Analysis Of The Us Outbound Travel Market

Published Date: 02 Nov 2017

Surprisingly, the size of the US doesn't inspire its residents to travel outside their home country.Despite the size of the US, outbound travel is not an aspiration shared by all its citizens. Since people of all ages are interested in overseas travel, it became more accessible to measure by a range of demographics.Overseas travel is accessible and embraced by a range of demographics, since appeal extends to all ages. Those born between 1946 -1964, also called baby boomers, who are seeking for more observational travels, are some of the most often overseas travellers. Baby Boomers (those born between 1946-64) are some of the most often overseas travellers, willing to indulge in more experiential travel. This segment group aged 46-56 years has a big appetite for overseas travel. Indeed, the average traveller is aged 46 years for men, although slightly lower for females. We see baby boomers as being the most relevant and important for the group of business women. These people have gained years of training and skills and lead successful business in the USA.

Over the past few years, the international travel circuit has become more elusive for the US travellers. Some of the factors influencing the overseas travel are the H1N1 virus, the hard-hitting recession and the catalogue of safety concerns in some countries. However, the numbers stand for a strong desire to travel, in 2011 there are over 58 million Americans unrestrained by economic conditions.

Increasingly, US travellers are seeking out more unique experiences, but on a tighter budget. Long-haul destinations in Central America and Asia are gaining popularity, enticed by the promise of new cultures, more flights and cheaper airfares to far-flung locations. The popularity of technological devices and heavy Internet usage among US travellers is also having a marked impact on outbound travel. The Internet has a strong influence on destination choice and booking methods. More and more new technologies have been used by tourism boards and trade companies to engage the US 'Web-savvy' traveller. The marketing strategies for targeting the US traveller now include enhancing the online travel experience and using social-media channels. Our target group of business women falls, depending on these conditions, perfectly. Modern businesses are dependent on social media, communications and the Internet as a whole. The Health Temple spa of Koh Samui is a suitable long-haul destination for this group, and as mentioned before, the Internet as a vital source could also be used for our advertising campaign.

Selected demographic characteristics of US residents travelling to overseas destinations, 2007-11

2007

2011

% Change

2007-2011

Male

54

49

-5.0

Female

46

51

+5.0

Average age (male)

46.4

45.9

-0.5

Average age (female)

43.2

44.2

+1.0

Occupation:

Professional/technical

37

37

0

Manager/executive

26

21

-0.5

Retired

12

14

+2.0

Source: Jessica Rawlinson (2012): US Outbound, Mintel Oxygen

( http://academic.mintel.com.proxy1.dom1.nhtv.nl/display/590763/ )

Tourism balance

According the travel reports, travel is more common among certain US states. In 2011, New York and California generated a combined total of 26% of all overseas travellers, accounting for 15% and 11% respectively. The other stand-out states were New Jersey (6%), Florida (8%) and Texas (6%). According to a UNWTO’s report, after Germany, the US is the second-largest market for international tourism expenditure. After declining in 2009, expenditure by US tourists abroad bounced back in 2010, making further gains in 2011. Despite the comeback, US travellers remain somewhat conservative with expenditure, looking for value for money and budgeting when travelling abroad. (See also Figure 1 in appendices)

Figure 1: US tourism receipts, expenditure and balance, 2006-11

2006

2007

2008

2009

2010

2011

% change 2006-11

US tourism receipts (US$m)

107,825

122,542

141,380

120,290

134,464

152,746

+41.7

Tourism expenditure abroad (US$m)

99,605

104,808

112,335

99,249

102,766

109,760

+10.2

Balance (US$m)

8,220

17,734

29,045

21,041

31,698

42,986

+422.9

Figure 6: Average trip expenditure by US outbound travellers, 2007-11

2007

2009

2011

% change 2007-11

US$

US$

US$

Average trip expenditure per visitor

3,216

2,708

2,936

-8.7

Average international airfare per visitor

1,503

1,177

1,351

-10.1

Average package price per visitor

2,748

2,385

2,584

-6.0

US citizens are big spenders when they are abroad, enjoying the chance to stay in good accommodation, shop for goods and sample local food and entertainment. The UNWTO ranks the US second in the world after Germany in terms of total outbound tourism expenditure. The traditional spending habits of American tourists have made the US outbound tourist a prime target audience for many tourist boards around the world.

The average household income was US$106,300 in 2011, although this has fallen 7% since 2007, as economic constraints have impacted income levels. In the year 2012, US outbound tourism expenditure continued to improve, although further economic recovery will be required for this to continue. Credit-card company Visa reports that US travellers increased spend in 2012, with international spending on Visa accounts up 9% in Q1/2012.

Changes in exchange rates help shape tourism expenditure patterns. The appreciation of the US Dollar can boost expenditure overseas, giving Americans more local currency in exchange for their Dollar. Travel in the Eurozone has become more affordable in recent years as the US Dollar appreciated against the Euro.

Transportation costs are a major part of trip expenditure, led by airfares, since air travel is involved to most destinations, with the exception of Mexico and Canada. The cost of air travel dropped during the recession as airlines tried to stimulate demand with cheaper deals. Air travel forms a large part of the cost of package deals, over which tour operators have little control. Rising fuel prices and the addition of fuel surcharges and airport taxes have inflated the cost of US outbound package deals in recent years.

Some demographic groups are more immune to economic hardship than others. Spring-Break holidays have remained relatively steady during the recession since students are used to travelling on a tight budget. Nevertheless, students and young adults have been forced to economise, mainly by selecting cheaper options and travelling for five nights instead of the normal seven.

Credit cards are the most common payment method when abroad, used by 53% of all US outbound travellers in 2011. According to the OTTI, cash is the second most popular payment method used by one third of Americans abroad. Debit cards are far less common and used by only one in ten US tourists abroad.

Jessica Rawlinson (2012): US Outbound, Mintel Oxygen

( http://academic.mintel.com.proxy1.dom1.nhtv.nl/display/590763/ )

Arrivals

The number of Americans reaching foreign shores was 58.7 million in 2011, not far off the entire population of the UK. Although these numbers are high by international standards, only one fifth of the US population travel overseas. This type of travel is a desirable pursuit for a section of Americans, but a much greater proportion of its society is simply content to holiday at home. The low level of annual holiday taken – around 10-15 days – is a major market limitation, making short breaks or one-week trips a popular option. Concerning the last findings here, we are inclined to think as most suitable to offer package trips for a one week time.

Consumers began to make cutbacks in travel in the latter part of 2008, after the economy started to weaken. The decline in outbound travel in both 2008 and 2009 reflected the weak performance of the US economy and international markets. Although there has since been an improvement in the US economy, the country continues to suffer from high unemployment and latent economic growth. Holidaying at home continues to be a viable substitute, attracting value-conscious travellers away from the outbound market.

Asia is a real threat for Western European countries and other long-haul country’s costs on the ground, such as accommodation, can be substantially cheaper than in Europe. It is gaining appeal as a long-haul destination for US travellers but economic hardship is preventing many Americans from turning dreams into reality. Although data shows a marked decline for many Asian markets, tourist boards are generally not so pessimistic, suggesting a more positive picture regarding US tourism in Asia. In the first half of 2012, Asia was one the fastest-growing regions, according to US outbound data. The availability of direct flights and cheaper airfares is making this region more accessible to the more adventurous American traveller. (See also Figure 3 in appendices)

Figure 3: US outbound travel by region, 2007-11

2007

2008

2009

2010

2011

% change 2007-11

% change 2010-11

,000

,000

,000

,000

,000

North America (Canada/Mexico)

32,801

32,774

31,119

31,764

31,679

-3.4

-0.3

Caribbean

5,184

5,973

5,696

6,186

6,134

+18.3

-0.8

South America

2,811

3,017

2,818

2,395

1,973

-29.8

-17.6

Central America

2,248

2,001

2,060

1,910

1,946

-13.4

+1.9

Western Europe

11,523

10,468

9,848

9,179

9,053

-21.4

-1.4

Eastern Europe

1,343

1,201

1,303

1,112

1,054

-21.5

-5.2

Asia

6,714

6,404

6,333

5,616

5,107

-23.9

-9.1

Middle East

1,312

1,724

1,909

1,824

1,756

+33.8

-3.7

Africa

874

801

1,061

969

892

+2.1

-7.9

Oceania

874

801

818

599

486

-44.4

-18.9

Thailand

Political and social unrest has tarnished Thailand’s image in recent years, keeping US tourists at bay. In October and November 2011, floods hit Thailand, resulting in a drop in US arrivals. The year 2012 has seen a rebound in travel by US citizens. The US was one of the target markets in its 2012 campaign to promote Thailand as a creative destination. The campaign generated 24 million online visitors to the website, stimulating a great deal of interest from Americans. (See also Figure 4 in appendices)

Figure 4: US outbound visitors to Asian destinations, 2007-11

2007

2008

2009

2010

2011

% change 2007-11

% change 2010-11

,000

,000

,000

,000

,000

China

1,374

1,201

1,182

1,254

1,108

-19.4

-11.6

India

999

1,016

1,061

770

946

-5.3

+22.9

Hong Kong

968

924

788

713

676

-30.2

-5.2

Japan

1,718

1,601

1,515

1,197

595

-65.4

-50.3

Philippines

312

308

394

371

513

+64.4

+38.3

Taiwan

687

647

576

513

513

-25.3

0.0

Republic of Korea

687

616

667

599

459

-33.2

-23.4

Thailand

468

431

364

342

324

-30.8

-5.3

Singapore

344

308

242

200

189

-45.1

-5.5

Figure 5: Means of booking, by US outbound travellers, 2007-11

2007

2009

2011

% change points

2007-11

Personal computer

32

39

40

+8.0

Travel agent

35

33

29

-6.0

Airline directly

17

15

15

-2.0

Company travel department

7

5

6

-1.0

Tour operator

5

3

4

-1.0

Travel club

n/a

1

1

-

Total

100

100

100