Summer 2003 *
 

      Fall season travel is underway, with business trips taking on increased importance for most travel suppliers.

      Optimism exists in each of the business travel sectors, spurred by a noticeable pickup in airline bookings, airport car rentals and weekday hotel occupancy. What is unclear is whether this is a short-term blip, and whether it can be sustained. In our mind, it's much too early to say that the recovery has occurred.

      Economic forecasts for the months ahead are generally positive. Expected GDP growth for the second half of 2003 is 3.5 percent. This represents an acceleration from the low first quarter (+1.4%), and a rising second quarter (3.3%).

      Drive vacation travel outpaced trips taken by air, up as much as 3.5-4.0 percent over a year ago. Domestic airline emplanements for June/July/August moved in the opposite direction.

      Leisure travel focus is on off-season bargains, and these are extensive, particularly for international travel. Domestically, summer 2003 turned out to be better than we estimated, with a late season surge in vacation travel demand.

      Consumer economic fundamentals remain strong. In spite of the political rhetoric on the loss of 2.7 million jobs, this has been offset by wage and salary increases not eroded by the inflation, tax reductions and low interest rates that have reduced mortgage payments for millions of Americans.

Economic Data: Department of Commerce, Bureau of Economic Analysis. Changes in inflation adjusted

Travel Data: Air Transport Association, revenue psgr miles; Smith Travel Research, hotel room demand;Commerce Department/Tourism Industries, outbound departures/inbound overseas arrivals;