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Travelers Plan to Spend More on Vacations in 2004, but
 Not on Business Travel; Five Star Resort Vacations
 are Selling Well

By Rick Barrett, Milwaukee Journal Sentinel
Knight Ridder/Tribune Business News 

Nov. 11, 2003 - The number of U.S. travelers planning to spend more than $5,000 on vacation in 2004 is up nearly double from 2003, a new survey from American Express shows. 

It's good news for the travel industry, with consumers reporting a renewed desire to venture farther from home, according to the survey of 1,356 adults. 

The American Express Leisure Travel Index looked at leisure travel spending budgets and where and when people vacation. 

On average, travelers expect to spend $2,962 in 2004 on airfare, accommodations, sightseeing, meals, souvenirs and other vacation expenses. That's up 37 percent from $2,163 in 2003. 

The percentage of travelers planning to spend more than $5,000 on vacation will nearly double, from 6 percent in 2003 to 11 percent in 2004, according to the survey. 

Mark Travel Corp., based in Milwaukee, has noticed a similar trend toward vacationers spending more and traveling longer distances. 

Advanced sales for January through April 2004 are up 2 percent over a year earlier and are up about 10 percent from two years ago, said John Tarkowski, Mark Travel national marketing director. 

"Five and six-star resorts are really what's selling," he said. "People have gone cheaper the last couple of years, and now they have started to loosen up. For the first time in a long while, the signs are good." 

Many spring-break and summer vacations have already been booked and paid for so that people get their first choices in travel dates, said Jane Foldy, senior product manager for Midwest Airlines Vacations, a service of Mark Travel. 

Vacationers might be willing to dig deeper into their wallets, but many business travelers are not willing to return to generous spending days, according to new data. 

Of 110 companies surveyed by the Business Travel Coalition, nearly 55 percent said their travel spending will be flat in 2004, while 18 percent said their spending will be down from 2003. 

"The common theme is that companies are holding the line on travel budgets as much as they possibly can," said Kevin Mitchell, chairman of the Radnor, Pa.-based Business Travel Coalition. 

Companies have become hooked on discount airlines and low corporate rates for services like hotels, according to Mitchell. 

"Travel cuts made during the recent recession were not crude percentage reductions, nor were they for the near-term," he said. "Changes to policies and purchasing strategies were well thought out ... In other words, changes were meant to be permanent." 

Overall, business airfares are expected to increase only 5 percent in 2004, according to the National Business Travel Association, based in Alexandria, Va. 

The NBTA predicts the beginning of a recovery in business travel in 2004. Companies are expected to increase their meeting and convention budgets, although those funds will come under close scrutiny. 

The cost-conscious nature of business travelers the last two years will remain, said Katie Beddingfield, NBTA spokeswoman. 

Business travelers are pinching pennies in dozens of ways. Hotel revenues, for example, have suffered as travelers have turned to mobile phones to avoid hotel-room surcharges, according to the NBTA. 

Overall, hotel rates are expected to increase 3 percent in 2004, the association said in a recent report. Occupancy rates have increased slowly this year, and the trend is expected to continue in 2004. 

"However, luxury properties continued to suffer from tighter corporate travel budgets, as more travelers frequented more mid-priced brands," the report said. "In 2004, hotel profitability will remain vulnerable to cautious business spending, price sensitivity, and security threats." 

-----To see more of the Milwaukee Journal Sentinel, or to subscribe to the newspaper, go to 

(c) 2003, Milwaukee Journal Sentinel. Distributed by Knight Ridder/Tribune Business News. AXP, MEH, 


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