Greater Western Chapter of the Travel & Tourism Research Association U.S. International Tourism Policies April 6 th , 2017
77M 77.5M $246B 8.2M
U.S. ECONOMIC OUTLOOK 2016F 2017F 2018F Unemployment Rate 4.8% 4.6% 4.7% CPI* 1.1% 2.2% 2.0% Real GDP* 1.9% 2.3% 2.3% Source: US Travel Association *Growth
CONSUMER CONFIDENCE ▪ The Conference Board Consumer Confidence Index, which had increased considerably in February, posted another gain in March ▪ Index now stands at 125.6 (1985=100), up from 116.1 in February 2017 ▪ Highest level in more than 16 years ▪ Consumer sentiment (survey of consumers conducted by Thomson Reuters and the University of Michigan) remained effectively unchanged for January 2017 at the cyclical peak levels recorded in December ▪ Index reading 98.1 is down 0, making it only the second-highest sentiment reading in 12 years. ▪ This index is said to be more sensitive to financial markets, while the Conference Board is more sensitive to labor markets Source: US Travel Association
100 120 140 160 20 40 60 80 0 CONSUMER CONFIDENCE Source: US Travel / Conference Board Jan '00 Jul '00 Jan '01 Jul '01 Jan '02 Jul '02 Jan '03 Jul '03 Jan '04 Jul '04 Jan '05 Jul '05 Jan '06 Jul '06 Jan '07 Jul '07 Jan '08 Jul '08 Jan '09 Jul '09 Jan '10 Jul '10 Jan '11 Jul '11 Jan '12 Jul '12 Jan '13 Jul '13 Jan '14 Jul '14 Jan '15 July '15 Jan '16 July '16 Jan '17 125.6
STR/TOURISM ECONOMICS FORECAST - US ▪ Occupancy rate nationally is projected to decline slightly off the peak, largely as a result of supply growth outpacing demand growth ▪ Occupancy rates are projected to drop 0.5% ▪ Demand is projected to grow 1.5% ▪ Supply is projected to grow 2% ▪ Change in overall revenue will be driven by the ability of hoteliers to increase rate. ▪ ADR is projected to increase 2.8% ▪ Overall revenue is projected to increase 4.3% ▪ STR and Tourism Economics have tempered their optimism for 2017, with their forecasts becoming successively less optimistic as 2016 concluded Source: STR Analytics
100 120 140 160 180 200 20 40 60 80 PERCEPTION OF AFFORDABILITY LEISURE: March 2007 = 100 index Source: MMGY TravelHorizons 0 Mar '07 Apr '07 Jun '07 Aug '07 Oct '07 Dec '07 Feb '08 Apr '08 Jul '08 Oct '08 Feb '09 Apr '09 Jul '09 Oct '09 Feb '10 Apr '10 Jul '10 Oct '10 Feb '11 Apr '11 Jul '11 Oct '11 Feb '12 Apr '12 Jul '12 Oct '12 Feb '13 Apr '13 Jul '13 Oct '13 Feb '14 Apr '14 Jul '14 Oct '14 Feb '15 Apr '15 Jul '15 Oct '15 Feb '16 Apr '16 Jul '16 Oct '16 171 Feb '17
100 120 140 20 40 60 80 PERSONAL FINANCES AVAILABLE FOR TRAVEL LEISURE: March 2007 = 100 index Source: MMGY TravelHorizons 0 Mar '07 Apr '07 Jun '07 Aug '07 Oct '07 Dec '07 Jan '08 Apr '08 Jul '08 Oct '08 Feb '09 Apr '09 Jul '09 Oct '09 Feb '10 Apr '10 Jul '10 Oct '10 Feb '11 Apr '11 Jul '11 Oct '11 Feb '12 Apr '12 Jul '12 Oct '12 Feb '13 Apr '13 Jul '13 Oct '13 Feb '14 Apr '14 Jul '14 Oct '14 Feb '15 Apr '15 Jul '15 Oct '15 Feb '16 Apr '16 Jul '16 Oct '16 123 Feb '17
LEISURE: TRAVEL INTENTIONS 80% 70% 63% 60% 50% 40% % of U.S. adults planning to take a leisure trip during the 30% next six months (January 2007 – January 2017) 20% 10% 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: MMGY TravelHorizons Note: January = Q1 data (Jan – Mar)
INTERNATIONAL TRAVEL ▪ Demand for international tourism remained robust in 2016 despite challenges ▪ International arrivals grew by 3.9% to reach a total of 1,235 million ▪ 46 million more overnight visitors travelled internationally last year over 2015 ▪ 2016 was 7 th consecutive year of sustained growth ▪ A comparable sequence of uninterrupted solid growth has not been recorded since late 1960s ▪ UNWTO projects international arrivals to grow 3% to 4% in 2017 ▪ Europe expected to grow at 2% - 3% ▪ Asia and Pacific at 5% - 6% ▪ Americas at 4% - 5% ▪ Middle East at 2% - 5% (given higher volatility in the region) Source: travelindustrywire.com UNWTO World Tourism Barometer
FORECAST OF INBOUND INTERNATIONAL TRAVELERS (US) Rank Order % Change % Change 2016F Origin Country 2016F 16/15 2017F 17/16 Total 76,783 -1% 78,598 2% 1 Mexico 19,150 4% 19,725 3% 2 Canada 19,048 -8% 18,858 -1% 3 United Kingdom 4,901 0% 4,852 -1% 4 Japan 3,721 -1% 3,721 0% 5 China 3,006 16% 3,457 15% 6 Germany 2,204 -3% 2,226 1% 7 South Korea 1,941 10% 2,097 8% 8 Brazil 1,842 -17% 1,731 -6% 9 France 1,735 -1% 1,752 1% 10 Australia 1,479 2% 1,523 3% 11 India 1,250 11% 1,362 9% 12 Italy 1,019 -2% 1,008 -1% 13 Argentina 903 14% 975 8% 14 Colombia 845 -1% 862 2% 15 Spain 775 3% 791 2% Estimates in thousands Source: U.S. Department of Commerce, International Trade Administration, National Travel and Tourism Office; Statistics Canada; Banco de Mexico
SUMMARY FORECAST FROM US TRAVEL ASSOCIATION (% GROWTH) 2016 2017 2018 Domestic Leisure 1.7% 1.6% 1.6% Domestic Business -0.6% 0.5% 0.8% International Visitors -0.9% 2.4% 4.1% Domestic Spending 2.5% 2.7% 3.5% International Spending -1.5% 3.3% 5.4% Source: US Travel Association
WELCOME AND FACILITATE INTERNATIONAL TRAVEL
ENSURE FUTURE GROWTH: MODERNIZE AMERICA’S AIR TRAVEL SYSTEM
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