Roughly 47 percent of Floridian respondents to a statewide survey from the Florida Atlantic University Business and Economics Polling Initiative (FAU BEPI) rate the national economy as poor or very poor, while 84 percent consider the cost of living and inflation a high priority that the country must address.
The economy, inflation, and the high cost of housing are weighing on the minds of consumers as recent price hikes force respondents to cut back on travel, entertainment, and other discretionary items as a result of inflation.
“This increase in prices in the travel industry will lead to adjustments in summer vacation plans,” said Monica Escaleras, Ph.D., director of FAU BEPI in the College of Business. “The hospitality industry most likely will see a decrease in demand.”
Summer travel likely will be impacted, according to the FAU BEPI news release. The latest Travel Price Index from the U.S. Travel Association noted that transportation costs are up 30 percent, lodging up 11.4 percent and food and beverage are up 14.2 percent, compared with pre-pandemic 2019.
“This increase in prices in the travel industry will lead to adjustments in summer vacation plans,” said Escaleras, Ph.D., director of FAU BEPI in the College of Business. “The hospitality industry most likely will see a decrease in demand.”
The expected decrease in hotel demand could prove to be worrisome as the industry comes off of one of its weakest years of business travel.
While Florida recently set records in domestic tourism visitation, business travel revenue was down across the state as a whole, according to a report by the American Hotel and Lodging Association (AHLA), anticipating an end-of-year profit margin nearly $1 billion below expectations.
The report emphasizes that the travel industry is still not back up to pre-pandemic levels, due in part largely because business travel profits operate differently than that of vacation travel, relying largely on large groups booking swaths of rooms and conference centers months or years in advance, providing an assured stream of revenue.
Business and corporate group travel is the leading source of revenue for hotels, but the AHLA expects revenue for the state to be at a decrease of 11 percent compared to last year.
“While dwindling COVID-19 case counts and relaxed CDC guidelines are providing a sense of optimism for reigniting travel, this report underscores how tough it will be for many hotels and hotel employees to recover from years of lost revenue,” said Chip Rogers, President and CEO of AHLA. “The good news is that after two years of virtual work arrangements, Americans recognize the unmatched value of face-to-face meetings and say they are ready to start getting back on the road for business travel.”