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Some Destinations Actually Faring Well in the Recession

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Financial crisis graphicThe economic slump is hardly news, but it is having some surprising effects on travel and tourism.

While some major players in the travel market, like Las Vegas, Hawaii and Orlando are experiencing dizzying drops in the number of visiting tourists, many “second-tier” markets are actually experiencing an uptick in business.

In many places that have long been considered relatively minor players in terms of travel and tourism, visitor numbers are now steady or growing.

Justin Gaull at the West Virginia Division of Tourism reports total demand in his state was actually up by 1.5 percent in 2008. What’s driving the increase? Well … driving.

With gas prices back down and belts tightening, Gaull points out that the state is “an easy one-tank trip getaway” for many cities in the eastern half of the United States.

Similarly, in Arkansas, visitor numbers and spending are also up. There, spending by out-of-state visitors grew by about 3.8 percent in 2008 over 2007.

Shawnee Mission ParkThe competition for travel dollars remains fierce and many second-tier destinations are eager to step up. “We’re sort of a driving destination … so if people aren’t flying to Las Vegas or Orlando, we benefit from that,” said Alan Carr, Director of Communications at the Kansas City Convention & Visitors Association. In tough times, being a lower-cost destination doesn’t hurt, either.

But not all of the less well-known or expensive destinations are seeing an increase in visitors.

Montana, for example, is relatively far away from major population centers that could provide easy sources of visitors. It also lacks cities that are significant players in the convention market.

In other words, it’s not an easy driving destination.

Glacier National Park MontanaIts visitor numbers are down modestly, about 3.7 percent, for 2008, with a further 2 percent decline expected this year.

For many destinations the trend is clear: Travelers are sticking closer to home. Says Kansas City‘s Carr, “People are still going to be traveling, they just might not be traveling as far.”

So just how bad are things for the bigger destination cities?

In Las Vegas, visitor numbers are down about 11 percent for December 2008, compared to December 2007, according to the Las Vegas Convention & Visitors Authority. In Hawaii in January 2009, spending by visitors was down by 13.6 percent over January 2008.

And in Orlando, hotel occupancy rates dropped from 65.7 percent in January 2008 to 60.6 percent in January 2009, according to Nilesh Patel, a research analyst at the Orlando Travel & Visitors Bureau. Patel does point out that these numbers cover only hotels, not timeshares or rental homes.

In other words, things could be even worse than those numbers suggest.

And even President Obama recently did the industry no favors when he lumped in trips to Las Vegas along with corporate jets and Super Bowl junkets as verboten activities for companies taking taxpayer money. This sparked a written response, signed by a group of hotel CEOs, advising Congress of their concern that “legitimate meetings, business events and recognition travel are now being portrayed as perks and symbols of excess.”

Related links: Northwest Arkansas News, Great Falls Tribune, Business Edge Magazine, New York Times, Hotel CEO Letter

By Matthew Calcara for Published March 1, 2009.

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