A recent survey indicates that American workers will give back an average of three vacation days this year. The survey concluded that various factors were in play, including fear of losing a job, needing the extra income those three days brought in and simply not having enough money to take the vacation anyway. With 151 million people in the U.S. labor force, that's a give-back of 450 million vacation days this year — no wonder hotels are empty.
The extent to which Americans are traveling — or not traveling — is a surprisingly accurate way to take the temperature of the current recession. In a recent column for Business Week,Gene Marks writes that he avoids many of the usual economic indicators to track consumer confidence, and instead checks the Web stats of Expedia.com. If Expedia is surging, folks are confident and splurging; if Expedia is sinking, spending is shrinking.
In the 21st century, the consumer is once again king. Back in the 1980's, when "trickle down" economics was the guiding light, the corporation that produced the jobs was king. But nowadays it has become more common to think that the people doing those jobs are the folks who are really driving the economy; the most important thing is that they spend the money they make. These are also the folks filling up airplanes, booking car rentals and staying in hotels.
So how good an economic indicator is the travel industry? I took a look at some stats and special offers this past week, and it turns out it's not a bad index. Expedia is a good indicator of consumer confidence and the state of the economy, but if you look at other travel sites, you can learn even more — and perhaps come to a slightly different conclusion.
I do not purport to be an economist, so for entertainment purposes only, let's look at some of the numbers and trends I found researching various travel sites. I looked at special offers and Web traffic with a mind to how well they track the larger economy.
Much as Gene Marks wrote, a look at the last 18 months on Expedia tracks consumer confidence almost to the day.
You can see the tail end of the slide down from much higher numbers in 2007; some rough days last winter when the first round of bank rescues took place; a surge during the summer before the extent of the current situation was exposed; and a severe plummet throughout the fall and into the winter of 2008 when the crisis hit. Expedia tracks the big developments in consumer confidence and in the macro news cycle almost perfectly.
Since that time, Expedia has also mirrored smaller variations in consumer confidence, pretty much in lockstep with official consumer confidence numbers along with (much less scientifically) the general tone of news reports.
Disney's special offers page
If Expedia and other booking sites are the canary in the coalmine as an early predictor of economic trouble, then signs of trouble at Disney indicate full-blown black lung.
I looked at Disney's various Special Offer pages, as Alexa and other Web-tracking sites show traffic to the entire Disney domain system, which is not all travel-related. In good times, Disney might typically offer something like an "off hours" deal for use during meal times or the early morning hours — not so much a true discount as an incentive to spread out capacity.
But as the economy sank last year, Disney began offering real and substantial discounts. It started by offering three nights for the cost of two at its resort hotels, but soon it was doing three nights for the cost of one, and there was even one last-minute deal before spring break that included a long weekend of free lodging.
When that wasn't enough, Disney started offering free meals, parents' admission at kids' admission prices, five days' admission for the cost of three and even free flights — whew. At this point, Disney is offering late summer visitors its Disney Dining Plan completely free as part of its vacation packages — paired up with insanely low lodging costs, the offer gets you all of Disney World for $58 a day per person, including lodging, admission and meals.
These read like 1970's prices. When family tourism juggernaut Disney gives back enough almighty dollars to pay for a week's meals and it's arguably cheaper to go to Disney than to stay home and go to a movie, you know times are tight.
Cruisers sail in any economic weather — if the price is right
I had a hunch on this one, and it paid off handsomely. The traffic to our sister site CruiseCritic.com very nearly reverses the trend of Expedia's stats; it is extremely steady irrespective of economic issues, has trended upward overall for the past 18 months and has had some of its best days in just the past 90 days. However, the special offers mirror Disney's — or in some cases are even more stunning bargains.
I believe there are three factors at play here:
- Cruise people are extremely dedicated to their chosen form of travel.
- Cruise Critic commits considerable resources to highlighting bargains and reviewing cruises; consumers go to a site like this when they are looking for the absolute best value in a tight economy.
- Because cruisers book months in advance, cruise companies tend to be on the vanguard of pricing trends.
It appears that almost irrespective of economic conditions, cruise people will try to keep cruising, so long as the cruise lines make it affordable — and the cruise lines are always and aggressively inclined to do so. Need an example? How about 7-night Alaska cruises starting at $299? That's $42.71 a day. What can you do for $42 a day? Heck, it costs $40 to go sleep on the ground at Yosemite National Park. Cruise Critic is calling this the "lowest fare we've ever seen," and it's hard to imagine such prices in happier economic times — another sign that the travel industry is a leading economic indicator.
Airfare aggregator Kayak exhibits an interesting pattern: overall, it has shown less variation in traffic than any of the other sites. There may be a few reasons for this. First, Kayak is not yet tremendously popular, and as such is not as affected by the large swings that show up on sites that have a bigger audience. Second, I would say it tends to be used by hardcore fliers, which is a less volatile and more consistent population.
For another example of the "hardcore sites defy economic fluctuations" phenomenon, check out the stats for SeatGuru.com; its level of page views is fairly steady regardless of short-term fluctuations in consumer confidence, the market, you name it.
Given all of the above, we can probably conclude that diehard travelers are still traveling (as evidenced by steady traffic to niche sites such as Seat Guru or Cruise Critic) even though the overall number of travelers is dropping. Disney is in a bit tougher spot, as families tend to see big trips as luxury expenditures, and Disney's fire sale prices are evidence of the predicament. In this economy people are only spending on what truly matters, and for some (but not all) people that's travel.
I also believe that while budgets may be draining, true travelers keep dreaming. Many folks seem to be researching travel but not booking, and even doing a bit of armchair traveling, as some of the research and message board sites we looked at have remained pretty steady. Either people are reading about travel till they can afford to do it again, or they're doing significantly more research before making any purchase.
All together now
Want to see all of these sites in one place? Click here.
And there, before your eyes, is the U.S. economy.