With all the dismal news lately we must remember that there are counterbalancing influences that may actually increase tourism to many U.S. destinations.
- The continued weakness of the U.S. dollar. Financial experts expect the dollar to remain weak due the continued reduction in interest rates by the Federal Reserve and our growing debt.
- Fuel costs are coming down. In just the past three weeks they’ve plummeted by nearly 50%, allowing some airlines to lock in rates by purchasing futures contracts. This will eliminate, or at least reduce, some of the fuel surcharges while the drive market will benefit from lower prices at the pump.
- Visa Waiver program expansion approved. Seven new countries have now been admitted to the visa waiver program and TIA estimates this may increase arrivals by 1 million passengers.
- Hotel rates have been reduced in the short term. Many hotels who have depended on business meetings and corporate travel are slashing their rates, some as much as 25% a month, to entice new business.
- The prohibitively high cost of traveling to Euro-denominated countries has resulted in domestic tour operators re-balancing their brochures for 2009 with more U.S. products than European offerings.
While it’s possible for these influences to be offset by a meltdown of the economy following a dismal Christmas retail season, it doesn’t seem likely that central bankers in the major developing countries would allow that to occur without additional intervention.
While we choose to remain upbeat we could certainly be dining on crow come next Spring if things head South.