Peter Yesawich, chairman and CEO of Ypartnership, reported the October results for the latest Traveler Sentiment Index, which gauges consumers’ interest in leisure travel and their perceived ability to travel. The TSI identified 60 percent of American households as travel households, and from that 60 percent, travelers rated their opinions on six measures. Three of the measures— perceived safety, quality of service and affordability—were rated highly among respondents, with affordability being up dramatically from July (39.1 to 53.1). The other three measures—perceived time to travel, interest in travel and availability of money to travel—dragged the rating down and implied the age old factors of time and money are big issues in the current lull.
The interesting aspect of the numbers is they remained largely unchanged from the TSI done earlier in July, with some numbers getting a boost, which means whatever the impact of the current economic downturn, the leisure market may have already bottomed out.
According to Yesawich, the increase in promotions and deals has led to the higher perception of affordability. "Value is king to the consumer, demonstrated by those saying they want to travel and are looking to do so differently. Three-fourths expect to book some inclusively priced vacation or a packaged vacation," Yesawich said. "People want to know the cost before departure. Managing a budget is important."
Six out of 10 travelers plan to comparison shop for prices, which is an all-time high in the TSI numbers. "People are defaulting to the online world to look at immediate promotional offers," Yesawich said. A growing trend is the all-inclusive trip, which travelers have been looking for more and more.
Another component in this slight increase in consumer confidence (which dropped to a 15-year low in July) is the drop in gas prices, which re-energizes the car trip and helps destinations with close proximity to large populations.
However, as always, there is a downside to this news. This increases a potential need to drop rates in order to draw the budget-conscious travelers, who often chase deals instead of destinations. Also, seven of 10 respondents plan to stay fewer nights on trips. And more remote destinations aren't helped as much by the lower gas prices.
Bottom line, leisure travelers still say they are going to travel—it just might be down the chain scale and for fewer nights.
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