(NEXSTAR) — With growing concerns over economic instability and global tensions, many popular tourist destinations across the nation are fretting about potential shortages of visitors this year. However, travel experts suggest that if the demand falls significantly enough, you might benefit from better deals emerging as a result.
Where is tourism declining?
A
Las Vegas tourism report
Released earlier this week indicated that both visitation rates and hotel occupancy saw declines compared to the previous year. This data was revealed by California’s tourism board.
reported steep drop-offs
beginning in February and March.
Due to the decrease in travel demands, leading U.S. airlines are cutting back on their flight schedules and adjusting or canceling their financial forecasts 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 local and international tourists.
U.S. Travel Association
International visits decreased by 14% in March compared to the previous year’s data. 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 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. due to dissatisfaction with what they see 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.
A modest reduction 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.
Will the drop in tourism result in 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 airfares decreased in both February and March, as reported.
Labor Department monitoring
.
The ticket prices have weakened compared to those in the final quarter of last year extending into January and early February,” said Alaska Airlines Chief Financial Officer Shane Tackett to CNBC. “While demand remains robust across the sector, it hasn’t reached the pinnacle levels we expected would persist from last year.
Before drawing too many conclusions, some industry analysts urge waiting until April data is released to assess if the usually busy spring break and Easter travel seasons also showed price drops.
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.
In reality, during the economic downturn in 2008, we observed deflation for several months where 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 pronounced for items considered somewhat luxurious for many families, such as traveling. For example, airfare typically sees declines in pricing throughout most recessions. If another recession were to occur, I believe we’d witness similar decreases once more.
Nexstar’s Addy Bink and the Associated Press provided contributions for this report.
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