While current forecasts paint a somewhat cloudy picture of this summer’s leisure travel business, foodservice operators say they are hopeful that Americans will still hit the road as the days begin to warm up.
The decline in gas prices coupled with a growing sense of optimism about the economy could help fuel an increase in travel, more upbeat observers say. At the same time, while Americans might indeed be clutching their wallets more tightly these days, most are not entirely inclined to suspend travel and dining-out pleasures altogether.
“Americans love restaurants and they love to travel, and there is a lot of pent-up demand for both,” said Hudson Riehle, senior vice president of research for the National Restaurant Association.
However, given lingering concerns about rising unemployment, declining housing values and other weak economic indicators, Riehle said certain areas of the country are not expected to fare as well as others when it comes to tourism. Yet, he added: “It doesn’t mean there will be total cessation of tourism spending on restaurant meals. We’ll probably see [the business] redistributed to different localities.”
The 2009 summer travel season got off to a modest start on Memorial Day as a projected 32.4 million Americans took to the roads, rails and air, according to the Automobile Association of America. That represents an increase of 1.5 percent over last year’s holiday figure of 31.9 million. However, 2008—when gas prices hit an all-time high of about $4 a gallon—was down 9.6 percent compared with 2007’s much more robust total of 35.3 million Memorial Day travelers.
For the months of June, July and August, 2009, the U.S. Travel Association forecasts 322 million domestic leisure person-trips, which reflects a decline of 2.2 percent from the summer of 2008. The USTT said Americans will take an average of two trips this summer, spend seven nights away from home and spend more than $900 on their longest summer trip.
Moreover, many consumers have yet to commit to a vacation yet. The USTT noted that an estimated 38 million Americans have not decided whether they will take a leisure trip this summer.
The Harris Poll also forecasts a lackluster summer leisure season and a fall-off in spending among the people taking vacation this year. According to a poll conducted in April, 35 percent of respondents said they are not likely to take leisure trips during the summer travel season.
Additionally, the poll found that 46 percent said they plan to reduce the amount of money they spend, while six in 10 said they are hoping to economize by finding less expensive meal options.
However, foodservice operators are generally optimistic about the upcoming vacation season. Kevin Kelly, president of Delaware North Parks & Resorts, a division of Delaware North Cos. in Buffalo, N.Y., forecasts that traffic into the four national and four state parks the company services will be “on par” with last year.
Kelly allowed, though, that consumers are expected to spend less in 2009. “People might vacation for four days instead of five,” he said, “and they might look to downgrade the dining experience from fine dining to casual dining, or even quick service.”
As a result, the company is offering value-oriented lodging and foodservice packages to help drive traffic.
Foodservice operators also point out that consumers are taking their time to book vacations. Kelly said average advanced bookings have declined from 90 days out to as few as 30.
Delaware North runs foodservice operations in Yosemite National Park, Sequoia National Park, Yellowstone National Park and the Grand Canyon.
Bill Catania, president of the Catania Hospitality Group in Hyannis, Mass., said he expects a good summer season on Cape Cod—“surprisingly.” Most vacationers to the cape drive from the nearby metropolitan areas of Boston, Providence, R.I., and New York, he said, so the lower price of gas should help.
But since consumers are looking for value, Catania said the company is offering packages for its eight restaurants and three hotels, which include the Hearth ‘n Kettle Restaurants, the Dan’l Webster Inn & Spa, and the Cape Codder Resort & Spa.
Patti Ann Moskwa, who, with her husband Steven, owns and operates Horn’s Gaslight Bar and Restaurant and the Yankee Rebel Tavern on Mackinac Island, Mich., said Detroit’s auto industry woes are expected to impact summer travel to the resort island in Lake Huron.
While the Memorial Day weekend was “extremely good,” she predicts business will be down 3 percent to 5 percent for the season. The two restaurants are open from April 1 through Nov. 5.
Wayne Canapp, director of operations for Phillips Seafood Restaurants in Baltimore, said several of the brand’s seven company-owned full-service restaurants tallied healthy sales over Memorial Day weekend. The chain’s Ocean City, Md., location had its best holiday since 1993, he said, and sales for the Baltimore harbor restaurant are up 4 percent over last year. Only the company’s Myrtle Beach, S.C., operation has been down, he said.
Phillips executives budgeted sales projections up from last year, he said, and while the restaurants currently are under budget by about 5 percent, he is expecting to make that up by year’s end.
While summer is historically not a boom time for Las Vegas operators, this year is shaping up to be particularly weak, said Tom Kaplan, senior managing partner of Wolfgang Puck Fine Dining Group. With little convention business conducted in the summer, operators tend to rely on tourists who don’t have as much disposable income and generally don’t frequent fine-dining restaurants. And while weekends tend to be a little stronger than weekdays, Kaplan said, the local market is expected to continue to underperform.
As a result, five of the six Wolfgang Puck restaurants in Las Vegas—Spago, Postrio, Cut, Lupo and Chinois—are slashing 25 percent off all lunch and dinner checks through September, he said.
“We just made a decision that it was going to be a tough market and that people would be looking for value,” Kaplan said. “The economy requires that kind of aggressive posturing, and we can continue to operate efficiently with that type of pricing.— [email protected]