The Refinishing Touch Blog

Earlier in the week, we blogged about the American Recovery and Reinvestment Act of 2009 and the views of the U.S. Travel Association, in support of the suggestions put forward by Roger Dow, the association's president and CEO. For anyone in doubt, figures show that following a decline in the lodging and the airline industries in the final quarter of 2008, predictions for 2009 are bleak.

PricewaterhouseCoopers announced a revised lodging forecast earlier this month, based on current forecasts for the U.S. economy combined with historical data from Smith Travel Research. In this, PricewaterhouseCoopers forecasts an 11.2 percent decrease in room revenue per available room (RevPAR) during 2009 - after a 1.9 percent decline in 2008.

The forecast for room occupancies also shows a decline. Robert Mandelbaum, of PKF Hospitality Research states: "This is… the lowest in 30 years."

Airlines are also declaring a marked decrease in customers. USA Today reported that Las Vegas airport has experienced its biggest passenger decline since 1981. The numbers released by the Clark County Department of Aviation include a 14.1% decline in December to about 3.2 million, and highlights how the recession has undercut Las Vegas tourism. This reflects the biggest year-over-year percentage decline since traffic fell from 10.3 million in 1980 to 9.5 million in 1981.

Despite this, Delta Air Lines which has seen the biggest losses, remains optimistic. CEO Richard Anderson admits that Delta will still be in the red in the traditionally weak first quarter, but overall he is "expecting profitability in 2009 and a growing cash position." This is due to the fact that Delta expects to save about $5 billion through lower fuel prices this year, about a $1 billion through capacity cuts and $500 million in streamlining benefits from its merger with Northwest.

With less disposable income to spare people will travel more selectively. This means that all elements of the hospitality sector: airlines, public transportation, hotels, motels, resorts, and restaurants, need to deliver a consistently strong customer experience and to promote their services to encourage visitors.

Labels: Airline Industry, Hospitality, US Travel Association; PricewaterhouseCoopers