North America

As the Recession pushes unemployment rates to historic highs, the jobless embrace their situation by becoming “funemployed” - those who are unemployed but use their free time to pursue their interests. Once cash rich and time poor, the funemployed are cash poor and time rich, making travel an enticing option. Tempted by unprecedented travel deals, this segment has a ‘now or never’ attitude towards travelling.

The dramatic drop in demand for travel has led to widespread discounting. Some industry players are specifically targeting the funemployed to tempt them into holidays despite their uncertain financial future, provided they have proof of job loss. Intrepid Travel offered the “Laid Off? Take Off!” promotion giving the unemployed a 15% discount on holiday packages up to 31 December 2009. Customers find experiential travel packages less expensive than staying at home due to the lower costs of living in destinations such as South Africa and Egypt.

"The 'Laid Off? Take Off!' promotion is bittersweet, but people are able to travel to gain perspective, experience different cultures and focus on their job search upon their return.”
Tiffany Richards, President, Intrepid Travel USA

Bartering with the funemployed allows small travel companies to improve their services. Low budget destinations like Colombia, Peru and Ecuador will benefit. Marketing to the funemployed in the offseason may be a means of increasing occupancy rates. The funemployed also serve as a target for extended trips, world cruises and long haul airline tickets. We see the recession as resetting values as people re-evaluate spending habits and careers, the funemployed offer the travel industry the opportunity to understand these consumer shifts to prepare for the future impact of high unemployment rates.

Future Outlook

After 2010, it is expected the employed population will return to growth and reach its 2008 level in 2013. Demand for travel will rebound around that time. Businesses and consumers are to remain price sensitive and cautious about their travel choices with conscientious consumerism prevailing. Budget players in hostels, hotels and campsites were upgrading their facilities and design prior to the economic crisis as a means to offer affordable luxury to ever-demanding consumers. It is likely that renovated budget players will benefit in the long term as both employed and unemployed travellers stick to their cost-conscious travel habits after the economic recovery.

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