INTERNATIONAL INBOUND TRAVEL OUTLOOK FOR 2015 AND THE NEAR TERM

U.S. Travel Marketers Can Expect Solid, Steady Growth for the Next Five Years:

At the outset of the recent seminar hosted by the U.S. National Travel and Tourism Office (NTTO) in which the agency laid out its forecast for 2015-2019, Mark Brown, the market research analyst who oversees the preparation of the forecast, gave a brief précis of his presentation in which he projected a steady increase in travel to the U.S. next year and beyond: “There is no reason I can see in any of the numbers available to me that this trend is going to change.”

Another key fact, not extant until several years ago, is the marketing of the U.S. as a travel destination. Now that Brand USA has been active in this regard—and with its Congressional reauthorization for another five years, it will continue to be active—the U.S. is focusing on driving traffic from the key destinations that produce the most visitors to the U.S. In 2013 and 2014, BUSA established offices in 11 global locations and launched marketing campaigns that target the 20 nations which generate 90 percent of U.S. visitors. And five of those nations where the Brand USA campaigns are strongest—Canada, Mexico, China, Brazil and the UK—are expected to drive nearly three-quarters of the growth in inbound travel volume over the next five years.

The Long View—International Arrivals to USA

† Forecast 

Source: U.S. Department of Commerce, International Trade Administration, U.S. National Travel and Tourism Administration; Secretaria de Turismo—Mexico; Statistics Canada

Steady Growth Through 2019:

In addition to the overall 40 percent increase in volume from 2013 to 2019, NTTO forecasts that the Compounded Annual Growth Rate (CAGR) for the period will be a steady 4 percent.  With the exception of China and Colombia, which are registering extraordinarily high increases (and Venezuela and Japan, which will register negative growth), the top inbound markets for the U.S. are expected to register CAGRs within or near the 3 to 6 percent margin.

International Arrivals to U.S.

Top 20 Markets 2013-2019

(000s)

Source: U.S. Department of Commerce, International Trade Administration, U.S. National Travel and Tourism Administration; Secretaria de Turismo—Mexico; Statistics Canada

The Currency Factor:

In the country by country notes that follow, it is clear that all of the top international markets, China excluded, have been affected by a now-robust U.S. economy, which is shoring up a strongest-in-some-time U.S. dollar. All of them have had their currencies decline in value versus the U.S. dollar. On its face, such news would normally cause shudders among travel sellers, but the decline follows a year in which some of those currencies had reached peak highs and are now retreating against the dollar.

Year Over Year Change† in Currencies of

Largest Markets vs. U.S. Dollar

† Rate used: mid-day Dec. 20, 2013 vs. mid-day Dec. 20, 2014

* France, Germany, Italy, Netherlands, Spain

** This is a government-proclaimed rate, which is essentially meaningless; the real “black market” rate is about six times higher than the government’s established rate

Source: Prepared by The Inbound Report