ATLANTA – Traci Butler and her husband cut out vacations after the U.S. recession five years ago. This week, the couple is taking their two boys on a weeklong trip that includes a July 4th visit to the nation’s capital, just a few weeks after touring Italy on their own.
In the aftermath of the recession, “things were much tighter,” said Butler, a special education teacher from Washington, Ill., whose husband works for construction machinery maker Caterpillar Inc. “We didn’t have bonuses for a while. The last two years have been better.”
About 34.8 million people plan to drive 50 miles or more from home during the five days ending July 6, up from 34.1 million last year and the most since 2007, AAA, the biggest U.S. motoring organization, said June 26. The travel recovery is boosting sales for hotels and attractions, a sign that consumer confidence and consumer spending are on the mend, said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pa.
“Stronger business travel and tourism is a very good barometer of the health of the broader economy,” Zandi said. “Spending on travel is more discretionary and expensive. The revival in travel is thus a good sign that the economic recovery is gaining traction.”
Hotel occupancies across the U.S. averaged 62 percent during the first five months of this year, up from 60 percent during the same period last year and the highest average for that time frame since 1996, according to data provided by Hendersonville, Tenn.-based research firm STR Inc. Average room rates climbed 4.1 percent to $113.58.
The Federal Reserve, in its Beige Book report of regional economic conditions from its 12 banks on June 4, described travel as “fairly strong across most of the country in recent weeks. The Boston, New York, Richmond, Atlanta, Minneapolis Districts reported increasingly robust tourism activity, and Philadelphia noted slight growth; Dallas observed a pickup in passenger airline demand.”
Parts of the U.S., including the New York and Philadelphia areas, “attributed some of the pickup to the marked improvement in weather driving pent-up demand,” the Fed said. “Boston credited the 2014 Marathon for much of the strength in April, and Atlanta cited strength in international visitors.”
The current expansion follows a first-quarter slump blamed in part on severe weather. Spending on travel and tourism fell at an annual rate of 1 percent after a 4.5 percent increase in the fourth quarter, the U.S. Bureau of Economic Analysis reported June 27.
Since the recession, the travel industry has added 749,000 jobs to employ close to 8 million in May, a record high, according to the U.S. Travel Association, an industry trade group based in Washington.