(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
starting 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.
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
and that President Donald Trump’s broad and haphazardly enforced tariffs will cause prices to rise.
The decrease in visitors includes both locals and international tourists.
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 increasing hostility toward Americans.
Over the past few weeks, many news articles have highlighted how tourists are cancelling their visits to the U.S., objecting to what they see as overly strict new trade measures,” he noted in his analysis for clients. “This suggests we should take into account yet another factor when evaluating the impact of these duties on overall economic performance.
A modest reduction in international travel, stemming from either boycotts or financial instability, could result in significant losses for the US economy amounting to billions of dollars.
Bloomberg
reports.
Will the decrease in tourism lead to better travel offers?
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.
Labor Department monitoring
.
Alaska Airlines Chief Financial Officer Shane Tackett informed CNBC, “The ticket prices have weakened compared to those in the final quarter of last year extending into 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 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 recession, there were several months when we experienced deflation as the general price level dropped,” explained Tyler Schipper, an associate professor of economics at the University of St. Thomas. “This phenomenon tends to be especially noticeable for items considered somewhat luxurious for many families, such as travel. For example, airfare typically sees decreases in pricing leading up to most economic downturns. If another recession occurs, I believe we will observe similar trends once more.”
Nexstar’s Addy Bink and the Associated Press provided contributions to this report.
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