Wednesday, May 4, 2011

Will gas hikes affect the travel market?

Not likely. When looking at historical trends and forecasts, rising oil prices will most likely not have a negative affect on travel bookings. The only scenario where it might be a factor is if barrel prices breach $150 per barrel (U.S.). What we saw during the last “gas-price crisis” was consumer spending decrease in the grocery stores and increase at the gas station. This time around, forecasters predict consumers will still choose gas and food, but likely postpone the big purchases - i.e., new cars.

At a recent Meet the Money Conference, Jan Freitag, vice president of Smith Travel Research (STR), shared that the U.S. hotel industry sold more room nights during the first quarter of this year than it did during the first quarter of each of the last five years. “Group room demand is basically on par with where it was in 2008 or so,” he said. “It’s going to be very interesting to see how that demand plays out.” Read more story highlights at

In the latest issue of ORLA's Lodging News magazine, you can read a related article by Smith Travel Research on Oregon’s rosy outlook. “Promising Outlook: Oregon Hoteliers Can Expect Better Times Ahead”, shares insight on the state’s forecasted performance and how it breaks down in the Portland and Eugene markets.