Trump's policies and a strong dollar have led to stagnant international tourism growth in the U.S. Expect the slowdown to continue in 2019.
Although the U.S. industry has discussed a Trump Slump for the last few years, there has been scant evidence that travel to the U.S. has suffered heavily since 2016. Now it looks like the evidence is finally here.
New research from Tourism Economics shows that international travel to the U.S. grew just 2 percent in 2018, with visitation from the Asia-Pacific region declining by 0.9 percent. While the Middle East and North America increased their visitation, the Middle East and Mexico have still not returned to 2016 levels. Visits from Canada are 9 percent lower than their peak in 2013.
When the United Nations World Tourism Organization reported its numbers on global tourism last month, it became obvious that the global tourism sector is experiencing a decline due to serious headwinds. The U.S., though, is positioned for a continued decline in the future.
The bigger picture shows the U.S. losing ground on the global stage. Arrivals to Europe and Asia-Pacific both increased by 6 percent, while the Middle East saw a 10 percent uptick in 2018. It seems that global travelers are looking elsewhere for their vacations.
“International travel markets posted disparate performance in 2018 including several notable surprises on the downside,” states the report from Tourism Economics. “After registering average annual growth of 23 percent over the previous decade, Chinese travel to the US stopped in its tracks last year—perhaps in connection to trade tensions. Similarly, South Korea fell 3 percent after averaging 11 percent growth over the prior ten years. Japan also contracted; this continues the narrative of an ever important but languishing market. And Germany surprised with a steep decline in 2018, perhaps evidence of a reaction to unpopular U.S. diplomacy and policies.”
The top growing markets for U.S. international travel turned out to be Spain (+11 percent), Italy (+11 percent), Brazil(+10 percent), and the Netherlands(+10 percent). Germany (-7 percent), Japan (-4 percent), South Korea(-3 percent), and Argentina (-2 percent). Visits from China were flat in 2018.
Inbound travel, overall, has slowed since March 2018, which was the beneficiary of an early Easter holiday.
Tourism Economics’ outlook for 2019 stops short of predicting a worldwide recession or economic meltdown. The group, however, suggests that a global slowdown in gross domestic product growth will occur, with China dropping from 6.6 percent growth in 2018 to 6 percent this year. That’s not good news for international travel in general.
With the U.S. dollar remaining expensive, at 10 percent higher than its long-term average, the outlook for inbound international travel remains tepid. With costs high, and declining economic performance abroad, it’s hard to see how the U.S. can boost visitation in the near term.
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Photo credit: Tourists in New York City's Times Square. Skift