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U.S. Travel Trends Index Revised, international visitation declines

US passport controlThe latest U.S. Travel Trends Index (TTI) updates earlier numbers with newly available data, and finds that international visitation—initially found to have grown consistently this year—actually contracted in four of the seven months for which data is so far available.

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 declines were steepest in February (6.8 percent) and March (8.2 percent). U.S. Travel economists say the slight uptick in April is likely due to the travel-heavy Easter holiday falling in that month this year.

CTI reading of 50.9 in July 2017 shows that travel to or within the U.S. grew 1.8% in July 2017, compared to July 2016. Revised estimates based on newly available data now verify earlier LTI projections of weakening international travel demand. This decline was offset by incremental growth in domestic travel demand.

Overall travel volume (person trips to or within the United States involving a hotel stay or air travel) grew at a slower year-over-year rate in July 2017 than in June 2017, marking a second consecutive month of slowing growth. Domestic travel expanded in July, albeit at a slower rate than in June, supported by solid leisure travel. International inbound arrivals declined slightly in July, following a more drastic drop charted by revised data for Q1 of 2017.

Domestic leisure once again led all segments of the U.S. travel economy, as domestic business travel weakened in July. Looking ahead, a slight slowing in vacation intentions and forward-looking bookings point to positive, yet modest domestic leisure travel growth in the coming months. While forward-looking bookings and searches remain positive, the pace of growth is markedly slower from this time last year.

International inbound travel to the United States declined once again in July 2017. The previously reported April rebound (which can likely be attributed to the timing of Easter this year versus last year) coupled with the slight uptick in May should be interpreted with caution, as the overall trend for the year remains negative.

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Domestic travel will likely grow an average of 1.6% year-over-year through January of 2018, spurred by firming business investment and, on the leisure side, healthy consumer spending. However, the frequent political turmoil surrounding President Trump puts elements of the president’s pro-growth agenda at risk, and while domestic travel indicators remain positive, failure of the Trump administration to deliver on campaign pledges of fiscal stimulus, tax reform, and reduced regulation has the potential to undermine confidence from businesses and consumers alike. Despite a projected decline in international inbound travel, total U.S. travel volume is expected to grow by an average of 1.2% year-over-year through January of 2018, fueled by domestic travel.

Adam Sacks, President of Oxford’s Tourism Economics group says, “Upbeat consumer attitudes and solid labor market conditions continue to support the domestic travel market. However, stagnant wages and the recalibration of expectations regarding the Trump administration’s campaign pledges pose risks to consumer and business sentiment. Additionally, the President’s continued rhetoric and policies weigh heavily on the international inbound market outlook.”

With travel supporting one in nine American jobs and inbound international travel the No. 2 overall U.S. export, the head of U.S. Travel said the American economy can ill afford for this troubling trend to continue.

"The international travel market is ultra-competitive, and the U.S. is falling behind," said U.S. Travel Association President and CEO Roger Dow. "Fortunately, there are levers the Trump administration can pull to help right the ship—continue the Brand USA tourism marketing organization, and protect policies that enable international travel to the U.S., such as Open Skies aviation agreements and the Visa Waiver Program.

“Inbound travel to the U.S. already went through one ‘lost decade’ after 9/11,” Dow said. “It took a sustained national policy effort to return to the pre-9/11 level of travel exports, which only happened last year. If we don’t want to give back all of that progress, the time to act is now.”

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