US domestic business travel projected to outpace leisure segment
Leisure and business travel to and within the U.S. grew 3.4 percent year-over-year in May, according to the U.S. Travel Association’s latest Travel Trends Index (TTI)—marking the industry’s 101st straight month of overall expansion. However, mounting trade tensions work against America’s pursuit of an increased share in the global travel market.
Most notable in the TTI is the effect near-historic highs in consumer confidence is having on the domestic travel market. According to the Leading Travel Index, domestic travel is expected to increase by approximately 2.5 percent in the next six months. Leisure travel led the domestic market in May, but the strength in business sentiment poses an opportunity for business travel to outpace leisure travel in the near term. While this is good news on the domestic front, there continues to be a concern that the U.S. is losing out on its share of the global travel market.
“Business travel has been on an upward trajectory in 2018, and this is expected to continue throughout the rest of the year. This is solid evidence that businesses are optimistic in the current economic environment, and are buoyed by the recent tax legislation,” said U.S. Travel Senior Vice President for Research David Huether.
International inbound travel is heading into a summer season that is expected to grow approximately three percent through the fall. However, U.S. Travel economists remain concerned that rising trade tensions and higher oil prices may hinder global activity.
“Amid these positive signs, missed opportunities and storm clouds exist. We urge officials to foster policies and messaging in the race to be globally competitive,” said Huether.
Solid growth propelling global travel to new record highs, combined with relatively modest growth in inbound travel to the U.S., will result in the U.S. continuing to lose out on its share of the ever-growing global travel market. Despite modest increases in arrivals from some key markets, the sluggish rate of growth in inbound travel will see the U.S. continue to fall behind markets like China, France, Germany and the United Kingdom, whose share of the global travel market continues to increase.
The TTI is prepared for U.S. Travel by the research firm Oxford Economics. The TTI is based on public and private sector source data which are subject to revision by the source agency. The TTI draws from: advance search and bookings data from ADARA and nSight; airline bookings data from the Airlines Reporting Corporation (ARC); IATA, OAG and other tabulations of international inbound travel to the U.S.; and hotel room demand data from STR.
Click here to read the full report.