Challenger Tourism Report

As the summer travel season kicks off with Memorial Day weekend, the nation's workers are undoubtedly feeling more confident about taking paid leave. However, increased travel costs could keep many vacationing workers close to home and diminish the positive impact on the economy, warns one workplace authority.

Job security is the strongest it has been in several years, as corporate job cutting shrinks to pre-recession lows, according to John Challenger, chief executive officer of global outplacement firm Challenger, Gray & Christmas, Inc. But stagnant wages and soaring gasoline prices are likely to limit the amount of money people are willing to spend on vacations.

Challenger statistics on corporate downsizing reveal that planned layoffs are at their lowest level since the late 1990s.  Through the first four months of 2011, employers announced a total of 167,239 job cuts or an average of about 41,800 per month. That is down 24 percent from a year ago, when job cuts averaged nearly 55,000 per month.  In 2009, employers announced an average of 177,775 job cuts per month between January and April.

The decline in layoffs is boosting workers' confidence about their job stability. A quarterly survey of workers by Harris Interactive on behalf of Glassdoor.com found that in the first quarter only 17 percent of employees were concerned about being laid off in the next six months. That was down from 26 percent in the first quarter of 2009.

Workers are starting to regain enough confidence in their employment situation to ask for and actually use vacation time. And, companies, realizing that they are asking existing employees to work harder for the same or less money, will likely be more than willing to grant their workers' requests, noted Challenger.

Improving job stability is already leading to increased travel plans. A survey from AAA shows that 34.9 million Americans will take trips away from home over the upcoming holiday weekend, the highest number since 2007. The survey found that 30.9 million of these travelers plan to travel by car.

However, with gas prices hovering near $4 nationwide and airfares up 22 percent from a year ago and expected to go higher as airlines tack on increased fuel surcharges and baggage fees, many travelers this weekend and throughout the summer may opt to remain close to home. Destinations with a half-day drive will probably become the preferred vacation spot for cost-conscious Americans, noted Challenger.

Even if many travelers decide to stay close to home this summer, local economies will still benefit greatly from vacation spending.  Anticipation for a stronger travel season has led to an early hiring surge in the leisure and entertainment sector.  Employers in this category added 742,000 new workers between February and April, according to non-seasonally adjusted data from the Bureau of Labor Statistics. That is largest February-to-April employment gain ever recorded in this industry.

Hiring in this sector began early this year.  Typically, the biggest employment gains come in May and June. This year, employers in leisure and entertainment added nearly 400,000 new workers in February and April.  Hopefully, summer travel lives up to expectations or we could see a surge in job losses in July and August, said Challenger.

As for vacationing workers, Challenger said that while job security is improving, it is still recommended that they keep the lines of communication open with their employers.

You don't have to spend a part of every vacation day working, but you want to take your cell phone and laptop and make an effort to occasionally check in with the office. If you are a team manager, stay in touch with your team members. Make sure supervisors know your e-mail and cell phone number just in case you are needed," said Challenger.

As employers continue the shift toward retention mode, many will be eager to let workers enjoy vacations without interruptions from work, but make no mistake, your efforts to remain connected, even if unnecessary, will be appreciated and remembered.

Technology has become so portable and so affordable that there really is no excuse anymore for not staying in touch.  Smartphones and tablet computers make it easy to stay connected anywhere with internet access, he concluded.