Forecast for International Travel to the United States Presented by: JULIE HEIZER National Travel and Tourism Office International Trade Administration U.S. Department of Commerce February 2014 1
U.S. Department of Commerce Agencies National Oceanic & Atmospheric Admin (NOAA) International Trade Administration (ITA) >> National Travel and Tourism Office (NTTO) U.S. Census Bureau Bureau Economic Analysis (BEA) Patent & Trademarks (PTO) National Institute of Standards & Technology NIST 2
Impact of Travel on U.S. Economy (2012) Total Tourism Sales: Direct tourism sales: Indirect tourism sales: $1.46 trillion $865.4 billion $591.2 billion Total Tourism Employment: 7.8 million Direct employment: Indirect tourism employment: 5.6 million 2.2 million Tourism Percentage of GDP: 2.8% Source: U.S. Department of Commerce: Office of Travel and Tourism Industries & Bureau of Economic Analysis 3
U.S. Travel & Tourism Employment (2012) Travel and tourism industries support 7.8 million American jobs 71% of all travel and tourism employment is accounted for by these four sectors: Food Services & Drinking Places 2.2 million employees (28%) Traveler Accommodations 1.8 million employees (23%) Air Transportation Services 781,000 employees (10%) Shopping (Retail) 750,000 employees (10%) Source: U.S. Department of Commerce: Office of Travel and Tourism Industries & Bureau of Economic Analysis 4
Why is International Travel Important to the United States? International travel & tourism accounts for 4% of total U.S. travelers, but 17% of, where it counts more, spending, jobs, wages and travel taxes. Federal tax accounts for 50% of all federal, state, and local taxes generated by the travel and tourism industry. 20% 15% 17% 10% 5% 0% 4% Total Travelers Total Spending, Employment, Payroll, Taxes 5
Travel & Tourism As a Leading Export (2012) Travel & Tourism exports $165.6 billion Percentage of total exports 7% Percentage of service exports 25% Travel trade surplus $47.5 billion Employment from tourism exports 1.2 million 6
U.S. Visitors & Spending (1996-2012) Visitor spending (receipts) closely mirrors visitor volume. Spending $165.6 billion in 2012, while visitor volume was 66.7 million. millions of visitors $billions in spending Spending Visitors Sources: Department of Commerce, National Travel & Tourism Office; Department of Commerce, Bureau of Economic Analysis; Statistics Canada; Banco de Mexico. 7
International Travelers to the U.S. (2000-2012) millions of visitors 51.24 46.93 43.58 41.22 46.09 49.21 50.98 55.98 57.94 54.96 59.80 62.33 66.66 Source: U.S. Department of Commerce, ITA, Office of Travel and Tourism Industries; Banco de Mexico/ Secretaria de Turismo (Mexico); Statistics Canada Note: All arrivals are for one or more nights * Overseas includes all countries except Canada and Mexico. 8
Overseas Visitors to Go West States (Main Destinations) 29.8m 6.6m 23% 9
Go West Destinations from Overseas Markets (2012) Destination Main (main + secondary) Ratio Go West Total 6,577,300 12,916,400 2.0 Alaska 29,800 89,300 3.0 Arizona 119,000 803,600 6.8 California 3,898,700 6,011,700 1.5 Colorado 238,000 446,400 1.9 Idaho 29,800 29,800 1.0 Montana 29,800 29,800 1.0 Nevada 744,000 2,767,800 3.7 New Mexico 29,800 89,300 3.0 Oregon 89,300 208,300 2.3 South Dakota 29,800 29,800 1.0 Texas 1,011,900 1,339,200 1.3 Utah 89,300 476,200 5.3 Washington 208,300 446,400 2.1 Wyoming 29,800 148,800 5.0 10
Go West Destinations from International Regions Destination Overseas ( 12) Canada ( 11) Mexico-Air Go West Total 12,916,400 9,016,000 1,328,000 Alaska 89,300 128,000 Arizona* 803,600 704,000 42,000 California* 6,011,700 1,476,000 460,000 Colorado* 446,400 171,000 Idaho 29,800 297,000 Montana 29,800 888,000 Nevada* 2,767,800 1,481,000 290,000 New Mexico 89,300 106,000 Oregon 208,300 334,000 South Dakota 29,800 127,000 Texas* 1,339,200 419,000 453,000 Utah* 476,200 192,000 Washington* 446,400 2,587,000 Wyoming 148,800 106,000 11
Go West Destinations from Overseas Regions (2012) Destination Europe Asia So. Am * Go West Total 5,890,000 3,790,000 1,696,000 Alaska 25,000 33,000 na Arizona 537,000 166,000 26,000 California 2,421,000 2,169,000 366,000 Colorado 237,000 75,000 44,000 Idaho 12,000 17,000 na Montana 25,000 8,000 na Nevada 1,335,000 706,000 238,000 New Mexico 62,000 8,000 na Oregon 75,000 66,000 22,000 South Dakota 25,000 17,000 na Texas 537,000 258,000 247,000 Utah 337,000 66,000 22,000 Washington 175,000 158,000 31,000 Wyoming 87,000 41,000 0 12
Who were the top traveler volume game changers in 2012? (among the top 40 origin markets) 2012 2012 Volume rank Country of Residence Arrivals Change % Change 1 Canada 22,697,000 1,360,000 6% 2 Mexico 14,119,000 518,000 4% 4 Japan 3,698,073 448,504 14% 7 China 1,474,408 385,003 35% 6 Brazil 1,791,103 282,824 19% 13 Venezuela 674,754 113,674 20% 9 Korea 1,251,432 106,216 9% 16 Colombia 602,338 105,524 21% 14 Argentina 614,504 102,246 20% 10 Australia 1,122,180 84,328 8% 12 India 724,433 60,968 9% 5 Germany 1,875,952 52,155 3% 35 Saudi Arabia 182,225 49,305 37% 26 Russia 259,699 37,811 17% 31 Peru 190,205 18,335 11% 32 Chile 187,603 16,144 9% 27 Dominican Republic 244,417 14,229 6% 24 Norway 262,822 13,655 5% 40 Trinidad and Tobago 144,535 11,604 9% 36 Costa Rica 179,755 11,033 7% 13
Who contributed to the largest declines in traveler volume in 2012? (among the top 40 origin markets) 2012 2012 Volume rank Country of Residence Arrivals Change % Change 15 Spain 607,273-92,910-13% 3 United Kingdom 3,763,381-71,919-2% 11 Italy 831,343-60,228-7% 8 France 1,455,720-48,462-3% 20 Ireland 331,850-15,029-4% 17 Netherlands 591,746-9,267-2% 33 New Zealand 185,706-3,268-2% 23 Denmark 271,363-3,057-1% 29 Ecuador 209,828-1,082-1% 22 Taiwan Province of China 290,163-150 0% 18 Switzerland 476,637 135 0% 25 Belgium 260,267 777 0% 21 Israel 303,629 956 0% 28 Bahamas, the 224,997 2,256 1% 39 Singapore 162,077 2,775 2% 19 Sweden 442,013 3,041 1% 34 Austria 183,276 3,794 2% 38 Jamaica 166,984 7,749 5% 37 Philippines 176,218 9,389 6% 30 Guatemala 194,373 10,702 6% 14
Global Travel Forecasts 15
United Nations World Tourism Organization (UNWTO Spring 2012) Forecasts for world and world regions only. Includes INbound and OUTbound forecasts! Methodology based on changes in GDP and transport costs. 1) assumes similar GDP growth trends as in the past; 2) assumes air transport costs will cease declining in real terms: 3) land transport costs to increase faster than air. 16
UNWTO 2030 Forecast Arrivals growth by year Arrivals > travelers, reflecting multiple counting across multiple country visits on a trip. Growth rates decelerate through 2030 reflecting 1) an ever-growing base, 2) assumption of increasing transport costs. = 43 million new travelers per year, on average to reach 1.8 billion arrivals by 2030. 1.4 billion if transport costs and GDP assumptions are worse. 17
UNWTO 2030 Forecast Destination Growth...Asia / Pacific and Europe. Growth TO these regions mostly reflects... 18
UNWTO 2030 Forecast Outbound Growth...growth FROM these regions, due to 1) population increases, 2) living standard increases, and 3) high intra-regional travel incidence. Europe??? IMF forecasts population growth, GDP growth, continued high intraregional travel. 19
UNWTO 2030 Forecast What Does It Mean? International travel has a bright future, even under the darkest assumptions. Nearly all non-asian countries will continue to lose share of global arrivals... 20
World Travel & Tourism Council (WTTC) As the private sector industry representative, focuses on the bottom line of travel GDP and jobs. By 2023 58% increase in travel real GDP value, 24% in employment, and 24 million net increase in travel employment. Increases in GDP and employment shares of total world GDP and employment. Thus, importance of travel as an industry continues to grow. 21
Pacific Asia Travel Association (PATA August 2013) Forecasts for 40 PATA countries released in Aug. Includes INbound and OUTbound forecasts! PATA forecast for USA 2013-2017 AAGR All 200 markets 1.4% China 17.6% Brazil 4.7% Australia 3.2% Mexico 1.0% Germany 0.7% Canada 0.0% U.K. -0.2% Japan -0.2% 22
U.S. Travel Association s Travel Forecast (July 2013) 23
The Current NTTO International Travel Forecast 24
The NTTO Methodology Jellybeans-in-a-Jar Approach 25
For each of 40 countries Total outbound: level, change, record Volume to USA: level, change, record USA share Outbound spending: level, change, record Spending in USA: level, change, record USA share Currency exchange rate Real GDP change GDP/capita Inflation rate Unemployment rate Population Government Debt Monthly volume trends Brand USA marketing effort Export % of GDP Air seat capacity trends And more 26
For each of 40 countries Qualitative review of positives and negatives from numerous sources. 27
For each of 40 countries Graphical review of relationships among variables 28
btw here s the relationship between change in real GDP and travel to the USA for a current year or next year. 29
Forecast for International Travel to the United States 30
Forecasting Sources Tourism UN WTO WTTC PATA IMF DOC/NTTO Aviation IATA FAA Aircraft Manufacturers Capacity Analysts 31
International Visitors to the U.S. and Projections (2001-2018) Arrivals in Millions Sources: U.S. Department of Commerce, ITA, National Travel & Tourism Office; Secretaria de Turismo (Mexico); Statistics Canada -- November 2013 forecast 32
Rank Visitor % % % Total % Order Origin Actual Forecast Forecast Forecast Change Change Change Change Change CAGR 2012 Country 2012 2013 2014 2018 12/11 13/12 14/13 18/12 18/12 18/12 Grand Total 66,740 68,994 71,778 83,894 6.4% 3.4% 4.0% 17,154 25.7% 3.9% Overseas 29,761 31,477 33,135 40,501 6.7% 5.8% 5.3% 10,740 36.1% 5.3% 1 Canada 22,697 23,378 24,079 27,630 6.4% 3% 3% 4,933 21.7% 3.3% 2 Mexico 14,282 14,139 14,564 15,763 5.9% -1% 3% 1,480 10.4% 1.7% 3 United Kingdom 3,763 3,726 3,763 4,276-1.9% -1% 1% 513 13.6% 2.2% 4 Japan 3,698 3,772 3,847 4,043 13.8% 2% 2% 345 9.3% 1.5% 5 Germany 1,876 1,895 1,970 2,051 2.9% 1% 4% 175 9.3% 1.5% 6 Brazil 1,791 2,096 2,242 3,049 18.8% 17% 7% 1,258 70.2% 9.3% 7 China 1,474 1,858 2,304 4,697 35.3% 26% 24% 3,223 218.6% 21.3% 8 France 1,456 1,441 1,513 1,654-3.2% -1% 5% 198 13.6% 2.2% 9 Korea 1,251 1,327 1,406 1,792 9.3% 6% 6% 540 43.2% 6.2% 10 Australia 1,122 1,190 1,249 1,489 8.1% 6% 5% 367 32.7% 4.8% 11 Italy 831 848 839 900-6.8% 2% -1% 68 8.2% 1.3% 12 India 724 797 861 1,097 9.2% 10% 8% 372 51.4% 7.2% 13 Venezuela 675 823 864 1,051 20.3% 22% 5% 376 55.7% 7.7% 14 Argentina 615 737 811 1,093 20.0% 20% 10% 479 77.9% 10.1% 15 Spain 607 607 601 644-13.3% 0% -1% 37 6.1% 1.0% 16 Colombia 602 735 801 1,002 21.2% 22% 9% 399 66.3% 8.8% 17 Netherlands 592 586 586 634-1.5% -1% 0% 42 7.2% 1.2% 18 Switzerland 477 486 496 537 0.0% 2% 2% 60 12.6% 2.0% 19 Sweden 442 446 464 517 0.7% 1% 4% 75 17.1% 2.7% 20 Ireland 332 348 362 432-4.3% 5% 4% 100 30.2% 4.5%
Key Points from the Forecast 2012 performance exceeded expectations (Can/Mex/O-S); through June 2013 we are within 2% points of the annual forecast. Of the top 20, 14 markets are performing slightly better than forecasted 17 of the top 20 are all within 1-3 percentage points of our annual forecast India, Colombia, & Venezuela are the markets performing 4-8% better than forecasted The origin country rankings continue to shift, by 2018. China jumped up 4 slots to top overseas market Korea, India, Argentina, and Colombia will move up in the rankings Outside the top 20, The Russian Federation and Saudi Arabia are rising fast. Fastest growers are China and South America (Argentina, Brazil, Colombia, Venezuela) But, largest contributors to growth in travelers are Canada, China, Mexico, Brazil, and U.K. These five are 2/3 of volume growth. 34
So, how are we doing? 35
International Travel s Impact on Lodging Metrics +3.0% Smith Travel Research 2012 change in U.S. hotel/motel room demand 20.5% +12% U.S. Dept. of Commerce/BEA industry demand tables Estimate for share of lodging industry demand by international travelers. NTTO Survey of International Air Travelers Combined change in international traveler room demand [1) change in travelers; 2) change in hotel/motel use; 3) change in hotel / motel stay length] +2.4% = 20.5% x 12%. 2.4% / 3.0% = 80%. 1.5 ppr? = 80% / 1.5ppr, or approximately 50% of growth 36
Top Destinations visited by Overseas Travelers to the U.S. in 2011-2012 2011 2012 Destination Destination Survey of International Estimated Estimated Percent Percent Air Travelers Visitation Visitation Change Change U.S. Destinations Visited (000) (000) 2010-2011 2011-2012 (I-94 Overseas Arrivals) 27,883 29,761 6% 7% New York 9,508 9,315 10% -2% New York City-WP-Wayne 9,285 9,107 10% -2% Florida 5,688 6,577-2% 16% California 6,134 6,012 9% -2% Miami 2,956 3,482-5% 18% Los Angeles-Long Beach 3,653 3,393 9% -7% Orlando 2,788 3,184 3% 14% Hawaiian Islands 2,286 2,827 7% 24% San Francisco 2,872 2,798 9% -3% Nevada 2,872 2,768 15% -4% Las Vegas 2,788 2,708 15% -3% Oahu/Honolulu 1,785 2,232 9% 25% Washington, DC 1,812 1,756 4% -3% Illinois 1,255 1,399 6% 11% Guam 1,227 1,399-7% 14% 37
Volume & Change in First Time Travel to the U.S. Between 2011 & 2012 for Top Destinations 2011 2012 1st-Time 1st-Time 1st time 1st time TABLE 24 - Q14a. U.S. Visitor Visitor % change % change Destinations Visited (1) (%) (000) (000) 11/10 12/11 Total Overseas First Time Visitors 7,752 6,905 19% -11% New York 3,496 2,776 15% -21% New York City 3,434 2,721 14% -21% California 1,954 1,609 23% -18% Florida 1,357 1,250 25% -8% Los Angeles 1,318 1,084 25% -18% Nevada 1,140 981 29% -14% Las Vegas 1,124 960 29% -15% San Francisco 1,000 822 15% -18% Hawaiian Islands 736 801 113% 9% Orlando 829 766 31% -8% Miami 713 635 20% -11% Oahu/Honolulu 574 601 110% 5% Guam 504 573-8% 14% DC Metro Area 682 511 25% -25% Massachusetts 364 290 30% -20% 38
Volume & Change for Repeat Visitors to the U.S. in 2011 & 2012 for Top Destinations 2011 2012 Repeat Repeat TABLE 24 - Q14a. U.S. Visitor Visitor % change % change Destinations Visited (1) (%) (000) (000) 11/10 12/11 Total Overseas Repeat Visitors 20,132 22,856 1% 14% New York 6,040 6,445 8% 7% New York City 5,899 6,308 7% 7% Florida 4,228 5,371-11% 27% California 4,389 4,503 3% 3% Miami 2,235 2,857-10% 28% Orlando 1,892 2,423-10% 28% Los Angeles 2,396 2,331-1% -3% San Francisco 1,953 2,057 2% 5% Hawaiian Islands 1,389 1,943-11% 40% Nevada 1,812 1,920 9% 6% Las Vegas 1,751 1,851 9% 6% Oahu/Honolulu 1,148 1,577-11% 37% DC Metro Area 1,188 1,280 1% 8% Illinois 966 1,189 1% 23% Texas 1,027 1,189 18% 16% 39
Volume & Change for Vacation Travelers to the U.S. in 2011 & 2012 for Top Destinations 2011 2012 Leisure Leisure TABLE 24 - Q14a. U.S. (VAC.) (VAC.) % change % change Destinations Visited (1) (%) (000) (000) 11/10 12/11 TOTAL Overseas Leisure Travelers 18 849 19 970 5% 6% New York 7,087 6,850 9% -3% New York City 6,993 6,750 9% -3% Florida 4,486 5,332-1% 19% California 4,053 3,754 9% -7% Orlando 2,469 2,916 1% 18% Miami 2,281 2,716-2% 19% Hawaiian Islands 2,055 2,496 9% 21% Los Angeles 2,677 2,376 9% -11% Nevada 2,450 2,317 12% -5% Las Vegas 2,394 2,257 11% -6% San Francisco 2,130 2,057 11% -3% Oahu/Honolulu 1,640 2,017 9% 23% Guam 1,169 1,258-3% 8% DC Metro Area 1,282 1,158 10% -10% Massachusetts 886 859 8% -3% 40
Volume & Change for Business Travelers to the U.S. in 2011 and 2012 for Top Destinations 2011 2012 TABLE 24 - Q14a. U.S. Business Business % change % change Destinations Visited (1) (%) (000) (000) 11/10 12/11 All Overseas Business Travelers 5,521 4,672 4% -15% New York 1,645 1,173 12% -29% California 1,435 1,173 4% -18% New York City 1,573 1,135 11% -28% Florida 690 743-21% 8% Los Angeles 646 528-1% -18% Miami 431 505-25% 17% Texas 458 420 6% -8% San Francisco 552 406 0% -26% Illinois 447 374 0% -16% Chicago 420 355-3% -15% Nevada 337 238 24% -29% DC Metro Area 359 234-8% -35% Houston 243 234 23% -4% Pennsylvania 265 224 4% -15% Las Vegas 320 224 25% -30% 41
Key Points Today Travel and tourism industry to remain a dominant and growing factor in the global economy, often a leader in economic output and employment growth even under lessthan-rosy assumptions. The UNWTO expects traveler volume growth to average 3.3% per year through 2030. Asia will lead in both volume from and to a region; non-asia global market shares continue to decline. Traveler volume growth to the USA to average 3.9% from 2012 through 2018. Volume to grow from 67 million in 2012 to 84 million by 2018. Growth rates led by China, Argentina, Brazil, Columbia, and Venezuela. Growth volume led by Canada, China, Mexico, Brazil, and the United Kingdom. These five countries will account for two-thirds of all visitor volume growth. Within the U.S. the traveler characteristics of our visitors is changing and destinations and travel businesses need to track these changes and adjust their approach to the different countries of interest to them to stay ahead of these changes. International travel to the USA continues to be the driving force for the growth in the U.S. travel industry; such as recent growth in hotel room demand would have been perhaps half as much in 2012 without international travel. Likely the same for 2013. 42
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Thank You! Questions? JULIE HEIZER National Travel and Tourism Office International Trade Administration U.S. Department of Commerce Phone: 202-482-4904 Julie.heizer@trade.gov http://travel.trade.gov 44