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After years of little growth in travel volume and significantly lower travel spending, 2004 marks a rebound for the travel industry, with all sectors showing increases in demand for the first time since 2000.
According to Travel Industry Association of America’s (TIA’s) Annual Travel Forecast, combined spending by domestic and international visitors traveling in the U.S. is forecast to increase 6.9% by year’s end to nearly $593 billion compared with $555 billion in 2003.
TIA predicts a 5.3 percent increase in 2005, which would bring expenditures to $624 billion.
Two of the hardest-hit segments in the industry, domestic business travel and international inbound travel, will both see their first increases since before 9/11, according to TIA.
U.S. residents will take nearly 144 million business trips by the end of the year, an increase of 4% over 2003, TIA reports. In 2005, the association forecasts that business travel will increase 3.6% to nearly 149 million trips.
“It’s clearly good news that business travel is showing the beginnings of recovery this year and will continue in 2005,” TIA’s Suzanne Cook, senior vice president for research and technology said. “The gains have been driven primarily by a stronger economy and fewer travel restrictions by corporate America.”
Cook also explained that the greatest unknown for future business travel is the impact of technological alternatives to business trips — online meetings, teleconferencing, etc.
Improved business travel also is fueling renewed strength in demand for both air travel and hotel rooms. The Air Transport Association forecasts a 5% increase in air passengers by year’s end. Smith Travel Research predicts a 4% gain in room demand this year.
After falling steadily for three years, international arrivals to the U.S. are expected to rise 7.5% this year and nearly 5% in 2005. That translates into more than 43 million international arrivals by the end of this year and almost 46 million in 2005. Those numbers remain well below the record high of 51 million in 2000.
According to the TIA forecast, leisure travel volume will grow 2.9% this year up from a 1.9% increase in 2003. It should increase again by nearly 2% in 2005.