TIA'S Barometer Shows U.S. Losing Market Share

UK Travel to U.S. Expected To Remain Flat Through Spring; More Positive Outlook Predicted for German

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. October 14, 2008

APRIL 19, 2007. The Travel Industry Association's (TIA) most recent Travel Trade Barometer shows that the U.S. was less competitive and lost market share in 2006 from the United Kingdom and Germany. Inbound travel from Mexico fared better with bookings and market share increasing over 2005.

TIA's travel trade-based survey provides the earliest indicator of market performance for the United States in the UK, Germany and Mexico. The program also provides destinations and subscribers with a reliable and timely tool to monitor their competitive position in these three key markets.

The most recent Travel Trade Barometer reported the U.S. was less competitive and lost market share in the United Kingdom in 2006, with year-end bookings and travel demand 1 to 3 percent below 2005 levels. The UK travel outlook for the 2007 winter and spring seasons is projected to remain flat compared to 2006. One reason could be waning consumer confidence-only one-fifth (20%) of the trade reported that British consumer confidence is stronger now than in 2006.

The U.S. lost market share from Germany last year and year-end 2006 bookings were flat, despite a 1 to 3 percent growth in the country's overall outbound long-haul travel. But the outlook for the first and second quarters of 2007 is expected to be more positive, with half of the trade projecting growth in travel to the U.S.

According to the Barometer, the German travel trade feels the top deterrent for travel to the U.S. for the next six months is implementation of the biometric passport. This most likely reflects misunderstanding about the new requirement, as there are no administrative difficulties anticipated with issuance of new biometric passports in Germany.

Of the three markets measured, Mexico continues to be the strongest performer with year-end 2006 bookings growing 4 to 9 percent, on average, compared to 2005. That growth continues into the first quarter of 2007 with bookings projected to increase 1 to 3 percent, on average. Second quarter 2007 bookings are also projected to be slightly higher compared to the same time period last year. An increased level of promotion by U.S. destinations was the top rated motivator.

The Barometer reports that Mexican travelers were most interested in shopping, sporting events, and travel featuring pop art/cultural events and exhibits.

Barometer results continue to be a proven predictor for actual visitor arrivals. For example, the UK Travel Trade Barometer has consistently been on target providing subscribers accurate early indicators. As a tool it also clarifies why travel is changing. The short-term forecast results are unmatched. In May 2005 leading research firms forecast British arrivals to grow 9 percent for the year. In contrast, the Barometer projected 1 to 3 percent growth for the year. Actual year-end growth was 1 percent. In addition, the Barometer highlighted why UK travel growth was slowing.

The methodology has proven to be reliable because it is primarily based on actual bookings and current booking demand, which inherently incorporates both traditional metrics (such as air capacity, exchange rate, the economy) with industry-specific indicators (such as policy changes, natural disasters, terrorism, and competitive marketing from other destinations), and most importantly consumer demand.

For more information, visit www.travel-barometer.com or http://www.tia.org/researchpubs/tia_research_international_consumer.html.

NOTE: The U.S. Department of Commerce's Office of Travel and Tourism Industries originally established the Travel Trade Barometer program in 2000 with TMI, and later expanded the program to measure and monitor the U.S. recovery from 9/11 and the war on terrorism. The Office of Travel and Tourism Industries is a sponsor and a strong advocate for the Barometer. TMI is a primary U.S. market research firm providing tangible and insightful marketing-focused research on international travel to the U.S. and U.S. travel abroad. The TTB is one of several research programs led by TMI.

TIA is the national, non-profit organization representing all components of the $703 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.