U.S. travel grew in July, but a slowdown may be coming

U.S. travel increased this summer, but growth is slowing even as a global travel boom continues.

That’s according to the latest data from the U.S. Travel Association (USTA).

Travel to and within the United States grew 3 percent in July from a year earlier, according to the USTA’s Travel Trends Index. And travel for the first seven months of this year has grown faster than the same period in 2017, said David Huether, vice president for research for the USTA.

Growth is credited mainly to increased domestic travel on the heels of higher consumer confidence. Business travel, in particular, is having its best year since 2010, Huether said.

However, domestic and international travel growth decelerated from June to July, a trend the USTA expects to continue over the next six months, though growth will remain positive. The association predicts domestic travel will grow an average of 2.4 percent through January.

Adam Sacks, president of the tourism economics group at research firm Oxford Economics, said “cooling consumer indicators and the potential for slower business investment growth” through the rest of this year could hurt domestic travel. Oxford prepares the Travel Trends Index for the USTA.

For example, new orders for durable goods, which can reflect future consumer and business demand, declined 1.7 percent in July, according to the U.S. Census Bureau. In addition, steep U.S. tariffs on many foreign products have risen fears about the long-term effect of the escalating trade wars on U.S. consumers and businesses.

Census July 2018 durable goods chart

As global economic growth moderates, the USTA predicts international travel will grow at an average rate of 1.6 percent through January. A longer-term concern, said USTA CEO Roger Dow, is that inbound international travel is not accelerating fast enough to boost the U.S. share of the global travel market, which peaked at 13.6 percent in 2015.

Case in point: In 2017, nearly 77 million people from other countries visited the United States, which was basically flat (+0.7 percent) from 2016, according to recent data from the International Trade Administration’s National Travel and Tourism Office. More visitors came from South Korea (+18 percent), Brazil (+11 percent), Argentina (+10 percent) and Ireland (+9 percent).

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Study: Travel makes us happier

You know that feeling of not wanting vacation to end? You do anything to extend it — put off packing and make a few stops on the way to the airport.

There’s a reason for that.

Travel and happiness are linked, according to a new report.

While the survey by the U.S. Travel Association (USTA) focused on employees, it reflects a much broader group of people.

Employees who use most of their time off for travel are much happier than those who travel less or not at all, the report found. It also found that travel preferences — from vacation budget to what is packed into luggage — varies greatly from state to state.

Big Sur Hwy 1
AAA expects nearly two-thirds of the 88 million Americans planning a vacation this year to take a road trip. Driving along California Highway 1 (near Big Sur here) is a popular option. (Fred Moore via Creative Commons)

Overall, America’s work culture is starting to change, with more employers encouraging vacation and more employees feeling better about using their earned time off.

While the numbers have improved since 2015, most U.S. workers (52 percent) don’t use all of their annual vacation days. Those workers accumulated 705 million unused days in 2017, up from 662 million days in 2016.

Workers in Colorado, Virginia and Arizona lead the nation in taking vacation.

No. 1 is Colorado, where workers take average of 20 vacation days a year. In Virginia and Arizona, workers use about 19 days a year. The national average is 17 days.

Perhaps the more vacation time you earn, the more you use. Coloradans earn an average of 28 paid time-off days, more than any other state and higher than the national average of 23 days in 2017. Virginia workers earn an average of 25 paid time-off days a year.

Or perhaps it has something to do with office culture. In Virginia, 52 percent of companies encourage vacation, compared with the national 38 percent.

Workers in Montana, Delaware and Rhode Island are the worst at taking vacation. At the bottom is Montana, where workers take an average of 16 days. Montana workers also earn less time, an average of 21.8 days. That’s the third lowest nationally, after Rhode Island and Delaware (21.6 days each).

Translating time

Using more vacation days appears to create a positive economic impact. The increased vacation time from 16.8 days in 2014 to 17.2 days in 2017 generated $30.7 billion in economic impact nationwide. It also produced 217,200 jobs (direct and indirect) and generated $8.9 billion in additional income for Americans.

It also increases worker satisfaction, which may improve productivity. Workers in Arizona and Washington tie for highest rates of happiness with their company — 68 percent vs. 54 percent nationwide.

Who travels?

Even when workers take time off, less than half (48 percent) don’t travel.

Moreover, a recent Gallup poll found that 62 percent of all Americans took a vacation away from home last year, similar to 2005 but lower than 70 percent in 2001. Of that 2017 figure, only about one in five people traveled internationally.

Gallup found that married adults with children plus adults with higher incomes and a college degree took more vacations.

The USTA report concluded that baby boomers take more vacation days and travel more than other generations. That could be the result of boomers having longer job tenures to accumulate more time off and money to be able to travel more.

Once again, Colorado workers led the nation in using vacation days to travel: 57 percent vs. 47 percent nationally.

Survey: Christmas season is worst time to fly

Just as millions of Americans prepare to fly back home after Christmas, a new study finds that consumers think air travel is more frustrating than it was five years ago.

Consumers also think the Christmas season is the worst time of year to fly, according to the Morning Consult national survey conducted for the U.S. Travel Association (USTA), an industry trade group.

Such negative emotions mean fewer Americans are willing to travel. The survey found that air travel hassles stopped 24 percent of leisure travelers and 14 percent of business travelers from taking at least one trip in the last five years.

And that’s translated into real losses for the U.S. economy. In 2016, the USTA says Americans avoided 32 million air trips because of travel hassles, costing the economy more than $24 billion in spending.

Here are some of the survey findings over the last five years:

  • 60 percent say airline fees, such as those for checked bags, flight changes and seat assignments, have worsened.
  • 51 percent say the overall cost of flying has increased.
  • 47 percent say airport hassles, such as long lines and crowded terminals, have gotten worse.

Improving airports would help, according to the USTA. Two in five frequent business and leisure travelers would take at least three more trips a year if airport hassles were reduced or went away, according to the survey.

In addition, many survey respondents think Congress should pursue policies to: modernize airport and air traffic control infrastructure (60 percent), give airports more flexibility to improve air service options for travelers (55 percent) and maintain competition between airlines (53 percent).

Morning Consult surveyed 2,201 adults online from Oct. 10-12, 2017. Results have a margin of error of +/- 2 percentage points.

Study: Travel is one of the nation’s largest job creators

People’s love of travel helps make it one of the nation’s biggest job creators, according to a study released today by the U.S. Travel Association (USTA).

The study , which analyzed data from the U.S. Bureau of Labor Statistics, found that the number of travel jobs rose 17 percent from 2010 to 2016 vs. a 13 percent increase for the rest of the  private employment sector.

USTA CEO Roger Dow said the travel industry often is an “under-appreciated” economic booster.

Last year, the economic output generated by U.S. and international visitors totaled $990.3 billion in direct spending and $1.3 trillion in indirect spending, according to USTA data. The tourism industry generated $157.8 billion in federal, state and local revenue.

Growth in travel is fueling such spending. This year, the number of global outbound trips is forecast to grow between 4 percent to 5 percent, driving by travel to Asia and the United States, according to the ITB World Travel Trends Report 2016/17.

The travel industry directly supports 8.6 million jobs plus 6.7 million jobs in other industries, according to the USTA. Dow noted that travel is a “good” jobs with career advancement opportunities.

Here are some other highlights of the new USTA study:

  • People whose first job was in a travel-related industry reach an average career salary of $81,900 — significantly higher than those whose first job was in nearly any other U.S. industry.
  • Nearly 40 percent of workers who started their career in travel reached an annual career salary of over $100,000.
  • The travel industry is a better career starter for people with less education: Workers with a high school degree or less whose first jobs was in travel reached an average career salary of $69,500, 5 percent higher than the average salary of those who started out in other industries.

Is U.S. travel increasing despite or because of election?

The U.S. presidential election didn’t put a damper on U.S. travel in November as some expected.

In fact, business and leisure travel within and to the United States that month increased at a faster-than-average pace over the last six months, according to the Travel Trends Index released this week by the U.S. Travel Association and Oxford Economics. And travel is expected to continue to grow in the next six months even with some continued uncertainty.

After Donald Trump’s election win in November, “we were prepared to see a wary short-term reaction, particularly in demand for inbound international travel to the U.S.,” U.S. Travel Association CEO Roger Dow  said in a statement.”Not only has no downturn materialized, but we have seen surprising strengthening in some areas, particularly the long-foundering domestic business travel segment.”

The travel uptick mirrors the rallying stock market, steady employment growth and other positive economic indicators. It should be noted that many of those indicators already were on an upward trend for many months before the election.

stock-graph
Stocks have rallied across indices: the Dow Jones Industrial Average (green line), the Standard & Poor’s 500 (blue line) and the Nasdaq (red line). Graphic is for the last six months. (Yahoo Finance)
The Dow Jones Industrial Average, one of the nation’s best stock baromoters, has gained 1,633 points since election day. Moreover, the Dow closed above 19,000 on Nov. 22 — for the first time in its 120-year history– and has been trading above that mark ever since then as investors expect more business-friendly regulations under Trump.

Today, the Dow was down 63 points as of 2:35 EST from Wednesday.

November travel trends

Travel within the United States accelerated in November, continuing a six-year expansion, according to the Travel Trends Index.

Most of the gains came from domestic leisure travel, which grew faster than domestic business travel. Still, domestic business travel reversed a trend where it was the only index segment to spend most of 2016 in negative territory.

International travel to the United States also rose in November, but at a slower pace due to pressures, such as global political and security disruptions and the strong U.S. dollar.

Outlook

Uncertainty still exists until Americans see more details about President-elect Trump’s policies.

The U.S. Travel Association predicts that overall U.S. travel will increase at an annual rate of about 1.8 percent through May, thanks to solid employment growth and healthy consumer spending. Once again, that growth will be led by domestic leisure travel based on forward-looking travel bookings, searches and vacation plans.

Adam Sacks, president of Oxford’s tourism economics group, expects international travel growth early this year will remain sluggish—and possibly decline—due to ongoing global political turmoil and the strong U.S. dollar.