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International travel and passenger fares, 1983.

The U.S. travel and passenger fare deficit reached a record $5.6 billion in 1983, more than double that of 1982. Expenditures of U.S. travelers in foreign countries and their payments to foreign transoceanic carriers totaled $19.5 billion, an increase of 14 percent. Receipts from foreign visitors in the United States and the fares they paid to U.S. transoceanic carriers totaled $13.9 billion, a decrease of 8 percent (table 1).

Expenditures of U.S. travelers in foreign countries totaled $14.0 billion, up 13 percent, compared with an 8-percent decrease, to $11.4 billion, in receipts from foreign visitors for travel in the United States. Simulated by strong economic expansion in the United States and a strong dollar in foreign exchange markets, the number of U.S. travelers overseas and their total expenditures abroad increased substantially. Limited economic recovery abroad and weakness of foreign currencies against the dollar led to fewer foreign visitors from overseas and a decrease in total receipts of the United States. Lower inflation both in the United States and industrial countries abroad held down average expenditures per traveler. A decline in receipts from, and an increase in U.S. payments to, Mexico reflected substantial peso depreciation in 1982 and 1983.

The increased value of the dollar in exchange marekts in 1982 and 1983, combined with declining inflation, led to lower costs for U.S. travelers to most overseas countries and to an increase in travel expenditures in constant (1972) dollars. In contrast, for most of the 1970's, a declining dollar and rising inflation held down constant-dollar expenditures (chart 1).

U.S. travelers ' payments to foreign carriers for transportation from and to the United States totaled $5.5 billion in 1983, up 16 percent. Foreign visitor's payment to U.S. carrier for transportation to and from the United States were $2.5 billion, down 6 percent. Increased number of U.S. travelers overseas and fewer foreign visitors were the major contributing factors. Because jet fuel prices were lower and charter traffic continued strong, air fares rose only moderately. For the first 9 months of the year, 9 percent of all U.S. travelers' departures were on charter carriers, up from 8 percent in 1982. Most of the growth in charter traffic was to Europe, especially to the United Kingdom, France, and West Germany. When Peoples' Express introduced a $149 flight from Newark to London, other transatlantic carriers also introduced competing discount fares. However, some carriers simultaneously raised economy and first-class fares. Near yearend, fares began to increase as increased traffic permitted the withdrawal of many of the heavy discount-fare promotions introduced during the 1981-82 recession. U.S. travel abroad

Overseas.--U.S. travel expenditures overseas increased 16 percent to $8.2 billion in 1983 (table 2). Expenditures overseas accounted for 59 percent of all travel expenditures, up from 57 percent (chart 2). A 19-percent increase in the number of U.S. travelers overseas more than compensated for a 3-percent drop in travelers' average expenditures (tables 3 and 4). The strength of the U.S. dollar against most major currencies and strong economic expansion in the United States encouraged U.S. travel to most areas. The increased buying power of the dollar and lower inflation in most foreign countries held down average spending by U.S. travelers.

The regional distribution of overseas travelers' destinations and their expenditures changed little from 1982 to 1983. Forty-nine percent of overseas travelers went to Europe and the Mediterranean in both years. Travel expenditures in that area accounted for 54 percent of all overseas expenditures, up from 53 percent in 1982. The Caribbean and Central America accounted for 31 percent of U.S. travelers in both years and 18 percent of expenditures in 1983, down from 19 percent. In both years, South America accounted for 6 percent of U.S. travelers and 5 percent of expenditures, while the "Other areas," primarily the Far East, accounted for 14 percent of travelers and 23 percent of expenditures.

U.S. travel expenditures in Europe and the Mediterranean were up 17 percent in 1983. A decline in average expenditures of 4 percent was more than offset by a 21-percent increase in the number of U.S. travelers. Expenditures increased in France, Switzerland, Denmark, Spain, and Israel, as both the number of travelers and average expenditures increased. Expenditures also were up in the United Kingdom, Germany, Austria, Sweden, Norway, the Netherlands, Belgium-Luxembourg, and Greece; increases in the number of travelers more than offset lower average spending. Expenditures in Italy fell slightly from the high level of 1982, as the increase in travelers only partly offset lower average expenditures. Expenditures in Ireland and Portugal fell sharply, reflecting drops in both the numbers of travelers and average expenditures.

The United Kingdom was the major European destination of U.S. travelers, accounting for 38 percent of all travelers to Europe and 24 percent of total European travel expenditures. France was the second most popular destination, receiving 25 percent of U.S. travelers and 14 percent of expenditures. Germany was third in its share of U.S. travelers (22 percent), but fourth in expenditures (9 percent). Italy was fourth in travelers (17 percent). Switzerland ranked as the fifth most popular European destination, with 16 percent of U.S. travelers and 7 percent of expenditures.

Travel spending in the Caribbean and Central America increased 13 percent, reflecting an 18-percent increase in the number of travelers and a 4-percent drop in average expenditures. Bermuda was the only country in the area to experience a drop in travel spending.

South American travel expenditures increased 11 percent; the number of U.S. travelers was up 9 percent and average expenditures were up 2 percent. Substantial currency devaluations in Argentina, Brazil, Peru, and other countries were largely offset by large increases in consumer prices.

Travel expenditures in "Other areas," primarily the Far East, were up 17 percent. The number of travelers increased 20 percent and average expenditures were down 3 percent.

Canada.--U.S. travel expenditures in Canada totaled $2.2 billion, up 12 percent. Canada accounted for 15 percent of U.S. worldwide travel expenditures, about the same as 1982. The number of U.S. travelers was unchanged at 32.5 million, but there was a shift toward long-term travel. Travelers returning the same day they entered Canada declined 1 percent to 20.6 million; travelers staying in Canada overnight or longer increased 3 percent to 11.9 million. Because overnight travelers spend more on average than same-day traavelers, the average expenditure of U.S. travelers in Canada increased 11 percent, from $60 to $67. Although the rates of increase in both Canadian and U.S. consumer prices were almost halved from 1982 to 1983, the rate of increase in Canada remained higher than in the United States. This difference in consumer price increases may also have contributed to the higher average expenditures. The U.S.-Canadian dollar exchange rate was virtually unchanged.

Mexico--Travel payments to Mexico totaled $3.6 billion, up 8 percent. Mexico accounted for 26 percent of total U.S. Travel expendituresd, compared with 27 percent in 1982. A 28-percent increase in expenditures in the interior of Mexico more than offset a 4-percent drop in expenditures in Mexico's border area.

An increase in the number of travelers to the interior of Mexico was the major factor contributing to increased expenditures. The pickup in travel largely reflected the substantial appreciation of the U.S. dollar against the Mexican peso during 1982 and 1983. In addition, uncertainties about currency conversion during Mexico's economic crisis in 1982 lessened in 1983. Also, to prevent rapid price increases from discouraging travel to Mexico, the Mexican Government set upper limits for hotel rates early in 1983.

The number of U.S. travelers crossing into Mexico's border area was unchanged, but average expenditures fell 5 percent. A large portion of Mexican border area travel expenditures consists of individuals' purchases of goods and personal services. The 45-percent increase in the value of the U.S. dollar against the Mexican peso was more than offset by Mexican consumer price increases of over 100 percent. Foreign travel in the United States

Overseas.--Visitors from overseas spent $6.3 billion for travel in the United States in 1983, a 6-percent decrease (table 5). Overseas travel receipts accounted for 55 percent of total travel receipts, up from 54 percent in 1982. Average expenditures of foreign visitors in the United States increased 5 percent (table 6). This increase was more than offset by a 10-percent drop in the number of foreign visitors, resulting from the continued weakness of most foreign currencies against the dollar and limited economic recovery (table 7).

The regional distribution of overseas visitors and their expenditures in the United States shifted from 1982 to 1983. Western Europe accounted for 34 percent of travel receipts and 38 percent of overseas visitors in 1983, down from 37 percent and 43 percent, respectively. The Caribbean and Central American accounted for 11 percent of receipts and 16 percent of visitors, up from 8 percent and 10 percent. Seventeen percent of receipts came from South America, down from 19 percent. Thirteen percent of visitors were South American, down from 15 percent. "Other areas," primarily the Far East, accounted for 38 percent of receipts, up from 36 percent, and 33 percent of visitors, up from 32 percent.

Travel receipts from Western Europe declined 13 percent to $2.2 billion. A 20-percent decline in the numberf of foreign visitors was only partly offset by a 9-percent increase in average expenditures. The French Government's imposition of foreign exchange restrictions, which limited nonbusiness French travelers to one trip abroad and $415 in expenditures, probably contributed to the decline.

The Caribbean and Central America was the only region with an increase; receipts were up 30 percent to $0.7 billion. The number of visitors was up 34 percent, and average expenditures were down 3 percent.

Travel receipts from South America decreased 14 percent to $1.1 billion. Average expenditures in the United States were up 4 percent, but the number of visitors fell 17 percent.

Travel receipts from "Other areas," primarily the Far East, decreased 2 percent to $2.4 billion. The number of foreign visitors fell 8 percent, and average expenditures were up 7 percent.

Canada--Canadian visitors spent $3.2 billion for travel in the United States, 21 percent more than 1982. Their expenditures accounted for 28 percent of total U.S. travel receipts, up from 21 percent. The average expenditures of Canadian Visitors increased 3 percent to $81, and the number of Canadian visitors increased 17 percent to a record 39.0 million. Both long- and short-term travel increased. Visitors who returned to Canada the same day that they entered the United States totaled 26.5 million, up 18 percent. Visitors staying one or more nights increased 15 percent to 12.5 million. General improvement of Canadian economic conditions, along with extremely cold weather in Canada and lower U.S. prices for gasoline and other goods, encouraged travel to the United States.

Mexico.--Travel receipts from Mexico were $2.0 billion, down 37 percent from 1982. Mexico accounted for 17 percent of all travel receipts, down from 25 percent. The substantial depreciation of the Mexican peso against the dollar during 1982 and 1983 was the major reason for the decrease in travel receipts in both the U.S. interior and border areas. Receipts in the interior were down 37 percent due to a drop in the number of Mexican visitors. U.S. border area receipts also fell 37 percent. A large portion of border receipts are for personal purchases of goods and services by Mexicans who reside near the U.S. border area and who may also be employed in the United States. These purchases cost over five times as much in Mexican pesos at the end of 1983 as they had at the beginning of 1982.
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Author:Bolyard, Joan E.
Publication:Survey of Current Business
Date:May 1, 1984
Words:1991
Previous Article:The business situation.
Next Article:U.S. business enterprises acquired or established by foreign direct investors in 1983.
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