Strong US domestic leisure travel carries weaker business, international travel
Travel to and within the United States grew 3% year-over-year in August, according to the U.S. Travel Association’s latest Travel Trends Index (TTI), marking the industry’s 116th straight month of growth.
The bright spot in the TTI was the strength of the domestic leisure travel segment, which expanded 4% while vacation intentions reached their highest level in 2019 thus far. However, forward-looking bookings and search data indicate there may be uncertainty on the horizon for the domestic segment: the Leading Travel Index (LTI), the TTI’s predictive element, projects domestic travel growth will soften to just 1.8% in the coming six months.
Domestic travel as a whole grew 3.4%, dragged down slightly by a weakening domestic business travel segment (1.2%), though business travel is expected to pick up again and expand 1.6% over the next six months.
“While the travel engine is not firing on all cylinders, the overall pace of travel through the first eight months of this year is solid,” said U.S. Travel Senior Vice President of Research David Huether.
International inbound travel—which has experienced a roller coaster of growth spurts and contraction in 2019—was flat in August. While this is a slight improvement from the 1.2% decline registered in July, it is not the hoped-for sign of international inbound travel’s revival. Over the next six months, the LTI projects the segment will decline 0.6% as it faces continuing obstacles in the form of trade tensions and the strength of the dollar.
Policy changes to help mitigate the effects of these challenges include the long-term reauthorization of the Brand USA destination marketing organization, expanding the Visa Waiver Program to include more qualified countries, and improving Customs wait times.
“Brand USA has kept the U.S. competitive in the global travel market and prevented the decline in our country’s share of global travel from being worse,” said Huether. “It is crucial that Congress works quickly to reauthorize Brand USA this year to ensure the future of the United States’ travel promotion and planning.”