U.S. Travel Goods Sales Hit Record High of $22 Billion in 2007 Despite Economic Slowdown - SNEWS

U.S. Travel Goods Sales Hit Record High of $22 Billion in 2007 Despite Economic Slowdown

Even as the economy started to slow in 2007, Americans continued to realize the benefit of using travel goods as part of their everyday lives, leading to yet another record year for sales in 2007, according to a new report from the Travel Goods Association (TGA). Travel goods are defined as luggage, backpacks, travel/sports bags, business cases/computer bags, handbags, personal leather goods, and travel accessories (the report does not include the category of travel accessories in its sales figures).
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PRINCETON, N.J. -- Even as the economy started to slow in 2007, Americans continued to realize the benefit of using travel goods as part of their everyday lives, leading to yet another record year for sales in 2007, according to a new report from the Travel Goods Association (TGA). Travel goods are defined as luggage, backpacks, travel/sports bags, business cases/computer bags, handbags, personal leather goods, and travel accessories (the report does not include the category of travel accessories in its sales figures). TGA's report estimates that U.S. consumers spent a record $22.2 billion on these items in 2007, fueled by burgeoning consumer demand in virtually all travel goods categories.

"Whether they are flying to Hong Kong or commuting to work, consumers today want to carry more with them wherever they go," explains Michele Marini Pittenger, TGA's President. "The average consumer today not only carries a cell phone, but they also have a BlackBerry, an iPod and possibly a laptop. If they're traveling, they need space for all of these things as well as their clothes, while complying with the airlines' ever-increasing restrictions on the size, weight and number of items they can bring onboard. And, for everyday use, consumers are now carrying all of these electronic items plus what they need for work or school, and often workout clothes as well."

As consumers' demands grow on the travel goods they use to meet these changing needs, the U.S. travel goods industry is responding with new and better products. "Consumers want to buy travel goods that meet all of these demands. That want has translated into continued pressure for the U.S. travel goods industry to continue to create products that are more versatile and functional, yet at the same time are smaller, more stylish and more lightweight. Of course, consumers want all of this at a good price. Record travel goods sales in 2007 show that we have succeeded," commented Pittenger.

Here's a quick look at how TGA estimates each of the major travel goods categories performed in 2007:

Luggage
Consumers demanded better product at lower prices in 2007. While TGA estimates that the pieces of luggage sold in the United States surged 20.6% to a record in 2007, the value of that luggage increased only 8.2%. As a result, the average retail price paid for each piece of luggage fell over 10% from the 2006 average price -- to the lowest average unit price in decades. U.S. luggage manufacturers and brands have responded to their customers, providing "value" luggage -- or higher-quality, but reasonably-priced luggage -- at as many price points and through as many retail channels as possible -- even selling "value" luggage through such unorthodox retail channels as grocery and drug stores. Thanks to these efforts, retail sales, valued in dollar terms, have finally returned to pre-September 11, 2001 levels. With the "one-bag" policies being implemented by all of the airlines this year, the demand for more versatile and practical carry-on bags as well as more versatile and lightweight luggage could rise, meaning that this "value" equation could change in 2008.

Backpacks
Backpacks continued to grab a larger share of the U.S. travel goods market in 2007 as more and more people used them as the primary mode of carrying their accessories in more and more aspects of their lives. TGA estimates that unit volume sales of backpacks grew 9.2% in 2007, while the value of those sales increased 5.5%. Part of this increase could be attributed to consumers getting more value for their money, with the average price paid on backpacks slipping 3.3% in 2007.

Travel/Sports Bags
While this category remains dominated by "freebies," or promotional bags used by companies as giveaways to customers and distributed to attendees at conferences and events, the airlines' increasing enforcement of weight-restrictions on checked luggage and the growth of lightweight, fashionable, multi-functional totes led to a TGA-estimated 7.4% increase in unit volume sales of travel/sports bags in 2007 and a 6.1% increase in sales by value. These new totes also helped slow the long-term decline in prices for travel/sports bags, with the average retail price slipping only 1.2% in 2007.

Business Cases/Computer Bags
Even with other travel goods, like backpacks and totes, eating into its traditional market share, U.S. travel goods firms unveiled enough innovative products and catchy designs to keep consumers' attention. TGA estimates that consumers pushed unit volume sales in this category up 1.1% in 2007. Sales of business cases/computer bags by value, however, decreased 3.7% for the year. Hence, the growth in volume sales came at a price, namely that the average retail price for business cases/computer bags fell by 4.8% in 2007.

Handbags
Handbags maintained its position as the travel goods industry's bestseller in 2007. Women's love affair with handbags in general combined with their desire to have "the" bag, led to records in both actual sales and the average unit selling price. While TGA estimates that unit value sales increased a strong 3.4% in 2007, the value of those sales surged 11.2%, leading to a whopping 7.5% increase in the average retail price for handbags. While sales of most handbags continued to be brisk in the first half of 2008, there are growing signs that the ongoing economic slowdown could start affecting handbag sales in the latter half of this year.

Personal Leather Goods
The downward trend in sales in this category continued in 2007. TGA estimates that volume sales of personal leather goods fell 4.4% in 2007. The value of those sales, on the other hand, increased 4.6%, leading to a healthy 9.4% increase in the average retail price for personal leather goods. Once again, U.S. travel goods firms were the victims of their own success. By making their other products much more versatile, enabling consumers to carry all of their various electronic gadgets and other accessories, many consumers no longer felt the need to purchase separate items for carrying accessories. As we noted last year, the rise of iPods and BlackBerrys have also eaten into sales of two core personal leather goods items -- CD cases and day planners. On the positive side, consumers who still bought personal leather goods were willing to pay more to buy the best personal leather goods possible.

For more information, go to TGA's just released State of the U.S. Travel Goods Market 1998-2007 Report at http://www.travel-goods.org/press/release/tgamarket2007.pdf (PDF format) or contact TGA at 609-720-1200, x-205 to learn more about the latest trends in the U.S. travel goods market.

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