Stronger US Dollar Leads to Record Breaking International Travel

Americans packed their bags and traveled abroad like never before in 2016, with more than 80 million people taking overseas trips. That’s a record high and a 7 percent increase compared to 2015, according to the U.S. Commerce Department. U.S. arrivals in neighboring Mexico and Canada both increased by 9 percent. Additionally, 13.6 million Americans visited Europe in 2016, an 8 percent growth.

And, why not? U.S. residents had plenty of reasons to hit the proverbial road. A Skift article explains, “A stronger U.S. dollar, the UK’s Brexit vote, and the growth of low-cost, long-haul carriers are only a few of the big reasons why U.S. arrivals in overseas destinations increased seven percent year-over-year in 2016.”

"...Australia, New Zealand, Canada, Mexico and other countries also enjoyed an influx of American travelers."

A strong U.S. dollar is great for Americans looking to experience new places and cultures, but it can also be leveraged by international supplier markets. For example, the United States was already the United Kingdom’s top source market, but with a floundering Brexit pound and a strong dollar, VisitBritain saw the opportunity to draw even more visitors. The UK specifically targeted U.S. travelers with all-time affordability as a selling point and the tourism industry was rewarded with 3.5 million Americans visiting the UK in 2016 – a 6 percent year-over-year increase.

The UK wasn’t the only savvy market to utilize the United States’ good fortune for their own benefit though. Australia, New Zealand, Canada, Mexico and other countries also enjoyed an influx of American travelers.

The UK pound and the Euro have both strengthened against the dollar within the last several months, but Skift points out that low-cost airlines, like Norwegian Air, are adding flights on the east and west coasts of the U.S. – making transatlantic flights hundreds of dollars cheaper. Now that Americans appear to have the travel bug, don’t be surprised if outbound data is strong again in 2017.

Here’s some more travel news you can use:

  • Traveling to Cuba just got harder. President Trump and the U.S. government announced new sanctions and travel restrictions for Americans hoping to experience the Caribbean island. According to a report from CNN, U.S. residents will now have to visit Cuba as part of organized tour groups led by U.S. companies, and with the participation of representatives from those groups.

The U.S. State Department will also release a list of hotels, shops and other businesses that are linked to the Cuban military. Americans will no longer be authorized to do business with those entities.

In a statement made by the U.S. Treasury Secretary Steven Mnuchin, he explains, “We have strengthened our Cuba policies to channel economic activity away from the Cuban military and to encourage the government to move toward greater political and economic freedom for the Cuban people.”

  • Good news for the cruise industry. Travel Weekly is reporting that even after the unprecedentedly strong hurricane season cost Royal Caribbean 55 million dollars, the company still reported an 8.6 percent increase in third-quarter net profits.

"That [$55 million in losses] made it by far the most expensive hurricane season in our 45-year history," chairman Richard Fain said.

Remaining profitable after that is quite a feat. 

Sources: Skift, CNN, Travel Weekly

Posted by Pete Bahrenburg