Fuel rises have opposite effects on different sectors.

Convention bureau officials in the top three US trade show cities - Las Vegas, Orlando and Chicago - are bracing for lower visitors to their venues, due to the soaring cost of fuel and, in turn, air travel.

Chicago-based United Airlines announced it would cut its domestic capacity by up to 17% by the end of the year, while Dallas-based American Airlines intends to cut capacity by 12%.

Delta Air Lines Inc, Northwest Airlines and US Airways said they are planning cuts of 13%, 9.5% and 8% respectively by the end of the year.

US Airways, citing a 90% fuel price increase over the past year, announced it would reduce its fourth-quarter mainline capacity by between 6% and 8% on a year-on-year basis. By January 2009, US Airways will have half as many flight departures from the convention and exhibition hub of Las Vegas as it did a year and a half ago.

JetBlue expects September 2008 capacity to be down 10% and does not expect to expand that next year.

Foreign carriers are not immune, either. Thai Airways, Qantas, Air France, Cathay Pacific and British Airways all announced they'll raise fuel surcharges and cut back services.

Consumer electronics revenues to hit US$183 billion in 2009

The hits taken by the convention and exhibition business should have the reverse effect on consumer electronics shipment revenues, according to research.

Such shipments will top US$173 billion in the US in 2008, according to a recent study released by the Consumer Electronics Association (CEA). Revenues are expected to grow 7.3% this year, reaching more than US$183 billion by 2009.

The reason for the favourable outlook is that consumers are turning to consumer electronics products for telecommunicating rather than travel by air and for entertainment at home.

Access to global consumers through free trade also helps the consumer electronics sector to flourish while growth rates of other industries have either stalled or declined, researchers say.

Leading the way are digital displays, with shipment revenues approaching US$28 billion.

Digital TV shipments represent 16% of all consumer electronics shipment revenues. With the deadline of switching to digital television broadcasting on 17 February, 2009, unit sales for digital displays will accelerate, climbing 24% this year, while retail prices will fall by 11%, says CEA.

With prices continuing to drop for LCD TVs, consumers are deciding to upgrade to digital. By the end of 2008, more than 60% of US households are expected to have at least one digital television.

Video games also remain a hot category as revenues once again reach record levels. Video gaming wholesale revenues will total more than US$21 billion in 2008.

Video game software is the dollar driver, buoyed by sales of next-generation consoles. With the help of blockbuster gaming titles and franchises, gaming software shipment dollars will grow 27% this year and 23% in 2009, CEA reports.

Portable video game systems will also shine in 2008 as consumers continue to seek products they can use anywhere, anytime.

Smart phones are expected to see new levels of demand, with revenue growth of 51% this year, comprising 28% of total wireless handset shipments.

Consumers want more than phone and texting functions. They also want to check email, surf the Internet, play games, watch videos, listen to music and navigate to new locations all on one device. Smart phones provide all this and more, says CEA.

from Teresa Hung, Los Angeles Office

(Image courtesy of Barun Patro)