U.S. TRAVEL SPENDING TO FALL 40 PERCENT IN 2020

With COVID Fear still running rampant among the general population and media spreading pandemonium of increasing virus cases and a second wave to hit, travel and tourism sectors, we forecast, will be hit harder than what the business media’s “experts” predict.

To date, it is estimated that people will take about 30 percent fewer trips within the U.S. this year, roughly 1.6 billion compared to almost 2.3 billion last year, according to a new study by research firm Tourism Economics.

As a result, travel spending within the U.S. will decline more than 40 percent in 2020, from 2019’s $972 billion to about $583 billion.

Travel-related businesses such as airlines and tourist attractions will take in $505 billion less this year than in 2019, with revenues falling to about $622 billion from last year’s record amount of more than $1.1 trillion.

In 2021, travel spending within the U.S. should climb 37.5 percent above this year’s total, to about $855 billion, the study says. But that is still 24 percent less than in 2019. The report sees a continued, but slower, recovery in travel spending in 2022 and 2023: 14.2 percent more and then a 7.4-percent increase, respectively.

If the forecast is accurate, in 2023, travel industry revenues would once again top $1 trillion.

Spending by travelers arriving from other countries will plummet from $155 billion last year to $39 billion this year, a plunge of about 75 percent, the forecast warns.

Travelers to the U.S. from Canada and Mexico will number 59.6 percent and 55.1 percent less, respectively, compared to last year, excluding students, migrant workers, and persons traveling to receive medical care. The total number of foreign visitors to the U.S. will shrink by 69.2 percent.

The study was released as the domestic tourism industry blitzes Washington lawmakers this week to plead for rescue, with measures including:

  • Expanding the Paycheck Protection Program to cover “destination marketing organizations,” such as government travel promotion offices or chambers of commerce, which are currently ineligible because they are not-for-profit or government agencies.
  • Creating a temporary travel tax credit, giving federal aid to the meetings and events industry, and offering tax credits covering businesses’ costs for personal protective equipment and sterilizing facilities.
  • Protection from COVID liability lawsuits.
  • Setting up a federal fund to backstop COVID risk insurance policies, modeled after the Terrorism Risk Insurance Act passed into law after the September 11, 2001, terrorist attacks.

TRENDPOST: The Trump administration reportedly is considering offering families a $4,000 tax credit for vacation spending. If implemented, unless the psyche of COVID Fear permeating society ends, be it through the invention of a vaccine or a series of other socioeconomic or geopolitical events pushing it out of the daily news streams, the tax credits will do little to boost tourism.

 

 

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