Staycations to kill parts of the economy

Discussion in 'Politics, Religion, Social Issues' started by ert3, Jun 12, 2008.

  1. ert3 macrumors 6502a

    ert3

    Joined:
    Dec 10, 2007
    #1
    What with people staying home because of predictions of a failing economy you have to wonder how long until places like Vegas start to fall under due to a lack of people visiting.
     
  2. leekohler macrumors G5

    leekohler

    Joined:
    Dec 22, 2004
    Location:
    Chicago, Illinois
    #2
    Do you have a link illustrating this phenomenon?
     
  3. PlaceofDis macrumors Core

    Joined:
    Jan 6, 2004
    #3
    i don't know that its actually happening in droves yet, but cnn is surely hyping it: http://www.cnn.com/2008/LIVING/worklife/06/12/balance.staycation/index.html

    people for the most part don't want to stay home on vacation, they want a change of scenery. what this means is that they will spend less while on vacation, search for more deals, and travel to a place closer to home.
     
  4. mkrishnan Moderator emeritus

    mkrishnan

    Joined:
    Jan 9, 2004
    Location:
    Grand Rapids, MI, USA
    #4
    Running up to Memorial Day, the estimate I heard was approximately a 1% reduction in Memorial Day travel outside the home city. I would guess that that would be a noise-level impact in general, economically, even if day by day the number of people traveling away from home was down by the same 1% all summer. I've heard a lot of panicked tourist destinations, but no specifics on economic damages to them.

    Nor have I heard any post-hoc economic cost estimates of vacation spending over the holiday.

    The major specific I've heard has to do with the crunch on gas stations (which is due in general to reduced fuel demand and the increased amount of the gas station margins being eaten up by credit card fees). On an anecdotal level, I've heard of a few less competitive gas stations here closing. I guess the credit card issue is a bigger deal than the reduced consumption (which is good in general but bad if you run a gas station). As I understand it, most gas stations are not able to hold their markup on fuel proportionate to their cost of the fuel. Meaning that as the price of fuel increased dramatically, the amount of money they made selling it stayed static. Unfortunately, consumers have shifted (no numbers that I've seen to quantify it) to purchasing fuel with credit cards, and the credit card company's take is a percentage of price, even though the fuel station markup didn't increase. The net result is that the gas station has to basically give its portion of the take to the credit card company, and sometimes even sell the fuel at a loss.

    But again, that has to do with payment by credit and the way fuel markups work, and not anything really to do with staycations.
     
  5. PlaceofDis macrumors Core

    Joined:
    Jan 6, 2004
    #5
    i work for a place that depends on tourism during the summer. and we are seeing overall a downward trend from last year, but nothing absolutely devastating.
     
  6. ert3 thread starter macrumors 6502a

    ert3

    Joined:
    Dec 10, 2007
    #6
    this is a hypothetical based on news hype. its not something that is happening to any markable numbers yet.
     
  7. arkitect macrumors 601

    arkitect

    Joined:
    Sep 5, 2005
    Location:
    Bath, United Kingdom
    #7
    While Staycations may be killing off the economy words like staycations are certainly hurting the English/American language… ;)
    ick… :eek:
     
  8. mkrishnan Moderator emeritus

    mkrishnan

    Joined:
    Jan 9, 2004
    Location:
    Grand Rapids, MI, USA
    #8
    That's too bad. :( I'm glad it's not devastating, but I hope your place maintains its stability given the economic conditions.

    Then again, it's very hard to pin down why, isn't it? For instance, the economy is doing poorly overall, in part because of fuel costs but for many other reasons as well, the housing market fiasco being several of them. On the other hand, tourism coming to the US from overseas should be relatively stronger than a year ago because the dollar has continued to decline, making their purchasing power here stronger and making the enticement of the US as a destination stronger.
     
  9. PlaceofDis macrumors Core

    Joined:
    Jan 6, 2004
    #9
    well i certainly won't disagree with you there.
     
  10. mkrishnan Moderator emeritus

    mkrishnan

    Joined:
    Jan 9, 2004
    Location:
    Grand Rapids, MI, USA
    #10
    Would you say, perhaps, that "staycation" is a frenemy of the English language? Or is its effect to brick the language so badly that recovery is impossible? :D
     
  11. SMM macrumors 65816

    SMM

    Joined:
    Sep 22, 2006
    Location:
    Tiger Mountain - WA State
    #11
    The price of gas is definitely a major concern for most people. Last year we bought a Honda Civic Hybrid, and have definitely benefitted from the purchase. On long road trip we get over 50 MPG. However, with gas over $4/gallon, it is still expensive to travel by car. My wife and I have recently retired. We have many investments, distributed over 401Ks, IRAs, Deferred Compensation Plans, Real estate and standard equities. However, with the economy tanking, it is easy to lose a great deal of money in a heartbeat. We have been slowly moving out of growth stocks and mutual funds, into lower yield, but safer ones. We have also cancelled half our vacations this year. Until the election is over, we are going conservative.
     
  12. ert3 thread starter macrumors 6502a

    ert3

    Joined:
    Dec 10, 2007
    #12
    Maybe we should guestimate on how much damage this will truly cause.
     
  13. PlaceofDis macrumors Core

    Joined:
    Jan 6, 2004
    #13
    the why is a tickle down effect essentially i think. the whole 'feeling' and talking about the economy in a negative turns it negative to an effect, and makes people more unsure. the but cost of gas going up, then makes everything else go up as well, makes people more reluctant to spend and then further hurts things. its a cyclical effect too.

    its not going to kill things off, but sales are slower overall. even last year wasn't the best year because of gas so we're not all that surprised this year either.
     
  14. iJohnHenry macrumors P6

    iJohnHenry

    Joined:
    Mar 22, 2008
    Location:
    On tenterhooks
    #14
    I believe staycations describes this phenomenon very well, which is probably why those in charge would just as soon as not have it in general use.

    To accept a word such as this in the vernacular, is to cause people to consider this a worthy option for their restbite from work.
     
  15. danny_w macrumors 601

    Joined:
    Mar 8, 2005
    Location:
    Austin, TX
    #15
    I don't know too much about the effect of staycations, but the overall economy and gas prices sure do seem to be having an effect on people eating out around here. Restaurants that used to be full all the time are now half empty. Maybe people think that they are saving enough by not eating out that they can still afford that vacation.
     
  16. iJohnHenry macrumors P6

    iJohnHenry

    Joined:
    Mar 22, 2008
    Location:
    On tenterhooks
  17. Desertrat macrumors newbie

    Joined:
    Jul 4, 2003
    Location:
    Terlingua, Texas
    #17
    MasterCard reported that for the week before the Labor Day weekend, charge card gasoline sales were down 7% from the previous year.

    Winnebago sales are down 43%. Other RV companies are also down. A low-end company which makes van-type RVs is guesstimated to possibly go bankrupt within six months.

    Some mid-price restaurant chains are closing down part--or in a few cases, all--of their operations. Applebee's, part; TGIF, all, so I've read. My last run west across I-10, low-enders like the Waffle Shops looked busier.

    Some car dealers won't take SUVs as tradeins.

    In earlier recessions, national parks have more visitors from in-state than from outside. Odds are that parks such as Yellowstone or Glacier will see a downturn--and the tourist businesses along the access highways.

    I've no idea how much of the staycation losses will be offset by foreign tourism, since we're now a cheap place to visit, in their currencies.
     
  18. Rodimus Prime macrumors G4

    Rodimus Prime

    Joined:
    Oct 9, 2006
    #18
    it a long effect. All the prices are going up. Food, gas and power being the big ones. Those 3 are all basic requirements so it is sucking the money from trips.

    It is not that people do not want to go on those trips it is the fact that they can not afford to go.

    I read a while ago with the economy dropping like it was along with creidt problems what going to control buying power is going to become one pay check instead of credit rating. WHich is how I know in the US the saving rate drop to negitive among the population.

    That being said I know for the not spending I am part of the problem because I have a pretty good savings rate. Now compared to a year ago I am spending a long more than I was but then agian it is not hard to beat 800 a month from a college student to some one out of school with a real pay check.
     
  19. CanadaRAM macrumors G5

    CanadaRAM

    Joined:
    Oct 11, 2004
    Location:
    On the Left Coast - Victoria BC Canada
    #19
    If people stay home, they don't stop spending money --- they spend it at home.

    So instead of transferring several thousands of dollars to oil companies and airlines in order to spend money at businesses and attractions in some remote location, they spend the money on businesses and attractions in their local community.

    Arguably, this creates more jobs and productivity than driving and flying do, and keeps the money local rather than sending it to oil-producing states.
     

Share This Page