US to be a tourism powerhouse in 2016
US travellers will remain on the move this year and Europe stands to gain, says EyeforTravel’s latest full year forecast
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 EyeforTravel's 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," says Alex Hadwick, EyeforTravel Head of Research.
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. Hadwick comments that "interest rate normalisation appears to be a key aim of the Fed in 2016. Although the predicted number of rises has fallen off the back of weaker data, I think that they will still push ahead with at least one or two increases in 2016. This will help maintain the strength of the dollar, particularly against the pound and euro."
The additional purchasing power of the dollar is meeting a good economic picture for US consumers, which bodes well for travel. US unemployment has fallen below 5%, inflation remains low and worker pay is increasing at the fastest rate since the recession. According Mastercard's Spending Pulse, US consumers spent a record $157 and $217 per person on airlines and lodgings, respectively, in 2015.
Also helping consumers to travel more were lower airline ticket prices, as carriers passed on savings from a tanking fuel price to tourists. US domestic prices fell by over 5% in 2015 and low cost carriers are planning to expand transatlantic routes.
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."
To find out more about how global travel markets performed in 2015 and insights for the year ahead, check out the EyeforTravel Full Year Round-up and Forecast 2016.
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