As Americans enjoy one of the quietest weeks of the year, the travel industry is in the midst of its busiest stretch ever. That makes for a great Christmas gift for hoteliers, airline operators and other ancillary businesses, but it also means employees have been working extra hard to make sure guests feel holiday cheer.
According to PricewaterhouseCoopers, the hotel industry is seeing the largest demand in the history of the industry for hotel rooms during the holiday season that started during Thanksgiving and will end after the ball drops in Times Square next Monday. It is expected when all figures are tallied up, demand for the entire holiday period would have jumped by 2.6 percent over the prior year to a new record level of 2.39 million average occupied rooms per night between November 23, 2006 and January 1, 2007.
The nine-day Christmas holiday period of December 25, 2006 through January 1, 2007 should is forecast to see a demand increase by 1.7 percent to 48.8 percent occupancy, compared to the same period last year. Christmas hotel rates are up four percent for AAA-rated Three Diamond hotels, as strong demand allows hoteliers to raise rates. Airfares stayed relatively even from last Christmas, while rental car rates have dropped an average of three percent from their prices last Christmas.
According to AAA, part of the reason for the seemingly low occupancy is most travelers will avoid hotels during Christmas and New Year’s in favor of staying at a friend or relatives house. The organization estimates 66 percent of holiday travelers will stay in someone’s home while 19.7 percent will stay in a hotel or motel. Just 2.4 percent will stay in a cabin/condo, while 1.9 percent will stay in a camper/trailer/RV/tent.
A good chunk of that increase is expected to be due from more Americans than ever before hitting the highways to travel more than 50 miles from home for the Christmas-New Year’s holiday than ever before. The AAA estimates a 2.2 percent increase in all travel this year to 64.9 million people. Last year, 63.5 million people traveled more than 50 miles to their holiday destination.
“Lower gasoline prices, gains in personal income, expectations of favorable year-end bonuses, increased inbound international travelers and no events, such as last year's hurricanes, that could negatively effect hotel supply and demand are among the factors that will result in a year of record demand for hotels” says Bjorn Hanson, Ph.D., a principal with PricewaterhouseCoopers LLP.
At AAA, CEO and President Robert L. Darbelnet agreed. “Because hotel rates, air fares and gas prices have risen only slightly from this time last year, Americans will not hold back when making travel arrangements this holiday season. This Christmas-New Year’s holiday we will see a healthy growth in travelers, following relatively flat travel seasons earlier in the year.”
Gas prices are up moderately compared to the same period in 2005. Right now the average price of gasoline is $2.29 a gallon of self-serve regular gasoline. That’s a seven 7 cent increase during the last month, and a 12 cent increase from this time last year. Because of the moderate rise in fuel, approximately 52.6 million travelers (81 percent of all holiday travelers) were expected to travel by motorcar, a 2.1 percent increase from the 51.5 million who drove a year ago.
Up in the skies, 9 million people (nearly 14 percent of holiday travelers) were planning to travel by airplane, up 2.7 percent from the 8.7 million that flew over the holidays last year.
“Airports will be busy this December as Americans visit family and take end of the year vacations to beaches, ski slopes, cruise ships and more,” said Darbelnet.
As in 2005, the greatest number of Christmas-New Year auto travelers will originate in the Southeast with 13.8 million, followed by the West, 13.2 million; Midwest, 10.2 million; the Great Lakes, 8.3 million; and the Northeast, 7.2 million. The Southeast is expected to produce the largest number of air travelers with 2.7 million, followed closely by the West with 2.5 million; then the Northeast with 1.8 million; Midwest with 1 million; and Great Lakes with 924,000.
Small towns and rural areas are the expected destination for 37.6 percent of holiday travelers, followed by cities, 35.3 percent. Oceans and beaches should see 10.1 percent of travelers, followed by mountain areas, 6.5 percent; theme/amusement parks, 3.9 percent; 0.7 percent for lake areas, and 0.1 percent for state/national parks. Another 4.7 percent responded with other and 1.2 percent didn’t know, according to AAA.
