Domestic, international travel weather shutdown turbulence

Travel to and within the U.S. grew 3.2 percent year-over-year in January, according to the U.S. Travel Association’s latest Travel Trends Index (TTI)—marking the industry’s 109th straight month of overall expansion.

But the predictive portions of the TTI continue to forecast a slowdown, as weakening global economic growth, trade tensions, and fading consumer and business confidence take hold in coming months. That could be problematic as the U.S. works to halt an erosion in its share of the competitive international travel market.

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Despite the 35-day partial federal government shutdown’s effect on air travel, the year started off positively for all sectors of travel: international inbound, domestic leisure and domestic business each reported growth in January slightly above the previous six-month averages.

International inbound travel grew 3.2 percent in January, bypassing its six-month moving average of 2.8 percent growth. Domestic leisure travel grew 3.4 percent, besting business travel’s 2.8 percent growth rate; the margin between domestic leisure and domestic business travel has narrowed over recent months.

Storm clouds, however, are on the horizon as all three travel segments are expected to wane in growth over the next six months. U.S. Travel economists caution that the sluggish growth rate will hinder the U.S. in its efforts to regain its lost share of the global international travel market; more robust growth is required to close the gap with other competing nations.

Business travel is expected to increase at a decelerated rate of 1.6 percent through July, while leisure travel will grow at a rate of two percent as both business and consumer confidence begin to moderate from recent strength. Meanwhile, a cooling global economy, as well as an elevated value of the U.S. dollar, will dampen international inbound travel, which is expected to grow at a decelerated 2.2 percent.

“As indicators of global growth and trade activity begin to cool, so too will international inbound travel,” said U.S. Travel Senior Vice President for Research David Huether. “Certain legislative initiatives—namely Brand USA’s long-term reauthorization and the inclusion of more qualified countries in the Visa Waiver Program—can improve U.S. competitiveness in the global international travel market.”