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Orlando visitor growth expected to ease off this year

06 March 2012 by By Sara K. Clarke, Orlando Sentinel

The pent-up demand for Orlando tourism could be about to run out of steam.

After two years of flying high with all-time visitor records, local forecasters now say that, though they expect continued growth this year, they expect it to be moderate at best.

Orlando visitor growth expected to ease off this year

Industry experts say travel to Orlando since 2009 has been bolstered by families who finally decided to take vacations that had been put off during the Great Recession. And the June 2010 opening of Universal Orlando's Wizarding World of Harry Potter helped pull in people who may have otherwise waited another year or two to visit Orlando.

But that backlog has "burned itself out," one researcher said, leading Orlando's convention-and-visitors bureau to forecast below-average growth this year, despite a stellar line-up of industry conventions and a host of new attractions in Orlando-area theme parks.

Orlando's tourist count jumped more than 10 percent the year after the 2007-09 recession and grew another 5.5 percent, almost double its normal rate, the following year. But "that pent-up demand, at least for travel, has probably now been realized," said Daryl Cronk, director of research for Visit Orlando, the area's tourism-marketing arm.

That doesn't mean an end to record head counts, however: Visit Orlando is predicting that 55 million people will visit Orlando this year for pleasure or business, which would be about 1.3 percent more than last year's record total, which is still an estimate.

A 1.3 percent increase would be about half the destination's historical growth rate, which has averaged 2.5 percent to 3 percent a year for the past two decades.

Orlando is understandably taking a conservative view of 2012 given the "outstanding" growth rates reported for the past two years, said Doug Frechtling, professor of tourism studies in the business school at George Washington University in Washington.

"I would think it would be wise to be conservative," Frechtling said.

Each U.S. travel destination has its own approach to forecasting visitor totals, but the main variables in the equation are changes in household income, travel prices, and the amount of air service available into a destination, Frechtling said. Also, "was there a special event last year that's not going to occur this year?" he said. "All of those things have to be taken into account."

The economy, whether hit by a double-dip recession, lifted by a high-flying recovery or nudged along by something in between, will also affect this year's visitor numbers. "Gas prices are on their way up again, and that'll keep budgets tight going into at least Memorial Day and the beginning of the summer," said Leslie Levesque, an economist with IHS Global Insight.

Levesque expects to see an improvement in consumers' discretionary spending toward the end of the summer or early fall, and she's not convinced the pent-up demand is spent.

"With continued improvements in employment and incomes, we will see more of an active consumer toward the end of this year than we did toward the end of last year," she said. "The ones that were out of the game last year will come back onto the playing field."

When viewed from a national economic perspective, the fate of Orlando tourism rests more on who is unemployed than on how many, according to Visit Orlando.

That's because two of three visitors from out of state have a college degree, and that segment of the workforce has fared better during and since the recession, with a current unemployment rate of less than 5 percent.

Sometime in 2010, that demographic decided the worst was over and, tired of their penny-pinching ways, sprang for a family vacation, leading to two very good years for Orlando, said Cronk, the Visit Orlando researcher.

That's why, after a 4.7 percent drop in visitors in 2009, Orlando recorded a 10.5 percent rebound in 2010, setting an annual record of 51.5 million travelers and becoming the first U.S. travel destination to reach or surpass the 50 million mark.

"That segment represents a significant part of our visitor base," Cronk said of college-educated travelers. "That audience, by and large, still has the means to travel."



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