Taking Flight- The Travel Industry Rebounds
By Jocelyn Chavez
After years of “staycations,” and video conference meetings, families and business travelers are once again embracing travel. More than six in 10 Americans say it’s important to get away from home this year, according to a recent USA Today/Gallup poll. And hotel bookings in popular vacation destinations are up from last year. The rebound in the leisure and business travel markets is benefiting not only airlines, hotels and car rental companies, but also the restaurants, stores and attractions that travelers frequent during their trips.
From vacationers filled with wanderlust, to corporate road warriors, the growth in the travel industry has a positive ripple effect on the U.S. economy as a whole. Domestic and international travelers spent $758.7 billion in the U.S. in 2010, an increase of 7.7 percent over 2009, according to the U.S. Travel Association.
The travel industry also has a powerful impact on the employment market. Total travel-related employment consisted of 7.4 million direct tourism jobs and 6.8 million indirect travel-related jobs, for a total of 14.1 million jobs in 2010, which translates into one in nine U.S. non-farm jobs directly and indirectly relying on the travel and tourism industry. And, according to 2009 data from the U.S. Travel Association, travel is among the top 10 industries in 48 states and the District of Columbia in terms of employment.
Meetings are Big Business
As the emphasis at companies shifts from cutting costs, to growing the business, video conferencing and virtual meetings have fallen by the wayside. Face-to-face meetings foster relationships that are crucial to boosting a company’s performance and bottom-line. In fact, a study by Oxford Economics USA, entitled, The Return on Investment of U.S. Business Travel, establishes the value of business travel, particularly when workers travel for meetings, conventions and exhibitions, training and incentive programs. The report finds that for every dollar invested in business travel, companies realize $12.50 in incremental revenue and $3.80 in new profits; and curbing business travel can also reduce a company's profits for years.
In an increasingly competitive environment, companies are once again spending on travel, and more professionals are taking to the skies. In 2010, corporate travelers accounted for 36 percent of the aggregate domestic travel industry revenues from airlines, hotels, car rental agencies, trains and cruises, with spending totaling $255 billion, according to the travel research firm, PhoCusWright. By comparison, in 2009, corporate travel spending totaled $233 billion, when corporate travelers accounted for 33 percent of the total market. And PhoCusWright projects that the corporate travel market will continue to grow by six percent in both 2011 and 2012, reaching $288 billion.
The corporate travel sector is closely linked to the meetings industry, which also plays an important role in the U.S. economy. A recent study conducted by PricewaterhouseCoopers (PwC) U.S., entitled The Economic Significance of Meetings to the U.S. Economy, found that the U.S. meetings industry directly supports 1.7 million jobs and $263 billion in spending.
Franchises Offer Travelers Familiarity, Predictability and Consistency
When traveling for business or for pleasure, consumers frequently seek familiar products and services. Franchises offer people consistency, convenience and predictability when they’re close to home and on the road. So, whether you’d like to own a restaurant or retail franchise, a hotel or motel franchise, a car rental concept, or a cruise travel business, numerous travel-related franchise opportunities provide you with the chance to tap into the momentum of the travel industry rebound.
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