Healthy Economic Indicators of Consumer Spending
Hotels, airlines and other travel segments are vulnerable to the ebbs and flows of the economic trends. Recessions and upsurge plays a vital role in consumer spending in their travel budget. In beginning of 2017 where we’ve witnessed global tailwinds, which eventually affected the travel industry whole year is seemed to bottomed out as 2018 set in.
If we talk about the economic fundamentals of 2018-19, this promising year is expected to show green signs of strong economy as average hourly earnings are continually accelerating. Henceforth, projecting rise in consumer spending resulting in fueled travel demand in 2018-19.
1. Intense Airline Competition
Intense airline competition from low-cost carriers as well as international flights, along with low fuel prices, will drive down the airline fares in 2018, resulting in enticing travelers and a spike in travel spending that includes—airlines, hotels, and restaurants.
2. Active Corporate Travel Demand
The building strength in the economy has driven the growth of business activities. 2018 is forecasted to be a robust year for corporate travel spending. Pending global uncertainties, corporate travel is expected to surge 6.1 percent, its highest rate of growth since 2011, as per a Deloitte report.
3. Spending Shift from Products to Experiences
There is a fundamental shift in consumer values towards experiences over things. Experiences are overtaking things or products. New figures show we are continuing to spend less money on buying clothing, cars, groceries, or other different stuff instead of spending more on experiences like travel, recreational activities, and eating out.
While positive signs continue to escalate, it’s a good chance for travel and hospitality traders to encash the opportunity and step forward for advanced technologies that further support their backs and help them achieve coveted heights in their businesses.
Codiant develops unsurpassable and value-driven travel app and web development solutions for the travel and hospitality industry that are poised to grow year by year.