrates trends and opinions of our nation’s leisure traveling set.

Positive Outlook, but no Full Recovery Yet

Destination Analysts’ research shows that (in terms of expectations for travel in the upcoming year) Americans are indeed gung-ho for more travel, with the vast majority either planning to hold constant the number of trips they will take (60.2%) or increase their travels (29.2%). Only 10.6 percent expect to cut back relative to the most recent twelve month period. According to Bratton, “it’s clear that the vast majority of Americans are feeling good about their likelihood of traveling this year.”

Bratton pointed out that while this was great news for the industry, to the surprise of many in the audience, “we have not yet fully recovered our mojo from those heady pre-recession days.” The chart below shows the detail. When we compared the average for the two years immediately prior to the financial crisis of 2008, we see a significant drop in the proportion of Americans who are expecting to travel more. In the two years immediately prior to the recession, 36.2 percent of leisure travelers said they would travel more. This compares to only 31.5 percent for the most recent two years.

Bratton explained that a similar story can be seen in the percent of travelers expecting to cut back on their travels. As the chart below shows, prior to the recessionary period fewer than one in ten (9.6%) of American leisure travelers said they would cut back on travel. In the most recent two years, this result is slightly higher at an average of 11.3 percent.

Clearly we have a way to go.

This story of strong (yet from an historical perspective diminished) travel expectations is supported by the actual number of leisure trips (50 miles or more one way) that Americans report having taken in the past year. As the chart below illustrates, the annual number of leisure trips taken by the typical American is down, from 5.4 trips in the immediate pre-recession period to 4.7 trips in the most recent five survey periods.

Spending Expectations Tell the Story

Bratton noted that “the real key to understanding current traveler confidence may be seen in looking at their spending expectations.” Nowhere is the picture clearer than when we compare the proportion of travelers who expect to increase their travel budget in the next year. The chart below shows that in the two years prior to the recessionary crash, 42.4 percent of traveler said they expected to increase their leisure travel spending in the upcoming year. In the most recent two years, this average stands at only 32.1 percent, nearly a 25 percent decrease.

While spending expectations are weak, Bratton pointed to numerous positive signals in leisure traveler confidence. These included greatly reduced proportions of travelers saying their personal financial situations, gasoline costs or airfare prices have kept them from traveling more than they would like to have traveled in the past year. Most encouraging, however, may be the marked decrease in consumer interest in travel discounts and bargains. Immediately after the financial collapse nearly 70 percent of travelers said they would be “actively seeking” travel discounts and bargains in the upcoming year. As the chart below shows, there has been a sea-change in this attitude. In the past year, just over 40 percent of American leisure travelers will be discount and bargain hunting.

“American leisure travelers are ready to go,” says Bratton, “but make no mistake, we’re not fully back. Not yet. While one could chose to be discouraged by these findings, a more constructive way of looking at the situation is that we have room to grow. As the economy continues to recover we expect to see more and more Americans traveling and generating even more support for our state and local economies.”

Click here for the complete PowerPoint presentation.