International visitor spending down 20%, misses $10bn mark

by Tom Johansmeyer on

Visitors to the United States from other countries spent a mere $9.6 billion in July, down almost 24% year-over-year, according to data from the Department of Transportation. Currency exchange rates continue to make a recession even more … ummm … recessed(?) for the travel business. So, we’re looking at nine consecutive months in which tourists from overseas just aren’t plunking down the cash they did last year.

The price paid to travel – called “passenger fare receipts” – plunged 26% from July 2008 to July 2009, with only $2.1 billion spent to get from Point A to Point B and back. This is the lowest level reached for passenger fare receipts in two years. Travel receipts – i.e. the purchase of travel-related goods and services – amounted to $7.5 billion for the month. This is the cash spent on food, lodging, entertainment gifts, and it’s down 23% year-over-year.

The fact that July was the ninth month in which international tourist spending fell masks an even greater problem: this trend has been gaining momentum. In November 2008, foreign visitor spending was off 4% from November 2007. By January 2009, the year-over-year change fell to -6% and -10% in February. May, June and July all posted travel export declines of worse than 20%.

For the year so far, travel exports (same thing as spending by foreign visitors) has reached $69.2 billion – a decline of 17% relative to the same period last year. What’s this mean? People visiting the United States have spent $13.9 billion less than they did last year.

But, in the spirit of fairness, we’re spending less when we leave the United States. American travel imports are down almost 13%. We’ve spent $8.3 billion less than we did last year. But, we still shelled out a total of $57.5 billion in “support” for the local economies we’ve visited in 2009. The United States is still sitting on an $11.7 billion trade surplus in the travel space – but the balance is $5.7 billion less favorable than it was last year.

Dim Sum Dialogues in Thailand: Ko Samui

by Stephen Greenwood on

My ears are still ringing from the stacks of speakers that exhilarated Haad Rin all night. The lack of sleep is making my eyes heavy, but the lurching of the ferry refuses to let my body sleep.

I’m departing Ko Pha Ngan and am en route to Ko Samui – the largest island in the Surat Thani province, and the third largest island in Thailand. It’s a forty minute ride from the beaches of Haad Rin, and when we arrive, there is another entourage of taxi drivers and hotel workers with signs and suggestions for lodging.

The island was first inhabited by Malay and Chinese settlers, the name is thought to have come from a degeneracy of the Chinese word Saboey, which translates in English as “safe haven”. A welcome thought for those looking to escape the aftermath of a full moon party.
With a population of 50,000 people over an area of 228 km2, Samui is considerably more developed than Pha Ngan, and lacks the quaint charm of the smaller island.

Riding on a scooter through the town of Baan Chaweng, it’s easy to see that tourism is the island’s main source of income – especially in this area, which is known for attracting rowdy backpackers.

The streets are an overwhelming barrage of polychromatic signs that advertise hostels, restaurants and luxury beach resorts. I dodge a few bikini and boardshort-clad tourists, weave past tuk tuks congesting the road, and inhale the sharp scent of thai food being grilled up near the street.

I park the scooter near the sand and walk past countless oceanfront resorts. The establishments are guarded by sun-beds and banana-leaf umbrellas in neat rows. Older couples lie stretched out in the sunshine, eager to work on their tan. They thumb through paperback books, only to lay their head on the sun-bed and close their eyes.

There are fancy swimming pools. Security guards. Valet attendants. Buffet lunches. There are families here. It’s a vacation destination – a different vibe than the island across the channel.

But it wasn’t always this way. Until the 1940’s, there were no roads or cars on Samui. There was no outside influence. The inhabitants traveled everywhere by foot or by boat. Then, in the 1970’s, backpackers began to access the island by way of coconut boats. A handful of bungalows were created and travelers on the island began to increase.

By the 1990’s, ferries of passengers were arriving on the island, and investors began to build five-star resorts in order to compete with Phuket as a tourist destination. Once Bangkok Airways committed to fund and build the island’s only airport, Samui’s fate as a tourist destination was sealed.

It’s a great tourist destination at that. Beautiful, large beaches. Several waterfalls. Plenty of day-hiking & trekking. Golfing. Kayaking. Boxing. ATV’s. Elephant riding. Paintball. The list goes on – there is no shortage of things to do on the island. It’s just not the low-key hippy haven that it once was.

Parts of the island reminds me of Phuket – pockets of upscale resorts are interspersed with areas containing cheap bars and a more rowdy atmosphere. But my general feeling is that Samui is cleaner, less tacky, and more family friendly than Phuket. The beaches are just as beautiful, and Samui will still be less developed in 5 years than Phuket is now.

If I were forced to choose between the two for a week long vacation, there is absolutely no doubt that I would head to Samui over Phuket.

After a little over 36 hours on the island, I have to catch a flight back to Bangkok. As much as I would like to stay, I’m also looking forward to one more night in Bangkok, and on the Khao San.

I step into the welcome area of the tiny tropical airport, and any last doubts that I have between Phuket and Samui are completely gone. The airport is a beautiful, well laid out, and very easy to access from almost anywhere on the island. The waiting lounges feature comfortable couches under large wooden ceiling fans. There is live news broadcast on brand new TV’s. Free coffee, juice, chocolate rolls, and WIFI. After a long week of questionable toilets, ferries, buses, and train transit – it’s heaven…or in the least, a safe haven.

If you’ve missed the previous articles in this series, be sure to check out the entire Dim Sum Dialogues column for more on the road from Bangkok to Ko Pha Ngan.

United States considering $10 “tourist fee” to pay for promoting tourism

by Scott Carmichael on

A proposal currently under consideration in the U.S. Congress may soon charge visitors to the United States a $10 entry fee.

The fee will go into a fund used to pay for promoting tourism. By now, I can imagine you are laughing about this (unless you don’t live in the U.S.). The concept of having tourists pay for the PR activities of a country they are already visiting is completely insane.

The idea behind the bill is that promoting tourism should not cost the U.S. taxpayer, something I completely disagree with.

The European Union is obviously against the concept, and given the hassles tourists already encounter when they come to the country, I have to agree with them.

The $10 tourism sponsorship fee would be linked to the ESTA pre-registration system currently required for all visitors from visa waiver countries. When ESTA was introduced, foreigners were told that it would always be free, and by hiding the new fee as a “tourism sponsorship fee”, the government obviously thinks they are keeping their word. The site currently says that there may be a fee in the future.

A family of five will have to pay $50, just for the right to travel to the States, in addition to any new luggage fees imposed by the airlines. This means a trip to the United States could start costing about $400 more than it used to – a price many people may simply refuse to pay, making them head elsewhere instead.

As always in the tit-for-tat world of immigration, if the U.S. pushes ahead with this, expect other nations to do the same to Americans heading abroad.

The end result could easily be a really well filled tourism promotion fund, but another slump in tourism and American tourists having to pay a reciprocal fee whenever they visit Europe.

One other thing to keep in mind, is that this fee (if implemented through ESTA) will most likely require a debit or credit card, something not everyone abroad possesses. ESTA itself is a horrible system, because it requires a computer to access, locking out anyone without Internet access. Now the penalty could be double – you’ll need Internet access and a credit card if you want to visit the US of A.

The bill in question, and all details about the proposal can be found here: Travel promotion act of 2009. The bill calls for a non-profit company to manage the money, and proposes to fund it with $100,000,000 in its first year.

Travel to Spain suffering

by Tom Johansmeyer on

It really is a shame: summer travel to Spain is off 6.1 percent this year, as the global economic decline is making the decision to travel tougher for everyone. The country’s Tourism Ministry puts the number of July arrivals at just over 6.6 million. For the entire year (through the end of July), arrivals fell 10.3 percent to 30.2 million visitors. This follows a record 33.6 million for the same period in 2008.

Spain has historically been one of the world’s top three tourist destination in terms of both the number of people arriving and income earned from them; France and the United States are the other two. So, a substantial year-over-year decline is likely to be felt.

Every part of Spain saw arrivals fell except Madrid, where arrivals increased by 6.6 percent. Andalucia saw visits drop by 11 percent, though Valencia had an easier time. Of the regions with falling arrivals, it had the lowest at only 0.4 percent.

Most of Spain’s tourist traffic came from Britain, which sent 1.6 million visitors to the country. France is second, overtaking Germany this year. British share of travel to Spain, 24.5 percent, fell 16.1 percent this year because of economic conditions. Meanwhile, French tourism to Spain increased this year, with visits to Valencia surging 35 percent and Madrid up 23.4 percent.

Corporate travel off 15%: ouch!

by Tom Johansmeyer on

This sucks: corporate travel is expected to fall 15 percent this year. As much as you like to think you’re doing your part by buying a heavily discounted ticket and going on vacation, the individual traveler’s contribution to the industry pales when compared to that of the corporate road warrior. If the airline industry is going to recover, it will come on the backs – and corporate cards – of those suited crusaders who wield laptops, demand pill water and pay full fare.

Hotels and airlines – and rental agencies and restaurants and just about everyone else – relies on corporate travel. In addition to spending more, this segment of the traveling population tends to hit the road more frequently, so they spend more per trip and per year than the rest of the world. Without their full “commitment,” the tourism and travel industry will have a hell of a time recovering.

A new report from travel industry research firm PhoCusWright dives into the 15 percent plunge for the $85 billion sector, which involves budget-cutting measures by the businesses on which travel service providers have typically relied. Meanwhile, the U.S. travel industry as a whole is only expected to drop 11 percent, making it smaller than it was in 2006.

How important is business travel? Historically, it’s accounted for around 40 percent of the travel market, but shrinking demand brought it down to 39 percent of the travel business in 2007 and could push it all the way to 35 percent by the end of 2010.

“Current economic challenges and public scrutiny of travel and entertainment spending has placed corporate travel on the chopping block. Sharply curtailed corporate travel budgets will mean not only less travel in 2009, but stricter policies and tougher policing when spending does occur,” said Susan Steinbrink, PhoCusWright‘s senior research and corporate market analyst. “However, the recession will positively affect innovation, as corporations and travel management companies intensify efforts to optimize travel programs. This means bringing more spend under management, accelerating integration efforts across the corporate travel value chain, and leveraging new technologies-from mobile to video conferencing-to bolster the bottom line.”