Domestic leisure slackens, but it’s still the strongest travel sector

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Disney's Magic Kingdom is one of the most popular destinatons for domestic leisure travelers.
Disney's Magic Kingdom is one of the most popular destinatons for domestic leisure travelers. Photo Credit: Matt Stroshane/Disney Enterprises

Domestic leisure travel is slowing down after months of being the driver of industry growth in the U.S.

In July, domestic leisure travel grew at its slowest rate since December 2012, according to the U.S. Travel Association’s latest Travel Trends Index (TTI). The report found that the domestic sector would continue to grow through the rest of 2016, but at a much slower pace.

For the past several months, domestic leisure has surged while business travel and inbound international travel softened. In July, domestic leisure weakened because consumer confidence, which previously had been boosted by low fuel prices, has waned, said the U.S. Travel Association.

Domestic business travel, the report found, was positive for the second month in a row but will decline toward the end of the year.

“What we're seeing here is a reversal from the post-recession economic expansion, when international inbound travel ignited the recovery,” stated U.S. Travel’s senior vice president for research, David Huether. “International inbound travel’s return to sluggish growth patterns in July was to be expected, given the dollar's continued dominance and Europe’s Brexit hangover. Even as it weakens slightly, domestic leisure travel will continue as the main source of strength for the travel industry.”

U.S. Travel predicted that those factors would “most likely drag international inbound growth to a standstill by the end of this year.”

However, the report said that the U.S. travel industry “remains in expansion mode,” indicating that U.S. travel overall is expected to grow at a rate of around 1.1% through January 2017.

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