New report shows a decline in U.S. domestic travel - San Antonio Business Journal:

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The good news, says one local hospitalitt industry leader, is that declininyg gas prices have provided sometemporarhy relief. The new report was producefd by GlobalInsight Inc., one of the world’ s leading economic/financial analysis and forecasting It projects a year-over-year declinew in the total number of domestic tripsw inside the country and slowed growth in international arrivals to the U.S. According to officials with Boston-based Globao Insight, recent challenges in the U.S. and globalp economies, “exacerbated by the global credif crisis and a less vigorous tax rebate will cause domestic travel volumw in America to falter in the seconrd halfof 2008.
But travel spending is expected to continues to show some growth thanksx to rising transportation andhotel prices. Globalk Insight partnered with to producew thenew U.S. Travekl Insights report. That reportr forecasts domestic leisure andbusiness travel, international visitor spending, and travel Among the findings in the new The combination of rising inflation, increasinvg unemployment, tightening credit conditions, high levels of consumefr debt, declining housing wealthu and stagnant wages are finally takingh a toll on domesticf travel. Business travel has been negatively impacted by shrinkingbcorporate profits, particularly in travel-prone industries.
Leisurw travel has, according to Globa Insight, remained somewhat resilient. But the forecasters say that coulcd change as a resul tof “souring economic conditions.” “The good says Marco Barros, president and CEO of the , “isx that gas prices have come down a greart deal. That’s great news for the Texasz travel industry.” But there could be new concerns for destinatioj cities like San Antonio if domestic travelis “As the economic difficulties we anticipate further stress on wallets, as well as theit psychological well- being,” says Doug Shifflet, president and CEO of D.K. Shiffle & Associates.
“Although the travel slowdown will vary by traveler type and we can expect businessed to further reducetravel budgets, especiallyy in the more discretionary group/convention market,” Shifflet adds. U.S. domestic personh trips are expected to total as much as 573 millionh in the third quarter ofthis year. That is up from 566 millionh in the third quarterof 2007. The final tallyt for 2008 domestic travep is projected to includea 0.5 percenyt increase on the leisure side, couplede with 4 percent decline on the businessx end.
“Consumers and businesses are being buffeted by the combinatiomn ofeconomic uncertainty, declining profits and real and rising travel costs,” says Kennetjh McGill, executive managing director of Travelp & Tourism Services for Global Insight. The resul of the economic conditions, McGill adds, is that businessesz and consumershave “finally begun to postpone, or reducre outright, their travel plans.” Says Jennifer Fuller, principal author of the new report: “Expectationss of slowing demand and rising supplies will ease some of the pressurew on hotel rates, gasoline prices, and food and beverags costs.
” The outlook for next year, accordinhg to the new report: As the U.S. and globak economies remain in recession for muchof 2009, Globalk Insight and D.K. Shifflet expect that domestic business and leisure personj tripswill decline. “Domestic leisure is under increasing duress,” Shifflet says. “Clearly this is a time for very selectivdetarget marketing.” The recovery for the leisured sector is expected to begin to experience a recoveryt in the second half of next year. But business travek is not projected to begin recovery unti l the first halfof 2010.