(NEXSTAR) — With growing concerns about economic instability and global tensions, many popular tourist destinations across the nation are concerned that visitor numbers might drop significantly this year. However, travel experts suggest that if demand falls too low, you might benefit from better deals as these areas try to attract tourists.
Where is tourism declining?
A
Las Vegas tourism report
Released earlier this week indicated that both visitor numbers and hotel occupancy rates decreased compared to last year. This data comes from California’s tourism board.
reported steep drop-offs
beginning in February and March.
Due to the decline in travel demand, leading U.S. airlines are cutting back on their flight schedules and adjusting or canceling their financial forecasts for the year.
“We concluded with a robust fourth quarter, experienced reasonable activity in January, but noticed a significant decline in domestic leisure travel as we moved into February,” said American Airlines CEO Robert Isom to CNBC.
Customer hesitancy to reserve trips would align with
a new poll
That indicated numerous individuals are afraid the U.S. is under threat.
steered into a recession
and that President Donald Trump’s broad and haphazardly enforced tariffs will cause prices to rise.
The decrease in visitors includes both local and international tourists.
U.S. Travel Association
Reports indicated that international visits decreased by 14% in March compared to the previous year. The largest declines came from travelers originating in Canada and Western Europe, according to the organization.
Michael Feroli, who leads the U.S. economics team at J.P. Morgan, suggested that the decline in travel might be attributed to increasing hostility toward Americans.
Over the past few weeks, many articles have highlighted how tourists are cancelling their visits to the U.S. as a form of objection against what they see as overly strict new trade measures,” he noted in his report for clients. “This could be an additional factor we should take into account when evaluating the impact these taxes may have on overall business activities.
A modest reduction in international travel, spurred perhaps by boycotts or financial instability, could result in significant losses for the US economy amounting to several billion dollars.
Bloomberg
reports.
Is the decrease in tourism likely to lead to better travel offers?
Should demand decline within the travel industry, airlines, hotel chains, and similar businesses might reduce their prices in an effort to attract more customers.
Airfares decreased in February and March, as reported.
The Bureau of Labor Statistics monitoring
.
Alaska Airlines Chief Financial Officer Shane Tackett informed CNBC, “The ticket prices have weakened compared to those in the final three months of last year extending through January and early February.” He further explained, “While demand remains robust across the sector, it hasn’t reached the elevated levels we expected would persist from last year onwards.”
Before jumping to too many conclusions, several industry analysts suggest holding off until the April data comes out to determine whether the typically bustling spring break and Easter travel periods also experienced price decreases.
Nonetheless, airline business writer
Brian Summers
stated to The New York Times, “Overall, I anticipate that prices will drop, and we’ll notice more unoccupied seats.”
Should the U.S. economy slide into a recession this year, it might lead to lower costs for travel as well as various other products and services.
Indeed, during the 2008 downturn, we observed deflation for several months when the general price level dropped,” explained Tyler Schipper, an associate professor of economics at the University of St. Thomas. “This phenomenon tends to be quite noticeable in sectors such as travel, which many families consider a luxury. For example, airfare typically sees decreases in pricing leading up to most economic recessions. If another recession were to occur, I believe we’d witness similar trends.
Nexstar’s Addy Bink and the Associated Press provided contributions for this report.
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