U.S. Travel Industry Grapples with Weak Demand
More struggles lie ahead for the tattered U.S. travel industry as hotels, casinos, airlines and travel agencies fight the tide of economic recession and flagging travel demand, reports Kyle Peterson and Deena Beasley of Reuters.
It's a tough battle for the companies. Job losses, obliterated savings and falling home prices have made potential leisure travelers reconsider vacations. Business travel has taken a hit, too, as companies trim costs or shut down.
It's a tough battle for the companies. Job losses, obliterated savings and falling home prices have made potential leisure travelers reconsider vacations. Business travel has taken a hit, too, as companies trim costs or shut down.
"For anything remotely touching the travel industry it's definitely a challenging time," says Warren Miller, a Morningstar equity analyst who covers travel and leisure companies. "I don't see a very quick turnaround in demand," he said. "In the next couple of quarters, I think things can and will get worse."
Hotels and resorts, already struggling to keep rooms filled as recession-wary consumers and companies cut spending, are now in a political battle to keep bailed-out banks and others from canceling business meetings. The U.S. airline industry, perpetually in survival mode, is in a rare and enviable position now in which it finds itself somewhat insulated from the recession. Travel agencies, often the go-between for travelers and suppliers, are in an especially tight spot. Those companies must convince bargain-hungry customers that travel is in the budget.