WASHINGTON, D.C. — The U.S. economy again bucked at projections of a looming recession over the Thanksgiving holiday.
Americans returned to their pre-pandemic spending habits with Adobe Analytics tracking $29.3 billion in sales revenue over the Thanksgiving weekend. Thanksgiving Eve saw $3.28 billion, $5.3 billion on Thanksgiving Day $9.12 billion on Black Friday, and $11.3 billion on Cyber Monday. Adobe is predicting a total of $210.1 billion in total revenue for the entire 2022 holiday season which will amount to a modest 2.5% level of growth over 2021’s $205 billion in revenue.
The National Retail Federation is predicting even stronger sales, forecasting that holiday retail sales during November and December will grow between 6% and 8% over 2021 to between $942.6 billion and $960.4 billion.
Still, many experts agree that inflation is the main stumbling block keeping spending in check. The Producer Price Index, which measures the average change over time in selling prices received by domestic producers of goods and services, increased 0.2% in October, seasonally adjusted, according to the U.S Bureau of Labor Statistics. Prices rose 0.2% in September and were unchanged in August. On an unadjusted basis, the index for prices has increased a full 8% during 2022.
But there are strong signs that inflation is cooling off. Gas prices are down about $0.10 over the past month and global oil prices have fallen about 35% since June according to data from Refinitiv. Data shows that both home prices and rents are on the decline, though there are often lags before they show up in official data. Prices of used cars have also drifted lower after reaching significant highs earlier this year.
On the travel front, the U.S. Travel Association reports that the Travel Price Index (TPI) increased by 2.5 % in October vs. September. After three months of declines, the TPI recorded increases in gas prices in October (up 4 % over September) and lodging increased by 5.6% while airfare decreased by 1.1%. On a year-over-year basis, TPI remained more inflated than the Consumer Price Index (up 11.3 % vs up 7.7 %). Most notably, airfare is up by 43% in 2022.
But that hasn’t kept consumers from flying. Even though airlines are operating 13% fewer domestic flights during the eight-day Thanksgiving travel period compared with 2019, according to data by Cirium, AAA reports that air travel is up nearly 8% over 2021, with 4.5 million Americans flying to their Thanksgiving destinations this year. That’s an increase of more than 330,000 travelers and nearly 99% of the 2019 volume.
Related: Experts Remain Optimistic for Trade Show Industry as GDP Eclipses Estimates with 2.6% Growth
In spite of higher costs, the industry’s recovery continues on a positive trajectory, with venues reporting continued growth in event volume levels. According to the International Association of Conference Centres’ (IACC) latest Meeting Room of the Future Barometer (MRoTF) 2022, which was released on Monday, two-thirds of respondents reported recovery to above half of 2019 volume and one-third reported having surpassed 80% of 2019 volume.
The research shows that residential meeting venues (hotels and resorts) are recovering slightly faster than non-residential (convention centers) venues. More than 45% of residential venues are on track to reach or surpass their 2019 revenue in 2022. Most non-residential venues still project to make a full recovery by no later than 2023, although 7% expect it to take until 2024 and a further 7% expect it to extend beyond 2026. Mark Cooper, CEO of IACC commented: “The latest Meeting Room of the Future Barometer clearly points to the fact that the industry’s recovery continues to grow, despite ongoing geo-political and economic challenges.”
Regardless, persistent elevated inflation has injected headwinds into the economy. However, on Nov. 30, the Fed indicated that its rate hikes will level off as soon as next month which sent the markets on a positive tear.
Nonetheless, CEIR anticipates that the industry will continue to improve. “This year, the CEIR Total Index is expected to fall below 2019 results by 26.3% and by 10% in 2023,” Cathy Breden, CMP-F, CAE, CEM, CEO, CEIR, said. “Full recovery for the industry is expected in 2024, surpassing 2019 results by 3.5%. Among 14 industry sectors that CEIR monitors, Government and Discretionary Consumer Goods and Services sectors are expected to perform better whereas IT and Building and Construction sectors will lag behind the overall exhibition industry.”
In the meantime, top producers like Emerald, Inc., are focusing on adding value by offering more education and networking opportunities through both face-to-face and virtual platforms. “Delivering greater value to both trade show exhibitors and attendees is one way event organizers can help offset rising costs,” Karalynn Sprouse, Emerald Executive Vice President, said. “While inflation has put upward pressure on many expenses within the events industry, delivering greater value and helping make in-person commerce more beneficial for both buyers and suppliers is paramount. And we believe these tangible benefits are being recognized as reflected in the growth of exhibitors and increase in attendance, a trend that we expect will continue.”
Reach Cathy Breden at cbreden@iaee.com; Karalynn Sprouse at karalynn.sprouse@emeraldx.com; and Mark Cooper at mcooper@iacconline.org
