n elite island amid povert
opEensSpo Wrtal beItw
P. 12Oeen 2 wPLorlds .
Carnival’s Q2 earnings beat
expectations at $390 million.
L T S
M I aL
RE W Or
lta has reSached a ne T
P. 20O behavPw low
eIPestronk’s Legal Bri
Section 1 of 2
THE NATIONAL NEWSPAPER OF THE TRAVEL INDUSTRY
JUNE 23, 2008
Leisure is lone bright spot
as U.S. travel outlook dims
By Lester Craft
The travel industry’s multiyear growth curve
appears to be flattening, with new performance data and forecasts
reflecting the accumulating damages from economic
stress and high fuel costs.
A batch of new indicators
suggests that the industry
now faces the prospect of
little or no growth this year.
Leisure travel may yet squeak
through 2008 with a hairline
increase before declining
slightly next year, but a key
consumer survey recently
indicated that gasoline prices
had already prompted some consumers to
Some travel segments, most glaringly aviation, clearly are contracting already.
In a jointly issued forecast, Global Insight
and D.K. Shifflet & Associates predicted that
domestic person-trips would rise by a scant
0.3% this year. The forecast pegged travel
spending growth at 3.6% this year, but that
trailed an expected increase
in travel prices of 3.9%.
Though consumers continue to suffer economic assault from several directions,
the Global Insight-D.K. Shifflet forecast does offer a glimmer of hope for the leisure
segment, which is expected
to continue growing modestly this year even as business travel declines slightly
because of corporate cost
controls and increased reli-
ance on technology-based alternatives.
The forecast, titled “U.S. Travel Insights,”
predicted that leisure travel would grow by
0.8% in the current quarter before picking
See OUTLOOK on Page 46
decline by 0.4%,
and leisure travel
will see its first
[ AIR LIFT AND METRICS KEEP DROPPING ]
Vegas, dealt a weak hand, braces for trouble
By Jeri Clausing
The odds in Las Vegas just keeping getting
With gaming revenue, visitor volume and
room rates already on the decline, Sin City
is now bracing for severe cuts in air service
A civilized Mazatlan MaMaison
wilderness in shifts its focus brings home-
British from climate to grown luxury to
Columbia. culture. ‘New Europe.’
P. 34 P. 26 P. 33
later this year, just before a round of new
hotel supply hits the Strip.
One analyst estimated that the combined
result could equal a deficit of 6 million visitors next year to a city that last year played
host to 39.1 million.
Thanks to high oil prices, US Airways,
Delta and United all have announced service cuts to Las Vegas’ McCarran Airport,
with US Airways planning to eliminate its
entire night hub operation beginning Sept.
The US Airways cutbacks alone will reduce capacity into Las Vegas by 7,200 seats
a day, according to a report from a Wachovia analyst, Brian McGill.
“This planned reduction is greater than
anticipated,” McGill wrote. “Previously, we
believed that the capacity coming out of Las
Vegas could be 12% across the entire industry, beginning in October. This would have
meant a reduction of 9,238 seats. In our
See VEGAS on Page 47
P O PU L
EEC T I
Despite an already slowing economy in 2007,
the biggest agencies still managed to get bigger,
though at lower rates of growth.
BY HARVEY CHIPKIN
R E W O P