khassandraChanging Travel Trends: Oil Again?
July 14th 2007 16:24
Travel trends have been changing in the past 5 years, involving foreign travel to the U.S. and the trips that U.S. citizens take abroad and domestically.
Travel spedning in the U.S. has been growing, and while the number of international visitors to the U.S. was at a peak decline in 2001 and continued to decline until 2003, international visitors to the U.S. and the amount they spend have been increasing ever since.
U.S. residents have also been traveling more and spending more on travel within the U.S., with the rise in U.S. domesetic travel and travel spending peaking in 2004 and remaining on the steady increase. Travel expenditures per traveler have been increasing by an average of about 5% annually for the past 4 years, and higher in some travel-heavy locations, like California, where annual travel spending has increased almost 7% for the past three years, reaching a total of $93.8 billion in 2006. And these revenues are expected to continue to climb, but what is the reason for this?
Many researchers cite the strength of the euro and the pound against the U.S. dollar, which has become relatively weak of late, drawing tourists from all over Europe, and the U.K. especially, to the United States, where their money can buy them better food, accommodations, and souvenirs than in years past. Others claim that in response to travel slumps in the wake of 9/11, the travel industry has pushed travel packages and destinations with unprecedented zeal to try to keep the industry and the other industries that it supports alive and well, which is why these peak travel increases (both domestic and foreign visitors) have happened in 2004-- when people are finally starting to feel really comfortable traveling again. However, others respond with the case that threats of terrorism have not truly abated, citing recent incidents in London and elsewhere, and suggesting that travelers have just become more accustomed to the risks of travel thanks to what seems like constant media attention to threats of terrorism.
One thing to keep in mind, though, is that travel itself is not increasing as rapidly as travel costs. The number of trips taken by U.S. citizens and by foreign visitors are not proportionate with dollars spent-- total travel spending is increasing at a much faster rate. Causes for this imbalance are vareid-- perhaps tightened travel security can be blamed for a portion of the cost, but it seems like a larger culprit is, once again, rising prices in oil.
Petroleum prices influence not only the prices of plane tickets (jet fuel) and transport within the country, but any number of products that have to be shipped from one location in the U.S. to another. While we do produce many products domestically, because the U.S. is so large the shipping costs (of dairy products from the midwest to the northeast, for example) are substantial. To cite one everyday example, costs of a gallon of milk in the U.S. have risen by about 30% recently, for a number of reasons all concerning oil: the corn used to feed cows has become more expensive because cow feed is competing with ethanol, a corn product that serves as an alternative fuel source (it's always been produced, but is being produced more now because of the increased price of oil). On top of that, shipping costs to get milk to various locations in the U.S. are also on the rise because of gas prices, so that the manufacturers can no longer produce milk for cheaper than about $3.50 a gallon, and retailers end up selling for about a dollar more than that. Milk is just one example of a product that has become more expensive by virtue of its assocations with the oil industry.
This isn't to say that people aren't traveling more and that that isn't a good thing-- I love to see travel numbers rising, but have to question the excitement about travel dollars spent when the truth is, they're probably being spent unnecessarily as the result of an out-of-control oil industry.
Travel spedning in the U.S. has been growing, and while the number of international visitors to the U.S. was at a peak decline in 2001 and continued to decline until 2003, international visitors to the U.S. and the amount they spend have been increasing ever since.
U.S. residents have also been traveling more and spending more on travel within the U.S., with the rise in U.S. domesetic travel and travel spending peaking in 2004 and remaining on the steady increase. Travel expenditures per traveler have been increasing by an average of about 5% annually for the past 4 years, and higher in some travel-heavy locations, like California, where annual travel spending has increased almost 7% for the past three years, reaching a total of $93.8 billion in 2006. And these revenues are expected to continue to climb, but what is the reason for this?
Many researchers cite the strength of the euro and the pound against the U.S. dollar, which has become relatively weak of late, drawing tourists from all over Europe, and the U.K. especially, to the United States, where their money can buy them better food, accommodations, and souvenirs than in years past. Others claim that in response to travel slumps in the wake of 9/11, the travel industry has pushed travel packages and destinations with unprecedented zeal to try to keep the industry and the other industries that it supports alive and well, which is why these peak travel increases (both domestic and foreign visitors) have happened in 2004-- when people are finally starting to feel really comfortable traveling again. However, others respond with the case that threats of terrorism have not truly abated, citing recent incidents in London and elsewhere, and suggesting that travelers have just become more accustomed to the risks of travel thanks to what seems like constant media attention to threats of terrorism.
One thing to keep in mind, though, is that travel itself is not increasing as rapidly as travel costs. The number of trips taken by U.S. citizens and by foreign visitors are not proportionate with dollars spent-- total travel spending is increasing at a much faster rate. Causes for this imbalance are vareid-- perhaps tightened travel security can be blamed for a portion of the cost, but it seems like a larger culprit is, once again, rising prices in oil.
Petroleum prices influence not only the prices of plane tickets (jet fuel) and transport within the country, but any number of products that have to be shipped from one location in the U.S. to another. While we do produce many products domestically, because the U.S. is so large the shipping costs (of dairy products from the midwest to the northeast, for example) are substantial. To cite one everyday example, costs of a gallon of milk in the U.S. have risen by about 30% recently, for a number of reasons all concerning oil: the corn used to feed cows has become more expensive because cow feed is competing with ethanol, a corn product that serves as an alternative fuel source (it's always been produced, but is being produced more now because of the increased price of oil). On top of that, shipping costs to get milk to various locations in the U.S. are also on the rise because of gas prices, so that the manufacturers can no longer produce milk for cheaper than about $3.50 a gallon, and retailers end up selling for about a dollar more than that. Milk is just one example of a product that has become more expensive by virtue of its assocations with the oil industry.
This isn't to say that people aren't traveling more and that that isn't a good thing-- I love to see travel numbers rising, but have to question the excitement about travel dollars spent when the truth is, they're probably being spent unnecessarily as the result of an out-of-control oil industry.
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Comment by Lesley