WASHINGTON, D.C. -- The Travel Industry Association of America's (TIA) quarterly Traveler Sentiment Index showed a slight increase of 1.6% in the third quarter versus the second quarter of 2004.
The overall index now stands at 99.0, up from 97.4. The primary reasons behind the increase are twofold: More consumers than last quarter are confident they have enough money to take leisure trips, and more consumers are interested in taking pleasure trips.
"The economy is growing and many consumers feel optimistic about their financial prospects," said Dr. Suzanne Cook, TIA's senior vice president of research. "The good news for the travel industry is that travel demand is improving, but consumers are experiencing higher travel prices because of it."
Among all five index components, the index measuring consumers' ability to travel based on personal finances saw the biggest increase (+5.1%), rising to 89.9. It's now higher than it was in the last two quarters of 2002 and all of 2003.
General interest in taking pleasure trips continues to climb -- now standing at 103.4, the highest point since the first quarter of 2001.
Although consumer perceptions of travel's affordability grew 3.3% over last quarter to 99.8, the "affordability" index has dropped considerably compared to all of 2002 and 2003. This is not surprising, since travel prices have risen nearly 8% since January of this year, according to TIA's Travel Price Index.
The index measuring the ability to travel based on free time fell slightly to 95.6 over last quarter. The index measuring the quality of service received while traveling remained stable at 105.3.
Because of industry concerns about the threat of terrorism, TIA began to measure consumer perceptions about travel safety starting with the fourth quarter 2001 (October) survey. Though travel safety is not a component of the Traveler Sentiment Index, it can be indexed by itself against the baseline of fourth quarter 2001. The travel safety index now stands at 122.6, up 2.4% from the second quarter of 2004.
When the overall Traveler Sentiment Index is examined on a regional basis, the index for the Northeast shows the biggest increase, rising more than 9% over the previous quarter. The index for the West also posted an increase (+3%). The overall sentiment indices for travelers living in the South or Midwest regions show slight declines over last quarter.
TIA's quarterly Traveler Sentiment Index is conducted four times a year and is a running gauge of consumers' interest in leisure travel and their perceived ability to travel. The study consists of five criteria: interest, time, finances, affordability, and service quality.
The TSI is based on quarterly interviews with approximately 1,000 U.S. adults who have taken at least one trip in the past year. Each criterion is measured individually and then combined to create an overall index score. The baseline year for the Index is the year 2000.