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HomeRegional NewsAfricaThe TBR/WTTC index of leading economic indicators declined 0.3 percent in August

The TBR/WTTC index of leading economic indicators declined 0.3 percent in August

The Travel Business Roundtable/World Travel and Tourism Council (TBR/WTCC) Index of Leading Economic Indicators declined…

The Travel Business Roundtable/World Travel and Tourism Council (TBR/WTCC) Index of Leading Economic Indicators declined 0.3 percent in August, the third fall in the past four months. The August Index 3/4 at 132.5 3/4 is now slightly below the recent high 133.6, which occurred in June 2002, and reflected the relatively sharp industry rebound from the events of September 11, 2001. Looking backward, the Index peak over the 1991-2001 business growth period occurred in March 2002. At that point, the TBR/WTTC Index amounted to 140.1.



The comparative rates of change for the U.S. and TBR/WTTC Indexes of Leading Economic Indicators are shown in the brief table below.



Both of these indexes have performed below expectations over the past several months. Undoubtedly, this reflects the current weakness that the overall economy and the travel and tourism industry are showing. At the same time, the indexes provide considerable insight into the future course of the economy several months ahead of overall economic activity. At this point, we must conclude that until the monthly rates of change in these indexes strengthen, it seems likely that whatever recovery we had expected in early fall will have to be put off until the coming winter, notes Dr. James Howell, economist and president of the Boston-based Howell Group.



A more detailed analysis of the components in the TBR/WTTC Index illustrates an interesting pattern in the travel and tourism industry since September 11, 2001. Shown in the brief table below are the actual Index numbers for five of the nine indicators in the TBR/WTTC Index (All data have been statistically adjusted to remove the influence of seasonal factors; 1992 = 100).



These data are important because they show clearly that in three of the five sectors 3/4 ATA RPMs, Hotel/Motel Occupancy Rates, and Industry Employment 3/4 the August 2002 level of industry activity still remains well below a year ago. Only two sectors, ARC Sales and Hotel/Motel Revenue, have returned to levels reached in August 2001.



The rates of change describe an industry performance that has been extraordinarily slow in recovering from September 11th. A part of this may be explained by the recent softening in the pace of growth in the economy overall, but perhaps more significantly by the lingering adverse consequences of September 11th on the travel and tourism industry.



With specific regard to the August Index, the 0.3 percent August decline occurred because of relatively significant falls in three sectors 3/4 Hotel/Motel Revenue, Hotel/Motel Occupancy Rates, and Consumer Confidence.

Increases in two of the nine sectors were not sufficiently strong to offset these declines. These two sectors are:


  • Rental Car Revenue per Day

  • Personal Consumption Expenditures for Travel and Related Items


Among the four remaining sectors, the August data were unchanged from the previous month; these were:


  • ARC Sales

  • ATA RPMs

  • Travel and Tourism Employment

  • Retail Sales at Eating and Drinking Establishments


As we have reiterated on many different occasions, the travel and tourism industry will return to its more traditional role of a strong contributor to national growth when the months of change are in the 0.5 to 0.8 percent range and 6 or more of the individual indicators in the index advance, adds Howell. As matters now stand, this seems as if it may be some time in the future.



The World Travel & Tourism Council (WTTC<.>) is the global business leaders’ forum for Travel & Tourism. Its members are chief executives from all sectors of industry. Its central goal is to work with governments to realize the full economic impact of the world’s largest generator of wealth and jobs – travel and tourism. The WTTC’s Seven Strategic Priorities are the organization’s guiding policy platform.



The Travel Business Roundtable (TBR) 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 National Football League, 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 people working directly and indirectly in the industry.

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