This report assesses factors that will likely affect incentive travel in 1994 and beyond. Factors assessed are related to both the global and American economies generally and to the travel industry specifically.
International Economic Overview: 1994 and Beyond
For more than three years, major economic forecasting organizations have consistently predicted that global economic recovery "lies just around the corner" (The rich, the slower, 1994, p. 92). With each successive forecast, however, the "corner" continues to remain elusively ahead of the present (The rich, the slower, 1994, p. 92).
The travel industry, particularly the incentive travel segment of the industry, is heavily dependent upon economic growth in the developed economies. The Organization for Economic Cooperation and Development (1993, p. 6), whose membership of 24 countries includes almost all of the world's developed economies, however, predicts an average growth for its members in 1994 of only 2.1 percent, increasing to a relatively modest 2.7 percent in 1995.
The 1994 growth forecasts range from a low of one-half of one-percent for Japan to a high of 3.7 percent for Canada, with 3.1 percent for the United States. The low forecast in 1995 is 2.2 percent for Germany, while the high is 4.1 percent for Canada, with projected growth in the United States falling to 2.7 percent.
While the rate of inflation is projected to remain modest in the developed economies, there is a danger that continued high unemployment will increase protectionist tendencies (The richer, the slower, 1994, p. 92). One factor that will likely continue to support growth in the developed economies is rapid growth (approximating eight-percent annually) in the developing economies (particularly those in Asia), which increases demands in the developing economies for goods and services from the developed economies.
American Economic Overview: 1994 and Beyond
In December 1993, Da...