Mary Dolheimer and David Smith reached a compromise last month that may help the US economy: they decided to take their first family vacation in two years.
The Abbottstown, Pennsylvania, couple plan to spend US$2,000 for a week on North Carolina's Outer Banks with their six children. It took some coaxing, said Dolheimer, 36, who found the rental property by shopping on the Internet.
Although Smith, 48, a construction foreman, wanted to reduce the family's debt, "the kids and I just wore him down," said Dolheimer, in charge of media relations at Gettysburg College. By sharing the rental cost with friends, the couple will have some of their US$3,000 tax refund left over to pay off credit cards.
The family's determination to travel helps explain why the number of US consumers planning vacations may be rebounding from recession and the terrorist attacks on Sept. 11. Online travel services such as Expedia Inc. report a surge in traffic, Walt Disney Co is reopening hotels, and low fares have boosted sales at Carnival Corp. and other cruise lines.
"What we have here are some extraordinarily attractive travel bargains and packages, and people are taking advantage of them," said William Sullivan, senior economist at Morgan Stanley Dean Witter & Co in Jersey City, New Jersey. "That's a welcome development for the US economic outlook."
Spending on travel and tourism accounted for about 4.5 percent of US gross domestic product from 1997 though 2000, the World Travel & Tourism Council says. That dropped to 4.38 percent last year. While spending on leisure travel is likely to rise this year, business travel will probably fall, limiting the contribution to 4.34 percent.
Discounts may spur individual travel. Holiday Inn, operated by Six Continents Plc, is offering US$10 vouchers for gasoline and 50 percent off a second night's lodging. Carnival, the largest cruise line, reduced prices to attract vacationers and boost profits in the first quarter.
More than 44 percent of US households said in February they planned to take a vacation in the next six months, according to the Conference Board, a New York-based research group. That compares with 43.1 percent, a two-decade low, in February 2001, just before the recession began.
The number of leisure trips will grow 6 percent after declining 5 percent in 2001, according to an industry survey sponsored by Orbitz LLC, an online travel site, other travel companies and USA Today. First-quarter bookings through Expedia, a unit of USA Networks Inc, rose 64 percent to US$1.1 billion from a year earlier, the company said.
While the terrorist attacks with hijacked passenger jets dealt a blow to travel for many American consumers and businesses, the tragedy had the opposite effect on some families.
Arlin and Stephanie Schmidt, back in New York from a week's vacation in St. Thomas, Virgin Islands, say they'll spend about US$25,000 on vacations this year, up from about US$20,000 last year.
Sept. 11 "encouraged us to not hold back too much," said Arlin, a 45-year-old vice president for Career Education Corp., which owns technical and cooking schools. The couple plan a golfing trip in June to Colorado Springs, staying at the Broadmoor Hotel & Resort, where rooms start at US$450 a night.
Cruise lines expect travel to improve. The number of North Americans taking cruises rose 0.4 percent last year, the worst since 1995, after a 17 percent gain in 2000, according to the Cruise Lines International Association. The group expects the number to grow about 7 percent this year.
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