There is no doubt that the USA is in an economic recession now. Thousands of businesses and millions of individuals in America have been affected by the recent credit crunch. Tourism, as well as hospitality businesses, are an integral part of the global economy and there is no doubt that these industries have been detrimentally affected by the outbreak of global financial and economic volatility.

There are some simple reasons explaining why tourism and hospitality businesses are especially vulnerable to economic uncertainty. During tough economic times, people think more about ways of saving money and prefer to use their cash to cover the essentials of life such as food, shelter and some family necessities. These are times when people start cutting back on luxuries. Because travel and tourism involves discretionary expense, vacations are seen as luxuries by most people. They aren’t going to be willing or able to spend money on expensive holidays and vacations as they had in the past, so they alter their travel plans, preferring to hold on to their cash and working on building up their savings account (or the mattress) for now. Another reason is that in the currency shakeout, which has occurred in recent months, Americans are concerned that the market might make a steep drop while they are traveling, leaving them no chance to sell their stocks before everything potentially hits rock bottom.

However, despite the current economic situation, people continue to travel. It’s just that now they’re traveling differently from the way they used to do during times of economic stability. It is likely that the demand for the luxury end of the tourism market will decrease while demand for either low cost or good value services will grow. Ironically, the surge in value of the US dollar may stimulate Americans to resume traveling overseas, as it is often cheaper than living at home. Destinations with “favourable” exchange rates may benefit. It is also likely that there will be a growth in domestic travel or short haul international travel as people prefer to stay closer to home. Anyway, Americans will continue traveling: they will continue taking vacations, going for honeymoons, traveling on business, making religious pilgrimages and so on. Travel will remain part of the way Americans live in the 21st century.

According to a national projections survey, 71 percent of leisure travelers are going to take an overnight trip of 50 miles or more from home during the next 6 months. The survey also revealed that 48 percent of all respondents were not planning to make any changes to their future travel plans as a result of the economic crisis. However, those travelers are likely to travel differently:

• more than 76% intend to book a packaged vacation to save money;
• 73% intend to spend less on food, beverages and entertainment;
• 67% expect to stay fewer nights;
• 58% plan to utilize the internet to comparison shop for better rates and fares;
• 75% expect to spend less over all.

“These results corroborate what we have been predicting for several months now. American travelers will be trading down, but not out”, reported Peter C.Yesawich, chairman and CEO of Ypartnership, which conducted the survey.

We realize that America and its people are going through hard times now. But as in the past, this financial crisis will end. With some savvy thinking and keeping a budget in mind, your family’s vacation need not be impacted too much.