What metrics do you watch to gauge the economy? Gene Marks, small business analyst and CPA at The Marks Group, guest on several Woodard webinars and keynote presenter at Scaling New Heights, recently suggested several metrics that you can watch to track the economy. Let's drill down on one of these metrics - the Transportation Security Administration checkpoint travel numbers.
Each day, the TSA provides checkpoint numbers for the current year as compared to the previous two years on the same weekday. For example, on April 28th of this year, well over 1 million travelers passed through TSA check points. Compare this to last year, when just over 100 thousand passed through checkpoints. Although travel has not fully recovered (compared to 2019 when 2.2 million travelers passed through checkpoints), the industry is well on the way.
When looking at current TSA checkpoint numbers, particularly when adding in an examination of rental car demand, you will see that travel is definitely on the rise. TSA numbers have shown consistent growth since the first of the year, with at least 1 million people travelling by air every day since March 11. And the rental car industry is enjoying soaring demand for travelers who are not yet willing to get on an airplane. In fact, the high demand for rental cars is leading to what some are calling a "perfect storm" with prices up to $700 per day in popular destinations.
Why should you as an accountant pay attention to travel metrics? Whether or not you have clients in the travel or leisure industries, this metric is important to you and your clients.
Business travel generates two forms of impact on the economy as a whole. First, direct travel spending impacts not only air travel, but also car rentals, train transportation, taxis, hotels, restaurants, and meeting planning sectors. Increased spending in these sectors also creates wide-reaching impacts rippling out from those sectors. For example, the jobs created and sustained by increased business travel provides wages and revenue for workers and owners in those businesses - money that is then in turn spent in other industries.
So, there is a very real chance that your clients have already seen or may soon see increased revenue as travel continues to grow. For you and some of your clients though, there is an even more important reason to watch and perhaps participate in business travel.
A report on the role of business travel in U.S. economic recovery showed historically that business sectors that spent the most on business travel tended to post higher growth in profits. In fact, detailed statistics indicates that each dollar invested in business travel results in nearly a ten dollar return in revenue and almost three dollars in profit.
Has an inability to travel affected your business or your clients' businesses? Are you or they starting to see positive impacts from increasing travel? Are you and your clients ready to start traveling yourselves?