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Consumer Demand, Economy Help Boost Tour Sales

June 17, 2010 By: George Dooley

The U.S Tour Operators Association (USTOA) reports that 2010 business is up significantly compared to 2009, surpassing expectations. In a recent informal membership poll, 92 percent of respondents said business is up since the beginning of the year, contrasting with 70 percent who last fall predicted a turnaround.

“Pent up demand for travel, a somewhat stronger economy, and more discretionary income are some factors fueling the growth in travel bookings,” said John Stachnik, USTOA chairman. “Business has picked up dramatically since the first of the year, with several record weeks,” said the president of one USTOA-member company.

Sales of international tours, vacation packages and custom arrangements led the way, with 96 percent of respondents seeing an average increase of 30 percent over last year. This surpasses last fall’s expectations, when three-quarters of members predicted international sales to grow in 2010 by slightly under 20 percent, USTOA reports.

The good news also extends into the domestic travel sector. Two-thirds of USTOA respondents report that domestic vacation bookings are up by an average of 33 percent this year. This improvement tops USTOA member projections. Last fall, some 56 percent of respondents expected an increase of just 10 percent in domestic travel bookings, while 37 percent predicted that domestic travel figures would remain unchanged.

With the economy improving, USTOA members are finding “Staycations” (shorter, close-to-home vacations) less popular for 2010. Some 79 percent of respondents said they see no increase in staycations compared to last year. However, 20 percent said they are seeing an increase, slightly down from the 25 percent who last fall predicted that closer to home travel would increase.

While the dollar’s value is helping to fuel the growth in international travel this year, discretionary income holds the key, according to the USTOA member poll. Some 84 percent of survey respondents see discretionary income as the major factor contributing to the up tick in international travel in 2010. Nearly 60 percent (58 percent) said that the dollar’s value is affecting international travel bookings for 2010-11, in line with earlier predictions. “The difference is that last year we were seeing a weak dollar, whereas this year the dollar has gained strength against currencies such as the euro,” says Stachnik.

Some 68 percent of respondents said that prices for tours, vacation packages, and custom arrangements have held constant since the beginning of the year, while 20 percent have lowered prices and 12 percent have increased them. Going into 2010, three-quarters of respondents said they were decreasing prices slightly, with one-quarter citing increases of 6 percent for 2010.



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