Foreign travel to U.S. disappoints

April 21, 2008
The Globe and Mail
By Barrie McKenna

WASHINGTON -- Lured by the cheap dollar, overseas travellers are slowly drifting back to the United States following a long exile that began after the Sept. 11, 2001, terrorist attacks.

Overseas visits to the U.S. jumped 10 per cent in 2007, and the trend appears to have accelerated this year as foreigners hunt for travel bargains in New York, Boston and elsewhere.

Indeed, foreign tourism is among a handful of bright spots in an otherwise grim U.S. economic picture, according to anecdotal evidence picked by the U.S. Federal Reserve Board in its 'beige book' survey of regional activity. The Fed found 'particular strength in foreign visitors' in several parts of the country, according to the report released last week.

In Boston, for example, the Fed credited the 'favourable exchange rate and pent-up demand' for a 'large increase' in travellers from Britain, Ireland, Germany and Japan.

But travel industry officials said the recent resurgence of foreign travel is a bit of a mirage. The country is still attracting two million fewer overseas visitors a year than it did before Sept. 11 -- 23.9 million in 2007 versus 26 million in 2000, according to U.S. Commerce Department figures. (Overseas visitors exclude those from Canada and Mexico.) 'With the dollar the way it is, the business should be extraordinary,' said Roger Dow, president and chief executive of the U.S. Travel Industry Association. 'We're just not getting the people we should be.' The U.S. tourism industry is fighting a perception that visitors are not welcome and that it's tougher than ever to get here because of more restrictive entry procedures, Mr. Dow complained.

He pointed out that global travel has skyrocketed since 2000. But relatively fewer travellers are opting to come to the U.S.

The industry estimates that the United States should have attracted more than 33 million overseas visitors last year, based on international travel trends. That's nearly 10 million fewer than it actually did, representing billions of dollars in losses to the economy, Mr. Dow said.

Visits last year from key markets, including Britain, Japan, Germany and Brazil, were all well below 2000 levels.

Unlike their Asian and European counterparts, Canadians and Mexicans have returned in large numbers to the U.S. since 9/11. Travel to the U.S. by its northern and southern neighbours started rebounding in 2004, reaching 32.8 million last year. That compares to 25.3 million visits by Canadians and Mexicans in 2000.

Canadian made fewer trips to the United States in February (3.74 million) than they did in January (3.75 million), according to the latest Statistics Canada figures. But visits are still up 18 per cent compared with last year, as Canadians take advantage of virtual parity between the loonie and the greenback.

Overseas visitors are more sought after by the tourism industry because they spend substantially more than North Americans - $4,000 (U.S.) a visit, versus $900.

The travel industry has been lobbying Congress to speed up visa and entry delays. It also wants Washington to impose fees on foreign travellers to fund an international tourism advertising campaign.

Most major currencies have risen sharply against the U.S. dollar in recent years. The euro, for example, is up 43 per cent in the past five years. One euro now buys roughly $1.57, compared to $1.10 in 2003.

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