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Hotel Industry In Record Breaking Mode

That's right; the pendulum has swung so far the industry is posting numbers 2007 would be jealous of. Here are the facts!

Friday, November 02, 2012
Glenn Haussman
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If you’re bent on insisting the hotel industry is still in the toilet, well, quite frankly it’s time to change your tune. For months we’ve been presenting proof the industry is going gangbusters. And if your hotel or company is not leveraging opportunity then it’s time to quit the blame game and look inside your organization to ferret out the naysayers and dead weight.

Sorry to spoil the pity party, but those people insisting on seeing the negative either have a hotel in the world’s worst location or its executive team is not maximizing opportunity. That’s because the state of the hotel industry economy is roaring, and in many cases records are being shattered.

You heard me right, if getting back to 2007 is the bellwether for you to start to feel better, guess what; we’re already there and 2013 is shaping up to be even better. So the real question is what are you going to do about it? We say raise your rates and get in on the fun.

According to David Huether, Senior Vice President of Research and Economics with the U.S. Travel Association (USTA), hotel industry records abound even if the larger economic environment is fraught with uncertainty.

Huether’s research is showing that actual trips taken (for any purpose) is up 1.8 percent this year, which is an all-time high. In fact, more trips will be taken this year than during the prior peak of 2007 and will total nearly 2 billion trips, a 1.5 percent increase over 2007 totals. An additional 23 million trips will be taken domestically with that number rising an additional 1.1 percent in 2013. In 2014 another 34 million trips being added in 2014 for yet more growth at 1.1 percent.

Domestic leisure travel is expected to grow 1.2 percent during 2013, a new record high, even if the pace of growth is abating somewhat. In 2014 leisure should uptick another 1.7 percent. Though leisure is up only about 2 percent compared to 2011, it’s still an incredible 4.5 percent above 2007 trip numbers.

That’s part of what we here at Hotel Interactive have dubbed the ‘normalizing effect.’ Business dropped off precipitously due to the Great Recession but has made strong gains during the last couple of years to bring the industry back to normal levels. So without a big trough to climb out of, it appears rooms demand is decreasing sharply, though in actuality it is climbing at a respectable rate.

While business travel volume will slow next year to less than one percent, the number of business trips has grown steadily since the downturn in 2009 and is expected to see more positive growth in 2014, said Huether.

Again the raw numbers belies the truth. Huether said 2012 is the third annual increase in business trips, a phenomenon not yet seen in the 21st century. And yes, 2007 is part of the 21st century.
Business trips are expected to increase 0.9 percent this year, 1.2 percent in 2013 and 1.1 percent in 2014 making for a string of record breaking years.

Total domestic travel spending, including leisure and business travel, will increase 3.0 percent.

“While the growth rate is more moderate than in previous years, leisure travel remains at an all-time high and is an indicator of rising consumer confidence,” said David Huether, senior vice president of research and economics for the U.S. Travel Association. “Businesses continue to have a heightened focus on the value and bottom-line benefits of travel. We feel the slight increase in business travel next year continues to reflect demand for face-to-face meetings that drive growth and productivity.”

Inbound travel to the United States is also sharply rising. And foreigners spend a whole lot more than American citizens. The USTA believes total international inbound travel will increase four percent in 2013 while spending will grow 7.1 percent. International arrivals to the U.S.A. now account for 15.1 percent of total travel spending in the U.S., up from 14.3 percent in 2011.

Overseas travel to the U.S. (excluding Canada and Mexico) will grow 4.3 percent, a slight decrease from last year’s growth of 4.8 percent. Overseas travelers to the U.S. spend an average of $4,300 per trip, according to the USTA.

All these trips are helping boost the overall job outlook domestically too. So many trip being taken means the industry should enable the industry to add 98,800 American jobs by the end of 2013. These job gains, say the USTA, will increase direct travel industry employment to more than 7.6 million jobs next year.

“The focus of this election season has been how to put Americans back to work, and our industry is uniquely capable of adapting to economic upswings and creating jobs,” said Roger Dow, president and CEO of the U.S. Travel Association. “Given our industry’s immense potential not only nationally, but also for local and state economies, we call on the Administration and Members of Congress to build a plan for economic recovery that drives significant increases in travel.”
Credit
Glenn Haussman    Glenn Haussman
Editor in Chief
Hotel Interactive, Inc.

Bio: Glenn Haussman is Hotel Interactive's Editor-In-Chief, where he manages all editorial content for the hotel industry’s leading online information resource. In addition to publishing the daily magazine, he hosts a weekly on demand radio shows and develops educational content for the company’s BITAC and HI Connect Design ...
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