January 11, 2010
Travel and tourism take a hit
When recessions appear, consumers become more frugal. They particularly reduce so-called discretionary spending, that is, spending they don't have to do to survive. Does this mean that an industry like travel and tourism has really had a hard time during the recession?
Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:
"That industry has. In fact, that's a perfect example of discretionary spending, and the travel and tourism industry has been hit big time during this recession. Spending on travel and tourism is down 12 percent from pre-recessionary levels, really exceeding the drop in recent recessions. The biggest drop we've seen has been spending on air travel, down 24 percent. Spending on hotels is down 15 percent. However, leisure-related shopping is down only 3 percent, and spending at recreational entertainment sites is off only 1 percent. So I think what this is suggesting is that people are not taking long trips; they're not staying at fancy hotels; and for their vacation, what they're doing is substituting going to - let's say - the local park or local recreational site, and they're also going shopping."
Posted by Dave at January 11, 2010 08:00 AM