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

U.S. Travel Goods Sales Hit Record High of $22 Billion in 2007 Despite
Economic Slowdown
Travel Goods Association Releases Report on State of the U.S. Travel Goods
Market 1998-2007: A Profile of the U.S. Travel Goods Market

PRINCETON, N.J., May 30 /PRNewswire/ -- 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.
SOURCE Travel Goods Association

Susan Abbey, Director of Public Relations of Travel Goods Association,
+1-609-720-1200, extension 205