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Slow Recovery Seen for 2010

By Brian Jewell

Modest gains in travel in 2010 are expected by many leading travel experts.


By most accounts, 2010 looks to be a good year for tourism, as travelers are expected to return to the road after showing hesitation in 2009. But the upturn, experts say, is only the first step in a recovery that could take several years and leave permanent changes throughout the industry.

The United States Travel Association (USTA) is forecasting modest gains in travel volume for 2010, including a 2 percent rise in leisure travel and a 2.5 percent uptick in business travel. These increases could yield gains of 4 percent to 5 percent in total travel spending, the association says.

“We’ve had major declines in travel this year, so we’re seeing the beginnings of a recovery from a depressed situation,” said Suzanne Cook, senior vice president of research for USTA. “Everyone seems to be optimistic about next year, but they recognize we’re in for a long, slow recovery.”

According to USTA research, leisure travel has fallen 2 percent in 2009. But coupled with sliding prices throughout the hotel and cruise sectors, this slide in traffic led to a 7 percent drop in travel spending.

Analysts such as PricewaterhouseCoopers, Smith Travel Research and others expect prices will remain low — or perhaps fall even further — during 2010.

“We expect certainly on the hotel side that prices will stay low,” Cook said. “Smith Travel research is forecasting a continuing decline in average daily room rates of about 3.5 percent. And given lots of new supply coming on board for the cruise lines, they’ll continue to offer good deals as well.”

‘Pent-up demand’

Throughout the group travel industry, tour operators and destinations reported a wide variety of experiences during 2009. But across the board, those interviewed for this story reported a sense of optimism that the slower economy has created a “pent-up demand” for travel in 2010.

“For 2010, our members are telling me that their bookings are looking very strong, because some people are going to continue to travel,” said Peter Pantuso, president and CEO of the American Bus Association (ABA). “Schools are going to continue. Older adults and baby boomers who have been sitting on the sidelines are now saying that they want to get out and do something.”

Ron Hersh, president of World of Travel in Columbus, Ohio, said that his business remained strong in 2009, although his company trimmed the number of trips they offered to ensure that departures remained profitable. Next year, he said, is looking even better.

“Our 2010 bookings are excellent,” he said. “Most of my big stuff, like Australia or European river cruises, is sold out all the way through June. People may have held back last year, but there’s a big pent-up demand.

“When you’re dealing with the over-55 age group, they know that they’re not getting any younger. They perceive that the time is right to go, because it’s relatively cheap right now.”

AFC Tours, a company based in San Diego, saw travelers gravitate toward its more affordable domestic products this year, choosing four- or five-day itineraries over lengthier trips abroad.

“We had one of the best falls we’ve ever had, although the rest of the year was not like that,” said AFC president and CEO Randy Case. “From September 2008 on, people just didn’t book. So there was a lot of pent-up demand, and when things leveled off, they felt better. In 2010, I think we’ll be back to normal.”

‘Flat is the new up’
For destinations, 2009’s decline in travel leaves next year’s traffic patterns subject to speculation. Nashville, Tenn., is facing a drop in overall visitation and scheduled tour arrivals but is hoping to make up the difference in other ways.

“Flat is the new up,” said J.P. Dansereau, vice president of tourism at the Nashville Convention and Visitors Bureau. “In the motorcoach segment, 2010 is definitely off from where it was this year. It seems to be a decrease in terms of series bookings. But we’re not worried about it, because other bookings seem to be taking its place. FIT and individual bookings are up, and we’re seeing a stronger pickup in AAA and travel agency consortiums.”

In an effort to bolster its tour business, the Nashville CVB is working on refreshing its focus to give tour operators a new perspective on the city, which has been well branded as a country music destination for years. Now, in addition to the music track, the CVB is promoting museums, festivals, historic sites and other attractions for groups.

“We’ve mixed up our itineraries,” Dansereau said. “We took a hard look at what we were offering and tried to get some new product in the marketplace. We’re trying to put a new face on a hard deal.”

Emphasis on group tours
In Wisconsin, the Door County Visitors Bureau staff is hoping that a renewed emphasis on marketing to group tours will translate into increased business for 2010. Though Door County is a popular vacation destination throughout the upper Midwest, the group market had been largely neglected until the bureau brought in new leadership two years ago.

“We’re in our second year, and just beginning to see the results of being out there at all the trade shows,” said Mary Dennis, director of marketing and sales for the Door County Visitors Bureau. “We think the economy is getting better, and we’re seeing an increase in inquiries that should translate into more tours. We’ve had a lot of inquiries for the spring, summer and fall of 2010.”

Dennis said that Door County is also beginning to partner with CVBs in Milwaukee and Racine, Wis., to market the entire region as a tour destination for groups. “It gives us the ability to combine the emphasis for people to come through our corridor,” she said.

Creativity and adaptability may be the keys to growth in the tourism industry in 2010, as recovery in the overall economy seems both promising and fragile. AFC’s Case believes that the current challenges may even leave the industry better off in the long run.

“I think there’s a lot of opportunities for companies that are very strong and have an excellent product,” he said. “I believe that adversity builds character in companies and that they’re going to come back stronger.”

Brian Jewell

Brian Jewell is the executive editor of The Group Travel Leader. In more than a decade of travel journalism he has visited 48 states and 25 foreign countries.