If you think Americans are spending less now, wait until after Christmas.
Analysts expect consumer spending to nose dive again in the first part of 2009, with the U.S. economy mired in recession and no more big shopping holidays.
Even an economic stimulus package from the federal government would not help because any package would come later in the year, they said. And retailers, restaurants, airlines, casinos, hotels and Broadway are likely to feel the effects.
"It's a recipe for consumer spending to really fall off a cliff here," said Ken Perkins, president of research group Retail Metrics. "There really is no catalyst to drive consumer spending for the next three months."
U.S. personal spending in October, the most recent month reported, fell 1 percent, the largest decline since September 2001 after the attacks on the World Trade Center and Pentagon.
In a survey over the weekend by America's Research Group, 44 percent of 1,002 respondents said they would further cut spending after the holidays. That's about twice as many people saying so as is typical in the survey, America's Research founder and Chief Executive Britt Beemer said.
Among the respondents, 37.6 percent said they would spend less dining out and 20.2 percent said they would spend less on entertainment. The restaurant industry is already among the hardest hit by the recession.
An RBC Capital Markets survey this month showed a record 51 percent of consumers said they would spend less at restaurants over the next 90 days compared with the previous 90 days.
A separate survey by the RBC showed a drop in consumer confidence, with 62 percent of consumers saying lower gasoline prices were not affecting their spending plans.
"We'd expect the weakness in restaurant spending to continue for several more months," RBC analyst Larry Miller said in a research report.
LESS FOR TRAVEL, HOTELS
Hotels also could take another hit in 2009. Consulting firm PricewaterhouseCoopers expects a key measure of the U.S. hotel industry's health, revenue per available room (RevPAR), to fall 5.8 percent next year, on the heels of this year's estimated 0.8 percent decline. That would be the industry's first back-to-back declines in the widely-watched measure since 2001-2002.
PwC said demand for hotels in 2009 is expected to fall by 2 percent which, when coupled with an increase in supply, is expected to reduce occupancy levels to 58.6 percent, the lowest rate of occupancy since 1971.
Casino revenue is also expected to take a hit. In October, Las Vegas Strip casinos won 26 percent less money from gamblers than a year earlier. "I expect January trends to be down year over year, but not more than in recent months," said Majestic Research analyst Matthew Jacob. "People are still not looking to travel, or take a trip to Las Vegas."
Some regional casinos have rebounded recently as people gambled closer to home. Louisiana casinos won 5.7 percent more money from gamblers in October than a year earlier, while Missouri's gambling revenue rose by 9 percent in November, according to official statistics.
"People are trading down, forgoing a big trip to Vegas in exchange for a nice weekend trip closer to home," said Nicholas Danna, senior research analyst at Sterne Agee.
The airline industry also expects some turbulence next year. Delta Air Lines (DAL.N: Quote, Profile, Research, Stock Buzz), which downsized and bought a rival carrier this year, said last week it would trim 6 percent to 8 percent of its capacity in 2009 as travel demand wanes.
DIM NEWS FOR GREAT WHITE WAY
From Las Vegas to Broadway, consumers are expected to keep their purses shut.
Charlotte St. Martin, executive director of the Broadway League trade association, said the industry was preparing for a winter that could be difficult because a greater number of shows than usual are closing in January and February.
"If there are really challenges, they are more likely to come in the 2009/2010 season, but we don't know that," St. Martin said. "We're just guessing." The 2009/2010 Broadway season begins June 7.
Treading water might be the best many consumer-related businesses will be able to do.
"It will be very difficult to grow your business in (this) environment. If you can maintain it, you're doing well," said Perkins of Retail Metrics.
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