Boost in Travel Business Expected This Summer

Summer Travel Vacationers can expect to find a little more company on the roads, in the air and in hotels in the coming months. Americans plan to do more traveling this summer, and some expect to dig a little deeper into their wallets to do it, according to a recent survey by the online travel firm TripAdvisor.

Some 86 percent of the more than 1,200 respondents said they were planning to take a summer vacation, up 7 percent from last year. Of those, 25 percent said they expect to pay more, while 53 percent said they will spend the same amount as last year.

The majority of the fun-seekers will be driving, according to the survey, which Mike Stout of Terry’s RV Shop in Frankfurt, Ill., can attest to.

“We’re about 20 percent ahead of what we were this time last year,” he said. “I think people are beginning to feel a little more at ease about the direction the economy is going.”

Those who chose to fly this summer can expect packed planes. According to the trade group Airlines for America, 209 million people are expected to take to the air this summer—the most since 2008. Of those, a record 27 million will be flying internationally.

“Domestic airfare is down 2 percent, international airfare is flat year over year and that would put you at $384 for an average domestic airfare and $985 for an average international airfare this summer,” said Travelocity’s Courtney Scott.

Of course, that doesn’t count add-on fees by some airlines, and baggage fees, which are now a routine part of travel. Although passengers paid a record $3.6 billion in baggage fees last year, a new survey by J.D. Power said fliers are getting used to laying out the extra cash. In total, 37 percent of passengers said they consider the fees to be “reasonable.”

For Rosewood Hotels and Resorts, which owns luxury properties like The Carlyle in New York and Little Dix Bay in Virgin Gorda, the increase in vacation plans has translated into a boost in business and the opportunity to “incrementally” raise rates.

“Our booking pace is 12 percent higher than last year,” said Radha Arora, president of Rosewood Hotels & Resorts. “Because bookings are coming in advance … it allows us to actually look at the average room rate and tweak the average room rate and get the best out of the daily rate and occupancies.”

The resort is not alone. Summer demand for hotel rooms is expected to almost climb back to records set in 2007, according to the hotel research firm STR.

“We’re selling 2 percent more rooms this summer than we did last summer,” said Jan Freitag, STR’s senior vice president for strategic development, “and then that lifts the occupancy up to an average occupancy of around 70 percent, seven out of 10 rooms.”

The average daily room rate is expected to increase 4.4 percent to $112.21 and the revenue per available room is expected to grow 5.4 percent, to almost $78.50.

So where is everyone headed? According to TripAdvisor, the most popular summer destination this year is New York, followed by Boston and Washington, D.C.

There are also those who haven’t necessarily planned their vacation yet – 71 percent of those surveyed by TripAdvisor said they’d take a spontaneous trip if they found a last-minute deal.

-With reporting by Phil LeBeau and Simon Hobbs

This entry was posted in US Economy. Bookmark the permalink.

Leave a Reply