Someone shared with me that he had seen a sign in a storefront that said, “I hear there’s a recession going on. I choose not to participate,” or something like that. That is the ultimate in being “bullish” on the condition of the economy, but I like it. I’m not one to be a Pollyanna about things, but I do appreciate the optimism. I think many people will see themselves as victims of the economy and won’t do anything but take whatever changes may come their way. That is a recipe for struggle. When I think about the statistics and market research that I see coming out of the travel industry, I tend to be optimistic about innkeeping.
People just aren’t willing to give up their vacations. American workers receive the fewest vacation days per year among the world’s “industrialized” nations. The scarcity of vacation time means, by God, we’re going to take our vacations! That, I believe is true, even when the economy turns a bit sour. Workers have earned the right to relax, travel and tour, and there is nothing to suggest people are not going to take their vacations. Actually, some recent research by one of the travel industry’s leading forecasters, Peter Yesawich with Ypartnership, suggests people are planning to take more trips in the near future. Their research indicates that 16% plan to take fewer trips, but 27% plan to take more trips. In addition, according to YPartnership in research released in May, “six out of ten Americans who are currently planning a trip with their car, truck or SUV this summer will not change their travel plans even with the additional increases in the price of gas.”
Changes in Behavior
Just because people aren’t willing to give up their vacations, doesn’t mean they aren’t going to change some things during a financially tenuous time. I think the bed and breakfast industry is positioned well to welcome the four out of ten who intend to change their travel plans due to the rise in gas prices. Many indicate they will now drive shorter distances and stay for shorter periods of time. Our industry is in the sweet spot for those looking to change their plans a bit. As you know, B&Bs are perfect for the drive-in market, and our bread-and-butter are the two-to-four night stays. If travelers are going to opt out of the week-long, cross-country vacations to the giant theme parks and five-star resorts, I think they’ll opt in for the experiences innkeepers are offering.
Also, the Travel Industry Association (TIA) has reported on trends in travel preferences, most of which fall right in the lap of innkeepers. TIA calls these “markets of future opportunities.” Among the experiences travelers are increasingly seeking, and which overlap the B&B market, are:
- Culinary Travel
- Destination Weddings
- Gen Xers and Millennieals
- Girlfriend Getaways/Mancations
- GLBT Travel
- Medical/Life-Enhancement Travel
- Procreation Vacations
Anecdotally, I hear there may be fewer inns in the marketplace today than a few years ago. We don’t have any national research to substantiate this, but it’s what I hear when I travel to state and local B&B association meetings. I imagine the likely culprit was the tremendous rise in real estate values during 2002 to 2006, and many innkeepers getting out of the game while sales prices were great. Assuming demand for stays at B&Bs and inns is no different, but supply might be down a notch, one would surmise that existing inns will fair pretty well. It’s simple supply and demand.
This is what I’m seeing from a 30,000-foot perspective. What is your take on the economy and what’s happening where the rubber hits the road? I welcome your stories and comments.