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International travel and passenger fares, 1984.

International Travel and Passenger Fares, 1984

THE U.S. travel and passenger fare deficit was a record $8.6 billion in 1984, following a $5.5 billion deficit in 1983. The increase in the deficit was solely due to increased U.S. travel abroad (chart 2). Expenditures of U.S. travelers in foreign countries and their payments to foreign transoceanic carriers totaled $22.5 billion, an increase of 16 percent. Receipts from foreign visitors in the United States and their payments to U.S. transoceanic carriers totaled $13.9 billion, virtually unchanged from 1983 (table 1).

U.S. travelers' expenditures for travel in foreign countries totaled $16.0 billion in 1984, a 14-percent increase; travel receipts from foreign visitors in the United States remained at $11.4 billion. Strong economic growth in the United States and continued strengthening of the U.S. dollar against other currencies made foreign travel especially attractive for U.S. residents, who traveled abroad in record numbers. Foreign travel to the United States was limited by economic recovery in most countries that lagged behind expansion in the United States and by weakness of foreign currencies relative to the dollar. Events such as the World's Fair in New Orleans and the summer Olympics in Los Angeles did little to draw significant numbers of foreign visitors. It is estimated that nearly 70 percent of all tickets to the Olympics were held by southern Californians.

U.S. travelers paid $6.5 billion to foreign carriers for transportation from and to the United States, an increase of 19 percent. Growth in the number of travelers overseas, up 19 percent, and a small increase in the proportion flying on foreign flag carriers, to 43 percent, contributed to the increase. U.S. carriers received $2.5 billion from foreign visitors for transportation to and from the United States, the same as the previous year. The number of foreign visitors from overseas fell 4 percent and the proportion flying on U.S. flag carriers fell from 40 percent to 37 percent. Air fares increased moderately over the year; a decline in jet fuel prices partly offset a rise in nonfuel costs. There were no major fare wars. A new British airline introduced service from Newark to London in competition with a low-fare U.S. airline, but the two low-fare carriers had only minimal impact because their service is limited. Charter traffic increased slightly less than scheduled traffic for U.S. travel overseas. A drop in the number of charter travelers to the Caribbean was more than offset by an increase in charter travelers to Europe. The two destinations accounted for 95 percent of all U.S. charter traffic overseas.

U.S. travel abroad

Overseas.--U.S. travel expenditures overseas increased 22 percent to $10.0 billion in 1984 (table 2). Overseas travel accounted for 62 percent of all international travel, up from 59 percent in 1983. Average expenditures increased 3 percent and the number of U.S. travelers increased 19 percent, following a similarly large increase in 1983 (tables 3 and 4). Strong expansion of the U.S. economy and the sharply higher value of the dollar against most foreign currencies contributed to the increase in U.S. travel overseas that began slowly in 1982 and picked up in 1983 and 1984 (chart 3). In most instances, the higher value of the dollar more than compensated for inflation in foreign countries.

Fifty-four percent of all travel expenditures overseas was for travel to Europe and the Mediterranean in 1984, the same as in 1983. That area accounted for 51 percent of U.S. travelers overseas, up from 49 percent. The Caribbean and Central America increased their share of U.S. travel expenditures from 18 percent to 19 percent, while their share of U.S. travelers declined from 31 percent to 29 percent. South America's share of U.S. expenditures declined from 5 to 4 percent, and the share of U.S. travelers from 6 to 5 percent. "Other areas,' primarily the Far East, accounted for 23 percent of U.S. travel expenditures in both years and 15 percent of U.S. travelers overseas in 1984, up from 14 percent.

Travel expenditures in Europe and the Mediterranean increased 22 percent to $5.4 billion, entirely due to an increase in the number of U.S. travelers. Average expenditures for the region were unchanged. The average length of stay in the area decreased from 19 days in 1983 to 17 days in 1984 (table 5). Expenditures increased in the United Kingdom, Germany, Denmark, Norway, Belgium-Luxembourg, Spain, and Portugal, primarily due to increases in both the number of U.S. travelers and in average expenditures. For four of these countries, the length of stay was unchanged; the length of stay increased 1 day for Denmark and 2 days for Portugal, and decreased 1 day for Spain. Expenditures increased in Italy and Ireland solely because of increased numbers of travelers; average expenditures were virtually unchanged, and the length of stay in each country decreased 1 day. Expenditures increased in France, Switzerland, and Austria because the increase in the number of travelers more than offset lower average expenditures and shorter lengths of stay. The length of stay decreased 1 day in France and Switzerland, and 2 days in Austria. Although the number of travelers to Sweden decreased, higher average expenditures resulted in an increase in travel expenditures; the length of stay was unchanged. Expenditures decreased in only three countries. In the Netherlands and Israel, an increase in the number of travelers was more than offset by lower average expenditures. In Greece, both the number of travelers and average expenditures decreased.

Two-thirds of all U.S. travel expenditures in Europe and the Mediterranean was concentrated in five countries. The United Kingdom was the most popular destination, receiving 34 percent of U.S. travelers and 23 percent of travel expenditures. Ranking second in travelers, France received 26 percent, and 13 percent of expenditures. Germany had the third largest share of travelers, 24 percent, and received 11 percent of expenditures. Italy accounted for 21 percent of travelers and 13 percent of expenditures. Switzerland received 18 percent of travelers and 6 percent of expenditures.

Travel expenditures in the Caribbean and Central America increased 27 percent to $1.9 billion, due to a 13-percent increase in the number of travelers and a 14-percent increase in average expenditures.

Travel expenditures in South America were unchanged at $0.4 billion. A 6-percent increase in the number of U.S. travelers was offset by a similar decline in average expenditures. High inflation rates in many South American countries were more than offset by appreciation of the U.S. dollar.

Travel expenditures in "Other areas,' primarily the Far East, increased 20 percent to $2.2 billion. A 24-percent increase in the number of travelers was partly offset by a 3-percent decline in average expenditures.

Canada.--U.S. travel expenditures in Canada increased 12 percent to $2.4 billion in 1984. Canada accounted for 15 percent of worldwide U.S. travel expenditures, the same as in 1983. Most of the increase was due to a 9-percent rise in average expenditures from $67 to $73. The number of U.S. travelers to Canada was up 2 percent: The number of long-term travelers (overnight or longer) increased 4 percent, and the number of short-term travelers (travelers who returned from Canada the same day they entered) was the same as in 1983. Air travelers increased 10 percent, bus travelers increased 7 percent, and auto travelers were unchanged. Because of the fares associated with air and bus travel and the longer length of stay, the change in the composition of U.S. travelers was the major reason for the increase in average expenditures.

Mexico.--U.S. travel expenditures in Mexico totaled $3.6 billion, the same as 1983. Mexico accounted for 23 percent of worldwide travel expenditures, down from 26 percent. Expenditures for travel in Mexico's interior fell 6 percent to $1.5 billion, as the number of U.S. travelers decreased nearly 2 percent. Many of the travel bargains to be found in Mexico last year due to peso devaluations in 1982-83 were eliminated by rapidly rising prices. The 40-percent increase in the value of the U.S. dollar relative to the Mexican peso during 1984 only partly compensated for the 60-percent increase in prices in Mexico. U.S. travel expenditures in Mexico's border area increased 5 percent to $2.1 billion, due to a 2-percent increase in the number of U.S. border crossers and a 3-percent increase in their average expenditures. A large portion of Mexican border area travel expenditures consists of individuals' purchases of goods and personal services.

Foreign travel in the United States

Overseas.--Receipts from overseas visitors for travel in the United States totaled $6.4 billion in 1984, a 1-percent increase (table 6). Fifty-six percent of all travel receipts came from overseas visitors, up from 55 percent in 1983. A 6-percent increase in average expenditures more than offset a 4-percent decrease in the number of visitors from overseas (tables 7 and 8). The continued rise in the value of the dollar discouraged foreign travel in the United States, especially from overseas countries that also experienced only moderate economic expansion.

Led by Japan, which experienced strong expansion and limited depreciation of the yen against the dollar, the proportion of travel receipts from "Other areas' increased from 38 percent in 1983 to 42 percent in 1984. In contrast, in Western Europe, where economic expansion was less robust than in Japan and nearly all major currencies depreciated substantially more against the dollar than did the yen, the share of receipts increased only from 34 percent to 35 percent. The share of receipts from the Caribbean and Central America declined from 11 percent to 9 percent, and from 17 percent to 14 percent for South America. High domestic inflation rates contributed to substantial devaluations of many South American currencies against the dollar.

Travel receipts from Europe totaled $2.2 billion, a 3-percent increase. An increase in average expenditures, up 5 percent, more than offset a 2-percent drop in the number of visitors. Receipts from the United Kingdom declined again, but those from France, Germany, and Italy increased after declining in 1983. The French Government's lifting of restrctions on foreign exchange helped to boost travel receipts from that country.

Receipts from the Caribbean and Central America decreased 11 percent, to $0.6 billion, from their high level in 1983. Average expenditures were up 9 percent, but the number of visitors fell 18 percent.

Receipts from South America decreased 19 percent to $0.9 billion. A 9-percent increase in average expenditures only partly offset a 25-percent drop in the number of visitors.

Travel receipts from "Other areas,' primarily the Far East, increased 13 percent, to $2.7 billion, due to an 8-percent increase in the number of visitors and a 4-percent increase in average expenditures. Japan accounts for almost one-half of the receipts from this area. Japanese travel spending in the United States increased 14 percent, largely due to the 10-percent increase in the number of visitors. The limited decline of the Japanese yen against the dollar relative to other major currencies and strong Japanese economic expansion contributed to the increase in U.S. travel receipts. Amongst all countries overseas, Japan is the single largest source of both travel receipts and visitors.

Canada.--U.S. travel receipts from Canada totaled $3.1 billion, down 2 percent from 1983. Canadian travel receipts accounted for 27 percent of worldwide travel receipts, down from 28 percent. A 5-percent increase in average expenditures--from $81 to $85--was more than offset by a 6-percent decrease in the number of Canadian visitors in the United States. Most of the drop in the number of travelers was due to a 7-percent decrease in auto travelers. Bus travel increased 4 percent, and air travel 6 percent. The increases in those two types of travel, with their associated higher expenditures, were probably the most important contributors to the increase in average expenditures. During 1984, the Canadian dollar depreciated 5 percent against the U.S. dollar, while it appreciated against most other major currencies. Thus, a number of Canadians may have chosen to travel overseas or within Canada, rather than in the United States.

Mexico.--Travel receipts from Mexico declined 3 percent to $1.9 billion in 1984. Mexico accounted for 17 percent of worldwide U.S. travel receipts, the same as 1983. A 23-percent decline in receipts in the U.S. interior, to $0.4 billion, was partly offset by a 4-percent increase in receipts in the U.S. border area, to $1.5 billion. The number of Mexican border crossers was virtually unchanged. Despite daily devaluations of the Mexican peso, Mexicans in the border area continued to make purchases in the United States; their buying power was better in the United States than in Mexico, where inflation rates exceeded 60 percent.

Table: 1.--International Travel and Passenger Fare Transactions

Table: 2.--Travel Payments of U.S. Travelers in Foreign Countries, by Area

Table: 3.--Average Expenditures of U.S. Travelers Overseas, by Area

Table: 4.--U.S. Travelers Overseas

Table: 5.--Average Length of Stay of U.S. Travelers in Selected Areas

Table:

Table: 6.--U.S. Receipts From Foreign Visitors in the United States

Table: 7.--Average Expenditures of Overseas Visitors in the United States, by Area

Table: 8.--Foreign Visitors to the United States from Overseas, by Area

Photo: CHART 2 U.S. Travel and Passenger Fare Payments and Receipts

Photo: CHART 3 Overseas Travelers
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Article Details
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Author:Bolyard, Joan E.
Publication:Survey of Current Business
Date:May 1, 1985
Words:2266
Previous Article:The business situation (corporate profits; first quarter 1985 and 1984)
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