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International Travel to the U.S.: Recovering, Recovered, or Growing?

International Travel to the U.S.: Recovering, Recovered, or Growing?. Presented by: julie heizer Office of Travel and Tourism Industries International Trade Administration U.S. Department of Commerce January 2011. Agenda for Today. The State of the U.S. Travel Industry 2010

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International Travel to the U.S.: Recovering, Recovered, or Growing?

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  1. International Travel to the U.S.:Recovering, Recovered, or Growing? Presented by: julie heizer Office of Travel and Tourism Industries International Trade Administration U.S. Department of Commerce January 2011

  2. Agenda for Today • The State of the U.S. Travel Industry 2010 • Global Forecast for World International Arrivals • U.S. International Travel Trends • Short & Long Term Forecast for Arrivals to U.S. • U.S. Department of Commerce Engagement in Travel and Tourism • Questions

  3. The Bottom Line • USA travel industry recovery mixed… • Total output…recovering. • Total employment…still declining.

  4. Our Current Economic Situation Summarized • The patient is stable and gradually strengthening • However, it remains weakened from past trauma • That weakness translates into uncertainty and vulnerability Source: Tourism Economics

  5. The State of U.S. Travel and Tourism Industries:Domestic & International • The next several slides are based upon OTTI’s Travel & Tourism Satellite Accounts quarterly data. • Accounts help the impact of travel on the United States economy.

  6. Recovery Stronger withFood Services and Shopping Sectors • Recession impacted tourism output unevenly. • Transportation and lodging hit hard. • Food service, shopping—”what recession?” • Recovery uneven, too! • Transportation and lodging recovering. • Food serviceand shopping showing growth! • Recreation and entertainment still recovering.

  7. Employment Has Not Come Backto Reflect Better Sales … Still Suffering • Recession impacted tourism employmentacross SOME sectors. • Shopping (retail) and all other industries hit hard. • Air services, food service, recreation—”what recession?” • No recovery in jobs! • Employment levels loweracross all travel sectors! • “Employment recession” for all.

  8. The Bottom Line • USA travel industry recovery mixed… • Total output…recovering. • Total employment…still declining. • Global travel arrivals and spending fully recovered • due to global economic recoveries…led by Asia and South America.

  9. World Tourism Arrivals & Receipts(1980-2010) 2009 880m $852b Source: U.N. World Tourism Organization

  10. Global Travel Trends(from UNWTO) • Global arrivals: • 2010YTD up 7% over 2009YTD; higher than 2008 levels • Forecast 2010 up 5%-6% -- a new record • 2011 arrivals +4% • 2010-2020: 5%-6% average annual growth rate Global receipts growing at similar pace: +5%-6% • Emerging countries leading the way

  11. U.S. Leads World in Market Share for Travel & Tourism Exports (2009) World Travel Export Market Share ShiftingU.S. share of world travel exports in 2009 declined from 17.4% in 2000 because of large new aggressive market entrants (China & Australia) and new small emerging markets like Turkey, Thailand & Malaysia. Source: U.N. World Tourism Organization

  12. The Bottom Line • USA travel industry recovery mixed… • Total output…recovering. • Total employment…still declining. • Global travel arrivals and spending fully recovered • due to global economic recoveries…led by Asia and South America. • International arrivals…fully recovered!

  13. U.S. Travel Exports, Imports & Trade Balance(1996-2009) U.S. travel exports (receipts) has exceeded travel imports (payments) since 1989. $billions Exports Imports Trade Balance Sources: Department of Commerce, Office of Travel & Tourism Industries; Department of Commerce, Bureau of Economic Analysis; Statistics Canada; Banco de Mexico

  14. 12 of Top 15 Origin MarketsShowed Declines in 2009 Sources: Department of Commerce, Office of Travel & Tourism Industries; Department of Commerce, Bureau of Economic Analysis; Statistics Canada; Banco de Mexico

  15. Solid Increases Seen in 13 of Top 15Origin Markets Through October 2010 Sources: Department of Commerce, Office of Travel & Tourism Industries; Department of Commerce, Bureau of Economic Analysis; Statistics Canada; Banco de Mexico

  16. Export Value Rank Varies from Visitation Rank: Japan, Brazil, China, India Total Travel Ranking Receipts Visitors Receipts Origin Country 2009 ($bil) 1 1 Canada $16.13 4 2 Japan $13.05 3 3 United Kingdom $11.43 2 4 Mexico $8.05 5 5 Germany $5.57 7 6 Brazil $4.57 6 7 France $4.12 14 8 China $3.60 12 9 India $3.57 10 10 Australia $3.42 U.S. TOTAL $120.34

  17. What’s in the Future For Us?

  18. The Bottom Line • USA travel industry recovery mixed… • Total output…recovering. • Total employment…still declining. • Global travel arrivals and spending fully recovered • due to global economic recoveries..led by Asia and South America. • International arrivals…fully recovered! • Forecast is bullish: • 51% grand total expansion by 2015; • Similar across Canada, Mexico and overseas; • Led by China (+346%), Brazil (+198%), South Korea (+171%), India (+123%).

  19. International Visitors to the U.S. and Projections(2001-2015) Arrivals in Millions Sources: U.S. Department of Commerce, ITA, Office of Travel & Tourism Industries; Secretaria de Turismo (Mexico); Statistics Canada. -- October 2010 forecast

  20. Short- and Long-Term Forecast: Growth from 55M in 2009 to 83M in 2015 Overseas includes all countries except Canada and Mexico. Sources: Office of Travel & Tourism Industries; Statistics Canada; Banco de Mexico - October 2010 forecast

  21. Short-Term ForecastInbound Travel to the U.S. Visitor Actual Change Change Change Origin 2009 09/08 2010f 10/09 2011f 11/10 (000s) (%) (000s) (%) (000s) (%) • Europe 11,550 -10% 11,658 1% 11,907 2% • United Kingdom 3,899 -15% 3,743 -4% 3,781 1% • Germany 1,687 -5% 1,721 2% 1,772 3% • France 1,204 -3% 1,241 3% 1,265 2% • Italy 753 -3% 806 7% 830 3% • Spain 597 -9% 639 7% 651 2% • Netherlands 548 -10% 564 3% 576 2% • Ireland 411 -23% 358 -13% 354 -1% • Switzerland 356 4% 377 6% 388 3% • Sweden 324 -18% 360 11% 378 5% • Belgium 246 -7% 258 5% 266 3% • Denmark 246 -4% 253 3% 263 4% • Norway 193 -10% 218 13% 225 3% • Austria 163 2% 170 5% 175 2% Source: OTTI - October 2010 forecast

  22. Short-Term ForecastInbound Travel to the U.S. Visitor Actual Change Change Change Origin 2009 09/08 2010f 10/09 2011f 11/10 (000s) (%) (000s) (%) (000s) (%) • South America 2,742 7% 3,180 16% 3,507 10% • Brazil 893 16% 1,205 35% 1,410 17% • Venezuela 507 0% 456 -10% 456 0% • Colombia 425 1% 475 12% 509 7% • Argentina 356 12% 417 17% 463 11% • Ecuador 168 11% 184 9% 190 3% • Peru 160 -1% 176 10% 192 9% • Costa Rica 157 -5% 170 8% 181 6% • Chile 127 -3% 145 15% 159 9% Source: OTTI - October 2010 forecast

  23. Short-Term ForecastInbound Travel to the U.S. Visitor Actual Change Change Change Origin 2009 09/08 2010f 10/09 2011f 11/10 (000s) (%) (000s) (%) (000s) (%) • Asia 5,669 -8% 6,738 19% 7,381 10% • Japan 2,918 -10% 3,298 13% 3,430 4% • Korea 744 -2% 1,004 35% 1,185 18% • India 549 -8% 632 15% 714 13% • China 525 6% 735 40% 911 24% • Taiwan 240 -19% 275 15% 295 7% • Philippines 172 -5% 180 5% 187 4% • Oceania 872 2% 1,028 18% 1,139 11% • Australia 724 5% 861 19% 964 12% • New Zealand 131 -10% 149 14% 156 5% Source: OTTI - May 2010 forecast

  24. Quick Focus on Four Key CHT Markets

  25. Select Markets Overview: United Kingdom Outbound to USA Recent Demos GDP Currency Jobs Markets TPA CS +— — — + + + —+ + + —+ OVERVIEW: Total outbound flat 2006-2008 for the #3 origin market. 15% decline to USA in 2009 continued the downward trend since 2000 record of 4.7M. 6-year forecast calls for total growth of 21% from 2009-2015, lowest among top 10 countries. Still, growth could equal nearly 1M more travelers! POSITIVES: Population growing slowly. GDP annual growth improving from +1.7% in 2010 to +2.6% in 2015. FTSE 100 not fully recovered from 2007 but getting there. UK beneficiary of state and city travel offices. Exchange rate down from 2007 sweet year of $2.00, but same as a decade ago. NEGATIVES: Total outbound had consistent growth up to 2006, then flat for at least 3 years. Recent outbound to U.S. in decline…U.S. share of total outbound down. Declines continuing in 2010. Unemployment high but improving over five years.

  26. Select Markets Overview: Japan Outbound to USA Recent Demos GDP Currency Jobs Markets TPA CS — — —+ — — + + — — + + OVERVIEW: #4 origin market showing a rebound of +13% in 2010, followed by moderate growth of 3%-5% for three years. Higher growth in 2014-2015 expected. 6-year forecast calls for total growth of 47% from 2009-2015—much of it in the out years—but volume will remain below 1997 record of 5.37M. POSITIVES: Following long-term decline in monthly arrivals, robust growth 10 consecutive months through Sept. follows 17/20 monthly declines. Currency exchange rate on 4-year upward trend. Increase in air capacity, lower fuel surcharge. Air capacity recovered or recovering from 2008-2009 losses. Open-skies agreement signed in November 2010. NEGATIVES: Total outbound in decline for years. Long-term decline to U.S., N.A. and W. Europe. Spending peak 1995. Population declining and aging. GDP moderate rebound in 2010, then 1%-2% annual growth. Unemployment stubbornly high. Stock market up and down after long-term massive decline. Huge public debt-to-GDP ratio. Geo-equity index of 7 lowest among top 10 visitor origin markets.

  27. Select Markets Overview: Germany Outbound to USA Recent Demos GDP Currency Jobs Markets TPA CS — —+ —+ — — — —+ —+ + — OVERVIEW: #5 market up and down since 1996 record of 2.00M. 6-year forecast calls for total growth of 35% from 2009-2015. POSITIVES: Unemployment relatively high compared to other countries, but improvement continues from 2005 level of nearly 11%. DAX market still down from 2007 high but improving. Likely beneficiary of TPA based on recent interest from U.S. state travel offices. Geo-equity index of 17 2nd highest among top 10 origin countries. NEGATIVES: Total outbound flat over last decade. Outbound to USA up and down. GDP growth declining from +3.3% in 2010 to +1.3% in 2015. IMF expects Euro to remain at current levels over next five years.

  28. Select Markets Overview: Brazil Outbound to USA Recent Demos GDP Currency Jobs Markets TPA CS + + +++ + + — —+ + + ? OVERVIEW: Smokin’ hot #7 visitor origin market firing on all cylinders. 6-year forecast calls for total growth of 198% (tripling) from 2009-2015. 2010 volume of 1.2M will shatter long-standing 1997 record of 0.94M. Tough to forecast because USA share of total outbound fluctuates wildly…33% in 1995, 10% in 2004, 16% recently. POSITIVES: Just about everything! Strong GDP growth linked to commodity exports to Asia. Open-skies agreement negotiated and pending signature. NEGATIVES: Stubborn high unemployment rate of 7.5% still lower than mid-00s. IMF forecasts real to decline slightly from current $0.55. Geo-equity index of 11 same as UK, but 80% to FL and NY.

  29. The Bottom Line • USA travel industry recovery mixed… • Total output…recovering. • Total employment…still declining. • Global travel arrivals and spending fully recovered • due to global economic recoveries..led by Asia and South America. • International arrivals…fully recovered! • Forecast is bullish: • 51% grand total expansion by 2015; • Similar across Canada, Mexico, and overseas; • Led by China (+346%), Brazil (+198%), South Korea (+171%), India (+123%). • Department of Commerce engagement

  30. Putting the Pieces Together

  31. DOC’s Engagement with Travel & Tourism Gary F. Locke, Secretary, DOC The World Organisation for Economic Co-operation and Development (OECD) Asia-Pacific Economic Cooperation (APEC) Multilateral organizations’ tourism committees to advance policy agenda U.S. Government Industry Tourism Policy Council (TPC) Interagency council to coordinate on tourism policy Office of Travel and Tourism Industries (OTTI)/ Office of Travel Promotion (OTP) DOC/ITA/MAS offices responsible for travel and tourism & liaison to CTP Travel & Tourism Advisory Board (TTAB)Private sector advisory board to the Secretary Corporation for Travel Promotion (CTP)Private sector corporation board appointed by the Secretary to promote the USA

  32. Tourism Policy Council

  33. Agencies of the Tourism Policy Council Department of Agriculture Department of Commerce (EDA/USFCS/NOAA/MBDA) Department of Homeland Security Department of Housing & Urban Development Department of Interior Department of Labor Department of State Department of Transportation Executive Office of the President Office of the Vice President Office of Management & Budget Small Business Administration U.S. Army Corps of Engineers Additionally Invited: President’s Committee on the Arts and the Humanities Environmental Protection Agency Department of Health and Human Services Advisory Council on Historic Preservation

  34. Travel & Tourism Advisory Board

  35. Travel & Tourism Advisory Board Members • Rossi Ralenkotter, ChairLas Vegas Convention & Visitors Authority • Dawn Drew, Vice-Chair; The M.O.S.T.E., Inc. • Holly Agra, Chicago’s First Lady Cruises • Richard Anderson, Delta Air Lines, Inc. • Jose Andres, Think Food Group • Sheila Armstrong, U.S. Cultural & Heritage Tourism Marketing Council • Helane Becker, Dahlman Rose & Company • Nicholas Calderazzo, RMP Travel • Todd Davidson, Travel Oregon • Maryann Ferenc, Mise En Place, Inc. • Chuck Floyd, Hyatt Hotels Corporation • Sam Gilliland, Sabre Holdings • Adam Goldstein, Royal Caribbean International • David Hayes, M.D., Mayo Clinic • Jeremy Jacobs, Delaware North Companies • Hubert Joly, Carlson • John Klein, Premium Outlets • David Kong, Best Western International • Philip Levine Baron Corporation • Gina Marie Lindsey, Los Angeles World Airports • Chandrakant (C.K.) Patel, BVK Holdings, Inc., • J. Stephen Perry, New Orleans CVB • Adam Sacks, Tourism Economics • Joseph Saunders, Visa, Inc. • Douglas Shifflet, D.K. Shifflet & Associates, Ltd. • Ronald Solimon, Indian Pueblo Cultural Center • John Sprouls, Universal Parks & Resorts • Greg Stubblefield, Enterprise Holdings • Perry John P. Tenorio, Marianas Visitors Authority • George Zimmerman, Michigan Economic Development Corporation

  36. Travel Promotion Act • Signed by President Obama March 4, 2010 • Establishes an independent nonprofit Corporation for Travel Promotion: • To promote the U.S. to world travelers • To augment USG communications on entry/exit policies

  37. Corporation for Travel Promotion Stephen CloobeckChairman and CEO, Diamond Resorts International, Las Vegas, Nevada Caroline BetetaPresident and CEO, California Travel & Tourism Commission, Sacramento, CA Daniel Halpern, President and CEO, Jackmont Hospitality, Atlanta, Georgia George FertittaCEO, NYC & Company, New York, N.Y. David Lim Chief Marketing Officer, Amtrak, Washington, D.C. Tom KleinPresident, Sabre Holdings, Southlake, Texas Lynda S. ZengerlePartner, Steptoe & Johnson LLP, Washington, D.C. Al Weiss President, Worldwide Operations, Walt Disney Parks and Resorts, Orlando, Florida Mark SchwabSenior Vice President-United Airlines, Chicago, Illinois Roy YamaguchiOwner and Founder, Roy’s Restaurant, California Diane ShoberTourism Director, State of Wyoming, Cheyenne, Wyo.

  38. National Export Initiative • Goal: Double exports over the next 5 years • Created Export Promotion Cabinet • Focuses on three key areas: • 1. Expanding trade advocacy • 2. Improving access to credit for small and medium-sized businesses • 3. Continuing enforcement of international trade laws

  39. Supporting the President’s National Export Initiative Target Industry Sectors Healthcare / Medical Devices Infrastructure Defense Environmental / Energy Technology Industries Education Travel and Tourism

  40. Travel & Tourism As a Leading Export (2009)

  41. Example of Reports Available from OTTI’s Website

  42. Summary • We are seeing travel and tourism industry sales GROW! • We need to continue to expand travel and tourism exports to eventually regain and GROW jobs.

  43. How to Find Us http://tinet.ita.doc.gov julie heizer Office of Travel & Tourism Industries U.S. Department of Commerce Phone: 202 482 4904 julie.heizer@trade.gov

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