International Travel to the U.S. Was Down in July. Will the Trend Continue?

Author: Christopher Durso       

This month’s cover story about how U.S. travel policies might be affecting international attendance at meetings and conferences in the United States included data from a Travel Trends Index released by the U.S. Travel Association in June. While U.S. Travel found that travel to the United States had actually increased year-over-year in April, it projected a slight decrease through October. The latest Travel Trends Index, released earlier this week, is consistent with that, showing a decrease in international inbound travel in July, and project decreases through January 2018. Convene talked to David Huether, U.S. Travel’s senior vice president for research, about the findings.

Were you surprised by the results concerning international travel to the U.S.?
Not too much. There was a big drop-off in March and then a big rebound in April. Then things are slowing again in the most recent couple months. Part of that was due to the change in the Easter holiday, if you can believe that. March international visitation was down really big, and if you look at the countries where it was down, a lot of the countries where they were increasing in prior months but ultimately declined were Christian countries. So, countries like Spain, where when they have Easter holiday, people travel, including travel to the United States. And last year, Easter was in March, and this year it was in April.

What else do you attribute the decrease to?
That’s been a trend that’s been going on for about a year and a half. There are a variety of reasons for that. Some of the reasons have to do with weakness in overseas economies as well as the value of the dollar, which has made the U.S. a more expensive place to travel to in the last couple of years compared to four or five years ago. After the recession, during the first few years of the recovery, international inbound travel was growing faster than domestic travel. It enabled the travel industry to recover faster than the rest of the economy. Now what we’ve seen transpire over the past year and a half is that as international travel to the United States has kind of edged down — last year it fell like 2.4 percent — the domestic travel market has picked up, thanks to lower gas prices, wages picking up a little bit due to the tightening labor force, and things of that nature. So I think what we’re seeing right now with the Travel Trends Index — what it’s pointing to is that dynamic is likely to continue for the second part of this year.

Is it possible to tie the decrease in international inbound travel to the political climate in the United States — the talk of travel bans, etc.?
I would say it’s difficult to do that, just because there are so many factors that are going on. The most important factor in general, overall, that governs international travel to the United States — there are three main components. One is obviously the value of the dollar. Two is health of the global economy. And three is the policies that support inbound travel to the United States, whether it be Brand USA, the Visa Waiver Program, things of that nature. If there were changes to those and there were changes in government policy that directly impacted a wide array of international travelers, then I think that would show up very clearly in the numbers. If you remember the countries that were the topic of the quote-unquote travel ban, or however they want to refer to it, I think that accounts for less than half of 1 percent of inbound travel. So it’s a relatively small number. And in fact, some of the numbers the government doesn’t even track because the visitation is so small.

Do you see the crazy hurricane season we’re seeing right now having an effect on travel?
Well, yes. If you look at Hurricane Katrina, that had a sizeable impact on the travel economy of Louisiana during that year, with the displacement of those people and things of that nature. Depending on the severity [of the storms] and how long people are out of work and how long they have to be out of their locations and out of their homes, it can have an impact on travel as well as the rest of the economy, for sure.

And something else — there has been an increase in the price of gasoline. If that’s short-term, that’s one thing. We don’t know how long that’s going to increase. But the increase in gas prices could have an impact on travel, since it’s increasing the cost of driving and the vast majority of travel [in the United States] is done by car. If you’re thinking about impacts of severe weather, with this particular event it’s affecting the energy sector, so the effects could be more wildly felt than just in the immediate area.

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