(NEXSTAR) — With growing concerns over economic instability and global tensions, many major tourist destinations across the nation are fretting about potential dwindling numbers of visitors this year. However, travel experts suggest that if the demand falls significantly enough, you might benefit from better deals as these locations may start offering more attractive prices 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 was according to data 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.
Consumer hesitance to reserve trips would align with
a new poll
That indicated numerous individuals dread 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 visitors includes both locals and international tourists.
U.S. Travel Association
International visits decreased by 14% in March compared to the corresponding period last year. 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.
Over the past few weeks, several articles have highlighted how travelers are cancelling their visits to America as a response to the stringent new trade measures,” he stated in his client memo. “This suggests an additional factor we should take into account when evaluating the impact of these duties on overall economic actions.
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.
Is the decrease in tourism likely to lead to better travel deals?
Should demand decline 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.
The Bureau of Labor Statistics monitoring
.
The ticket prices haven’t maintained the strength observed during 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 levels everyone expected would persist from last year.
Before jumping to too many conclusions, several industry analysts suggest holding off until the April data comes out to determine whether the typically bustling spring break and Easter travel periods exhibited similar decreases 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 and various other goods and services.
“Indeed, during the 2008 recession, there were several months when deflation occurred, causing the general price level to drop,” 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 during most economic downturns. If another recession hits, I believe we’d witness similar declines once more.”
Nexstar’s Addy Bink and the Associated Press provided contributions to this report.
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