U.S. Federal Reserve Reports Positive Travel Indicators

Travel and tourism was "generally strong" across the United States in January and early February except in the Philadelphia area, which saw slightly declining activity, according to the U.S. Federal Reserve.

The Fed in its regularly scheduled update on economic conditions around the country noted that a "majority of districts reported a solid start in the first quarter for hotel bookings, occupancy and revenue with an optimistic outlook for the remainder of the year."

Overall economic conditions "continued to expand" during the reporting period for most of the 12 Federal Reserve districts, according to the Wednesday report. "Eight districts reported improved levels of activity, but in most cases the increases were characterized as modest to moderate. New York and Philadelphia experienced a slight decline in activity, which was mostly attributed to the unusually severe weather experienced in those regions. Growth slowed in Chicago."

The Fed's general outlook for most districts "remained optimistic."

In the Richmond district, "tourism and corporate travel picked up, and hoteliers reported strong bookings," according to the report. One hotel contact noted "a shift to more transient visits than conference or group bookings in recent weeks." A Baltimore contact also told the Fed of "increased corporate travel."

In the New York district, bad weather and the Super Bowl pressured hotel demand from opposing directions. On balance, Manhattan's hotels reported relatively flat occupancies, "though room rates were up sharply," according to the Fed's report.

Atlanta also suffered through disruptive weather during the reporting period, although the Federal Reserve found that hotels were not as negatively impacted as restaurants and attractions. "Hoteliers still expect only slight growth in occupancy rates for the first quarter of 2014 compared to the same period last year, while room rates and revenue per available room are expected to grow more robustly," according to the report.

The Fed also cited higher hotel occupancies and room rates in the Kansas City and San Francisco districts, with San Diego's hotel occupancies "reaching historic highs."

Meanwhile, for the Dallas district the report highlighted "solid to slightly stronger demand" for air travel with at least one airline noting modestly higher ticket prices.