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The return of the vacation

By Joe Taschler And Kylie Gumpert

Milwaukee Journal Sentinel (MCT)

Published: Monday, July 14 2014 12:00 p.m. MDT

More than five years after one of the worst economic downturns in U.S. history, a lot of us have decided it’s safe to take a vacation again.

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More than five years after one of the worst economic downturns in U.S. history, a lot of us have decided it’s safe to take a vacation again.

The leisure travel market has rebounded from the ravages of recession that prompted people to put off or curtail their travel plans and helped coin the term “staycation,” travel industry professionals and economists say.

“We’re really seeing a lot more people venture out,” said Peggy Fischer, owner of Shooting Star Travels. “I have a guy who is doing shark diving in South Africa. I have people doing Iceland. A couple is going gorilla tracking — it seems like it’s the whole bucket list thing.”

For Michelle Boening of Redgranite, traveling isn’t something she and her family do much of. If they do, they drive, staying close to home.

But this summer, she decided it’s time to go to the Bahamas, after flying out of Mitchell International Airport on Thursday to spend a month in Atlanta with family.

“It’s something she’s really needed to do,” said her daughter, Hansen Boening.

Still, there is a sense of caution that Fischer says wasn’t seen in the late ’90s and early part of this century. For example, people who pay for trips with credit cards have all but disappeared from her business, she said. Instead, they pay with cash.

“Spending on travel has been increasing, but it’s still viewed as a luxury by many,” Brian Jacobsen, an economist and chief portfolio strategist for Wells Fargo Funds Management in Menomonee Falls, said in an email.

Employment and earnings have held steady in recent months, giving people more leeway to spend on travel.

“Higher incomes are definitely helping when it comes to travel budgets,” Jacobsen said. “Median weekly earning for Americans is $791. It’s 2.7 percent higher than a year ago and 8.1 percent higher than in 2009.”

Overall, that’s a good sign for an economic recovery best known for its fits and starts.

“Stronger business travel and tourism is a very good barometer of the health of the broader economy,” said Mark Zandi, chief economist at Moody’s Analytics Inc. “Spending on travel is more discretionary and expensive. The revival in travel is thus a good sign that the economic recovery is gaining traction.”

Bargain-hunting

Those who have decided they can afford to take a vacation remain on the lookout for bargains, Jacobsen said.

That’s how Denise Bellcock from Hartland said she and her family have been able to travel throughout the years.

“My husband gets lots of travel points. He’s a good bargain hunter,” Bellcock said.

“It may not be on the traditional airlines and it may not be in every market, but there are still some attractive prices out there,” said Robert Mann, an airline industry consultant who operates R.W. Mann & Co. “There are always deals to be had, but it requires a lot of flexibility on the part of the traveler.”

Still, there is no question more folks are willing to spend on travel these days.

“Our bookings to our leisure destinations are strong this year,” Dan Landson, a spokesman for Dallas-based Southwest Airlines, said in an email. “We are seeing more demand for destinations in the Caribbean and Mexico as we convert current service from AirTran Airways to Southwest Airlines.”

Southwest is Mitchell International Airport’s largest airline, controlling nearly 50 percent of the market at the airport. The airline plans to add Saturday service from Milwaukee to Cancun in August.

A survey by Orbitz.com, a travel website, showed 51 percent of U.S. residents are planning to spend at least $2,000 or more on their summer vacations this year vs. 44 percent last summer. An estimated 88 percent planned a vacation this year, up 11 percentage points from a year earlier, the survey found.

Since the recession, the travel industry has added 749,000 jobs to employ close to 8 million in May, a record high, according to the U.S. Travel Association, an industry trade group based in Washington.

State tourism rebounds

For Wisconsin destinations, things have also been looking better in recent years, said Tom Diehl, president of the Tommy Bartlett Inc. entertainment business in the Wisconsin Dells.

“Once you get out here into the Heartland, we basically rely on the region to provide us with tourism,” Diehl said.

“In 2009, we had a very slight dip,” he said, speaking of the Dells area. “But we have recovered. Every year has beaten the previous year.”

That matches what other state travel industry watchers are seeing.

Chet Gerlach, executive director of the Madison-based Association of Wisconsin Tourism Attractions, said tourism’s status is “good and getting better.”

“I think there is a pent-up demand, quite frankly, to travel,” Gerlach said. “I think people are feeling better about their jobs and their security.”

“I think it’s been kind of steady growth,” Gerlach added. “It’s been kind of constant, another percentage or two or three (of growth) every year.”

In the United States, “There is an improved optimism,” said Shane Norton, director of economics and country risk at IHS Global Insight. “People have got their jobs. People have caught up on belt tightening they took during the recession and after. They are looking forward.”

Bloomberg News contributed to this report.

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©2014 Milwaukee Journal Sentinel

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Distributed by MCT Information Services

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