Inbound travel to the U.S. took a sizable downturn even before Britain narrowly voted to leave the European Union and roiled international markets, according to the U.S. Travel Association's Travel Trends Index. International inbound travel continued to register negative year-on-year growth in May, due to factors including a strong U.S. dollar, which will particularly weigh on travel from Canada. Any fallout from the recent Brexit vote will begin to show in August's version of the monthly TTI, which will reflect data from June.
The Leading Travel Index, the economic indicator's predictive component, projects a similarly dour outlook for international travel through late 2016, and posits that it will continue to trail the domestic market. Domestic business travel also reverted to previous downward patterns in May, and the segment's prospects for growth remain subdued through November of this year.
However, travel still grew overall in May 2016, albeit at a slower rate than the previous month, propped up by the robust domestic leisure travel market. According to the LTI, as the international inbound travel market begins reacting to the Brexit vote and the once-strong Canadian travel market founders against the strength of the U.S. dollar, domestic travel will be relied upon heavily to drive growth -- though domestic business travel is back to its previous lackluster performance. According to the association's monthly economic indicator, domestic leisure travel is likely to continue leading the U.S. travel sector into late 2016.
"This months' Travel Trends Index proves yet again that American leisure travelers, who account for 60 percent of travel spending in the U.S., will likely continue their role as engines of growth for the U.S. travel industry in 2016," said David Huether, U.S. Travel Association's vice president for research. "It will be interesting to see how global events, such as Britain's recent vote to leave the European Union, affect these trends in the months ahead."
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