Economy Matters logo

About


The Atlanta Fed's SouthPoint offers commentary and observations on various aspects of the region's economy.

The blog's authors include staff from the Atlanta Fed's Regional Economic Information Network and Public Affairs Department.

Postings are weekly.


SouthPoint

04/29/2014


Is the Southeast Poised for Tourism Growth?

The Atlanta Fed's Travel and Tourism Advisory Council met at the Miami Branch for the first time this year on April 17. Overall, council members were enthusiastic about economic activity, and its benefits for the tourism sector, in the Southeast.

Georgia and Alabama bounced back from harsh weather conditions in January and February. The outlook for the next three months is positive, with contacts reporting a strong number of bookings and ticket sales. Florida's tourism benefited from the winter weather with travelers seeking warm weather or extending stays as a result of cancelled flights. Fort Lauderdale, in particular, indicated record numbers in February and March.

The Southeast experienced an increase in international tourist activity in 2013, primarily from Latin America and Europe. Participants noted domestic travelers were travel fatigued and are staying closer to home. Consumer spending increased from a year ago, not only in hotel and food expenditures but in retail stores as well. The increase in spending came primarily from luxury restaurants and hotels.

On the horizon for regional travel and tourism
The council discussed the increase in capital expenditures across the region, reporting heavy construction activity in new hotels, sports venues, and other attractions in addition to renovations of restaurants, hotels, and convention centers.

Technology enhancements continue to significantly affect the industry and are being implemented across many segments of the industry. For example, customers can now complete ticket sales for theme parks, sporting events, and other entertainment events as well as reservations for dinner or special services such as spa treatments prior to traveling. Travelers can electronically handle requests for food orders, hotel check-in, beach chair reservations, and maintenance requests once they have reached their destination. (Don't be surprised to find yourself handed an iPad upon arrival at your hotel to facilitate check-ins and any other needs during your stay.)

Tourism markets expand
Interestingly, the council indicated that families are using children's sporting events—like traveling little leagues—as their family vacation. In response to this growing market, the industry is developing special venues and events for these groups to include family- and sports-oriented activities.

The state of Florida is promoting itself as a destination for medical treatment as a way to expand its customer travel industry. The state is proposing legislation to require VISIT FLORIDA, the State's official marketing corporation, to market Florida as a medical destination. Business contacts in the health care field are also heavily marketing health care in the state to countries with an underdeveloped health care sector.

All that said, the travel and tourism sector looks promising in the near term, and new industry developments should enhance the vacation experience for those about to visit the Southeast.

By Marycela Diaz-Unzalu, an economic and financial education specialist in the Miami Branch of the Atlanta Fed


April 29, 2014 in Alabama, Economic conditions, Florida, Georgia, Growth, Tourism, Travel | Permalink

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a011572565d3f970b01a511ac7b6e970c

Listed below are links to blogs that reference Is the Southeast Poised for Tourism Growth?:

Comments

Post a comment

Comments are moderated and will not appear until the moderator has approved them.

If you have a TypeKey or TypePad account, please Sign in

05/02/2013


Travel Outlook Remains Bright, but Challenges Remain

Members of the Atlanta Fed's Travel and Tourism Council recently met at the Bank's Miami Branch to discuss economic conditions in the travel and tourism sector. Optimistic about current conditions, council members agreed that the sector remains strong and has a positive outlook for the remainder of 2013.

Driving council members' confidence is continued strength across key metrics of growth such as occupancy, average daily rate, revenue per available room, and bed tax collection. The consensus among members is that the health of the industry continues to improve throughout the Sixth District. As a result of robust activity in leisure travel and strong demand from international visitors, South Florida has experienced significant increases across all measures of growth. Though government and business bookings have slightly decreased because of budgetary constraints, council members expect that activity during the next six months will continue to grow.

The only exception to the positive momentum is casual dining, which is experiencing flat to negative growth. As noted in a previous SouthPoint post, consumers have begun to modify spending in an effort to absorb the impact of the payroll tax increase, elevated gas prices, delayed tax refunds, and increased health insurance premiums. As an increased number of consumers forgo dining out, casual-dining restaurants are feeling the impact of these choices. Hungry for business, the restaurant industry has experienced a 5 percent decrease since the beginning of the year, with some restaurants experiencing double-digit decreases in sales. Council member reports noted that that this recent decline is the weakest performance that the industry has experienced since 2009. Unlike their counterparts in casual dining, fast food restaurants and fine dining establishments are not experiencing similar headwinds.

While socioeconomic class is a key driver of demand for restaurants and currently highlights divergent preferences among income groups, consumers across all income levels continue to show strong demand for travel and tourism. Advisory council members reported that consumers—even in challenging economic times—go on vacation and seek tourism opportunities. Whether it's to take the kids to Disney World, go on a cruise, or listen to jazz in the French Quarter, consumers make vacation a top priority in their household budget. Council members agreed that this consumer preference makes the travel and tourism industry one of the last sectors to feel the effects of a sluggish economy.

The industry is not totally insulated from macroeconomic challenges, however. Council members expressed concern about the impact of sequestration on travelers and, in turn, the potential economic fallout in their industry. Several members reported that sequestration is having a negative impact on government-related travel. As sequestration has imposed limitations on travel for government employees, cancellations of government bookings have increased.

In addition to its impact on government travel, the sequestration is also affecting airline passengers. As noted in Jack Nicas and Susan Carey's recent article in the Wall Street Journal, flight delays and cancellations have dramatically spiked as a result of the Federal Aviation Administration's furloughs of air traffic controllers. Our council reported that 1,000 passengers missed their connecting flights at the Miami International Airport in one day alone after the cuts were implemented. As 50 percent of travelers arriving in Miami International Airport are international travelers looking to connect to other flights or visit Miami, the airport is experiencing high volumes of travelers frustrated by missing connecting flights or standing in long lines in customs.

The Miami airport is not alone. As Nicas and Carey noted, delays and cancellations are occurring across the nation. Similarly, the sequestration's impact on Customs Border Patrol has led to significantly longer lines for travelers who must pass through customs. As international travelers have been key drivers of recent demand for travel and tourism in the Southeast, especially in South Florida, the sequestration's effect on them presents a headwind to the industry in this region.

The hotel and airline sectors are not the only ones in the industry to feel the impact of the sequestration. Cruise lines are experiencing the negative effects of not having timely custom clearance. Our council reported that the disembarkation of cruise line passengers has, in some cases, taken as long as two hours. Tourism destinations that offer government-funded programs such as military air and sea shows are also experiencing disruptions. Many of these shows, which draw large numbers of tourists, have been cancelled. Without the shows on the calendar for coming months, cities that host these events expect cancellations of travel bookings.

If prolonged, the widespread delays, cancellations, missed flights, and long lines present a potential headwind to the outlook for the travel and tourism industry. Why? As council members noted, experience and image are integral to consumers' assessment of a travel or tourism encounter and their decision to make future travel plans. Negative experiences, or the anticipation of one, can lead to cancellation or alteration of plans. Thus, while business for the short- and medium-term is booked and council members' organizations are not currently experiencing a significant increase in cancellations, council members agreed that review of activity in three to six months will allow the industry to gauge the economic impact of the sequestration on travel and tourism.

By Jennifer Staley, a Regional Economic Information Network director in the Atlanta Fed's Miami Branch

May 2, 2013 in Tourism, Travel | Permalink

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a011572565d3f970b017eeac28125970d

Listed below are links to blogs that reference Travel Outlook Remains Bright, but Challenges Remain:

Comments

Post a comment

Comments are moderated and will not appear until the moderator has approved them.

If you have a TypeKey or TypePad account, please Sign in

04/26/2011


Beige Book: Southeast economy improved through March; but what about April?

On April 13, the Sixth District's most recent Beige Book was released. The opening paragraph, which summarizes the entire report, said, "Sixth District business contacts described economic activity as advancing modestly from mid-February through March. Retailers cited that consumer spending improved while auto dealers reported strong sales growth. Tourism activity remained positive as occupancy rates and air travel mostly increased. Residential brokers and builders indicated that sales growth of new and existing homes were mixed, but generally remained weak, while commercial contractors mentioned improving conditions as development increased slightly. District manufacturers experienced increasing levels of new orders and production. Transportation firms noted modest advances in shipments and tonnage. Banking contacts reported soft but improving loan demand. Labor markets continued to recover at a gradual pace. Cost pressures grew for most District firms, but the ability to pass through price increases continued to vary by industry."

The report discusses economic activity that took place from mid-February through March, but the official release date lagged by a couple of weeks. In a time when data and information are so easily available, this type of lag can make the information seem dated. The Atlanta Fed is continuously gathering information via meetings with our Regional Economic Information Network contacts. Recently, we held two advisory council meetings, which gave us more insight into their particular sectors. On April 12 our Trade and Transportation Advisory Council met in Atlanta, and on April 14 our Travel and Tourism Advisory Council met in Miami. What follows is some of the anecdotal information collected from these meetings.

Trade and transportation
Demand is up for almost all industries in the transportation sector, especially for those involved in export activity. The trucking industry is seeing a return to pricing power but is challenged with finding qualified drivers and mechanics and faces a shortage of drivers amid new regulations. Increases in the cost of fuel are challenging all modes of transportation, but fuel surcharges remain intact. Intermodal volume is benefiting from increased fuel costs as customers move certain types of goods from truck to rail. Inventories remain very low and inventory turns are high; slow steaming in maritime shipments is creating floating inventories. All industries reported increases in capital expenditures for replacement and new equipment, information technology, and infrastructure and buildings. Hiring is taking place at some level in most industries, and wage pressures are just beginning to surface in parts of the sector. Events in Japan have not caused major disruptions but lags in shipments of certain goods and equipment have been reported.

Travel and tourism
Activity is up in almost all industries of the sector. Occupancy, room rates, and cruise and convention bookings are increasing. A modest level of pricing power has returned; however, increasing fuel and commodity costs are challenging all segments of the sector. Restaurant activity is mixed, and price increases are being passed through. Capital expenditure is increasing in most of the sector, and the overall tone was one of optimism with a cautious eye toward rising commodity costs. The areas and locations adversely affected by last year's BP oil spill have regained business, and many are back to normal levels.

Based on these meetings, it appears that the Sixth District's economy is still moving in a positive direction.

By Shalini Patel, a senior economic analyst in the research department, Sarah Arteaga, a senior REIN analyst, and Lon Lazzeri, a REIN director

April 26, 2011 in Beige Book, Tourism, Trade, Transportation, Travel | Permalink

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a011572565d3f970b01538e23c506970b

Listed below are links to blogs that reference Beige Book: Southeast economy improved through March; but what about April?:

Comments

Post a comment

Comments are moderated and will not appear until the moderator has approved them.

If you have a TypeKey or TypePad account, please Sign in

08/04/2010


Is the worst over for Gulf Coast tourism?

There has been a clear shift among our contacts in the Gulf Coast leisure and hospitality sector since the oil stopped flowing in mid-July. Cautious optimism has replaced outright pessimism. That said, most realize that the damage done by cancellations and fewer visitors may not be undone in 2010. However, fears that long-term damage to the Gulf Coast "brand" of clear water and white sandy beaches beyond the current year have subsided somewhat.

Assessing the economic impact on tourism-related businesses is a challenge. We have received anecdotal accounts of reduced hiring of seasonal workers by hotels and property managers, but this reduction is unlikely to be reflected in data through June. Reports of cancellations from our contacts in the region did not begin in earnest until after Memorial Day. In addition, hotels appear to be faring better than rental properties such as beach houses and condos, so the overall impact on accommodation-related employment may not be as great as feared. Clean-up workers, oil company employees, media, and National Guardsmen appear to have stepped in to fill some of the vacancies created by potential Gulf Coast vacationers changing their plans because of the spill. Of course, it is fair to assume that vacationing families spend more on hotel amenities and pump more into the local economy through retail purchases, recreational outings, and dining out than do workers employed to deal with the spill. For that reason we expect to see the greatest impact on recreation jobs as well as food services because of the decline in recreational fishing excursions and fewer visitors patronizing eating and drinking establishments.

On July 20, the U.S. Bureau of Labor Statistics released state and local employment data for June and revised data for May. Based on the total number of people employed in arts, entertainment, recreation, accommodation, and food services in Gulf Coast metro areas (excluding New Orleans) we estimate there were roughly 105,000 tourism-related workers along the affected areas (see the chart). This number is up slightly compared with June of last year and is in line with the average for June over the past decade. We do not see any large swings in the monthly data, but as we noted above, most cancellations came in after Memorial Day and accommodation jobs appear to be the least vulnerable.

080410
(enlarge)

Perhaps vacationers who put off travelling to the Gulf Coast may choose to take a fall vacation this year once they are assured that the coast is clear—figuratively and literally—but a recent survey suggests challenges lie ahead for the Gulf Coast's leisure and hospitality businesses. The State of the American Traveler survey conducted by Destination Analysts Inc. showed 26 percent of respondents said they were less likely to travel to the region over the next 12 months.

By Amy Ellingson, a research analyst at the Atlanta Fed

August 4, 2010 in Employment, Gulf Coast, Oil Spill, Tourism, Travel | Permalink

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a011572565d3f970b013485fc1556970c

Listed below are links to blogs that reference Is the worst over for Gulf Coast tourism?:

Comments

Post a comment

Comments are moderated and will not appear until the moderator has approved them.

If you have a TypeKey or TypePad account, please Sign in

Google Search



Recent Posts


November 2015


Sun Mon Tue Wed Thu Fri Sat
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30          

Archives


Categories


Powered by TypePad