USA: Big Spenders Keep Travel & Tourism Growing Into 2016

Helped by a strong dollar, low inflation and rising wages, US travellers will remain on the move this year and Europe stands to gain, says latest full year forecast

In 2015, US tourists had more money in their pockets, helping travel to outbound destinations rise by 7.7%.

“As our latest report notes, this was the fastest period of sustained US outbound spending growth in the last few decades.

The upward tick was thanks to the strong greenback, which made gains against just about every other major world currency. Traditionally a safe haven in turbulent times, the US dollar’s strength was driven by concerns over global growth, the slump in commodities and the Federal Reserve Bank’s call to raise interest rates from historically low levels.

There were other factors too that helped US consumers feel more flush; unemployment rates, which kept falling throughout the year to 5% in November 2015, as well as low inflation and highest wage growth since the recession. The latest numbers suggest wage growth will continue – good news for discretionary travel spend.

Also helping consumers to travel more were lower airline ticket prices, as carriers passed on savings from a tanking fuel price to tourists, according Mastercard’s Spending Pulse. The financial services provider also reported that in 2015, US consumers spent a record $157 and $217 per person on airlines and lodgings respectively.

And the good news continues. Going forward, the World Travel and Tourism Council forecasts that outbound travel and tourism expenditure for the US will grow at an average annual rate of 4.9% between 2014 and 2025.

Says Hadwick: “The rapidly growing numbers of low-cost-carriers flying across the pond, coupled with an attractive exchange rate, should also make it a particularly good year for US tourism to Europe.”

So despite uncertain times – the outcome of the upcoming presidential election being one – US travellers will keep hitting the road in 2016, with more money going towards discretionary travel spend.