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The Honolulu Advertiser
Updated at 5:26 a.m., Wednesday, December 17, 2008

Report: Tourism spending across nation in sharp decline

Associated Press

ATLANTA — Spending on travel and tourism declined sharply in the third quarter, marking the largest drop since 2001, the U.S. government said Wednesday.

Real spending on travel and tourism, which is spending adjusted for price changes, decreased at an annual rate of 8.1 percent in the third quarter, according to the Commerce Department's Bureau of Economic Analysis.

It was the largest decline since the fourth quarter of 2001, the agency said.

In the second quarter of this year, real spending grew 2.8 percent, which is a revised figure, the agency said. By comparison, real gross domestic product declined at an annual rate of 0.5 percent in the third quarter based on preliminary figures, after growing 2.8 percent in the second quarter, according to the Commerce Department.

Passenger air transportation led the downturn, decreasing 20.4 percent in the third quarter, after falling 18.7 percent in the second quarter. Real spending on international flights fell sharply after two quarters of strong demand; spending on domestic flights declined for the fourth consecutive quarter.

Spending on accommodations also was weak, decreasing 3 percent in the third quarter. Hotel occupancy fell and room rates rose as hotels eliminated discounts intended to boost demand.

Retail shopping by travelers also was weak.

Travel and tourism prices, meanwhile, rose overall in the quarter, according to the report.