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NEXSTAR
As economic concerns and global strains increase, many major tourist destinations are fretting about potential shortages of visitors this year. However, travel experts suggest that if demand falls significantly enough, you might benefit from new bargains emerging as a result.
Where is tourism declining?
A
Las Vegas tourism report
Released earlier this week indicated that both visitation 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.
Consumer hesitancy to make travel reservations would align with
a new poll
That indicated numerous individuals are afraid the U.S. is under threat.
steered into a recession
Moreover, President Donald Trump’s extensive and inconsistently applied tariffs will lead to increased costs.
The decrease in travelers includes both local and international visitors.
U.S. Travel Association
International visits decreased by 14% in March compared to the previous year’s figures. According to the report, 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 increasing hostility toward Americans.
Recently, many articles have highlighted how tourists are cancelling their visits to the US due to objections over what they see as overly strict new trade measures,” he noted in a memo for clients. “This suggests we should take into account yet another factor when evaluating the impact of these taxes on overall economic actions.
A modest decrease in international travel, spurred either by boycotts or economic instability, could result in significant financial losses for the US economy amounting to billions of dollars.
Bloomberg
reports.
Will the decrease in tourism lead to better travel offers?
Should demand decrease within the travel industry, airlines, hotel chains, and similar businesses might reduce their prices in an effort to attract more customers.
The cost of air travel decreased in both February and March, as reported.
Labor Department monitoring
.
The ticket prices haven’t maintained the strength observed during the fourth quarter of last year through early January and mid-February,” said Alaska Airlines Chief Financial Officer Shane Tackett to CNBC. “While demand remains robust across the sector, it hasn’t reached the elevated levels we expected would persist from 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 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 prices for travel as well as various other products and services.
Indeed, during the 2008 economic downturn, deflation occurred for several months, with overall pricing dropping,” explained Tyler Schipper, an associate professor of economics at the University of St. Thomas. “This effect tends to be pronounced in items considered luxuries by many families, such as travel. For example, airfare typically sees decreases in price leading up to most recessions. If another recession hits, I believe we will witness similar declines.
Nexstar’s Addy Bink and the Associated Press provided contributions for this report.
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