AAA predicts summer travel abroad will rise

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American travel abroad will rise an estimated 2.6% this summer compared with last summer, and American spending on foreign trips will rise an estimated 5.7%, according to AAA.

That translates into 25.1 million Americans abroad spending $30.7 billion.

AAA is reporting aggressive growth despite a weakened economy, an even weaker dollar and rising prices, especially for fuel and air fares.

AAA commissioned the summer forecast for foreign travel, a first for the organization. The report was produced by Global Insight, which has tracked travel patterns for the last 25 years, according to Kenneth McGill, its executive vice president and managing director.

China and India are projected to see the highest increases in American travelers, at 13.4% and 13.1%, respectively.

Betsy Sell, AAA's managing director of travel, said international bookings at AAA agencies were up 18.6% for this summer compared with last summer, with the sharpest rise on the long-haul routes being Ireland, with a 36% increase.

She said AAA was seeing examples of strong hikes in the Caribbean, up 68% year-over-year for the Dominican Republic and up 43% for Aruba. Also, sales are up 25% for the Bahamas and 15% for Jamaica.

Despite higher fares and a softer economy, Sell said, "Americans are working harder and longer than ever, and they feel they deserve their vacations."

Because of the weaker dollar and rising costs of travel, she said, travelers make adjustments either in where they go or how they allocate resources, perhaps spending less on souvenirs and other discretionary purchases or buying more packaged tours or European cruises because most trip components are then paid for in dollars.

Destination-shifting, she added, is a partial explanation for significant jumps in business to India and Ireland, as well as to Punta Cana in the Dominican Republic.

When asked what might finally dampen the urge to leave the country for a holiday, McGill agreed that the economic factors under discussion could be the trigger points for a reversal.

"But we don't expect to reach that point soon because the bad economic news is relatively concentrated in the financial and housing areas," he said.

As for the cost of transportation, it also has not yet caused international travel to drop, McGill said, because "travelers are still able to make changes; they trade down or they reallocate money in their budgets. Our energy group sees some relief for energy prices, and carriers will get some relief."

McGill predicted relief for the weak dollar due to the "tremendous performance of U.S. exports and some settling in the financial turmoil."

As for strong increases in specific long-haul markets, McGill agreed that the Olympics are "no doubt" influencing sales to China but there is "an amazing trend toward China anyway." For India, a lot of that rise could be business from family and friends returning home to visit, he said.

Ireland, he continued, benefits from "a lot of promotional dollars ... and is very popular anyway."

To contact the reporter who wrote this article, send e-mail to Nadine Godwin at [email protected].

 

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