It turns out that the NTTO forecasts are pretty reliable. Since the U.S. Department of Commerce’s National Travel and Tourism Office (NTTO) ended the contracting out of its semi-annual forecasts in early 2010, the agency has been able to increase the input provided for the process, as well as expand the number of sources and the diversity of information configured into the development and fine-tuning of the model for the forecast, which has proved to be a valuable planning tool for U.S. travel suppliers and DMOs that are marketing and promoting the U.S. travel experience internationally.
There are two reasons why. First, it has become increasingly accurate. A look at the last semi-annual forecast, which was released last November—at the time, NTTO has just released international arrivals data for up to, and including, August 2014—shows why. (Final figures for 2014 did not come out until earlier this month.) By the time a year finally happens, Mark Brown, the Department of Commerce economist who heads the forecast team, NTTO will have forecasted volume for that year up to 12 times as it deals with a fluid set of metrics in its calculations.
And, second, it is free.
INBOUND recalled the projections NTTO made last November for 2014 arrivals from the then-top 20 international markets and compared them in the table below to the actual 2014 arrival numbers posted earlier this month. What they show is that a fairly conservative NTTO was dead-on accurate or near-dead on accurate for the key markets of the UK, Japan, Germany, France, South Korea, Australia, India, Italy, Colombia, Sweden and Taiwan.
Overall, the government agency was off by percentages that are small: international arrivals off by +1 percent and overseas arrivals off by +2 percent. Other key markets registered as follows: China (-2 percent); Spain (+2.6 percent); Brazil (+2.6 percent); India (+2.7 percent) and Mexico (+4 percent).
Forecast and Final Arrivals Figures for 2014
For International Arrivals to the USA
(000s)
| Country/Market & Rank for Full Year 2013 | 2013 Arrivals-Actual | 2014 Arrivals Forecast in November 2014 | 2014 Arrivals-Actual |
|---|---|---|---|
| (date from March 15) | |||
| 1. Canada | 23,387 | 23,621 | 22,975 |
| 2. Mexico | 14,343 | 16,638 | 17,334 |
| 3. UK | 3,835 | 3,950 | 3,972 |
| 4. Japan | 3,730 | 3,618 | 3,580 |
| 5. Brazil | 2,060 | 2,205 | 2,264 |
| 6. Germany | 1,916 | 1,955 | 1,969 |
| 7. China | 1,807 | 2,240 | 2,188 |
| 8. France | 1,505 | 1,625 | 1,625 |
| 9. South Korea | 1,360 | 1,442 | 1,450 |
| 10. Australia | 1,305 | 1,277 | 1,276 |
| 11. India | 859 | 936 | 962 |
| 12. Italy | 839 | 948 | 934 |
| 13. Venezuela | 788 | 670 | 616 |
| 14. Colombia | 748 | 875 | 881 |
| 15. Argentina | 686 | 720 | 685 |
| 16. Spain | 620 | 682 | 700 |
| 17. Netherlands | 589 | 619 | 616 |
| 18. Sweden | 477 | 534 | 543 |
| 19. Switzerland | 473 | 506 | 487 |
| 20. Taiwan | 385 | 404 | 413 |
| Overseas Total | 32,028 | 33,629 | 34,419 |
| International Total | 69,768 | 73,877 | 74,729 |
Source: U.S. Department of Commerce, International Trade Administration, U.S. National Travel and Tourism Administration; Secretaria de Turismo—Mexico; Statistics Canada
Where the agency was off—in the case of Venezuela (-8 percent), Argentina (-4.9) and Switzerland (-3.8)—the impact was not that great, except for Canada in which a slightly off-mark projection (-2.7 percent) translated into more than 640,000 arrivals.
But, there were unforeseen factors that help to explain the divergence between forecast and final figures. For Venezuela, a bad situation got worse toward the end of 2014 as airline lift capacity was reduced by major airlines that, in some instances, are still waiting to convert into dollars the Venezuelan currency (bolivares) they hold that was used to pay for billions of dollars worth of travel. Also, out-of-control inflation and a nearly worthless bolivar ruined the opportunity for many Venezuelans to take any international trips during the last third of the year. The outlook for 2015 is not much better than the outcome of 2014—an outlook made even cloudier by the Venezuelan government’s decision to force the U.S. embassy to cut its staff by 80 percent, which will make the review and approval of visa applications a slow and lengthy process. Argentina, too, has been plagued by inflation and currency devaluation so bad that it has had an impact on international travel for the past six months.
In the matter of Canada’s Q4 falloff, the slide of the loonie vs. the dollar was so dramatic in the past 30 months that, toward the end of 2014, short-haul overnight travel to the U.S.—the sort of travel used for overnight shopping trips—fell off precipitously. Instead, there was a spike in short-haul travel from the U.S. to Canada.
Toward the Future: Perhaps the public or private sector will come up with a mechanism that is able to track, in real time, data based on the input of the receptive tour operators who are the point of contact for the tour international tour operators who are buying, assembling and selling USA travel product. Such a mechanism would be a valuable addition to the NTTO information already available. (In the meantime, until that happens, read INBOUND.)
