(NEXSTAR) – As economic anxiety and international tensions mount, some of the country’s biggest hotspots are worried visitors won’t turn up this year. But their loss could be your gain, travel analysts say, if demand drops so low that deals start to pop up.
Where is tourism declining?
A
Las Vegas tourism report
released this week showed showed visitation and hotel occupancy were down year-over-year. California’s tourism board
reported steep drop-offs
beginning in February and March.
As a result of dropping travel demand, major U.S. airlines are reducing their flight schedules and revising or withdrawing their profit outlooks for the year.
“We came off a strong fourth quarter, saw decent business in January, and really domestic leisure travel fell off considerably as we went into the February time frame,” American Airlines CEO Robert Isom told CNBC.
Consumer reluctance to book vacations would correspond with
a new poll
that showed many people fear the U.S. is being
steered into a recession
Moreover, President Donald Trump’s extensive and inconsistently applied tariffs will lead to increased costs.
The decrease in visitors includes both domestic and international travelers.
U.S. Travel Association
Reports indicated that international visits decreased by 14% in March compared to the previous year. The most significant declines were seen in travelers from Canada and Western Europe, according to the group.
Michael Feroli, who leads the U.S. economics team at J.P. Morgan, suggested that the decline in travel might be attributed to an increasing negative attitude towards Americans.
Over the past few weeks, several articles have highlighted how tourists are cancelling their visits to the U.S. due to dissatisfaction with what they perceive as overly strict new trade measures,” he stated in a memo for clients. “This suggests we should take into account yet another factor when evaluating the impact of these duties on overall economic performance.
Even a relatively small drop in foreign tourism, whether it’s because of boycotts or economic uncertainty, would cost the U.S. economy billions,
Bloomberg
reports.
Will the drop in tourism result in travel deals?
Should demand decline within the travel industry, airlines, hotel chains, and similar businesses might reduce their prices to attract more customers.
Airfares fell in February and March, as reported.
The Bureau of Labor Statistics monitoring
.
“The fares aren’t as strong as they were in the fourth quarter of last year and coming into January and first part of February,” Alaska Airlines CFO Shane Tackett told CNBC. “Demand is still quite high for the industry, but it’s just not at the peak that we all anticipated might continue coming out of last year.”
Before jumping to conclusions, several industry analysts recommend holding off until the April data comes out to evaluate whether the typically bustling spring break and Easter travel periods exhibited similar declines in prices.
Nonetheless, airline business writer
Brian Summers
stated to The New York Times, “Overall, I anticipate that prices will drop, and we’ll observe more unoccupied seats.”
Should the U.S. economy slide into a recession this year, it might lead to lower prices 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 pronounced in items considered luxurious for many families, such as travel. For example, airfare typically sees declines in pricing throughout most economic recessions. If another recession were to occur, I believe we’d witness similar trends once more.”
Nexstar’s Addy Bink and the Associated Press provided contributions for this report.
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