Trends & Research

NTTO Data Show U.S. Gateways Losing Share

June 23, 2020 by Tom Berrigan

Seven of Top Ten U.S. City Destinations Lost Share from Overseas Markets Last Year vs. 2018: With the COVID-19-driven global pandemic having utterly destroyed the chance for meaningful comparison and analysis of what happens this year versus 2019, one has to look long and hard at the numbers recently posted by the U.S. Department of Commerce’s National Travel and Tourism Office (NTTO) and wonder what they truly mean for the U.S. inbound tour and travel industry.

What is apparent at first blush is that New York, Los Angeles, San Francisco, Las Vegas, Washington, D.C., Boston and Chicago lost market share last year against 2018.

Does this suggest a trend? One cannot say without having reliable survey information that would cover a three-year window. But, because of the cratering of the inbound tour and travel industry this year, we will have to wait till 2022 to do some serious comparison and analysis.

In the interim, one possibility worth contemplating is that efforts of the past several years by second-tier destinations to persuade overseas visitors to the United States to try new and different places have realized some degree of success. Or, it might mean that Brand USA’s “Beyond the Gateways” promotion of the past several years has begun to yield some results.

In reviewing the data below, perhaps one would do well to pay heed to one pollster who said a generation ago, “If you look at the data long enough, they begin to talk to you.” So, you are welcome to look at the numbers below, and wait to find out if you hear voices.

Japan Securely No. 2 Overseas Source Market

June 9, 2020 by Tom Berrigan

Tour and travel industry analysts who cover Japan have essentially written off the country as any kind of a meaningful or active market for 2020. While other major overseas source markets for inbound travel to the United State have a similar outlook, due to the impact of the coronavirus-driven global pandemic, the hurt is especially unsettling to the industry in Japan.

A major reason for the disappointment lay in the fact that the travel trade in Japan—it is the second largest overseas source market for inbound tourism, behind only the UK—had been looking forward to a banner year, with tour operators and travel agencies anticipating healthy levels of both outbound and inbound travel. Driving the optimism was the expected boost in overall travel that was expected to come with the staging of the quadrennial Olympic Games, which were scheduled to take place from July 24 to August 9 this year in Tokyo. Last March, however, as the coronavirus spread throughout the world, the games were postponed for a year. They are now scheduled to take place July 23-August 8, 2021 in Tokyo.

The coronavirus disruption in Japan and in other key source markets has been total, with year-on-year arrivals figures dropping by nearly 100 percent in some cases.

In the wake of such developments, little notice was given or received when the U.S. National Travel and Tourism Office (NTTO) recently posted market profiles for top-producing countries, including Japan. At first glance, little seems to have changed in the outlook for visits to the United States by Japanese travelers.

Much of the activity recorded in the NTTO profile for Japan shows that it has been a steady and reliable source of visitor traffic for the past decade and is expected to continue to be so through 2024, according to NTTO’s long-term forecast, which was published last October. Underscoring the importance of the NTTO market profile for Japan is the fact that another major reliable source of analysis for the travel trade in Japan—the quarterly report of the Japan Association of Travel Agents—has not been issued a report since last December.

So, the NTTO market profile becomes especially significant and useful, since the report, which is for 2019 becomes, in effect, the only benchmark analysis of Japanese travel and travelers to the United States.

In it, the reader will find reliable assurances regarding the favorite U.S. destinations of Japanese travelers: Honolulu, Los Angeles, New York and San Francisco. One will also see that shopping and sightseeing comprise the favorite activities of Japanese travelers. As well, the market profile shows that a majority of Japanese travelers to the U.S. rely on travel agents—both online and offline.

Indeed, there are differences in some of the material listed below, which INBOUND has fashioned into tables. These differences are subtle, but U.S. travel suppliers will probably be able to detect them and, in doing so, make it worth the effort to do business with, for what has been—and likely will be for at least several years out—the second largest overseas source market for the U.S. inbound tourism industry.

Multiple responses, % of profiled inbound

Notes on NTTO material: Only country and world region destinations having a sample size consistently of 100 or more are displayed. Visitation incidence was rounded to two decimal places in NTTO source files beginning in 2014 to reduce artificial ‘jumpiness’ in the data caused by rounding to only one decimal places, especially for destinations having incidence of less than two percentage points. Due to quarterly data weighting by country and port of entry, some unreported destinations may have a higher proportion of total than those reported.

For additional information, visit https://travel.trade.gov/

Disruption Seen in 2019 Overseas Arrivals to States

June 9, 2020 by Tom Berrigan

For those of us not directly involved in the scrappy give-and-take of destination marketing for U.S. states and territories, the significance of a shift of 2.7 percent in total arrivals from overseas source markets for inbound travel and tourism from one year to the next might not be worth even a mild sneeze. But for those who are in the midst of the fight, it means things like the state of New York lost that percentage of visits from these source markets, as the movement of traffic meant the loss of 286,000 visitors 2019 vs. 2018—just about as many overseas visitors as the state of Minnesota received for the whole year.

Because of facts such as these, the state officials who are seeking to protect or increase their appropriations—along with the consultants and private sector marketers who serve state clients—are involved in a pitched battle right now. The reason is that July 1st marks the beginning of the new Fiscal Year for most states. Competition for limited state funding is particularly fierce this year, as program cuts are then norm for state budgets reeling from the impact of the coronavirus-driven global pandemic and its impact on state economies.

Recently posted by the U.S. National Travel and Tourism Office (NTTO), the key figures for overseas visitors to U.S. States reveal the statistical ticks and turbulence in the key numbers for U.S. states and territories. Not all states are included, as NTTO included only those states in which the survey produced at least 100 respondents. (Remember, these data are generated by a survey, not a total count or census.)

The New Benchmark Year for Inbound–2019

June 8, 2020 by Tom Berrigan

Borders are closed and international travel to the USA is down. “I don’t think anyone thought it would be possible to halt international travel to virtually zero!” exclaimed Scott Johnson, president and CEO of Travel Market Insights (TMI), in the firm’s latest monthly update of its research newsletter, adding, “The decline in April 2020 over April 2019 visits is the largest decline in history! The global response to the COVID-19 virus has resulted in an unprecedented impact on international travel to the United States.”

With the above as preface, Johnson asserted that, going forward, 2019 will be the new benchmark year in tracking and reporting the rebound, recovery, and forecast for international travel to U.S. destinations.

A Recap: Johnson noted that the decline in overseas visitor traffic to the U.S. in April 2020 was the largest decline, year-over-year, in history. All world regions were down nearly 100 percent in April, he pointed out, adding that, for the year, through April, visits to the U.S. have been cut in half (down -48.3 percent). Western Europe declined the strongest (down -51 percent) and visits from Eastern Europe declined the least (down -41.8 percent).

(For a country-by-country account of top overseas arrivals to the U.S. for the month of April, visit https://www.inboundreport.com/2020/05/26/overseas-arrivals-down-99-6-last-month/)

In his brief update narrative, Johnson added the following:

—2019 will be the new benchmark, pre-coronavirus. The Canada drive market is widely accepted as the first major market segment to rebound. The Canadian drive market to the U.S. is larger than the top three overseas markets combined.

—The Mexico drive market will likely start to rebound after the border is open as well, although fewer states will benefit compared to Canada.

—There will likely be fewer direct air routes and more hub and spoke routes.

—There will be casualties in the supply chain.

—Vacation and visiting friends and family in “familiar” destinations will kick off the rebound, with business and education following.

For more info, contact scott@travelmi.com.

The China Profile—Before COVID-19

May 26, 2020 by Tom Berrigan

In its recent postings of country market profiles, the U.S. National Travel and Tourism Office (NTTO) tells us that, even absent a COVID-19 global pandemic, the once-overheated Chinese Market was about to/certain to, stay cold for another year. NTTO’s most recent long term forecast for key international markets forecast projected a total of 2,871 visits from China to the United States. Statistically, this is about the same as what it was for 2019 (2,830 visits).

Beyond the impact of the global pandemic on travel between the U.S. and China, analysts and observers were already advising clients in the U.S. that other obstacles stood in the way of a growth, such as the number of rejections of applications to travel to the United States and the on-again off-again “trade war” between China and the U.S.

In the Meantime: If one can get beyond the type of mental bloc that the obstacles above present, a cursory review of some of the key data in the China Market Profile reveals such points as these:

—The share of the overall number of Chinese visiting New York, Los Angeles and San Francisco declined from 77.7 percent of the overall total in 2015 to 60.9 percent last year.

—About two out of every five Chinese travelers to the USA like to visit U.S. National Parks.

—For nearly two-thirds (65 percent) of Chinese travelers, the purpose of their trip is to take a vacation or holiday, or to visit friends and relatives.

Some other highlights of NTTO’s China Market Profile are in the tables below.