Business

Economy has big impact on vacation industry

The struggling economy apparently is keeping more people at home this summer.

Consumers are having to do more with less, so fewer are packing their bags and traveling. High unemployment has driven down consumer confidence along with vacation sales.

The situation has even coined a new name for the phenomenon: "Staycation."

Collinsville travel agent Brad Smith said that his business is off by 60 percent over last summer. He's been planning and selling vacation packages for 12 years and has been working on his own out of his home for the past five years.

He wonders whether he will be in business next year.

"We've taken a direct hit with the economy," Smith said. "This is the worst I've ever seen it."

The cost of vacations has come down 20 percent to 30 percent, Smith said, but the recession has still had a "tremendously negative effect" on the travel agency.

Agent Julia Crunk said her business at Ambassador Travel in Belleville is down by about 25 percent over the pervious summer. The agency manager said those who are still traveling are making arrangements later than usual.

"People are not booking reservations far in advance," Crunk said. "It is more waiting around until they can make sure they can afford it. It's more last-minute travel."

"I think a lot of people who were planning to do something are now last-minute booking," said Pat Grimes, owner of Grimes Travel in Fairview Heights. "There's a lot of pressure on the agents to get deals."

But deals are there, Grimes said. She recently sold packages for an Alaskan cruise to couples who saved $1,600 per cabin.

"Alaska had been so expensive, I was so surprised," she said. "Rarely have I seen prices for Alaskan cruises so low."

That's why those who are still traveling this summer are taking a more concentrated approach, said Jo Kathmann, executive director of the Tourism Bureau of Southwestern Illinois in Fairview Heights.

"They want to spend less on hotels, want better deals, bigger breaks, more bang for their buck," Kathmann said. "They're really doing serious shopping around."

Current economic conditions are not exactly keeping people holed up at home, either, Kathmann said. She said tough times are bringing more of those living within 300 to 500 miles to St. Louis-area tourist attractions.

"As far as people coming to our hotels, I really can't complain," Kathmann said. "We're doing OK, surprisingly enough. We haven't really been feeling the pinch yet. That doesn't mean to say that a year from now, it might be worse. I don't know that we're not feeling it as much like say California, Florida or any other big destination areas."

Other analysts believe the travel industry has already hit bottom and has adjusted. According to the U.S. Travel Association, Americans are expected to take 322 million domestic leisure person-trips during June, July and August --a decline of 2.2 percent from summer 2008. Association spokeswoman Cathy Keefe said leisure travel remains strong in light of the current economic climate.

"It's important to note that we are seeing a slight decline with over 2 percent of summer traveling volume," Keefe said from her office in Washington, D.C. "It still means hundreds of millions of Americans are still traveling. But all things considered, it's not surprising where we are this summer, but it is somewhat resilient. We're not seeing double-digit declines. It is important to keep that in perspective."

Chris Russo, a spokesman for the American Society of Travel Agents in Alexandria, Va., added: "The bleeding has stopped. This year has been a struggle, but it's definitely not as bad as it was the last quarter of last year. I think that every agency out there has made the right cuts and moves to cut costs and expects to be able to survive."

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