Days after the United States repealed its Covid-19 testing requirement for incoming air travellers, the U.S. Travel Association published its complete biannual forecast for travel through 2026, which includes travel spending and volume.
This forecast predicts that all travel segments will experience a short-term increase in demand due to pent-up demand and consumer savings, despite rising inflation.
However, this is not anticipated to continue, which will result in reduced development and growth in the forecast’s latter years. Earlier this month, at the association’s IPW trade event, they made the forecast’s foreign component public.
According to U.S. Travel, $1.05 trillion (in 2019 dollars, adjusted for inflation) will be spent on travel in the United States in 2022. However, this is 10 per cent below 2019 levels and 16 per cent below where it should have been in 2022 if not for the pandemic. Estimated yearly spending through 2026 is shown in the table below, with inflation taken into account.
The prediction assumes that domestic business travel will reach 81 per cent of pre-pandemic levels in 2022 and 96 per cent in 2023. This is based on research from Tourism Economics. However, domestic business travel spending will not entirely return to pre-pandemic levels after accounting for inflation, within the forecast range.
U.S. Travel is pushing for government regulations that will hasten the recovery of the corporate travel industry. For example, U.S. Travel recently requested the agency’s support for a tax extenders package that includes a temporary reinstatement of the entertainment business cost deduction and an extension of full expensing for business meals in a letter to U.S. Treasury Secretary Janet Yellen. The Meetings Mean Business Coalition of U.S. Travel has identified these measures as one of its top goals.
Although spending is anticipated to remain $46 billion below where it would have been in 2022 had the pandemic not happened, domestic leisure travel will continue to be the key driver of the entire U.S. travel industry’s recovery for some time.
With the recent elimination of the incoming pre-departure testing requirement, international inbound travel is moving closer to recovery. As a result, the industry is anticipated to expand quickly until the end of 2022 before slowing down in 2023–2026. However, it won’t be until 2025 that volume and spending will fully return to pre-pandemic levels.
However, alterations to policy may potentially speed up that period. By the end of 2022, the U.S. could welcome 2.2 million more foreign visitors and generate $5.2 billion in increased spending if wait times for visitor visa interviews are cut to fewer than 30 days. The U.S. Travel Association has several policy recommendations to restart global visa processing operations:
1 Create a pilot project using videoconferencing technology during visa interviews for low-risk, returning visa applicants and candidates who have an urgent or time-sensitive trip.
2 Give high-demand embassies and consulates priority when allocating processing resources for visas.
3 All visitor visas should be temporarily extended for a year, and applicants who want to renew their visas—especially those already in the country—may do so without having to go through an interview.
4 Consider enabling some low-risk visa holders already in the country to extend their visas while still there.
5 Create new strategies to speed up the visa application procedure for medium- to large-sized groups of tourists.
6 Postpone and re-evaluate the proposed d non-immigrant visa fee increase.
The next time the U.S. Travel Association will update its projection is in the fall of 2022.
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Source: U.S. Travel Association