Research

Travel Remains Steady Amid Economic Caution​

While August Industry data is gathered, we take this opportunity to share year-to-date insights from some of the best sources in the Travel Industry. Tourism Economics, a specialized division of Oxford Economics and a global leader in economic forecasting and analysis, reported its latest U.S. economic insights, including:​

  • Employers are holding on to workers for various reasons, including uncertainty over future economic conditions and fears of difficulties in rehiring. Conversely, the same economic uncertainty is delaying hiring plans, prolonging the job search for unemployed workers.​
  • Continuing claims for jobless benefits have been steadily climbing, reaching the highest levels since November 2021. This “no hiring, no firing” confluence eventually seeps into the mindset of employed workers, stoking heightened anxiety over job security and discouraging discretionary spending.​
  • Overall U.S. consumer spending through May remains above last year’s levels; durable goods (appliances, electronics, furniture) dropped significantly to 4.3% after a jump in April, while non-durable goods spending remains steadier (+2.4%). Spending on travel-related services (F&B, air, lodging) remains above the level of May last year (+3.2%).​

Within the travel industry, prices related to recreation and food and beverage have increased (+4%) compared to June of last year, while others have adjusted according to demand, including lodging (-3.7%), airlines (-3.5%), and transportation (-6.3%). ​

A new factor that could push prices higher in the future is the weakening of the U.S. dollar compared to other major European and Asian currencies. Since the dollar doesn’t go as far as it used to, buying goods from other countries has become more expensive. When you add these higher costs to existing import taxes (tariffs), it creates more pressure for prices to rise overall.​

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