Travel business is expected to gain strength next year, fueled by
international inbound visitors and the first increase in domestic
business travel in more than three years.
In one of the first major global travel forecasts for next year,
the Travel Industry Association of America projects a 4.4 percent
increase in domestic and international travel spending next year
over this year.
The TIA’s annual travel forecast, released during its Marketing
Outlook Forum in Austin this week, is a traditional bellwether of
the industry’s health.
Although many at the forum warned about the possibility of
international crises that could hurt the forecast, several analysts
noted that economic indicators suggest a rebound is possible.
“Travel spending (in the United States) will post gains but it
will be a long winding road back to prior peaks,” said Richard
Curtin, director of consumer surveys at the University of
Michigan’s Survey Research Center. “Gains will be very slight.”
Last year, TIA forecast a 5 percent increase in travel spending
for 2003; the actual increase will be closer to 3 percent,
according to TIA data.
“Domestic leisure has been the industry savior,” said TIA
spokeswoman Cathy Keefe.
At the American Society of Travel Agents annual conference in
Miami this week, some in the industry said they already have
started to see an uptick.
Mandy Chomat, senior vice president for sales and marketing of
Sandals and Beaches Resorts, said he has been visiting travel
agents across the country over the past few weeks.
“They’re telling me they’re starting to see the phone ring,
people are traveling again,” he said.
Bookings for Sandals/Beaches resorts for next year are above
what they were this time last year, said Chomat. “I feel it’s going
to be a strong 2004,” Chomat said.
The increases in leisure travel have helped offset business
travel (which is down 4 percent so far this year) and international
travel (which is down 3.7 percent), according to the TIA.
However, the TIA said a growing economy should help boost
business travel by 4.2 percent from 2003 to 2004, which would be
the first increase since 1999.
Still, some executives said current studies may not accurately
reflect the habits of today’s business travelers, many of whom use
leisure rates and book through the Internet.
“Business travel is back, but it’s in a different form than
we’ve ever seen before,” said Robert Dirks, senior vice president
of brand management and marketing for Hilton Hotels.
Analysts were more bullish on the growth of inbound travelers
next year, despite continuing sluggishness in that market. In the
last decade, the U.S. share of international travel has fallen 37
percent, according to Department of Commerce data.
The latest Department of Commerce numbers released during the
forum predict that the number of international visitors to the
United States will grow at a rate of 5 percent from 2004 to 2006,
thanks in part to a favorable exchange rate.
By 2007, 48.8 million visitors are expected to visit the U.S.,
up from 40.1 million this year, according to Helen Marano, director
of the Department of Commerce’s Office of Travel and Tourism.
The effort to attract international tourists will be aided by a
$50 million allocation to promote tourism from the U.S. government,
the first of its kind. The $50 million will initially be used to
target five countries Canada, Mexico, Japan, Germany and United
Small countries with thriving economies will likely provide a
large percentage of the projected travel growth.
Increases of more than 30 percent from countries like Austria,
Denmark, Finland and Sweden will help Europe traffic to the U.S.
grow by 28 percent by 2007, according to Department of Commerce
“Granted, (the numbers) are from a smaller base, but this is a
strong statement that these are other countries we should be
looking at,” Marano said.
Asia Pacific traffic is projected to grow 13 percent from 2002
to 2007, with China and South Korea providing the bulk of the new
“Beginning in 2004, we expect a full turnaround for Asia travel
to the United States,” said Adam Sacks, managing director of travel
and tourism division of research firm Global Insight.
But Sacks added that 2007 Asia Pacific travel levels will still
be 10 percent below peak 2000 levels. Traffic from Japan alone has
declined 44 percent from 1997.
Still, new visa restrictions could derail the recovery in
international visitors, executives warned.
Some travelers may have to wait two months to get a visa under
new review policies, said John Marks, president and CEO of the San
Francisco Convention & Visitors Bureau and the TIA national
“It’s hard to believe” the government is implementing these
procedures at a time when “uncertainty about travel to the U.S. has
never been higher,” he said.