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Travel Trends for USA and Utah: An International Perspective

Travel Trends for USA and Utah: An International Perspective Presented to: The Utah Travel & Tourism Industry Presented by: Mark Brown Office of Travel and Tourism Industries MANUFACTURING & SERVICES International Trade Administration U.S. Department of Commerce May 2010 Agenda for Today

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Travel Trends for USA and Utah: An International Perspective

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  1. Travel Trends for USA and Utah:An International Perspective Presented to: The Utah Travel & Tourism Industry Presented by: Mark Brown Office of Travel and Tourism Industries MANUFACTURING & SERVICES International Trade Administration U.S. Department of Commerce May 2010

  2. Agenda for Today • Overview of OTTI & Commerce Travel & Tourism Services • Travel Trends for the U.S.& Western USA • Forecast for International Travel • Policy and Promotion Issues • Q & A

  3. “Who is OTTI?” The National Tourism Office for the U.S.

  4. Department of Commerce Agencies Involved Department of Commerce (DOC) International Trade Administration (ITA) Manufacturing and Services (MAS) Services (S) Office of Travel and Tourism Industries (OTTI)

  5. Publications Business Development Office ofTravel & TourismIndustries Research Policy Industry Outreach What We Do at OTTI…

  6. Inputs U.S. Integrated Statistical Systemfor Measuring International Travel & Tourism Deliverables GDP / Contributionof Travel & Tourism to GDP I-94Census ofInternational Arrivals (DHS Immigration Statistics) TTSA Travel & TourismSatellite Accounts System (OTTI / BEA) I-92Estimate of U.S. Departures (DHS Immigration Statistics) Balance of TradeReceipts & Payments (Bureau of Economic Analysis) Survey of InternationalAir Travelers (OTTI) OFFICIAL AIRLINE GUIDE Census of International Flight Schedules (OAG) Market Potential and Profilesfor industry export expansionand competitiveness Forecast (OTTI / GII) MEXICOSurvey of Visitors to/from the U.S.(Banco de Mexico) Other FederalAgency UsesDHS (CBP & TSA performance) State (consulate staffing needs) BLS (Airfare Pricing index) Travel Trade Barometer (OTTI / TMI / TIA) CANADASurvey of Visitorsto/from the U.S. (Statistics Canada) Topical Studies e.g. Japan Outbound

  7. U.S. Department Of CommerceInternational Trade Administration Tourism Resources OFFICE OF TRAVEL & TOURISM INDUSTRIES Foreign Commercial Service 151 Offices in 83 Countries Office of Domestic Operations 105 U.S. Offices http://www.buyusa.gov/eme/tra.html http://trade.gov/cs/

  8. Impact of Travel on the U.S. Economy(2009) Source: U.S. Department of Commerce: Office of Travel and Tourism Industries & Bureau of Economic Analysis.

  9. Travel and Tourism Employment(2009) • Food Services and Drinking Places • 2.5 million employees (31%) • Traveler Accommodations • 1.6 million employees (20%) • Shopping (Retail) • 844 thousand employees (10%) • Air Transportation Services • 757 thousand employees (9%) Travel and tourism industries support 8.2 million American jobs! 70% of all travel and tourism employment is accounted for by four sectors Source: U.S. Department of Commerce, Office of Travel and Tourism Industries, Bureau of Economic Analysis.

  10. International Travel & Tourism to the U.S.(2009) • Largest services sector export –$121 billion in 2009. • Third-largest merchandise/services export category. • Generated a trade surplus of $22 billion. • Supported 1.1 million jobs. • International travelers spend 4-7 times more than domestic travelers on a trip: • Length of the trip is 2-4 times greater than domestic travelers. • International travelers have higher activity participation rates than domestic travelers. • International travelers were more inclined to stay at hotels/motels & rent cars than a domestic traveler. • 4% of travelers, but 17% of traveler spending, payroll, employment and taxes.

  11. Global Travel Trends

  12. World Tourism Arrivals & Receipts(1980-2010) 2009p 880m $878b Source: U.N. World Tourism Organization

  13. Top Ten Country Rankings of GlobalVisitors and Receipts (2009/2008) The United States leads the world in global travel and tourism exports (spending receipts) and ranks 2rd in global visitation. Destination 2008 World Destination 2009 World Rank Country Receipts* Share Country Visitors Share ($bil) (%) (mil) (%) All Countries $944 All Countries 880 1 United States $110 11.7% France 74 8.4% 2 Spain $62 6.5% United States 55 6.2% 3 France $56 5.9% Spain 52 5.9% 4 Italy $46 4.8% China 51 5.8% 5 China $41 4.3% Italy 43 4.9% 6 Germany $40 4.2% United Kingdom 28 3.2% 7 United Kingdom $36 3.8% Turkey 26 2.9% 8 Australia $25 2.6% Germany 24 2.8% 9 Turkey $22 2.3% Malaysia 24 2.7% 10 Austria $22 2.3% Mexico 22 2.4% U.S. Air Carriers Source: U.N. World Tourism Organization. * Latest data available and excludes air passenger fares ($31.6 billion for U.S. alone). World shares based on unrounded data.

  14. Note: the top four countries (France, Spain, U.S, and Italy) represented 31% of world visitors in 2002. Top 15 Non-Asian Countries 17% China + Hong Kong + Malaysia + Thailand 10% Top 15 * Non-Asian Countries’ vs. Asia’sShare of Global International Arrivals(2002 - 2011) * The top market share trend line includes the top 19 world destination countries excluding China (ranked 5), Hong Kong (ranked 12),Malaysia (ranked 15), and Thailand (ranked 18). The 4 Asian countries’ market share is forecasted to grow from 11.4% in 2002 to16.2% in 2011, depicted in the lower trend line. Sources: Office of Travel & Tourism Industries, International Trade Administration, U.S. Department of Commerce; Global Insight, Inc.

  15. Travel Trends to the U.S.

  16. U.S. Visitors & Spending(1996-2009) Visitor spending (receipts) closely mirrors visitor volume. Spending was a record $121.1 billion in 2009, while visitor volume was 54.9 million. millions of visitors $billions in spending Spending Visitors Sources: Department of Commerce, Office of Tourism Industries; Department of Commerce, Bureau of Economic Analysis; Statistics Canada; Banco de Mexico.

  17. Top Origin Markets forInternational Travelers to the U.S. Origin of Visitor 2009p 09 / 08 10/09 Feb. YTD (000s)(% change) (% change) International Total * 54,884 -5% 15% 1Canada 17,964 -5% 53% 2 Mexico 13,164 -4% 3% Overseas ** 23,756 -6% 10% 3 United Kingdom 3,899 -15%-3% 4 Japan 2,918 -10% 11% 5 Germany 1,687 -5% 4% 6 France 1,204 -3% 3% 7 Brazil 893 16% 34% 8 Italy 753 -3% 9% 9 South Korea 744 -2% 47% 10 Australia 724 5% 28% * International travelers include all countries generating visitors to the U.S. ** Overseas includes all countries except Canada and Mexico. Record year for Travel to U.S.

  18. Top Ten Travel Export Markets(2009 & record receipts/year) Total Travel Record Year Receipts Travel Record Origin Country 2009p Receipts Set ($bil) ($bil) Canada $16.22 $18.66 2008 Japan $12.88 $17.80 1995 United Kingdom $12.13 $17.72 2008 Mexico $8.34 $9.74 2008 Germany $5.60 $6.68 2008 Brazil $4.25 2009 France $4.23 $4.78 2008 India $3.58 $4.29 2008 China $3.50 $3.61 2008 Australia $3.31 $3.70 2008 U.S. TOTAL $121.07 $141.71 2008

  19. Top U.S. Destinations1 for Overseas Visitors(2008) Top Market Top Market States Share Cities Share New York 33.2%New York City 32.4% California 20.9% Los Angeles 11.0% Florida 20.7% San Francisco 10.3% Nevada 8.3%Miami 10.2% Hawaii 7.2% Orlando 9.6% Illinois 5.6% Las Vegas 8.0% Massachusetts 5.0% Honolulu 5.9% Guam 4.7% Washington, D.C. 5.5% Texas 4.3% Chicago 5.4% New Jersey 4.1% Boston 4.4% 1 These percentages are based on multiple responses. Main destination (one response) is also available.

  20. Western USA Visitors by Origin Country (2008) Visitor Share Western USA Origin Country Visitors of Western USA Share of Country (000s) (%) (%) TOTAL OVERSEAS 25,341 - - - - - - Western USA 7,577 - - - 29.9% 1 United Kingdom 1,260 16.6% 27.6% 2 Mexico (air) 837 11.0% 49.0% 3 Japan 702 9.3% 21.6% 4 Germany 579 7.6% 32.5% 5 Australia 417 5.5% 60.5% 6 France 389 5.1% 31.3% 7 South Korea 350 4.6% 46.1% 8 China 299 3.9% 60.6% 9 India 297 3.9% 49.6% 10 Netherlands 235 3.1% 38.7% Note: Overseas includes all countries except Canada and Mexico.

  21. Western USA Visitors by State (2008) Western USA State Share State Share Destination State Visitors of Western USA of Overseas (000s) (%) (%) TOTAL OVERSEAS 25,341 - - - - - - Western USA States 7,577 - - - - - - California 5,296 69.9% 20.9% Nevada 2,103 27.7% 8.3% Texas 1,090 14.4% 4.3% Arizona 710 9.3% 2.8% Washington 456 6.0% 1.8% Utah 380 5.0% 1.5% Colorado 380 5.0% 1.5% 2-year average Oregon 184 2.5% 0.7% Wyoming 84 1.1% 0.4% Alaska 64 0.9% 0.3% Montana 44 0.6% 0.2% Idaho 35 0.5% 0.1% Note: Overseas includes all countries except Canada and Mexico.

  22. Travel Characteristics of Visitors fromTop Origin Markets (2008) Travel U.K. France Western USA Characteristic Overseas Germany Japan # of nights in U.S. 16 14 16 16 8 21 % 1st-time U.S. 24 % 15 % 23 % 29 % 31 % 22 % Party Spending in U.S. $5,939 $5,902 $5,181 $5,336 $5,619 $7,163 Purpose of trip (net) 1: Leisure / Rec. / Holiday 64 % 70 % 60 % 62 % 78 % 58 % Visit Friends/Relatives 33 % 28 % 35 % 37 % 16 % 38 % Business / Convention 33 % 28 % 35 % 31 % 21 % 45 % 1 These trip purpose items are based on multiple responses. Main purpose of trip (one response) is also available.

  23. Information Sources Used by Visitors fromKey Markets to the U.S.(2008) Information Overseas U.K. Germany France Japan W. USA Sources (%) (%) (%) (%) (%) (%) Personal Computer 41 48 47 44 45 40 Travel Agency 39 29 26 33 48 42 Airlines Directly 20 23 28 23 10 21 Friends/Relatives 15 13 15 11 15 15 Corporate Travel Dept. 9 9 14 9 7 12 Travel Guides 8 7 14 7 18 8 Tour Company 7 6 4 5 25 5 State/City Travel Office 4 1 19 1 1 4 Newspapers/Magazines 3 2 3 1 8 3 Advance Decision (days): Trip Decision: 87 118 104 97 68 89 Airline Booking 61 94 74 67 43 58 Note: Multiple choice responses allowed for information sources.

  24. Activity Participation while in the U.S.(2008) Information Overseas U.K. Germany France Japan W. USA Sources (%) (%) (%) (%) (%) (%) Shopping 88 88 84 83 89 85 Dining in Restaurants 84 94 85 83 85 87 Sightseeing in Cities 44 42 36 46 48 49 Visit Historical Places 38 37 45 49 15 42 Amusement/Theme Parks 26 32 25 20 14 31 Visit Small Towns 26 26 31 23 29 33 Art Gallery/Museum 22 19 26 37 7 22 Cultural Heritage Sites 22 21 40 32 12 27 Water Sports/Sunbathing 22 26 23 16 37 16 Touring Countryside 19 21 37 17 15 28 Visit National Parks 18 20 26 22 7 32 Guided Tours 17 18 16 16 20 19 Concert/Play/Musical 16 17 17 21 8 18 Note: Multiple choice responses allowed for activity participation.

  25. Overseas Travel to Utah2006-2008 average • Utah share of total increasing past four years:1.2%, 1.4%, 1.5%, 1.6% • Trip purpose to USA(net): • 73% leisure/vacation • 19% business • 10% convention • 9% visit friends/relatives

  26. Utah Overseas Visitors by Origin Country(2006-08) Visitor Share Origin Country Visitors of Utah (%) Utah Overseas 325,000 Western Europe 212,000 65% France 48,000 15% United Kingdom 47,000 14% Germany 40,000 12% Netherlands 27,000 8% Asia 54,000 17% Japan 16,000 5% South Korea 10,000 3% China (PRC) 8,000 2% Oceania 17,000 5% Australia 12,000 4% South America 15,000 5% Brazil 9,000 3%

  27. Traveler Volume from Canada(stays of 1 or more nights) Pre-2009 2009p Forecast All-time Record Source: Statistics Canada.

  28. Canadian Visitors to Western USA States (2008) U.S. State Visitors Visitor-Nights Spending (000s) (000s) ($000s) TOTAL U.S. (NET) 18,914 146,602 $12,159,398 Western US (sum 2008) 7,317 41,921 $3,993,500 Washington 2,142 6,078 $461,309 California 1,257 10,774 $1,072,402 Nevada 1,059 4,936 $867,651 Montana 650 2,035 $192,398 Arizona 515 8,587 $564,131 Oregon 409 1,386 $104,080 3-Year Average Texas 371 3,749 $301,367 Idaho 259 757 $60,604 Utah 171 754 $84,329 Colorado 145 825 $108,707 Wyoming 88 236 $19,829

  29. Canada to Utah3-year averages based on 2006-2008 combined data (1+ nights) • Visitors: 171 thousand producing 754 thousand visitor-nights. • Spending: $84 million; $/visitor = $493; $/visitor/night =$112. • Purpose: holiday/vacation-65%; VFR-17%; business-14%; other-4%. • Stay length: 4.4 nights, 1 night-30% ; 2-6 nights-49% , 7+ nights-21% • Province: Alberta-39%; Ontario-26%; BC-20%; Saskatchewan-8%. • Mode: auto-58%; Air-38%. • Accommodations: hotel-53%; f/r-10%; not stated 20% (RV?). • Age: 55 or older-54%; children under 20-6%. • Timing: Q2-30%; Q1-27%; Q4-26%; Q3-17%.

  30. Forecasts for International Travel

  31. UN/WTO Forecast for World Arrivals & Spending for 2009 & 2010 • 5% decline in world arrivals for 2009. • The UN/WTO forecast for travel spending in 2009 is to expect a decrease of 6-8%. • For 2010, the UN/WTO forecast for world arrivals is a 1-3% growth rate. • Asia will show the strongest rebound, Europe & the Americas will probably take longer to recover.

  32. 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 & IHS Global Insight, Inc. -- May 2010 forecast

  33. The BRIC(K)s Greenland Sweden Iceland Russia Finland Russia Norway Estonia Canada United Kingdom Latvia Denmark Lithuania Belarus Ireland Poland Netherlands Germany Bel. Lux. Czech Rep. Ukraine Kazakhstan Slovakia Austria Moldova Hungary Switz. Mongolia France Slovenia Romania Croatia Italy Bosnia & Herz. Serbia Bulgaria Uzbekistan Montenegro Georgia Kyrgyzstan N. Korea Macedonia Portugal Albania Azerbaijan Spain Armenia United States Turkmenistan Turkey Tajikistan Greece China S. Korea Japan Malta Syria Cyprus Lebanon Afghanistan Iran China Morocco Iraq Tunisia Israel Jordan Pakistan Kuwait Nepal Algeria Libya Egypt Qatar Western Sahara Bahamas Mexico Taiwan U.A.E. India Cuba Oman Burma Saudi Arabia Laos Dominican Republic Mauritania Haiti Mali Jamaica Belize Niger Thailand Cape Verde Philippines Eritrea Chad Honduras Vietnam Senegal Yemen Guatemala Gambia Sudan Cambodia Burkina Faso Nicaragua El Salvador Dijbouti Guinea-Bissau Guinea Benin Panama Nigeria Togo Cote d’Ivoire Costa Rica Guyana Central African Republic Venezuela Ethiopia Sierra Leone Suriname Ghana Brunei French Guiana Liberia Sri Lanka Cameroon Somalia Colombia Malaysia Equatorial Guinea Uganda Congo Kenya Gabon Rwanda Ecuador Dem. Rep. of Congo Burundi Indonesia Papua Indonesia New Guinea Tanzania Peru Solomon Islands East Timor Brazil Angola Zambia Vanuatu Malawi Bolivia Zimbabwe Namibia Fiji Mozambique Botswana Paraguay Chile Madagascar Australia Swaziland Lesotho South Africa Uruguay Argentina New Zealand

  34. Visitors to the U.S. from Brazil 7 000s of visitors

  35. Brazil • Positives: Total outbound increasing trend. US share increasing. Economic and social environment on a roll. 9 consecutive monthly increases, many dramatic. Strong potential benefactor of any TPA impacts 2013+. • Negatives: Potential World Cup cannibalization. Can US visa processing keep pace with demand. • Forecast: very strong growth.

  36. Visitors to the U.S. from Russia 35 000s of visitors

  37. Russia • Positives: Flat 2009 visitation despite massive GDP decline. Three months of solid growth to USA. Low GDP growth in 2010 changing to solid GDP growth. Outbound has doubled in ten years. Simplified visa processing. growing middle class. new flights. Could benefit from any TPA impacts, if only because it's a "BRIC." • Negatives: High inflation. USA share of total outbound stable. Population decline; visitor growth must come from more outbound trips and/or US higher share of total. • Forecast: very strong growth.

  38. Visitors to the U.S. from India 12 000s of visitors

  39. India • Positives: 5 consecutive months of growth. Many of the down months in 2009 were the largest annual share months, so bar is low. Strong and growing GDP. Total outbound growing, US share varies. "Travel-worthy" middle class now estimated at 100 million of 1.1B. Low potential of any TPA impacts. • Negatives: can visa processing keep up with demand. Growth partially dependant increases in leisure travel, not just dominant business. • Forecast: very strong growth

  40. Visitors to the U.S. from China(PRC) 14 000s of visitors

  41. China • Positives: Seven consecutive months of monthly increases including near doubling in Feb. Will be a huge beneficiary of any TPA impacts. Tremendous growth in total outbound for more than a decade. U.S. share increasing since SARS. Very strong GDP growth. USA-China MOU. • Negatives: Shanghai World Expo might keep some Chinese home. • Forecast: Wowwie!

  42. Visitors to the U.S. from South Korea 9 000s of visitors

  43. South Korea • Positives: won at .000866 and stable. 6 consecutive months of fantastic growth off of dramatic declines. Solid GDP growth, then strong growth. Industrial production fully recovered. Moderate beneficiary of any TPA impacts in 2013+. Strong growth in total outbound up until 2008. • Negatives: Important Q3 was actually up in 2009, thus bar is not that low. US share of total outbound declining. Potential World Cup cannibalization. • Forecast: Very strong growth

  44. National Export Initiative • Goal: Double exports over the next 5 years to support 2 million American jobs • Creates Export Promotion Cabinet that will consist of leaders from top agencies • Focuses on three key areas: • 1. Expand trade advocacy in all its forms by: • Educating U.S. companies about foreign opportunities • Directly connecting them with customers • 2. Improving access to credit for small-and medium-sized businesses that want to export through the Export-Import Bank, and • 3. Continuing enforcement of international trade laws.

  45. Travel Promotion Act • Bill signed by President Obama on March 4, 2010 • Establishes an independent non-profit Corporation for Travel Promotion with a Board of Directors appointed by the Secretary of Commerce. PURPOSE: • To promote the U.S. to world travelers • To augment USG communications on entry/exit policies

  46. Travel Promotion Act • Umbrella - opportunity to shine beneath • Exposure for top markets without full investment cost • Work with corporation for travel promotion to ensure Utah product is seen! • Better measures possible for ROI

  47. Travel Regional Investment Partnership ActT.R.I.P. • H.R. 4676, introduced by U.S. Representative Sam Farr (CA). • Creates a matching grant program in DOC to promote domestic tourism through local and regional partnerships. • Administered by OTTI. • CVBs, parks, resorts, attractions. • Grants of $100,000 to $1 million: from annual $10 million fund. (5 years)

  48. The Quickest Way to U.S. International Tourism Information:http://tinet.ita.doc.gov Includes International Travel Research Online Order, read, download & print the latest statistics on international travel to and from the U.S. • All of the latest summary tables highlighting specific tourism trends • More than 30 market and regional profiles available • Forecast of international travelers to the U.S. through 2013 • Information on OTTI’s nine on-going market analysis (research) programs • Updated monthly statistics on arrivals and departures • Late-breaking TI News announcements and information releases • Links and information on the Commerce, Commercial Service Travel & Tourism Team in the USA & Abroad • Links to other organizations in the travel industry Sign up for TINews, OTTI’s FREE news service, for the latest in tourism industry news and program updates

  49. Travel Summary WHTIthrough November 2009 • Visitors to U.S. • Canada: Visitation up past 4 months, but down prior to and thru pII. • Canada: Auto day visitors down 14 months prior to Nov rebound. • Mexico: Records set four years prior to 2008. Visitation down big, started before WHTI. Air 14% of total Mexican inbound. • Caribbean: Visitation near 2000 record in 2008. Recent declines started prior to WHTI phase II. • U.S. Outbound Travelers--generally down • Canada: Down most months for past 5 years. Record low level. • Canada: Auto day visitors down every month for 5+ yrs. • Mexico: Up over previous two years; declines prior to WHTI pII. • Caribbean: Patterns nearly identical to Mexico; recent big declines.

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