How Inflation Affects the Tourism Industry in North Carolina

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Americans are paying more for just about everything as inflation rises, forcing them to reconsider how they spend their money. But after more than two years of COVID-related restrictions, most people aren’t likely to cancel their upcoming travel plans, according to NC State tourism experts.

“People are certainly concerned about the cost of travel, but many feel they can finally do it safely,” said Whitney Knollenberg, professor of parks, recreation and tourism management at the College of Natural Resources.

The latest report from the Bureau of Labor Statistics shows that the consumer price index rose 8.3% in April from a year earlier. Yet surprisingly, for the first time since the start of the pandemic, US travel spending was 3% higher in April than in 2019, at $100 billion.

With only half of Americans comfortable with air travel due to the pandemic, North Carolina has an opportunity to capitalize on increased travel demand, according to Knollenberg, whose research focuses on tourism development. sustainable.

“Most people aren’t comfortable with international travel yet, so they’re looking for road trips,” Knollenberg said.

North Carolina, which ranks fifth in national visits, already serves as a destination of choice for travelers within a day’s drive. In fact, most of last year’s 44.4 million visitors were from the state and South Carolina, Virginia, Florida, Georgia, Tennessee, New York, Pennsylvania, Ohio and Texas.

However, while many travelers are likely choosing to drive to their destinations due to the pandemic, a recent survey by tourism market research firm Longwoods International found that a third of travelers are concerned that gasoline prices will significantly affect their travel decisions over the next six months. .

The national average for unleaded gasoline is now $4.72 per gallon, up $1.67 from the same time last year. It could top $6.20 a gallon by August as demand is expected to reach 9.7 million barrels of gasoline per day.

Ann Savage, tourism extension associate at NC State, said rising gas prices could cause people to travel closer to home and seek destinations with free activities or natural attractions, noting that North Carolina state parks, which offer free admission, could see another record year for visits as a result.

Savage added that rising costs for other travel-related expenses, such as hotels and restaurants, could also impact visitor behavior in the coming months. Many travelers, for example, are likely to seek short-term rentals in response to the rising cost of restaurant meals, which jumped 7.2% in April.

“I think a lot of people will be looking for places with kitchens so they can cook their own food,” Savage said.

Ultimately, Savage and Knollenberg agreed that growing travel demand will likely generate both benefits and challenges for North Carolina.

While new visitors often spend money on local businesses and recommend destinations to friends and family, the growing demand could strain some communities still recovering from the pandemic.

Restaurants, hotels, shops and other tourism businesses are not only grappling with increased operating costs due to inflation, but they are also struggling to overcome labor shortages, disruptions in supply chain and more.

The tourism industry has still not fully recovered from the pandemic. Now he is also trying to cope with an influx of visitors,” Knollenberg said. “There’s always this lingering problem of companies having to do more with less.”

As communities continue to address these challenges, it’s important for travelers to support local businesses, according to Savage. Many businesses have seen an increase in disruptive and rude behavior from customers during the pandemic – a trend that is partly to blame for the labor shortage.

Savage and his extension colleagues recently launched the “Be a SPARK” campaign to address this issue. The campaign promotes four basic principles for travelers to follow: show support, be patient, act with respect and spread kindness.

“The last few years have been tough for everyone,” Savage said. “The ‘Be a SPARK’ campaign is designed to remind people to enjoy dining out, shopping at local retail stores and visiting cultural attractions while appreciating those that make these simple pleasures possible.”

This post originally appeared in College of Natural Resources News.

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