Economic Slowdown May Not Affect Tourism

With all the talk of an economic downturn and a possible recession in the U.S., some states are concerned with how it will affect tourism. In places like Florida and California, where tourism is one of the largest industries, the rising cost of gasoline and travel expenses could spell trouble for the hospitality industry.

The big question on everyone’s mind this year is how gasoline prices will affect travel plans. However, many in the industry don’t anticipate a problem. While some consumers may curtail longer trips because of gas prices, they might opt for shorter ones. This is good news for many states as more people could be staying near home for their vacations.

Thomas Ranese, chief marketing officer for the “I Love New York” tourism campaign, said the industry has seen a trend toward shorter trips in recent years. A poor economy could accelerate the trend. As a result, New York has directed its tourism advertising at New York City, as well as nearby states and Canadian provinces.

Rising gas costs aren’t the only problem. As people feel the economy’s pinch, they may be inclined to find less expensive vacation plans. Why stay in a costly hotel when family and friends can put you up for the night? This could mean fewer jobs in the hospitality industry.

In a recent article in the Orlando Sentinel, University of Central Florida economist Sean Snaith disagrees. He noted that Central Florida has not seen any impact of the economic downturn. In fact, Metro Orlando has added 4,100 jobs in the hospitality industry during the past year.

“I think tourism will fare pretty well, and that this won’t be an equal-opportunity downturn,” Snaith said. “Leisure and hospitality should continue to grow jobs.”

If anything, the devaluation of the dollar could be good for U.S. tourism. Those who might normally travel abroad may stay home when faced with a weaker dollar in Europe. Likewise, Europeans may see a trip to the U.S. as a bargain.

Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., said the hotel and tourism industry has been doing surprisingly well. Because, he said, a weak dollar is attracting international tourists.

According to the Tourism Industry Association of America, the tourism industry generates $740 billion annually, from both domestic and international travelers in the United States.

Although the country’s economy may be slowing down, the forecast for this year’s tourism industry is still generally sunny. More importantly, it may be tourism that helps balance economic troubles in other sectors of the U.S. economy.