The U.S. vacation and leisure travel market reached $115.3 billion in 2004, the highest rate for the reporting period of 1999-2004.
Economic woes and the terrorist attacks of 2001 caused declines in the market in 2001 and 2002, but with the economy stabilizing and the threat of terrorism diminishing consumers are returning to travel. Baby Boomers are recognized as the biggest target demographic, and as they age into retirement, so increases the time available for them to take longer trips.
The main challenge the industry faces is getting consumers to take trips longer than 5 days, with many of the promotions currently available being geared toward the last minute, short break traveler. The Internet presents the ideal opportunity for this, with an increasing number of U.S. households connected. Continual advancements in technology will enable a greater level of ease for researching and booking travel online. Competition among online providers will keep pricing down, a plus for the budget conscious traveler.
Another challenge is the perceived image of the airline industry. While price wars keep costs down, with that comes the risk of flight disruptions due to factors such as labor disputes. Low-cost carriers continue to be a threat to major airlines, and consumers have indicated that they are willing to pass on perks in order to save money on flights.
Source - Research and Markets
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