Domestic and international travel demand expected to drag over next six months
Travel to and within the U.S. grew 3.2% year-over-year in May, according to the U.S. Travel Association’s latest Travel Trends Index (TTI)—marking the industry’s 113th straight month of overall expansion.
While this is up slightly from April’s 3.0% overall growth, the Leading Travel Index (LTI) predicts travel growth will soften through November 2019 as all travel segments experience softer growth.
International travel grew only 1.2% in May, following three months of wide fluctuations due to the timing of Easter, which has historically been a peak travel time for visitors to the U.S. Over the next six months, the LTI predicts international travel growth will slow to just 0.4%.
“Headwinds like the strong dollar and lingering trade tensions indicate sluggish growth for international inbound travel, but the much-needed work of the Brand USA destination marketing organization has prevented a further constriction,” said U.S. Travel Senior Vice President for Research David Huether. “Political leaders would be wise to act on policies that can help us thrive in spite of these challenging circumstances, such as Brand USA’s long-term reauthorization and the expansion of the Visa Waiver Program.”
The outlook is brighter on the domestic travel side: domestic travel demand increased 3.6% in May, buoyed by growth in both the business travel and leisure travel segments.
However, weakening consumer spending and business investment is projected to hamstring domestic travel growth over the next six months. The LTI predicts domestic travel growth will expand only 2.0% through November, with leisure travel outpacing business travel growth. Vacation intentions from January-April 2019 registered above 2018 levels over the same period, and forward-looking bookings and searches support predictions of continued, albeit moderate, growth.
“Domestic leisure travel has been a source of solid demand for the travel industry over the past several years,” said Huether. “This has been especially important given the impediments to international inbound travel growth.”