We all have a right to worry about the present state of the American economy and the potential for diminishing enrollments for our travel programs. This clearly is a complicated and worrisome economic crisis that is both similar and different from past economic downturns.
In the more than 35 years that I have been active in educational and cultural travel, I have successfully weathered several recessions as well as more than enough international unrest.
- • 1973-75 OPEC Oil and Economic Crisis
- • 1980-82 Iranian Revolution and Oil Shock
- • 1990-91 Economic Slowdown
- • 2001-03 Dot.com Bubble (+9/11, Iraq War & SARS)
- • 2007-? Credit Market Crisis
What is similar is that the economy is slowing down with both personal consumption and manufacturing declining while unemployment is rising.
What is unusual this time is the credit crisis which has seriously undermined the world economic system. While the underlying cause is the real estate bubble, it has seriously impacted all aspects of the economy. Until the credit markets are stabilized there is little hope of a strong leisure travel sales market.
Here are a couple of things I have learned from the past.
- Leisure travel sales are generally thought to be a lagging economic indicator where sales only begin to drop off after the overall economy begins to stall. This helps to explain why 2008 has generally been a strong year for many organization’s travel programs. And, why early 2009 sales are down.
- Conversely, leisure travel sales lag as the economy recovers. If, as is now suggested by many economic commentators, the US and world economies will not begin to recover until the second half of 2009, we may not see resurgence in leisure travel sales until later next year.
- Keep marketing: it is generally accepted that companies that continue to vigorously sell in downturns come out stronger and with improved market share than those companies that cut back on promotion and sales.
The current crisis has hit right in the heart of the prime Labor Day to Thanksgiving booking season. Add to that the fact that some travel industry observers feel that travel sales usually decline during and election year. We all have experienced the hiatus in strong bookings between Thanksgiving and Christmas.
Will 2009 be a good year for educational and cultural travel? The answer will be in the December 2008 to February 2009 bookings.
David Parry
Chairman
Academic Travel Abroad
