Greater Western Chapter of the Travel & Tourism Research - - PowerPoint PPT Presentation

Greater Western Chapter of the Travel & Tourism Research Association

U.S. International Tourism Policies

April 6th, 2017

77.5M $246B

77M 8.2M

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%

U.S. ECONOMIC OUTLOOK

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

CONSUMER CONFIDENCE

Source: US Travel / Conference Board

20 40 60 80 100 120 140 160

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

LEISURE: PERCEPTION OF AFFORDABILITY

Source: MMGY TravelHorizons March 2007 = 100 index

20 40 60 80 100 120 140 160 180 200

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 Feb '17 171

LEISURE: PERSONAL FINANCES AVAILABLE FOR TRAVEL

Source: MMGY TravelHorizons March 2007 = 100 index

20 40 60 80 100 120 140

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 Feb '17 123

LEISURE: TRAVEL INTENTIONS

0% 10% 20% 30% 40% 50% 60% 70% 80% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

% of U.S. adults planning to take a leisure trip during the next six months (January 2007 – January 2017)

Source: MMGY TravelHorizons Note: January = Q1 data (Jan – Mar)

63%

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 7th 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)

Estimates in thousands Source: U.S. Department of Commerce, International Trade Administration, National Travel and Tourism Office; Statistics Canada; Banco de Mexico

Rank Order 2016F Origin Country 2016F % Change 16/15 2017F % Change 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%

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