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USTOA Predicts Increases in Domestic/International Travel, FITs

December 10, 2009 By: George Dooley

An informal member survey by the United States Tour Operators Association (USTOA) found that more than 75 percent of respondents anticipate sales to rise by an average 18 percent in international packaged travel next year. Just over 56 percent said they foresee average growth of 10 percent in domestic packaged travel. While over 35 percent said they believe domestic travel sales will remain on par with 2009 results, only 7 percent said they expect a decline.

This year’s survey results are in sharp contrast to responses from USTOA tour operators at this time last year, when more than 70 percent said they expected sales to either plateau or decline in 2009—a prediction that proved accurate throughout most of the year.

Some 75 percent of respondents said they are more likely to lower their prices in the year ahead by an average 5 percent, while the remaining 25 percent said their 2010 prices would increase slightly, about 6 percent .

“Staycations”-- shorter, closer-to-home vacations --are predicted to fall in 2010, according to three-quarters of survey respondents.  But 25 percent of respondents, by contrast, said they believe the trend could continue to rise slightly next year.

Summing up the sentiments of some, one USTOA member said he hope to see “staycation” erased from the lexicon of travel terms in the year ahead. More than 65 percent of USTOA respondents said they are planning to increase their 2010 offerings, adding new destinations and hotels, plus more experiential travel based around specific consumer interests.

Despite guarded optimism, a full 80 percent of respondents see the amount of discretionary income as the major factor affecting international travel in 2010, with another 20 percent saying the value of the dollar will be a determining factor, the survey shows.  

Several major tour operators predicted that travelers will continue to make cost-conscious decisions such as traveling to countries less affected by dollar declines, adapting their vacations by choosing less expensive alternatives in hotel arrangements or taking shorter trips, and seeking last minute deals that include significant savings.

The informal survey of USTOA tour operators also showed that despite the downturn, for the third straight year FITs saw the greatest year-to-year growth.

Nearly 40 percent of respondents reported FITs as their greatest growth area, with nearly one-quarter reporting greatest growth in independent tours.  Escorted tours were close behind, with 20 percent of respondents seeing that area as greatest growth, and packages represented the greatest growth for 15 percent.

“It’s not surprising that FITs continue to gain in popularity.  A 2007 consumer survey conducted for USTOA found that flexibility and choice were the features people want most in packaged travel,” said president Bob Whitley.

Over 45 percent of respondents said that 2009 domestic travel was down compared to 2008 by an average of 14 percent, with one-third reporting business unchanged.  Slightly over 20 percent reported that domestic business was up.

As predicted, international travel fared worse.  “Last year’s survey of USTOA members found 70% of respondents predicting that packaged travel would either decrease or remain constant for 2009,” notes Whitley.

True to predictions, nearly 70 percent of respondents said 2009 business was down; and 55 percent saw the dollar’s value responsible for an average 15 percent drop in business.  More than 20 percent of respondents saw no change, while less than 10 percent reported international business up for 2009 over 2008.

If USTOA member predictions continue to be accurate, 2010 will see a turnaround. Nearly 70 percent of respondents predicted a  business turnaround for 2010, while nearly 20 percent said that business had already turned a corner.

Of those foreseeing a 2010 turnaround, predictions were mixed. More than 30 percent see business picking up the first quarter, and nearly one out of four targeted the second quarter for recovery.  More than 10 percent were less optimistic, saying that the turnaround would not occur until the third quarter, while nearly 15 percent saw no recovery in 2010. 

The survey, conducted in November, was based on responses from 51 USTOA brands, representing the top brands in vacation packages, tours and planned itineraries. 


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