Will Dropping Tourism Rates in U.S. Destinations Pave the Way for Cheaper Summer Travel?

(NEXSTAR) — With growing concerns over economic instability and global tensions, many popular tourist destinations across the nation are fretting about potential visitor shortages this year. However, travel experts suggest that if demand falls significantly, 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.

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 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
and that President Donald Trump’s broad and haphazardly enforced tariffs will cause prices to rise.

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The drop in travelers is both domestic and foreign. The
U.S. Travel Association
reports international visits were down 14% in March when compared to the same month a year prior. The biggest drops were in visitors from Canada and Western Europe, the group said.

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 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 noted in his report for clients. “This could be an additional factor we should take into account when evaluating the impact these taxes have on overall economic actions.

A modest reduction in international travel, triggered by either boycotts or financial instability, could result in significant losses amounting to billions for the US economy.
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 attempt to attract more customers.

The cost of airfares decreased in both February and March, as reported.
The Bureau of Labor Statistics monitoring
.

The ticket prices have weakened compared to those in the final three months of last year, extending through January and early February,” said Alaska Airlines Chief Financial Officer Shane Tackett during an interview with CNBC. “While demand remains robust across the sector, it hasn’t reached the elevated levels we expected would persist from last year.

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Before jumping to conclusions, several industry analysts recommend holding off until the April data is published 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 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 downturn, we experienced 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 especially noticeable in items considered luxuries for many families, such as traveling. For example, airfare typically sees reductions in cost leading up to most economic slumps. If another recession were to occur, I believe we’d witness similar trends.

Nexstar’s Addy Bink and the Associated Press provided contributions for this report.

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