One would be mightily challenged to find any year since the Great Recession of 2008-2009 in which IPW (June 1-5 in Anaheim, California) is taking place midst such sluggish market conditions as demonstrated, in part, by the following:
At INBOUND, we’ve written and reported on Numbers 1 and 2 above in recent issues. And we’ve followed what US Travel has to say in its TTI. There haven’t been any real surprises of late. However, if one studies the emphases, the tone, on different figures as discussed given by David Huether, senior vice president of research for US Travel, one hears few unqualified high notes.
- A U.S. trade war with China has, by all reliable accounts, helped slow the non-stop growth boom of inbound traffic from the world’s largest tourism source market that has taken place since 2007, when U.S. travel suppliers and DMOs began were allowed to promote leisure travel to the country;
- The largest overseas market from Continental Europe, Germany, is struggling to post positive number this sales season to just about any outbound international destination, including the USA; and
- The latest monthly report of the Travel Trend Index, or TTI—and the comments on it by the chief economist for the U.S. Travel Association, the producer of IPW—strains to produce anything bright and cheery about international inbound tourism.
“The outlook for international inbound travel remains lackluster, suggesting that a further loss of global market share is in the cards for the U.S. in 2019,” he said, but added, “Acting on certain legislative initiatives, such as the long-term reauthorization of Brand USA and the enhancement and expansion of the Visa Waiver Program to include more qualified countries, can help reverse this trend.”
More specifically, the TTI stated, “international inbound travel fell a whopping 5.4 percent year-over-year in March—after edging down just 0.2 percent in February.”
The report suggested that the sharp decline in international inbound travel in March was likely due to the timing of Easter, which fell on April 1 last year and April 21 this year; the holiday has historically been a peak travel time for visitors to the U.S. This resulted in lower levels of inbound travel in March 2019 compared to March 2018.
On a slightly brighter note, the TTI tells us that global economic activity is expected to improve, yet remain soft, in the second half of 2019, supporting predictions that international inbound travel growth will be positive, but slow. (It should be noted that “the dreary international inbound travel forecast” was countered by the strength of domestic travel. Domestic leisure travel registered 3.2 percent growth in March, while the business segment increased by a more tepid 2.0 percent.)
Continued moderation in consumer spending, vacation intentions and business investment is expected to cause both segments of domestic travel to cool in the coming months. The Leading Travel Index (LTI) projects domestic travel as a whole will grow 2.0 percent through September 2019. Domestic business travel is projected to grow 1.6 percent while domestic leisure travel is projected to expand 2.2 percent.
A CTI reading* of 51.0 in March 2019 indicates that travel to or within the U.S. grew 2.0 percent in March 2019 compared to March 2018. LTI predicts travel growth will remain at its current rate through September 2019, a result of moderate growth across all travel segments.
*A Note About Methodology: The Travel Trends Index measures the direction and pace of travel volume to and within the U.S. on a monthly basis. The index includes a Current Travel Index (CTI) and a Leading Travel Index (LTI). Both the CTI and the LTI include subcomponents (domestic, international, leisure and business).”
The TTI is prepared for U.S. Travel by the research firm Oxford Economics. The TTI is based on public and private sector source data which are subject to revision by the source agency. The TTI draws from: advance search and bookings data from ADARA and nSight; airline bookings data from the Airlines Reporting Corporation (ARC); IATA, OAG and other tabulations of international inbound travel to the U.S.; and hotel room demand data from STR.
To read the full report, click here.
(INBOUND is a service of Connect Travel, which will be at booth 2235 at IPW in Anaheim. Stop by and pay us a visit!)