Not since the first full year of the Great Recession of 2008-2009 has the United States a decline in overall international visitor arrivals. But, on the basis of two percent year-on-year decline in arrivals, was 2016 a lost year for growing the international market?
To answer the query, first, here are the raw, preliminary numbers released late last week by the U.S. Department of Commerce’s National Travel and Tourism Office (NTTO) as the agency struggles with a system of collecting and compiling raw data by another federal department that has caused it to fall about six months behind the schedule it once maintained of providing arrivals figures in a window of two-to-three months after the passing of a calendar month.
Putting the Numbers in Context, or—was 2016 really that Bad? The answer is “No.” At first blush, the numbers point to a year in which the USA experienced its first annual decline in international arrivals since 2009, and only the second year since the trough year of 2003 following the terrorist attacks on the U.S. on Sept. 11, 2001. Overall international visitor traffic to the U.S. dropped 2.4 percent from 2015.
Upon a closer look, however, the trend line evens out. Here are several reasons why:
—First, 2015 was a record year; arrivals for 2016 were still greater (by just 0.8 percent) than they were in 2014.
—Nearly three-quarters (74 percent) of the decline from 2015 to 2016 was due to a drop-off of 1.4 million visitors from Canada alone.
—As for a cause of the decline in long-haul overseas arrivals (this excludes visits from Canada and Mexico), it appears that 2015 numbers were strong because—despite the decline in the value of both the euro and the British pound vs. the U.S. dollar, tour operators were able to lock in prices before the slide of the euro and pound began in late 2014. In this context, 2016 was a shakeout year—the first full calendar year in which a strong dollar made a travel package to the U.S. costlier.
What about this year? In its latest Travel Trends Index (TTI), the U.S. Travel Association sounds almost defiant in its positive tone: “International travel continued to defy the expectations of many in May 2017, according to the U.S. Travel Association’s latest Travel Trends Index (TTI), posting its 13th straight month of year-over-year growth. International travel to the U.S. grew 5.2 percent in May versus the same month in 2016.”
It should be noted that US Travel was trying to make sure people knew that there was no real “Trump Slump” in travel to the USA from abroad. It made a point note that “the latest TTI even revised upward (to 6.6 percent) its positive international travel figure from April—the first month of data to begin fully reflecting any effects of President Trump’s initial executive order on immigration issued January 27.”
(US Travel has been able to provide the closest thing to “real time” analysis of inbound travel trends and shifts, thanks to a data base that includes input on advance search and bookings data from ADARA and nSight; passenger enplanement data from Airlines for America (A4A); airline bookings data from the Airlines Reporting Corporation (ARC); and hotel room demand data from STR.)
If the industry’s business turnover is as healthy as the TTI seems to suggest, 2017 is certain to be an improvement on 2016 and could also be indicative of consumers adjusting to increased prices by reducing their spending levels by reducing length of stay and class of hotel. We’ll all have a better idea once data on the key travel months of July and August are recorded.
US Travel, in assaying the performance of the overall travel market—both domestic and inbound international—said “travel will likely grow by about 1.8 percent through November 2017, and domestic travel growth will lead the U.S. travel market into the end of the year. However, while growth in forward-looking domestic bookings and searches remains positive, their pace of growth is markedly slower than this time last year.” The graph below illustrates NTTO’s most up-to-date long term outlook for inbound travel.