US Visitors to Europe: Market Profile

By Irena Smith
Mar 2008
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Summary

This article presents a profile of the US travel market, and looks at trends in US travel to Europe. The article brings together data from a number of sources to provide a profile of US travellers, their prefered travel patterns, the purpose of their visits and they ways they tend to book. It looks in depth at US outbound travel to Europe, and presents the latest data from 2007.

Finally the article presents a prediction of travel trends for 2008. US travellers represent the most important long-haul inbound market to Europe, and represent the largest long-haul market for many European countries. Americans remain enthusiastic about Europe but given the unstable economy and weak dollar, growth in 2008 is likely to be slow.

Further information on the US travel market is available in the VisitBritain, United States Market & Trade Profile (available free of charge at www.tourismtrade.org.uk).

US travellers are amongst the biggest spenders in the world with US$72 billion expenditure on travel abroad in 2006. 63.3 million trips were made in 2006, of which 30.1 million were trips to overseas destinations. The latest data for 2007 indicate growth of around 3.3% in travel to overseas. Over 30% of the American population currently hold a valid passport and the percentage is expected to rise significantly in 2008. Passports are now required for visits to Mexico and Canada.

The population is aging. The 65+ group is forecast to double in size within the next 25 years. The 55+ age group is the fastest growing segment. The internet is becoming a very powerful tool for researching and purchasing travel, and the older generation is increasingly spending time online and less time with offline media sources.

Europe remains the most popular overseas destination for US travellers but its market share amongst world regions has decreased since 2000. In 2006 travel to Europe grew by 3.5%. In 2007 the growth was less, at 1.97%. Americans remain enthusiastic about Europe but given the unstable economy and weak dollar, growth in 2008 is likely to be slow. Data for 2007 indicate strong growth in travel to Mediterranean countries with cruising becoming increasingly in demand.

ETOA carried out a survey of its tour operator members in February 2008. Results show that bookings for 2008 in the escorted tours sector are static while independent travel is down by approximately 6%. Destinations currently most in demand are Italy, France and Eastern Europe. The UK and Ireland were cited as least popular.

Since 2000 the population of the United States has been growing by 1% a year. This growth is mainly due to immigration. In 2006, the population stood at 299.7 million. The 2007 estimate is 302.5 million. (International Monetary Fund (IMF), 2007 [1].)

Also, the US population is growing older; improvements in health and living conditions are leading to an increase in longevity.

Age%
Under 5 years6.8
5-14 years13.7
15-24 years14.2
25-34 years13.3
35-44 years14.7
45-54 years14.4
55-64 years10.5
65-74 years6.4
75-84 years4.4
85+ years1.7

Source: US Census Bureau, 2006. American Community Survey

The population aged 65 and over is forecast to double in size within the next 25 years. By 2030 almost one out of five Americans will be 65 years or older (some 72 million people).

At the moment, the over 85 age group is the fastest growing segment. The average age has been increasing, a trend bucked only by the Baby Boomers of the 1950s and 1960s. In 1980 the median age increased to 30 years, and then to 35.3 years in 2000. Currently it stands at 36.6 years and is expected to increase to 37 years in 2010 and then to 39 years before levelling off (US Census Bureau, 2005 [2]).

According to the 2006 American Community Survey published by the US Census Bureau, English is spoken by about 80.3% of Americans and Spanish is spoken by 12.2% of the population.

The exchange value of the US dollar is regarded as weak at present and has been continuously falling against the euro and sterling in recent months. The graph below shows changes in the exchange rates of the US dollar with euro and sterling since 1996.

A large and sustained nominal appreciation in 1996-8 led to a serious and continuing overvaluation of sterling which has been associated with severe pressure on the manufacturing sector. In 2007 when the scale of the crisis in the US mortgage industry started to become clear, the US$ fell below parity even with the Canadian dollar. Record lows were hit against the euro through the autumn as warnings about a US recession became more frequent and the US Federal Reserve started to cut interest rates. This policy is still in place at the time of writing.

The United States has the largest economy in the world.

 200220032004200520062007 (est.)2008 (est.)
GDP (US$ bn)10,470 10,960 11,68512,43313,19413,79414,305
Real GPD growth (%)1.62.53.63.12.91.91.9
GDP per capita (US$)36,31137,64039,34141,19643,444 (est.)45,17547,049
Unemployment (%)5.86.05.55.14.64.75.7

Source: IMF, World Economic Outlook Update, July 2007

In 2006 GDP was $13.194 billion. During 2007, the US economy was slowing down, with consumer debt rising and the housing market cooling. Americans now owe an astounding US$ 16 trillion (US$ 2.4 trillion in personal loans and US$13.6 trillion borrowed through property mortgages) [3]. The US economy remains unstable and its prospects for 2008 are uncertain. According to estimates by the IMF, GDP is expected to increase by 1.9% in 2008.

The unemployment rate remains low. It increased in 2001 but it has been recovering since 2004. Most current figures show that the unemployment rate held steady at a relatively low 4.7% in November 2007, which is a reassuring sign for the current wavering US economy. In 2008, it is estimated to increase to 5.7%. (IMF, 2007 [4].)

Source: US Labor Department (2007)

According to the US Labor Department consumer prices rose by 4.1% in 2007, up sharply from a 2.5% increase in 2006. The US economy is also facing major inflationary pressures because of record energy prices which jumped 17.4% in 2007. However, core inflation has been more controlled, and asset prices like housing and shares have been falling.

Data from the US Department of Commerce, Office of Travel and Tourism Industries (OTTI) for the 1996–2000 period shows steady growth for the US outbound travel market peaking in 2000 when 61.3 million travellers headed abroad.

In 2001, the US outbound market was in decline before the events of September 11th, affected by recession.

In the aftermath of the events of September 11th, the number of travellers in 2002-03 dropped by 2-3%. In 2004, the market recovered with a 10% increase, reaching 61.8 million outbound travellers so exceeding the 2000 peak. Since then it has maintained a steady growth.

 199619971998 199920002001200220032004200520062007
Total (mn)52.953.255.657.261.359.458.156.361.863.563.6 n/a
To overseas (mn)19.821.623.124.626.925.223.324.427.327.830.131.1
To Canada (mn)12.913.414.915.115.115.616.114.215.114.413.9n/a
To Mexico (mn)20.318.217.817.519.318.618.517.619.420.319.7 n/a

Source: The US Department of Commerce, Office of Travel and Tourism Industries (OTTI, 2007). Note: travel to Canada and Mexico includes both air and land travel

63.6 million Americans travelled abroad in 2006 compared to 63.5 million in 2005 [5]. The main factor behind this minimal growth was the increase in overseas travel by 5% to 30.1 million. Travel to overseas grew by 3.3% in 2007. The total US outbound volume to overseas destinations rose by 4.7%. Travel to Mexico and Canada bucked this trend, declining by 4% and 3%, respectively.

Source: OTTI and IMF (2007)

The fall in people's incomes and decrease in GDP prompted by the 2001 recession meant that there was less money available for foreign or even domestic travel. The dollar continued to be defeated against major foreign currencies, including the euro and the Japanese yen. Even with the declining dollar, American outbound travel grew: the number of international travellers improved by 13% to over 27 million.

A look at the US outbound travel market share amongst world regions reveals a shift in travel preferences. The pie charts in figure 4 illustrate this shift.

Source: OTTI (2007)

Europe's share has decreased from 42% in 1996 to 38% in 2006. Destinations in Asia Pacific (particularly to Northeast Asia) have become increasingly popular over the recent years and its share increased from 17% to 20%. For the Americas, shares of Central America and the Caribbean both increased by 1%.

The top countries for US travellers' spending were Mexico (US$10.9 bn), UK (US$10.5 bn), Canada (US$7.7 bn), Germany (US$5.2 bn) and France (US$5 bn) (OTTI, 2007).

The top origin cities of US citizens travelling to overseas destinations in 2006 were:

  • New York City/Nassau (NY)
  • Washington DC Metro
  • Los Angeles (CA)
  • Miami (FL)
  • Chicago (IL)
  • San Francisco (CA).

The UK's International Passenger Survey (IPS) shows that the top three origin US states of visitors to the country in 2006 were California, New York State and Texas (OTTI, 2007).

The following data comparing the characteristics and profile of the US traveller (leisure and visiting friends and family) visiting overseas destinations in 2006 and 2005 were researched by OTTI [6].

  • The average ages of males and females were 46.9 and 44.4 years old, respectively; slightly older than in 2005. In general, there was a growth in the 55–65+ year old segments.
  • Advance trip decisions declined from 101.8 to 99.3 days.
  • Advance airline reservation increased only marginally from 65.2 to 65.3 days.
  • The two most cited information sources were travel agency (decline in responses from 37% to 36%) and personal computer (increase from 38% to 41%).
  • The percentage share of those using pre-paid packages increased from 15% to 17%.
  • The average number of nights spent outside the US declined from 16.4 to 15.7.
  • The average number of countries visited was 1.3.
  • Seven percent of travellers were on their first international trip, unchanged from the previous year. The remaining 93% were on a repeat trip.
  • Top activities of American travellers besides shopping and dining in restaurants were: visiting historical places, visiting small towns and villages, sightseeing in cities, touring the countryside and visiting cultural heritage sites.
  • Average total trip expenditure remained almost unchanged at $2,571.
  • Average international airfares per visitor were $1,123, up by 1%, and average trip expenditures (travel payments) per visitor while overseas were $1,275, up by 2%.
  • Average household income was $109,900, up 3.4% from 2005.

The main 10 departure airports (and their % share of overseas departures in 2006) are [7]:

  • New York JFK (15.5%)
  • Miami (12.4%)
  • Los Angeles (10.1%)
  • Chicago (8.4%)
  • Newark (7.8%)
  • Atlanta (7%)
  • San Francisco (6.1%)
  • Washington Dulles (4.5%)
  • Houston (4.3%)
  • Boston (3.1%).

The following tables show the seat capacities from the US to Europe.

 FlightsSeats
Total2,934732,689
% change on Q2 2005+5+4

Source: ETC, Market Insights (2006)

DestinationFlightsSeats
UK989257,804
Germany527134,063
France31280,281
Netherlands23459,405
Italy18239,267
Ireland15438,904
Spain12130,277
Switzerland9722,442

Source: ETC, Market Insights (2006)

The US travel market is largely a leisure and visiting friends and relatives (VFR) market as opposed to business or meetings, incentives, conferences and exhibitions (MICE). According to the US outbound travellers' survey which is shown in table 6, 42% of respondents stated leisure or holidays as the main purpose of their trip. 31% of them stated that their main purpose for travel was to visit their friends and family.

Main purpose of trips (%)*Leisure/VFRBusiness/MICEAll US travellers
Leisure/holidays51842
VFR37731
Business87721
Study/teaching221
Convention/conference182
Number of travellers (24,752,000) (8,261,000) (30,148,000)

*Figures include multiple responses. Source: OTTI (2007)

The following table shows different ways of booking travel. Americans' booking patterns were transformed dramatically by the emergence of the Internet.

The first data collected by OTTI shows the use of personal computers to book travel for 1999. They illustrate that online bookings increased from 3% of all bookings in 1999 to 29% in 2006. Hence, bookings through travel agents and directly with airlines decreased from 58% to 39% and from 21% to 16%, respectively. The share of bookings through company travel departments and tour operators remained more or less the same.

Means of booking air trip (%)Leisure/VFRBusiness/MICEAll US travelers
Travel agent394139
PC321829
Airline171416
Company travel dept.3248
Tour operator414
Number of travellers(24,752,000)(8,261,000)(30,148,000)

Source: OTTI (2007)

The Internet and emerging technologies are becoming very powerful instruments in researching and purchasing travel. The rush of travel consumers to the internet has resulted in an online marketplace estimated at $68 billion [8]. The Consumer Travel Trends Study by PhoCusWright reports that 51% of U.S. travel was booked online in 2007 and is projected to increase to 56% in 2008 and 60% in 2009 (ETC New Media Review, 2008 [9]).

According to the Internet World Stats (2007), the United States has the highest number of internet users in the world (211 million or 67% of the total population) followed by China (162 million). It is a 120% increase on 2000 and is forecast to expand even further. According to projections from eMarketer (March 2007) 65 million households subscribed to broadband in the US: 53.6 % of all US households. eMarketer estimates that the number of households with broadband will increase to 89.9 million by 2011.

Data from Pew Internet & American Life Project (survey of 2,200 adults in Feb-Mar 2007) shows that 71% of men and 70% of women (as a % of respondents in each group) use the Internet.

Even though the top internet users are still the ones at the younger end of the age scale, the older generation is increasingly catching up.

Age group% of each group that uses the Internet
18-29 87%
30-4983%
50-6465%
65+32%

A study carried out by BURST Media [10] reveals that online users over the age of 54 are spending more time on the internet and less time with offline media sources. Despite this fact they remain the heaviest consumers of offline media, 57.9% of responding adults (55+years old) taking part in research by BURST say that internet sources provide them with 'content I cannot find on television, radio, magazines or newspapers.' Other findings show that:

  • 47.2% said that internet will be the primary travel research tool and that they will book offline.
  • The more complex the travel product, the more likely it is that they will book offline; they truly appreciate the help from a 'live' customer service which is the main incentive.
  • Two-thirds will follow their research by online booking.
  • Online searches of those using the internet solely to research travel divide into categories as shown in figure 5 below.
  • Reservations of those conducting travel transactions online are likely to be as shown in figure 6 below.
  • As household income increases, so does the likelihood of researching and booking online; over 70% of those with an income $75,000 upwards will do so.
  • When asked what made the respondents return to a particular website, the answers most cited were the ability to check availability for flights, hotels, car rental (55.1%), destination information (49.9%) and travel promotions and specials (49.7%). Interestingly, women placed a much greater importance than men to travel promotions (55.4% and 44.5%). Older respondents placed a greater emphasis than younger ones on destination information.
.

Close to 100 million Americans are defined as 'heavy users' (a person who accesses the Internet at least 11 times in a week), according to a study by Universal McCann [11]. Almost 90% of 'heavy users' shop online and research further purchases. Consumer reviews, blogging and podcasting are receiving a lot of attention in the media. Only 13% of heavy users downloaded podcasts. Blogging activities, on the other hand, attracted some 62% of heavy users.

Another survey by online market researchers Compete shows that 56% of respondents consider 'consumer-generated content' to be credible while 36% trust descriptions created by a hotel or other travel supplier [12].

Search engines continue to be the main way for internet users to navigate key industry categories. Comparing May 2007 to May 2006 – travel, news and media, entertainment and business and finance categories received double digit increases in the share of traffic they receive directly from search engines. Search engines accounted for 31.2% of traffic to travel sites; Google alone accounted for 19.9%. (Hitwise [13].)

Google accounted for 65.1% of all US searches in the four weeks ending May 26, 2007, according to Hitwise. Yahoo! Search, MSN Search and Ask.com each received 20.9%, 8.4% and 3.9% respectively.

Each city has its own newspaper(s) and most of them have online editions that are read across the country. Some of the biggest titles are USA Today, Newsweek, Wall Street Journal, Los Angeles Times, New York Times and Washington Post. In 2005, there were 2,366 daily and Sunday newspapers in the US (Plunkett Research).

Travel & Leisure is the leading monthly travel publication for consumers, others include Travel Holiday, National Geographic, Conde Nast Traveler (specialising in luxury travel) and quarterly issue Vacations. Some newspaper circulations fell between 5-10% between 2005-07, partly because of the availability of online editions which have no restriction on space.

78.6% of US travellers, however, still report that they read the travel section of the Sunday paper [14].

Non-travel magazines reach a broader spectrum of international travellers than travel magazines. According to Mento Consulting this is because US travellers feel that travel magazines offer more expensive products. Only 26.1% of international leisure travellers read any of the eight main general circulation travel magazines on a regular basis (Menlo Consulting, 2006) [15].

Of those interested in visiting Europe, some spend 7+ hours per week:

  • watching cable TV 40%
  • watching network TV 39%
  • listening to radio 27%
  • reading magazines 7% (variety specialist magazines, incl. travel magazines and the travel section of Sunday papers) [16].

Figure 7 shows a breakdown of US outbound travel to overseas destinations.

US travellers represent the most important long-haul inbound market to Europe. It is the largest long-haul market for many European countries. Americans are keen to explore European cultures, historical attractions and gastronomy, and they simply enjoy observing the 'European way of life'.

Source: OTTI (2007)

13.4 million US travellers came to Europe in 2000. As a result of the recession and 9/11 this figure fell to its lowest 10.1 million in 2002. It then began to recover slowly, reaching 12.2 million in 2004. By 2006 the number reached almost 13 million but was still short of the record figure in 2000. Latest data for 2007 show minor increase of 1.97% in air traffic to Europe totalling 13.3 million travellers. Total air travel to overseas destinations reached 31 million, a 3% annual increase on 2006.

Figures 9 and 10 below show the correlation of US travel to Europe and the UK with euro/dollar and sterling/dollar exchange rates. The increase in the dollar's value against the euro is reflected in an increased travel volume. Since then, the dollar has fallen about 40% against the euro [17]. Despite the unfavourable exchange rates, Americans have continued to travel to Europe. It appears that Americans are attracted to Europe when the US dollar is strong but they are not dissuaded when the dollar is weak.

Source: OTTI (2007)

US travel to the UK follows the exchange rate relatively closely at times, as indicated in the graph below. Since peaking in 2002, the US dollar has been falling against the UK pound. With the exception of 2004 when the increase in travel did not follow the exchange rate, there is a noticeable correlation between the two otherwise.

Source: OTTI (2007)

As shown in table 9 below, the UK and France received the highest volume of American visitors in 2006. The greatest growth between 2005 and 2006 was experienced by Ireland and Switzerland (both 22%), Italy (8%) and the Netherlands (5%).

DestinationVisits ('000)% change 05/06DestinationVisits ('000)% change 05/06
UK3,286-14.18Netherlands904 4.63
France2,2310.63Ireland84422.14
Italy2,2017.68Switzerland63322.20
Germany1,6881.08Greece482-1.43
Spain9951.63Czech Rep.3324.73

Source: OTTI (2007)

Table 10 shows the number of US citizens' arrivals, and in the case of Finland, bednights in Europe [18].

DESTINATION200020052006% increase 2006/05
Austria (AA)781,455548,376607,87010.8
Belgium (AA)347,793292,050292,8240.2
Croatia (AA)50,340115,000154,000 33.9
Cyprus (AT)28,43022,04620,054-9
Czech Rep. (AA)224,418303,641322,0266.1
Denmark (NA)334,760 337,737413,1339.4
Estonia (AA)13,049 19,50619,8561.7
Finland (NA)225,722208,695207,459-0.6
France (AG)n/a3,342,483 2,998,589-10.3
Germany (AA)2,416,0011,949,8252,118,5648.6
Greece (AV)218,731205,656311,65351.5
Hungary (AA) 167,806174,643193,20010.6
Ireland Rep. (AT) 957,795 853,979947,58110.9
Italy (NA)n/a11,366,77112,304,7718.3
Lithuania (AA)n/a19,98021,6528.4
Luxembourg (AA)32,05823,11523,7812.8
Malta (AT) 19,26716,820n/an/a
Montenegro (AA)n/an/an/a74.3
Netherlands (AA)999,000971,0001,019,0004.9
Norway (NA)407,426324,078330,0431.8
Poland (AV)288,100339,700353,500 4.1
Romania (AA)55,24598,502n/an/a
Serbia (AA)1,752 12,656 13,5527.0
Slovakia (AA)28,851 32,593 29,569-9.2
Slovenia (AA) 25,36241,347n/an/a
Spain (AT)1,153,580881,901930,4905.5
Turkey (AV)515,022 434,991532,419 22.4
UK (AV)4,097,000 3,438,000 3,896,00013.3
DefinintionsAA – arrivals at all paid forms of accommodation establishments. AG - arrivals at hotels and similar establishments. AT - arrivals of tourists at frontiers. AV - arrivals of visitors at frontiers. NA - bednights in all paid forms of accommodation establishments. NG - bednights hotels and similar establishments.

Sources: TourMIS, Hungarian National Tourist Office, Central Bureau of Statistics Croatia, Note: Care has to be taken when comparing this data as individual countries use different measures to collect this data

The statistics show the difference in arrivals in many European countries (and most notably in Western Europe) in 2000 and 2005 following the 2001 recession. Arrivals in 2002-03 dropped significantly and only in 2004 did the Americans return in greater numbers and the trend grew upwards. But in 2005, the numbers were still short of the 2000 level. Figures for 2006 were up for most countries in Western Europe, particularly in the UK (13.3%), Ireland (10.9%) and Austria (10.8%). France posted a decrease of 10.3%.

Central and Eastern Europe have become increasingly popular. Estonia (48.7%) and Slovenia (36.1%) achieved record increases in American visits in 2004/05 following their accession to the European Union. In 2006 Croatia, which is not in the EU posted a 33.9% increase. There was particularly strong demand for travel to Greece (51.5%), indicating recovery from its Olympic-induced slump. Hungary (10.6%) posted a good result, and Montenegro saw an outstanding increase in visits by Americans of 74.3% [19].

Despite the soft economy and weak dollar Americans continued to visit Europe during 2007. There were contrasting performances in visits from the US to European destinations in 2007. According to the latest available statistics from TourMIS, some countries, particularly euro-zone destinations (and the UK with its strong pound) saw minor increases or declines in visits. Other non-euro zone countries achieved good growth.

CountryPeriod Arr./Nights% p.y.
Austria (AA) Jan-Nov548,660-4.2
Belgium (NA)Jan-Mayn/a 1.6 est.
Croatia (AA)Jan-Nov 179,168 18
Cyprus (AT)Jan-Dec23,73718.4
Czech Rep. (AA)Jan-Jun135,204-1.2
Denmark (NA) Jan-Dec369,164-11.2
Estonia (NA)Jan-Augn/a11.7
Finland (NA)Jan-Oct195.5313.9
France (AG)Jan-Jul 1,819,618-1.8
Germany (NG)Jan-Jul n/a -2.1
Greece (AA)Jan-Augn/a30 est.
Hungary (AA)Jan-Nov 188,632-0.5
Ireland Rep. (AT)Jan-Oct862,282 2.4
Italy (AA)Jan-Augn/a10 est.
Latvia (NA) Jan-Sepn/a-8
Lithuania (AA) Jan-Sep18,311-0.3
Malta (AA)Jan-Nov19,73620.6 est.
Montenegro (NA)Jan-Aug n/a25.5
Norway (NA) Jan-Dec330,7090.2
Poland (AV)Jan-Sep269,600-9.1
Portugal (NG) Jan-Nov631,602 5.1
Romania (NA)Jan-Sepn/a9.7
Slovakia (NA)Jan-Junn/a-4.4
Slovenia (AA) Jan-Nov48,3645.9
Spain (AT)Jan-Nov1,061,279 20.5
Switzerland (NG)Jan-Augn/a -0.1
Sweden (NG) Jan-Dec419,2493.8
Turkey (AV)Jan-Dec646,37621.4
UK (AV)Jan-Sep2,870,000-5.5 est.

Source: Croatian Bureau of Statistics, National Statistics (UK), TourMIS (2008)

Denmark (-13%), Poland (-9.1%), Latvia (-8%) and the UK (-5.5% est.) experienced the most noticeable drop in US visits in 2007. Greece attracted an estimated 30% more American visitors in 2007 and other Mediterranean countries – Montenegro (25.5%), Spain (20.5%), Malta (20.6%), Cyprus (18.4%), and Croatia (18%) posted strong annual increases. According to the latest 2008 Travel Trends Survey carried out by Carlson Wagonlit [20] 'cruising in the Mediterranean' is heading the American wish list and takes the number five spot in the list of top ten international destinations.

As to the popularity of European destinations for American travellers, the annual informal poll of USTOA members carried out in December 2007 shows that for five years in a row Italy has been the most popular destination for packages and tours. Eastern Europe was named as the hottest up-and-coming area and Croatia as the hottest up-and-coming country [21].

Data for length of stay in European countries is shown in Table 12.

Czech Republic 4 nights on average
Hungary2.9 nights on average
UK69% of visitors to the UK stayed between 1-7 nights, 36% of which came for a short break (1-3 nights)

Sources: Czech Tourism, Hungarian Central Statistical Office, http://portal.ksh.hu Visit Britain (2007)

As Figure 11 below demonstrates, the peak time for visits to Europe is the summer. Both the March and June figure are boosted by demand from American student groups.

Source: OTTI (2007)

Paid holiday entitlement in the US is two weeks. The US has a number of national holidays, and in 2008 these fall on the following dates [22].

  • New Year (1 Jan)
  • Martin L. King's Birthday (21 Jan)
  • President's Day (18 Feb)
  • Memorial Day (26 May)
  • Independence Day (4 July)
  • Labour Day (1 Sep)
  • Columbus Day (13 Oct)
  • Veterans Day (11 Nov)
  • Thanksgiving Day (27 Nov)
  • Christmas Day (25 Dec).

Most states also have their own additional holidays.

Activities undertaken by Americans while on holiday have a very similar pattern across Europe. The most popular activities of Americans visiting Germany in 2006 were [23]:

  • dining in restaurants (92%)
  • visiting historical places (89%)
  • shopping (85%)
  • visiting small towns (69%)
  • sightseeing in cities (66%)
  • touring countryside (57%)
  • art gallery/museums (55%)
  • cultural heritage sites (51%).

According to a February 2008 survey of ETOA members, leading tour operators bringing tourists to Europe, the countries currently in most demand are Italy, France and those in Eastern European countries. The least popular countries cited were the UK and Ireland. The responding tour operators indicated that bookings in the escorted tours sector for 2008 are static whilst bookings for independent travel have declined by about 6%. When asked about the effect of the weak dollar on demand for Europe, most respondents considered the effect to be marginal. But the impact of a worsening economy was deemed to be crucial if it happened.

TripAdvisor recently conducted a survey of more than 2,500 travellers offering an outlook into travel in 2008. Highlights of the survey reveal that [24]:

  • 41% of Americans said the unfavourable exchange rates will either prevent them from going, or limit their travel to Europe in the coming year
  • 34% of Americans are planning to engage in an educational activity on vacation this year, such as a cookery or art class, up from 28% last year
  • 48% of travellers are likely to visit a spa while on vacation in 2008 and 13% will go on a dedicated spa vacation this year.

In another survey, conducted by USTOA in December 2007, more than 50% of member tour operators serving Europe revealed that their bookings dropped in 2007; for some by as much as 20%. They expect the bookings to be similarly affected in 2008 and predict a move to inclusive products that bundle more features into a single price, as value for money is becoming a more important element in holiday decision making.

Industry experts now predict that domestic travel could benefit from the weak dollar, as people are looking for ways to spend less money. Shortened trips and stays with friends are also envisaged. Italy, countries in Eastern Europe, Lithuania, Latvia and Slovenia were cited to be 'the European hot spots for 2008'. Lisbon in Portugal – 'the last affordable European city' – had the biggest gains in page views on Yahoo! in 2007 [25].

The US aging population has a positive effect on travel abroad and its demand for travel is being driven by the Generation X age group. They are less anxious about travelling and are surprisingly intensive users of the internet when booking travel. The oldest baby-boomer generation are now in their early 60s, and combined with the growing interest in cultural tourism, could further boost travel to Europe.

An estimated 27% of Americans had a valid passport in 2006, and 12.1 million new passports were issued by the US State Department that year. The number of passports issued rose to 18.4 million in 2007 as a result of the new passport rules within WHTI, thereby increasing the percentage of passport holders to 30% (the Department of State, 2007 [26]). Currently over 74 million Americans hold a valid passport and the number is expected to rise significantly in 2008 [27]. Some in the industry believe that there may be a positive long term impact on travel to Europe as Americans forced to obtain passports may be tempted to travel further afield.

Americans continue to be enthusiastic about visiting Europe. The overall growth of US travel to Europe in 2007 was small even though a few European countries, particularly in the Mediterranean, achieved strong growth. The growth of the market is likely to be slow in 2008. Whilst the uncertain economic situation and weak currency may lead to greater demand for dollar-based destinations such as the Caribbean, the increased risk of recession in the US (and thus the increased likelihood that Americans will spend less on travel) may mean lower demand for travel to Europe.

  1. International Monetary Fund, 2007. World Economic Outlook Update, July 2007. Available at IMF website
  2. US Census Bureau, 2005. 65+ in the United States: 2005. (Issued December 2005). Available at www.census.gov
  3. Benson R, 04/07/2007. How Indebted Americans are Giving up their Independence. Available at www.moneyweek.com
  4. International Monetary Fund, 2007. World Economic Outlook Update, July 2007. Available at IMF website
  5. The US Department of Commerce, Office of Travel and Tourism Industries (OTTI), Available at http://tinet.ita.doc.gov/
  6. Results come from OTTI’s annual survey of 30,148,000 international travellers
  7. The US Department of Commerce, Office of Travel and Tourism Industries (OTTI, 2007)
  8. Burst Media, 01/02/2007. Online Insights - survey of over 2,100 web users 18 years or older, who plan to travel in the next 3 months. See www.burstmedia.com
  9. European Travel Commission, New Media Review, (2007). www.etcnewmedia.com
  10. Burst Media, 01/02/2007. Online Insights - survey of over 2,100 web users 18 years or older, who plan to travel in the next 3 months. See www.burstmedia.com
  11. The New Digital Divide. Universal McCann (2006)
  12. European Travel Commission, New Media Review, (2007). www.etcnewmedia.com
  13. Hitwise, (2007). Hitwise Search Engine Analysis (2007). Available at www.hitwise.com
  14. VisitBritain, United States Market & Trade Profile (updated January 2007). Available at www.tourismtrade.org.uk
  15. VisitBritain, United States Market & Trade Profile (updated January 2007). Available at www.tourismtrade.org.uk
  16. European Travel Commission, Market Insights – United States (October 2006), www.etc-corporate.org
  17. Gumbel Peter, 07/12/07, Why Europe Should Stop Whining. Available at http://money.cnn.com
  18. TourMIS, 2007. Available at http://tourmis.wu-wien.ac.at/
  19. European Travel Commission, European Tourism Insights 2006. www.etc-corporate.org
  20. Carlson Wagonlit, 2008. The 2008 Travel Trends Study. Available at www.reuters.com. The 2008 Travel Trends Study is based on responses received from a record 555 Carlson Wagonlit Travel Associate owners, managers and travel agents throughout the US
  21. USTOA, 2007. USTOA Member Survey. Available at http://ustoa.com/pressroom/trends.html
  22. US Commercial Service, 2007. US Bank Holidays 2007 and 2008www.buyusa.gov
  23. German National Tourist Office (2005), www.germany-tourism.co.uk/ Note: multiple choices possible in the survey
  24. HotelMarketing.com, 11/01/2008, Tripadvisor's US Travel Outlook for 2008. www.hotelmarketing.com
  25. CNN.com/travel, 28/12/07. Travelers may stay Closer to Home in '08. Available at www.cnn.com/travel
  26. The US Department of State, 2007. Department to Open Second Passport Mega-Center in Tucson in Spring 2008. Available at www.state.gov/r/pa/prs/ps/2007/dec/96460.htm
  27. The New York Times, 17/03/2007. Rule Change for Passports Creates Crush of Applicants. Available at www.nytimes.com

Irena Smith has worked in the Research Department of ETOA since January 2006. Before this, Irena studied at the University of Westminster and graduated with a first class honours in BA Tourism and Planning in 2004. Irena then embarked on several internships in the tourism industry such as working at Dubai Department of Tourism and Commerce Marketing and tour operator Hotels and More.

Since its foundation in 1989, ETOA has grown exponentially to include over 400 member organisations, of which more than a hundred are tour operators. Collectively, ETOA represents over €7 billion spending on accommodation and travel services annually. ETOA provides representation at the European government level for companies involved in bringing tourists to Europe. The Association promotes greater awareness of the benefits provided by the group travel industry in Europe – particularly increased income and employment. ETOA also influences European tourism policy and legislation.