Business travel "continues to be the main driver of tourism activity" in the Boston and
Kansas City areas, according to commentary on current economic conditions published Wednesday
by the Federal Reserve. The report also noted "strong" travel
bookings in the New York district and higher hotel occupancies, particularly in
the Atlanta, Boston, New York and San Francisco districts.
Overall, "reports from the twelve
Federal Reserve districts indicated that the economy continued to expand at a
modest to moderate pace from mid-February through late March," according
to the latest commentary. "Manufacturing continued to
expand in most districts, with gains noted in automotive and high-technology
industries. Demand for professional business services showed modest to strong
growth and freight volume was mainly higher." The report also noted steady
or modestly higher hiring across many districts, and modest price inflation.
"Manufacturers in
many districts expressed optimism about near-term growth prospects, but they
are somewhat concerned about rising petroleum prices," according to the
Fed, which added that fuel prices especially are pressuring upward
transportation costs.
For the Boston district,
the Fed cited a 10 percent increase in hotel revenues during January and
February. "Higher hotel
occupancy has positive spillover effects for restaurants, retail and
entertainment venues," according to the report. "Business travel is driving this increase,
as leisure travel is still subject to some consumer caution."
Similarly, in Kansas
City, increased business travel is powering tourism activity, with industry
contacts "generally optimistic about future months."
In New York City
specifically, the Fed reported that "tourism activity has been
fairly robust since the last report." It added that the market's hotels
saw revenue per room increase "roughly 6 percent from a year ago in
February and March, with particular strength in the last couple of weeks. All
of the increase reflects higher occupancy rates, as room rates have leveled
off. Moreover, an industry contact notes that advance bookings are very strong
and that room rates are poised to rise."
For both the Minneapolis and Dallas districts,
the Fed report pointed to increased airfares resulting from higher fuel costs.
In Dallas, "airlines reported solid passenger demand over the past six weeks." While there were
"scattered reports" of small employment increases in the airline
industry, the report noted that "aviation equipment
manufacturers said demand weakened during the reporting period. Contacts were
less optimistic in their outlooks for the year, citing high energy prices and
the bankruptcy of several service and maintenance companies that serve the airline industry."