Have Confidence, Will Travel

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By CAROLINE BETETA

After months of doom and gloom news about major losses in the travel industry, there’s no better time to focus our attention on the light at the end of the recession tunnel.

There are encouraging signs that consumer confidence may be foreshadowing a better year than originally anticipated, which could mean positive news for tourism. According to the U.S. Conference Board, consumer confidence increased considerably in April and May. That confidence is reflected in travelers’ intentions for vacations and business trips in the next 12 months.

In November, only 10 percent of travelers foresaw increasing their travel in the next 12 months compared with the previous 12 months; by April, that figure rose to 21 percent. The converse is true as well the percentage of those planning to decrease travel in the next year compared with the prior year has fallen significantly between November (34 percent) and April (24 percent), according to Travelocity’s Traveler Confidence Report.

A key factor in this is smart marketing. The travel media’s touted “year of the deal” has certainly helped turn the tide, with decreased airfare and value hotel packages giving wary travelers an offer they can’t refuse. When asked how lower prices would impact travel plans, 25 percent said lower airfares would allow them to take a trip they had not expected, while 18 percent said lower hotel rates would allow them to stay at a hotel with higher star rating, according to Travelocity.

Best of all, travel budgets overall are stronger than anticipated. According to Travelocity, two-thirds of respondents report their summer travel budgets will remain the same or increase compared with last year. Of the one-third planning to reduce their budgets, the vast majority will do so by 50 percent or less.

In California, the picture is looking a little rosier as well. Despite a difficult fourth quarter in 2008, data released in April show that travel spending in California increased 0.9 percent to $97.6 billion for the year, according to Dean Runyan Associates. Also, the number of domestic stays was down just 1 percent in 2008, despite high gasoline prices in the first half of the year and the economic downfall in September, according to D. K. Shifflet & Associates. Contributing to this stability is a large and mobile in-state traveling population, which helped boost leisure travel by this segment 6.4 percent last year, Shifflet reported.


International scene

The international markets had an even better year in 2008, with overseas visitation to California up 3 percent to 5 percent for the year and international visitor spending in the state up 9.6 percent, according to the U.S. Department of Commerce and Dean Runyan.

Looking forward, 78 percent of traveling Californians who were surveyed recently by travel research company SMARI said that they intend to take a trip in state in the next 12 months. This is on par with intentions from a year ago (79 percent) and is up considerably from fall (71 percent). It seems that despite economic difficulties in California, residents are becoming more optimistic.

California is also a top destination for visitors from other West Coast states, and the numbers indicate that travel intentions from these “primary” markets Arizona, Nevada, Washington, Oregon, Colorado and Utah are high, with more than half (52 percent) of those surveyed declaring intentions to visit the Golden State in the next year. This is up a bit from last year (50 percent) and again up considerably from fall (45 percent).

This is good news for Los Angeles County’s tourism industry, which attracted $23.4 billion in visitor spending in 2007 and supported 162,600 jobs. The visitor industry also generated $509 million in local tourism tax receipts and $841 million in state tax receipts in 2007.

Although we are seeing some encouraging trends, it’s important that the travel industry in California and the United States not take this for granted, and continue to provide the greatest value possible for consumers by creating “must-do” deals and experiences. Destination marketers must also do their best to remind consumers about the benefits of travel, from creating special memories in wonderful places to enhancing health, relationships and productivity.

Those of us at the California Travel and Tourism Commission emphasize all this in our lifestyle marketing efforts, and our stable funding has put us in the enviable position of being able to continue promoting the state globally via sales, advertising and public relations. While some of our partners have had funding decreases, they continue to leverage our resources (see tourism.visitcalifornia.com), helping us unify and expand our industry voice around the world.

We believe it’s important to continue working smarter together to make the light at the end of the tunnel grow brighter and brighter.


Caroline Beteta is president and chief executive of the California Travel and Tourism Commission, an industry non-profit. She also is deputy secretary for tourism for the California Business, Transportation and Housing Agency.

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