Travel Industry, Tourism Industry, airlines, hotels, cruises market research, trends, statistics, business analysis, competitive intelligence

A complete analysis of the Airline, Hotel & Travel Industry, including trends, statistics and profiles of the 300 most successful Airline, Hotel & Travel firms, is available in the Plunkett's Airline, Hotel & Travel Industry Almanac.

The past several years have seen dramatic changes in the travel industry. In the earliest edition of this almanac (2002), we detailed the massive losses and restructurings incurred by airlines, hotels and cruise ships following 9/11. Today, we paint a rosier picture. Although the major airlines are still trying to emerge from the rubble of recent events, other types of travel companies have eagerly seized new opportunities and built solid businesses. Indeed, one of the biggest trends reported in our first edition is no longer just a trend—discount airlines are the new paradigm in air travel.

Meanwhile, online travel agencies like Orbitz and Expedia continue to steal market share from traditional agencies. Leisure and business travel are enjoying a nice rebound, giving firms operating hotels, cruise ships and rental cars the opportunity to raise rates. Regional jets and air taxis promise convenient alternatives to conventional air travel, while upscale time-shares and the Queen Mary 2 offer new experiences for the wealthy (and those who want to live the rich life temporarily).

As 2005 draws to a close, several questions loom regarding the near-term future of the travel industry. The largest wild card is the price of gasoline, fuel for cruise ships and jet fuel. Not long ago, Americans, for example, were accustomed to paying about one dollar for a gallon of gasoline. Today, American consumers and businesses are faced with price three times as much. This not only makes it much more expensive to travel by automobile or to drive cross-country in the RV, it also cuts deeply into discretionary spending for leisure and business travel. Meanwhile, the traditional airline business remains difficult at best due to a number of factors (such as older, maintenance-intense fleets and inefficient route systems), and the soaring price of jet aviation fuel could easily put the nail in the coffin for one or two struggling airlines. The cost of jet fuel, at the very least, will delay a return to profitability for legacy airlines and hurt the financial results of discount and regional airlines.

Additional near-term effects of summer 2005’s hurricane Katrina will be hard on the U.S. travel industry in some parts of the nation, while boosting business in other areas. Clearly, Gulf Coast hotels, resorts, cruise ports, tourist attractions, casinos and convention centers in Louisiana, Alabama and Mississippi are completely out of commission. Many facilities will be replaced, or rebuilt and eventually back in business, but the process will be lengthy and expensive. Meanwhile, convention facilities in cities including Houston are off the market for the near term while they are used as temporary housing for hurricane evacuees. Some meetings planned in those cities will be cancelled entirely; others will be moved to alternative cities. Since there is a glut of new convention facilities nationwide, finding alternative sites may be relatively easy. Many major hotel firms, from Hyatt to Harrah’s suffered immense damage to their Gulf Coast hotel properties.

In North America, a robust business environment and growing real estate and stock market values have fostered a rising tide in both business and leisure travel. Airplane passenger loads are high. Cruise ships are nearly full. Resorts and hotels have enjoyed climbing occupancy, room rates and profits. Tourists are flocking to resorts in Mexico and Canada. Vacation property and time-share sales are extremely high. Las Vegas continues to grow at an astounding rate. Also, many U.S. airports have grown, or are expanding, via huge construction projects.

In the global travel and tourism business, threats of terrorism continue to cause the travel industry to evolve. At the same time, Thailand and neighboring nations are struggling to rebuild their tourism sectors after the tsunami of December 2004. On a more positive note, economies in many parts of the world are much stronger than they were in 2001 through 2003. Business travel to certain nations is absolutely booming, especially India and China. Tourism is soaring in New Zealand, as well as in many new or alternative travel destinations around the world. Ecotourism and adventure tourism are booming. Affluent retirees from the U.S., Canada and Japan are traveling more and more, while tourists from Europe are flocking to U.S. cities to take advantage of bargain prices due to the relatively low value of the U.S. dollar. While the high-flying days of the tech boom/travel boom of the 90s are gone, today’s outlook for the travel industry is one of innovation, high occupancy rates, healthy competition and, outside of the legacy airlines, returning profits. The following is a summary of some of the exciting changes taking place airline, hotel and travel industry.

Internet Research Tip:
For extensive information and statistics on the entire travel sector, visit:
Travel Industry Association of America at www.tia.org
World Tourism Organization at www.world-tourism.org