Hotel Online  Special Report


  Two Segments of  U.S. Travel Industry, Domestic Business
Travel and International Inbound Travel, Will See Declines
in 2003 of 3.7% and 4%
AUSTIN, TX -- October 22, 2003 - After years of little travel volume growth combined with significantly lower traveler spending, it looks like things might be finally turning around for the travel industry. Attendees at the Travel Industry Association of America’s (TIA) Marketing Outlook Forum in Austin, Texas, have reasons to be cautiously optimistic for 2004 and beyond. According to TIA’s Annual Travel Forecast, overall traveler spending by domestic and international visitors is forecasted to increase 4.4 percent in 2004 to $568 billion, up from $544 billion in 2003. Still, it won’t be until 2005 that the level of spending—forecasted to reach $594 billion—will finally surpass the record set in 2000.

Two of the hardest hit segments in the travel industry, domestic business travel volume and international inbound travel to the U.S., will once again see year-over-year declines in 2003 of 3.7 percent and 4 percent, respectively. However, the outlooks for both segments are more positive for 2004 and 2005.

Increasing for the first time since 1999, U.S. residents are forecasted to take more than 122 million business trips in 2004, an improvement of 4.2 percent from 2003. In 2005, business travel will increase 3.5 percent to nearly 127 million trips.

“It’s clearly good news that business travel will show an up tick in volume next year. The big unknown is the possible long-term impact of alternative technologies,” TIA’s president and CEO, William S. Norman stated at the Forum. “The question remains, ‘has the decline in business travel bottomed out?’ What is certain is that it will be some time before business travel returns to its peak levels of the late 1990s.”

After falling steadily for three years, international inbound arrivals to the U.S. are forecasted to increase 5 percent annually in both 2004 and 2005. This translates to more than 42 million international arrivals in 2004 and more than 44 million in 2005. However, these numbers are well below the high of 51 million arrivals in 2000. International traveler spending in the U.S. is forecasted to increase 5.5 percent in 2004, to more than $69 billion, and increase nearly 8 percent in 2005 to $75 billion. Once again, these spending levels are well below the $82 billion spent by international travelers in 2000.

Domestic leisure travel has slowly but steadily increased over the years, despite the aftermath of September 11, the lagging economy and the war in Iraq. TIA is forecasting leisure travel volume to grow 3.2 percent in 2004, up from a predicted 2.8 percent annual increase this year. It will increase once again in 2005 by nearly 2 percent.

“Leisure travel has been the bright star in a relatively dim travel constellation. However, Americans have remained reluctant to commit, so last minute planning and booking will continue to be the norm,” remarked Dr. Suzanne Cook, TIA’s senior vice president of research. “We expect that the increased preferences for domestic travel, close-to-home destinations, and highway travel will continue, although I think as time goes on Americans will begin to go back to their more traditional travel patterns.”

TIA is the national, non-profit organization representing all components of the $525 billion travel industry. TIA's mission is to represent the whole of the U.S. travel industry to promote and facilitate increased travel to and within the United States.

Cathy Keefe 
Also See: Americans Still Plan on Traveling this Summer But Many Aren't Sure When or Where They're Going / June 2003
Travel Industry Association of America Forecasting Business Travel Turnaround by 2003 / July 2002

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