WASHINGTON, DC — The U.S. economy again bucked projections of an impending recession over the Thanksgiving holiday.
Americans have returned to their pre-pandemic spending habits, with Adobe Analytics recording $29.3 billion in sales revenue over the Thanksgiving weekend. The day before Thanksgiving saw $3.28 billion, $5.3 billion on Thanksgiving, $9.12 billion on Black Friday, and $11.3 billion on Cyber Monday. Adobe is forecasting a total of $210.1 billion in total revenue for the entire 2022 holiday season, representing modest growth of 2.5% over 2021’s $205 billion in revenue.
The National Retail Federation is forecasting even stronger sales, predicting that holiday retail sales in November and December will increase between 6% and 8% from 2021 to between $942.6 billion and $960.4 billion.
Yet many experts agree that inflation is the biggest obstacle to controlling spending. The producer price index, which measures the average change over time in selling prices received by domestic producers of goods and services, rose 0.2% in October, after seasonally adjusting, 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 price index rose 8% in 2022.
But there are strong signs that inflation is slowing. Gasoline prices have fallen about $0.10 over the past month and global oil prices have fallen about 35% since June, according to Refinitiv data. The data shows that housing and rental prices are falling, although there is often a lag before they appear in official data. Used car prices have also fallen after hitting significant highs earlier this year.
On the travel front, the U.S. Travel Association reports that the Travel Price Index (TPI) increased 2.5% in October compared to September. After three months of declines, the TPI saw gasoline prices increase in October (up 4% from September) and lodging prices up 5.6% while airfares decreased 1.1%. On a year-over-year basis, the TPI remained more inflated than the Consumer Price Index (up 11.3% from 7.7%). Most notably, airfares increased 43% in 2022.
But that hasn’t stopped consumers from flying. Even though airlines are operating 13% fewer domestic flights during the eight-day Thanksgiving period than in 2019, according to Cirium data, AAA reports that air traffic is up nearly 8% from 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 2019’s volume.
Related: Experts remain optimistic for trade show sector as GDP beats estimates with 2.6% growth
Despite higher costs, the industry recovery continues on a positive trajectory, with venues reporting continued growth in event volumes. According to the International Association of Conference Centers’ (IACC) latest Meeting Room of the Future (MRoTF) Barometer 2022, released on Monday, two-thirds of respondents reported a recovery to more than half of 2019 volume and one-third reported exceeding 80% of 2019 volume.
The study shows that residential venues (hotels and resorts) are recovering slightly faster than non-residential venues (convention centres). More than 45% of residential venues are on track to meet or exceed their 2019 revenues in 2022. Most non-residential venues still expect a full recovery by 2023, although 7% expect this to take until 2024 and a further 7% expect it to extend beyond 2026. Mark Cooper, CEO of IACC, commented: “The latest Future of Meeting Rooms Barometer clearly indicates that the sector’s recovery continues to grow, despite ongoing geopolitical and economic challenges.”
Regardless, persistently high inflation has wreaked havoc on the economy. However, on November 30, the Fed indicated that its rate hikes would stabilize as early as next month, which propelled markets into positive momentum.
Still, CEIR expects the sector to continue to improve. “This year, the total CEIR index is expected to decline 26.3% from 2019 results and 10% in 2023,” said Cathy Breden, CMP-F, CAE, CEM, CEO of CEIR. “The sector is expected to fully recover in 2024, surpassing 2019 results by 3.5%. Of the 14 industry sectors monitored by CEIR, government goods and services and consumer discretionary are expected to outperform, while IT and building and construction will lag the overall exhibition sector.”
In the meantime, leading producers like Emerald, Inc. are focused on creating value by offering more education and networking opportunities through both in-person and virtual platforms. “Delivering greater value to exhibitors and attendees at trade shows is one way event organizers can help offset rising costs,” said Karalynn Sprouse, executive vice president of Emerald. “While inflation has put upward pressure on many expenses within the events industry, it’s critical to deliver greater value and help make in-person commerce more advantageous for buyers and suppliers. And we believe these tangible benefits are being recognized as being reflected in the growth in exhibitors and attendance, a trend we expect to continue.”
Contact Cathy Breden at cbreden@iaee.com, Karalynn Sprouse at karalynn.sprouse@emeraldx.com and Mark Cooper at mcooper@iacconline.org