Domestic and International Vacation Travel to Benefit from Increased Spending by the Affluent
November 5 2003--The economic recovery, and the vacation travel market in particular, will get a boost from increased spending by the primary beneficiaries of the recent tax cuts and the rise in the stock market according to the latest semi-annual Survey of Affluent Americans ™ conducted by the American Affluence Research Center (AARC).
Completed in October, the survey focused on the wealthiest 10% of all U.S. households. With incomes averaging $270,000, these 11 million households have a minimum net worth of $750,000. They account for 40% of total personal income and two-thirds of the personal wealth of all Americans.
As the primary beneficiaries of the recent tax cuts and increase in the stock market, the affluent are feeling increasingly well off. Furthermore, they believe that business conditions, the stock market, and their own personal income will all continue to improve in the next 12 months.
To track changes in future spending and the economic outlook of the wealthy for the next 12 months, Affluent Consumer Expectation (“ACE”) indexes were compiled from the survey data. Indexes can range from 000 to a maximum of 200. A reading of 100 is neutral, a reading below 100 is negative, and a reading above 100 is positive.
The ACE vacation travel spending index of 111 is an average of the domestic vacation index of 122 (up from 105 last spring) and the international vacation index of 100 (up from 71 last spring). The overall vacation-spending index is up 23 points from last spring. The international vacation-spending index, now at 100, suggests that the decline in international vacation spending is over.
Thirteen percent of those surveyed indicated plans to take at least one cruise during the next 12 months. This number, which has essentially held steady over the past 12 months, represents about 2.8 million cruises (about a third of the total market). Intent to cruise was highest among those over 60 years of age (24%) and those with a net worth in excess of $6 million (27%).
In the past 12 months, 84% of the survey participants used the internet to buy products or services, or to conduct research before making a purchase. Seventy-one percent used the internet to conduct research for non-business airline travel before making a purchase, and 57% made the purchase on-line. Corresponding figures for lodging for non-business travel were 63% and 48%. For cruises and ocean travel, the figures were 17% and 5%.
The men and women surveyed were asked to name brands that they felt represented "the very highest quality". Among the top 25 brands named were Ritz-Carlton and Four Seasons. No other travel-related brands were among the top 50.
This survey has a maximum margin of error of five percentage points. The complete 35-page report is available for $295 from AARC.
This article courtesy of http://www.travelheadquarter.com.
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