Travel industry loses $100 billion

If 2008 was bad for the travel business in the United States, 2009 was worse. With 54.9 million people coming into the country, international visitation was off 5 percent. And, those who came spent far less. Visitors from abroad dropped only $121 billion last year, a 15 percent decline that cost our economy $21 billion. This is the worst year-over-year drop in spending in history, according to the U.S. Department of Commerce.

It wasn’t all bad last year: much of the financial damage was in one place. The $4.6 billion by which UK visitor spending fell was greater than that from Africa and the Asia-Pacific region. Nonetheless, concentrated losses had a global impact. The travel and tourism industry lost 400,000 jobs, eliminating virtually all employment gains for the sector since 2004. And, total travel and tourism spending in the U.S. (not just international) fell by $100 billion from 2008.

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

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.

Foreigners spend $9.5bn on travel to and in the U.S., down 22%

It’s not exactly a surprise: foreign spending on U.S.-related travel is down sharply year-over-year. In May this year, foreigners dropped $9.5 billion on travel to the United States and tourism within the country. This is down 22 percent from May 2008. according to the Department of Commerce. A global recession triggered by last year’s financial crisis (duh) has made travel relatively more expensive, despite the fact that it’s generally cheaper. After all, a trans-Atlantic flight for $10 is worthless if you only have $1.

People traveling to the United States spent $2.1 billion last May, a decline of more than 22 percent. Other travel and tourism goods and services accounted for $7.5 billion – off 23 percent year-over-year. This is the seventh month in a row in which travel spending to and within the United States fell, and the trend has accelerated since November 2008. Single-digit declines ended in February 2009, and a 15 percent drop in April preceded May’s total 22 percent decline.

So, if you aren’t hearing as many fun accents at your local restaurant, this is the reason why. Travel discounts, sometimes, aren’t enough to offset financial calamity … a fact that industry has come to know all too well.

Canadians Finding the U.S. a Travel Deal

My friends who I recently stayed with in the Georgetown section of Washington, D.C. are Canadian. This is a good time for Canadians to be visiting the U.S. since these days the Canadian dollar has an exchange rate to the U.S. dollar that is a vast improvement over what it used to be. U.S. gas prices being cheaper than in Canada make driving a great travel option. [see article]

Despite the travel woes when crossing borders, the border between Canada and the U.S. is not so cumbersome. Since driving to the U.S. doesn’t have the same travel restrictions as flying, you can load your car with gallons of shampoo if you want. No one will stop you. (Any of you flying in or out of the United States are restricted to enough shampoo to wash about half your hair–an exaggeration–a 3 ozs. bottle is allowed.)

According to David Sharp in the Associated Press article, Old Orchard Beach, Maine is a popular destination since it’s close to Quebec. I’ve been to Old Orchard Beach and its lovely. I can see the draw. Other popular destination states are New York, Florida, Washington, Michigan, California and Nevada. New York is the first pick.