The U.S. economy expanded just over 2 percent in 2012, after a nearly 2 percent increase in 2011. While the compromise deal over the fiscal cliff reduced risks to the economy, the sequester is scheduled to go into effect on March 1, unless Congress comes to an agreement over the long-term budget, according to the most recent U.S. Travel Outlook.
While the specific impacts of the sequester are unknown, the U.S. travel industry is likely to be hit hard, according to Geoff Freeman, COO of the U.S. Travel Association. The expected 5 percent decrease in 2013 budgets would affect staffing at airports, increasing waiting times for international travelers entering the country. According to the U.S. Dept. of Commerce, more than 44 million international visitors traveled to the U.S. during the first eight months of 2012, up 6 percent from 2011. During this time period, eight of the top ten international countries of origin for U.S. visits posted increases in visitation. Growth in spending by these visitors was even more positive at a nearly 10 percent increase for year-to-date through November from the same time period in 2011. Information on international visitation to North Carolina can be found here.
Despite worries about the federal budget cuts, there was good news on the job front. Employment growth averaged about 181,000 new jobs per month in 2012. According to David Huether, senior vice president of economics and research at the U.S. Travel Association, the travel industry “continues to drive the nation’s economy.” The travel industry added a total of 54,300 jobs in 2012.
Though consumer spending is expected to slow this year as a result of higher Social Security taxes, consumer spending grew about 2.2 percent during the fourth quarter of 2012 and January spending data was mostly positive. A recent Gallup poll revealed that in January consumers self-reported daily spending averages similar to numbers in December, and much higher than last January.
The leisure travel sector continues to be optimistic about 2013 and 2014. The U.S. Travel Association’s latest forecast indicates a 1.2 percent increase in domestic leisure travel and a nearly 2 percent increase in 2014. There is pent-up demand among leisure travelers, says the latest survey by Travel Leaders Group. Business travel is expected to grow by about one percent this year, and just over one percent in 2014.
The U.S. lodging industry continued to experience great growth in demand and ADR in 2012. Demand at the national level was up 3 percent in 2012 and rates were up 4.2 percent. Smith Travel Research forecasts that rates will continue lead the indicators in growth with a nearly 5 percent growth this year and 4.6 percent increase in 2014. Demand is expected to grow another 1.8 percent in 2013 and 2.8 percent in 2014. The most recent North Carolina lodging data can be found here.