Anahere Inc

The Economy Means Different Things to Different People
- Jim Cooper, Market Intelligence Analyst, Conscientia Research, California

By now everyone who has been reading the papers is probably aware of some kind of impending doom in the US economy. The media bombards us all with stories of imminent financial collapse, and uncertainty in the lending markets.

While many newspapers proclaim Wall Street's dramatically softened expectations, fortunately the reality is somewhat different, and more so in US tourism markets.

America's tourism industry, both in-bound and out-bound has gotten off to a pretty good start. While there may not be an encore performance in 2008, all indicators point to growth.

For luxury and business travel, it appears to be "business-as-usual". A recent survey by the National (US) Business Travel Association 62% of respondents indicated that business travel would be continuing, despite the economy's weak turn-out. Luxury travel, according to a recent Wall Street Journal article is already up 6% from the same period in 2007.

In an interview with Scott Kirby, President at US Airways, "We remain concerned about the economy, although it is hard to find any concrete evidence of a booking slowdown".

Based on this analysis and others, I have only found information to the contrary that the weakening economy has affected travel, both domestically in the US, and in the international market, of a luxury and business travel slowdown.

Further, although the US dollar is weaker in many destinations, like Europe’s Euro Zone, luxury consumers and vacation makers are seeking other destinations. For Australia and New Zealand, as an example, the dollar price, while bumpy against the NZD and AUD, is just as high currently as it was in September and October 2007 (respectively), but don't expect a return anytime soon to the heady days of US travel to Australia and New Zealand like the summer of 2006.

According to our assessment, destination operators need to become more creative in their approach of luring US customers, offering perhaps "Pay-for-four-get-5th-free" or some other alternative. The luxury American consumer likes the little touches, flair and engagement. Taking care of the US luxury customer will need to become the new mantra in the market slow down.