(NEXSTAR) — With growing concerns over economic instability and global tensions, many major tourist destinations across the nation fear they might see fewer visitors this year. However, travel experts suggest that if demand significantly decreases, you might benefit from better deals as these areas try to attract guests.
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.
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 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 hesitation about scheduling trips would align with
a new poll
that showed many people fear the U.S. is being
steered into a recession
and that President Donald Trump’s broad and haphazardly enforced tariffs will cause prices to rise.
The decrease in travelers includes both local and international visitors.
U.S. Travel Association
Reports indicated that international visits decreased by 14% in March compared to the previous year. According to the group, the most significant declines came from travelers originating in Canada and Western Europe.
Michael Feroli, who leads the U.S. economics team at J.P. Morgan, suggested that the decline in travel might be attributed to an increase in negative feelings 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 communication with clients. “This suggests we should take into account yet another factor when evaluating the impact these taxes may have on overall economic actions.
A modest decrease in international travel, stemming from either boycotts or financial instability, could result in significant losses amounting to billions for the U.S. economy.
Bloomberg
reports.
Is the decrease in tourism likely to lead to better travel deals?
Should demand decrease within the travel industry, airlines, hotel chains, and similar businesses might reduce their prices in an effort to attract more customers again.
The cost of air travel decreased in both February and March, as reported.
Labor Department 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 into January and early February.” He further noted, “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 recommend holding off until the April data comes out to evaluate whether the typically bustling spring break and Easter travel periods also demonstrated decreases in prices.
Nonetheless, airline business writer
Brian Summers
told The New York Times, “On the whole, I expect prices will fall and we will see more empty seats.”
If we see the U.S. economy tip into an economic recession this year, that could also make travel — and other goods and services — cheaper.
“In fact, in the 2008 recession, you actually saw deflation for for a couple months where the overall price level was actually lower,” said Tyler Schipper, an associate professor of economics at the University of St. Thomas. “I think of this being particularly true for things that maybe are more luxury for a lot of households, like travel. So airline travel, for instance, you can see falls in prices around most recessions. And I suspect if we went into a recession, we would still see that again.”
Nexstar’s Addy Bink and the Associated Press provided contributions for this report.
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