PRESS RELEASE

For Immediate Release

The TBR/WTTC Index Of Leading Economic Indicators Increased 0.6 Percent In November

WASHINGTON, D.C. - January 11, 2002 - The Travel Business Roundtable/World Travel and Tourism Council (TBR/WTTC) Index of Leading Economic Indicators increased 0.6 percent in November, making it the second consecutive monthly advance following the 0.4 percent increase in October. While the increase indicates the beginnings of a recovery for the travel and tourism industry, it also provides further insight into the severity of the decline the industry experienced immediately following September 11. A forecast of the Index indicates that the industry is expected to recover slowly over the next two years, but will still be unable to meet 2000 levels by the end of 2003.

The complementary U.S. Index of Leading Economic Indicators increased 0.5 percent in November - the sixth monthly advance over the past eight months, and also the second consecutive monthly increase since this past September. The relevant rates of change are shown in the table below.

Putting these changes into a broader economic perspective, Dr. James Howell, economist and president of the Boston-based Howell Group, notes the following:

	The rates of change in both indexes support the conclusion that the travel and tourism industry, as well as the economy as a whole are beginning to recover from September 11th. At the same time, the severity of the fall off in the TBR/WTTC Index from a year ago continues to reflect just how hard the industry was impacted by the events of September.
	While recovery will continue to be evident in the travel and tourism industry, the current monthly rates of change imply that it will most likely take 12-15 more months before all sectors of the industry - as reflected in the TBR/WTTC Index - will fully return to pre-September 11th levels of activity.

With specific regard to the TBR/WTTC Index for November, Dr. Howell said, the monthly increase was in a generally acceptable range, but was concentrated in only three of the individual sectors. These were:

	ARC (travel agent) sales
	Hotel/motel occupancy rates
	Rental car revenue per day

Among five of the remaining rectors, the November figures were unchanged from the previous months. These sectors were:

	ATA Revenue Passenger Miles
	Consumer Confidence
	Retail Sales at eating and dining establishments
	Personal expenditures for travel and related items
	Travel and Tourism employment

In the one remaining sector - Hotel/Motel Revenue - there was a modest decline.

According to Dr. Howell, the significance of these industry developments is as follows:

It should be recognized that strong and balanced growth in the travel and tourism industry depends on a return to a growing national economy. The October and November data showed that the industry’s growth patterns were far from balanced. Specifically, in October, five of the nine indicators increased, but in November only three advanced. For there to be widespread growth, there would need to be increases in at least seven or more of the nine individual sectors.

The fundamental improvements in the industry’s underlying profitability cannot be bought by price discounting. While this can successfully enhance utilization rates in the short-run, long-run profitability will require strong national economic growth.

In this context, the following table provides the basic numbers in the economic forecast for the next two years.

Annual Rates of Chance in GDP

Period - 2000 / 2001
Growth Rates - 4.1 / 1.0

2002 -- 1st half / 2nd half ++ 2003 -- 1st half / 2nd half
Growth Rates -- 0.3 / 1.8 ++ 3.0 / 3.2

Dr. Howell said, "Assuming this business cycle recovery pattern is on target, it will be stretched out; meaning that the overall environment for the recovery of the travel and tourism industry will be less than robust."

TBR worked closely with elected officials last year and strongly advocated the inclusion of measures to assist the travel and tourism industry in an economic stimulus package. These recommendations included incentives to spur business and leisure travel, low-interest loan guarantees for small travel and tourism businesses, and unemployment and health insurance assistance for displaced workers. Unfortunately, Senate and House negotiators were unable to reach an agreement and Congress adjourned in December without passing an economic stimulus package.

In 2002, TBR will continue to pursue initiatives in the upcoming congressional session to help the industry, and will continue its efforts to further a proposal made to the Bush Administration last May for the formation of a Presidential Advisory Council on Travel and Tourism.

The Travel Business Roundtable is a CEO-based organization representing all sectors of the travel and tourism industry. In addition to the major airlines, car rental companies, travel management agencies, hotel chains, TBR’s membership roster also includes companies such as The Coca-Cola Company, USA Today, the Taubman Company, and the International Council of Shopping Centers, demonstrating the broad scope and diversity the industry represents. In 2000, travel and tourism was the nation’s third largest retail industry and second largest employer with more than 18 million Americans employed directly or indirectly in travel and tourism.

Reflecting of the important global aspects of the travel industry, TBR has formed a strategic affiliation with The World Travel & Tourism Council (WTTC) - the global business leaders' forum for Travel & Tourism. Its members are chief executives from all sectors of industry, including accommodation, catering, entertainment, recreation, transportation and other travel-related services.

Founded in April 1990, WTTC policies are set and implemented by a Member Executive Committee, a President and a small staff in London, with representative offices in North & South America, Asia/Pacific and Europe.

CONTACT:
Debra Kelman
212-794-DKPR (3577)
dkelman@dkpr.com

EDITOR’S NOTE. Additional information on TBR is available at www.tbr.org. In addition, Dr. James Howell is available for further insight into the TBR Index and the specific data.

back to top

ABOUT TBR | CHAIRMAN'S CORNER | LEGISLATIVE ACTION CENTER |
NEWSROOM | MEMBERS