Tourism to U.S. Helps Bolster Hotel Occupancy Rates, by CBRE
Tourism is a bright spot in the nation’s anemic economic recovery, according to a new issue of CBRE Research’s About Real Estate. International leisure travel to the U.S. has hit all-time highs. According to the United Nations World Tourism Organization (UNWTO), nearly 49 million leisure travelers from overseas visited the United States in 2011 (the latest year for which data is available) — twice the level experienced just 10 years ago. This represents a marked change from previous years. Both business- and leisure-related travel to the U.S. was largely stagnant between 1995 and 2005.
During that period, leisure travel rose at an annual rate of just 1.2 percent a year, while business-related travel fell by 2.2 percent a year (both figures are annualized). The global financial slowdown that began in 2008 didn’t help matters, and the number of overseas leisure and business travelers declined due to weakened business and financial activity, reported CBRE.
The report also noted:
- Overseas leisure and business tourist traffic to the U.S. have seen drastically different recoveries. The number of business-related travelers from overseas has yet to reach the pre-recession high of 10.4 million, but leisure-related travel to the U.S. has boomed — rising by a massive 30 percent in 2011 following an impressive 11 percent increase in 2010.
- The divergent recoveries of leisure and business travel to the U.S. speaks volumes about the state of the nation’s economy in relation to a number of overseas markets. Here in the U.S., a sluggish recovery has not supported a rebound in business-related travel from overseas markets. Strong growth in a number of overseas markets (many of which can be classified as emerging), however, has supported an enormous recovery in leisure-related travel to the U.S.
- International tourism is driving hotel demand more than ever. Despite a sluggish recovery, Starwood Hotels expects North America to be the top-performing region in 2013 on the back of strong demand from overseas travelers. A Wynn Resorts executive said it would be a “catastrophe” for their hotel business if anything interfered with Chinese travel to the United States. And the rise of global tourism is affecting hotel markets outside the U.S. as well.
- Overseas travelers are propping up hotel occupancy rates in countries whose domestic economies have had a disastrous few years. In Spain, for example, where domestic tourism has fallen dramatically as a result of the nation’s weak economy, demand from foreign tourists has helped ease the pain for the hotel sector, with international overnight stays in the country growing 2.3 percent in 2012. In Spain, foreign tourism has continued to increase its share over the past few years, and represented 63.7 percent of the total demand in 2012.
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