High debt repayment, reduced enterprise valuations, limited access to capital, and lower demand for products and services will force the travel industry to restructure itself in the coming year, asserts a new forecast from New York-based travel industry consultancy Hudson Crossing.
"As in previous recessions, we fully expect that the current market will not support the breadth of travel firms that were created during the expansion cycle," Hudson Crossing Managing Partner Michael W. McCormick said in a statement. "We expect 2009 will bring consolidation and restructuring for the travel industry in most every sector."
Titled "Hudson Crossing 2009 Trends in Travel Investment," Hudson Crossing's report offers the following seven predictions for the U.S. travel industry, which it hopes will guide companies' business decisions in the New Year:1. An OTA Will Change Hands:
One major Online Travel Agency (OTA) will experience a change in ownership.2. Luxury Brands Feel the Pinch:
As affluent consumers are impacted by the nation's economic downturn, they'll be less willing to spend money on travel, hurting once immune luxury brands.3. Venture Capital Stands Aside:
Corporations, not venture capitalists, will lead travel industry investment activity.4. U.S. Airlines Survive Subsidy-Free:
Thanks to reduced capacity and lower fuel costs, U.S. airlines will stay afloat throughout the downturn without government support.5. Hotel Industry Hit Late:
The global hotel industry will feel the impact of the economic downturn in late 2009.6. Online Advertising and Media See Growth:
Online advertising and media will continue to thrive and attract short-term travel investment in spite of the economic downturn.7. The Real Advent of Mobile Computing:
Mobile computing in travel will skyrocket in 2009 thanks to the popularity of Apple's iPhone and BlackBerry's Storm.
Concluded McCormick, "A year of transformation does not equate to a year of failure in travel. Strong companies that embrace opportunities for change will emerge even stronger as they head into 2010 with perhaps even more customers, better products and fresh market strategy."
To download Hudson Crossing's complete report, visit www.hudsoncrossing.com