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Consumer Confidence Index Drops to Four-Year Low;
What Could This Mean for the Leisure Industry and the 2025 Outlook

Today, it was announced that consumer confidence has taken its biggest hit in four years, signaling potential trouble for various industries, including pointing to leisure and hospitality. The decline suggests that consumers are becoming more cautious with their spending, which could have both immediate and long-term consequences for travel, dining, entertainment, recreational activities, theme parks, museums, and zoos.

As we have seen in the past, a sharp drop in consumer confidence usually leads to a pullback in discretionary spending. Our leisure industry, which relies heavily on consumer sentiment (things like watching the gas pumps turn daily) is likely to see an immediate impact in several key areas. Interestingly though, gas prices went down today (3/25/25) in the face of the negative CCI numbers being published? A bit confusing?

When there is an economic downturn, we have seen consumers opt for staycations or budget-friendly travel alternatives instead of expensive trips. We saw this happen in 2007-2008-2009 when the term “staycation” was created, impacting airlines, hotels, and cruise lines. People did remain closer to home, which had a definite impact on destination operators.

Restaurants, amusement parks, and live entertainment venues typically experience lower attendance and smaller average checks as consumers prioritize essentials over luxuries. This has been a natural reaction when the CCI falls off, and has impacted the leisure industry in 2007-2008, 2020, 2022-2023.

To stimulate demand, when moving forward into an operating season, many companies roll out aggressive promotions, loyalty programs, and early booking incentives. This is already starting to happen in the theme park industry, and we are just getting started.

Given this announced drop in consumer confidence, here at ITPS we are projecting that we will likely see an inordinate amount of discounting this 2025 summer season, which is already starting to be announced much earlier than usual. In fact, we are already seeing some early signs on quoted day pricing packages, as well as discounts oriented towards season passes. This is already occurring within the destination parks, as well as the regional operators.

Operators will use deep promotions to fill the later-than-normal bookings due to the current economic trends. This would help them maintain sales volume, even possibly at the expense of some profit margin deterioration. This early discount trend is expected to be especially evident in air travel, hotels, and package vacations.

It is difficult at this early point in the prep season to fully predict visitation trends, but I believe parks that have existing agile plans ready for adjusting pricing strategies and offering value-driven experiences can capture market share. It depends on how quickly the reaction times are to economic shortfalls. At this early point, we have already found travel providers who are bundling deals, restaurants that are promoting happy-hour specials deeper and longer, and park operators focusing on group discounts to attract budget-conscious consumers in their local, primary, and secondary markets.

Beyond early spring and summer, the effects of reduced consumer confidence index could extend into the broader leisure market, creating shorter booking windows resulting in consumers waiting until the last minute to make reservations, hoping for better deals or discounts.

With regard to housing, there could be a shift to budget friendly brands as such mid-tier and luxury brands may struggle as consumers opt for budget-friendly alternatives in accommodations, dining, and leisure options.

As we look further ahead, the outlook for the 2025 season will largely depend on whether consumer confidence rebounds quickly enough to hit peak season demands. If economic conditions stabilize, whether through lower inflation, price reductions at the pump and store shelves, job growth, or other positive economic indicators, the leisure sector could regain momentum. However, if uncertainty persists, we may see a prolonged period of conservative spending. Again, very early to determine.

For now (early 2025 spring/summer), the leisure industry should brace for an interesting period of “economic state of flux” over the next few months. Those that can effectively plan and implement pricing strategies, enhance customer value, and adapt to shifting consumer behaviors will be best positioned to weather an economic maelstrom, emerging stronger when confidence eventually resumes, which fortunately for us, always does!

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