SUMMARY
In 2003, travel to the United States by overseas visitors (which excludes Canada and Mexico) declined for the third straight year to 18 million. Arrivals declined by 6 percent when compared to 2002. The decline in 2003 comes after double digit declines in overseas arrivals in 2001 and 2002. In 2001, there were 21.8 million overseas travelers who visited the country, down 16 percent from the record overseas arrivals in 2000 (26.0 million visitors). Even with the declines, the arrivals total in 2003 was still greater than the 1992 overseas arrival figure of 17.8 million, but less than the total arrivals registered annually between 1993-2002.

In 2003 among the top 20 states/territories, only two states saw growth in their visitation estimates when compared to 2002. Two additional states saw no growth when comparing the two years. Six states registered declines that were equal to or less than the six percent decline in overseas travel to the USA, and 10 states saw their declines grow at a rate that was greater than the average overseas rate.

Among the top cities visited, six destinations saw no change or experienced growth in their visitation levels between 2003 and 2002. Eight cities registered declines, but they were less than the six percent average decline for all overseas arrivals to the USA. Only six cities, among the top 20, posted declines that were greater than the average decline in arrivals to the country.

UNDERSTANDING THE CHANGES
So why did certain destinations post higher or lower figures than the national average decline? While there is no simple answer, there are a number of things a destination may review to determine who is visiting their area and what might have changed. One of the variables to review is to compare visitation increases or declines by world region and/or country to the changes seen in these markets for the United States as a whole. If visitors to a destination come from world regions or countries that saw steep declines in travel to the U.S. in 2003, then, a destination’s ability to attract visitors to this area will be more difficult.

VISITATION LEVEL SHIFTS FROM MARKETS CAN AFFECT A DESTINATION
For example: Among the top 20 markets generating arrivals to the U.S. in 2003, the following markets saw the steepest declines: Venezuela (down 28%), China (down 25%), Taiwan (down 17%), Brazil (down 14%), Japan and Colombia, (both down 13%), and Switzerland (down 9%).

In contrast, if a destination relies upon travelers from India (up 6%), Spain (up 5%), Sweden (up 4%), the U.K. (up 3%), Italy (up 1%), and Australia which registered no growth between 2003 and 2002, increases in visitation would have been far more likely.

TRAVELER BEHAVIOR SHIFTS CAN AFFECT A DESTINATION
In addition, there were other shifts in some of the key traveler characteristics that have also had an impact on the destinations visited by overseas travelers. When the Office of Travel and Tourism Industries (OTTI) reports visitation estimates for states and cities, it includes all travelers who visited each destination. This includes business and leisure visitors, travelers visiting friends and relatives, those on a package and first time travelers to the country. Additionally, shifts in the number of destinations visited, or modes of transport used to travel within the USA can also impact the destinations visited.

The Use of Packages & First Time Visitors: In 2000, package travelers accounted for almost 21 percent of all overseas arrivals. This has dropped two straight years to only 17 percent in 2002. Add the decline in the number of travelers to the USA, and package travel has seen a 29 and 15 percent decline, respectively, in the number of travelers using this option. These declines were much greater than the declines in travel to the USA. In 2003, the package market saw only a 3 percent decline in the number of travelers using packages. If a destination is dependent upon the package market for visitors, then, the decline for your destination will be greater. Similarly, the declines in first time travelers have been similar to that of the package traveler. In 2001 and 2002 the decline in the number of first time travelers was 21 percent each year. In 2003, the USA saw a dramatic increase in first time travelers as 22 percent of the visitors were here for the first time, up from 18 percent from 2002. So, if a destination tends to attract first time travelers, you may have experienced more declines in 2001 and 2002.

Purpose of Trip: Since 2000, the leisure and visiting friends and relatives (VFR) markets have held fairly steady. There have been declines in the number of travelers as travel to the country has declined, but the share for leisure travelers have been virtually the same from 2000 to 2003. The share of VFR travelers jumped between 2000 and 2001 from 33 percent to 38 percent. Since that time, this share has remained very steady through 2003. Unfortunately, the declines in the purpose of trip to the USA have been in business travel. The share of travelers stating they were here for business has declined four straight years from 30 percent to 26 percent. If you add the decline in the number of travelers then business travel was down 40 percent from 2000. This is ten percentage points more than the volume decline in leisure visitors. So, if a destination has a higher volume percentage of business travelers, declines in travel to these destinations will be the steepest. Since VFR saw the fewest declines, destinations with a higher proportion of visitors for this purpose should have faired better.

Number of Destinations Visited: On average, overseas travelers to the USA spend 16 nights in the country. This has not changed much since 2000. What has changed is the number of destinations visited. The number of travelers who only visit one destination has risen from 52 percent in 2000 to 55 percent in 2003. This translates into fewer travelers going to that second destination. So, for destinations that are not normally the primary destination visited on the trip, you will see greater declines.

Mode of Transportation Used within the USA: In 2003, there were only 7 ports-of-entry with over 1 million overseas arrivals. These 7 ports account for 64 percent of all the overseas arrivals to the country. If your destination was not a major port of entry, your ability to host an international traveler is dependent upon the traveler using some other mode of transport while within the country to get to you. Unfortunately, the share of travelers who took a domestic flight while within the country and those who rented a car declined dramatically. In both 2000 and 2003, these two modes saw 41 and 36 percent decline respectively in the number of travelers who used these two types of transport. So, secondary destinations that rely upon overseas travelers renting a car or boarding a domestic flight to travel to that destination were hurt in the last several years. The declines for these two modes of transport were much greater in 2001 and 2002. Fortunately, the declines in the number of travelers using these two modes of transport were similar to the national declines in 2003.

With the dramatic shifts in selected traveler characteristics over the last several years, OTTI recommends that destinations consider obtaining a custom report on international visitors to help you analyze the changes in travel to the state or city represented. We recommend that you not only compare the profiles of the visitors between 2002 and 2003 for your destination, but that you also review the differences in the travelers to the United States and compare them to the travelers to your state or city. The differences seen in your visitors compared to the national profile may also help explain what happened in your destination.

So, to facilitate this type of an analysis, OTTI is offering a discount for these destinations that were the top destinations visited for 2003.

DESTINATIONS VISITED SHIFTS

States/Territories Visited
In 2003, Florida resumed its position as the top destination visited, although it had to share this spot with New York State. Last year, New York State was the top destination for overseas travelers. In 2002, New York surpassed Florida to register its first ever number one spot for state visited. New York has traditionally been the third most popular state visited. In 2001, 1999, and 1990 it ranked second as a destination. In all of the other years between 1990 and 2000, New York has held the third spot for destinations visited.

Florida, which hosted 4.2 million visitors in 2003, shared the top spot after dropping to second in 2002. California has been the top destination visited seven times between 1990 and 2002. But, in 2003, it remained as the number three destination visited with almost 4 million overseas visitors. California and Florida had traded places as the top destination. Since 1990, Florida was the top state visited in 1992, 1993, 1995, 1998, 2001, and 2003. California was the top state visited in 1990, 1991, 1994, 1996, 1997, 1999 and 2000.

Being the top state visited is the result of numerous factors. As stated earlier, one of the factors is the composition of the travel market that visits each state. If one follows the growth or declines in arrivals to the United States by the world region and country of residence, one will see similar changes in a state’s or city’s visitation volume. If a particular destination depends upon its visitors from countries that have seen increases in arrivals to the United States, chances are they, too, have seen growth. In contrast, if visitors from a particular country decline, chances are the destinations that rely upon this country for their visitors will also see a decline. Florida tied New York in 2003 because it saw an increase in market share when compared to last year. In contrast, New York State saw a corresponding drop in its market share. So, what caused the shift? To understand the changes, one must look at the composition of the markets that generate travelers to each state so an analysis follows on what happened between Florida, New York and California.

Florida:
Florida’s visitors primarily come from Western Europe (2.2 million, up 1%), and were the top generator of visitors to the state in 2003. The state’s market share of Western European visitors increased to 53 percent in 2003 from a 49 percent share over the previous last two years. Florida was the number two destination for Western European travelers in 2002-2003. Over the years, Florida and New York have changed places as the top spot for this region. South America (939,000, down 6%) was the second largest region generating overseas visitors to the state. Arrivals from South America were down 16 percent in 2003 for the country, but less than half of this for Florida. Florida dominates as the top destination for South American travelers; in fact, it has more than a two-to-one market share over the next most popular destination, New York. The Caribbean (629,000, up 8%), and Central America were the other top regions generating visitors to the state.

New York State:
As stated earlier, New York State was tied with Florida for the number one spot in 2003. New York did surpass Florida to secure its first ranking as the top state visited in 2002. But, with a slight decline in 2003, it now shares this spot with Florida. Western European markets dominate as sources for New York, garnering a 53 percent market share. New York did see its market share and volume estimates for this region increase, but Florida edged the state as the top destination for Western European visitors. Western Europe is the top world region generating visitors to the USA; it was the only world region to post an increase in 2003. Asia was a distant second generating 17 percent of the visitors to the state, followed by the Caribbean (8%) and South America (6%). Looking at specific country visitation as well can deepen this analysis. New York saw increases in market share in a number of its top markets, which contributed to its shared number one ranking for 2003.

California:
Like Florida and New York, the top region generating visitors to California was Western Europe (1,692.000, up 5%). This was the first time in three years that Asia (1.5 million, down 8%) was not the top source region for California. Even with the eight percent decline in 2003, California’s decline was less than the 12 percent decline in Asian travel to the USA. Other top regions generating visitors to the state included Oceania (266,000, up 2%), and South America (148,000 down 20%). Based upon OTTI’s regional market profiles, California’s visitation totals are dominated by visitors from Western Europe and Asia. Combined, these two regions accounted for 80 percent of the state’s visitors. Among the top three states visited by all overseas travelers, California posted the best results, down only 2 percent. Because of the declines suffered by this state in 2001 and 2002, it has dropped to the number three spot after being the top destination in 1990, 1991, primarily from the Asian visitors, 1994, 1996, 1997, 1999 and 2000.

This analysis can be reviewed for other destinations and be conducted by country or other world regions by going to the Inbound Travel to the U.S. area on OTTI’s web site. Profiles of travelers from nine world regions and over 30 overseas countries are provided at no cost. To view the free world region or market profiles, click on the region or country of interest. Once within the page you wanted, the regional or market profiles are the first link on each page.
The other top 10 states/territories visited in 2003 were: Hawaii (1.9 million), Nevada (1.4 million), Guam (847,000), Illinois (829,000), Massachusetts (829,000), and Texas (829,000). New Jersey (685,000), according to the 2003 In Flight Survey on Overseas Travelers to the United States data released by the U.S. Department of Commerce, the Office of Travel and Tourism Industries.

Who were the other top states visited in 2003? Go to OTTI’s web site States Visited Table to see all of the state and territory visitation estimates for overseas travelers where sample permits. Estimates are available for 34 states/territories in 2003. By going to the Inbound Travel to the U.S., area one can see the world region and country visitation estimates for the states in 2002 and 2003. Historical analyses can be made using the past profiles, which are also available.

Cities/Islands Visited:
OTTI also provides visitation estimates for city and island destinations. In 2003, estimates for overseas visitation were provided for 58 destinations. The market share and volume estimates for 2002-2003 may be viewed on OTTI’s web site Cities Visited Table.

The top 10 destinations visited by overseas travelers in 2003 were: New York City (4.0 million), Los Angeles (2.1 million), Miami (2.1million), Orlando (1.8 million), San Francisco (1.7 million), Honolulu (1.6 million), Las Vegas (1.3 million), Washington, DC (865,000), Chicago (775,000), and Boston (757,000). Like the states, over time there have been numerous shifts in the top destinations visited. New York City and Los Angeles have held the number one and two positions for many years.

Miami & Orlando:
The third through fifth most popular destinations have switched over time, with Miami having held the third spot between 1993-1999, and then again for 2001-2003. In 2000, Orlando surpassed Miami to become the third most visited destination with Orlando’s growth rate (+5%) double that of Miami’s.

While Miami and Orlando are the third and fourth most popular destinations, and have battled for this position over the years, they have little else in common. In reviewing the visitation to Miami, South America dominates with a 38 percent share of all overseas visitors to the city. Miami saw a slight increase in its market share from this region, and even though the visitation volume to the city was flat in 2003 when compared to 2002. This was counter to the trend of South American travel to the USA having declined by 16 percent in 2003. Western Europe is the second largest region generating visitors to the city. Visitation from this region increased in 2003 slightly more than the one percent increase in travel to the USA, which meant that Miami saw an increase in both market share and visitation. The Caribbean and Central America round out the top regional visitation volume for Miami. Orlando on the other hand, receives the vast majority of travelers from Western Europe (1.2 million). This region comprised 68 percent of all the overseas visitors to the city, up from 64 percent in 2002. South American travelers were a distant second with only 292,000, down 4 percent from 2002.

San Francisco/Honolulu/Las Vegas:
San Francisco remained the number five most popular destinations in 2003. It was the fifth most popular destination from 1998-2003. San Francisco was the fourth most popular destination in 1994, 1996, and 1997. Honolulu was the sixth most popular destination for the third straight year in a row. Las Vegas was ranked sixth for visitation by overseas travelers in 1999-2000, as Honolulu slipped to number seven. After posting a 33 percent decline in visitation in 2001, Las Vegas has held the seventh spot for three years.

Washington, DC/Boston/Chicago:
Washington, DC has been ranked as the eighth most popular destination since 1993, but because of its decline in visitation in 1999, Washington DC then tied with Chicago. In 2002 and 2003, the nation’s capital saw a 14 percent and 16 percent decline, respectively, in its visitation levels narrowly edging out Chicago. Chicago saw a five percent decline in visitation to maintain its ninth place ranking, holding this spot for the last four years. Over the years, Chicago and Boston have traded positions much like Florida and California have over time, but as stated earlier, Chicago again edged out Boston to claim the ninth place ranking in 2002 and 2003. In 2001, Boston and Chicago tied for the ninth spot. Boston rounds out the top 10 cities for visitation by overseas travelers in 2002 and 2003. Seven of the top 10 cities generated at least 1.0 million visitors in 2003. To see the market share, visitation estimates and increases or declines in visitation for the other top cities, visit the Top Cities Table.

The Office of Travel & Tourism Industries (OTTI) would like to encourage interested parties to visit the Inbound Travel to the U.S. page on OTTI’s web site and review the free world region and market profiles provided. Please review the information for the shifts reported in the traveler characteristics. It too, will help further explain some of the changes.

OTTI provides information on: The purpose of trip, the percentage of first time visitors, what portion of the market used a package, the type of transportation used while in the country, average length of the trip, per day spending, and the average number of states visited. Shifts in any of these variables at the national and destination level will have an impact on the visitation patterns for the states and cities.

While the information on the web site provides some of the answers, there is additional information available from the Office of Travel & Tourism Industries (OTTI). OTTI sells an In-Flight Survey Report on Overseas Travelers to the United States. In the 2002 and 2003 reports there are actually 35 different traveler characteristics reported. These tables can be compared against 10 world regions and 16 countries. The countries broken out include: France, Germany, Italy, Netherlands, Sweden, Switzerland, United Kingdom, Japan, the Republic of China (Taiwan), Singapore, Australia, Argentina, Brazil, Chile, Colombia, and Venezuela.

The diversity of international travelers to the U.S. can best be illustrated by the differences among the traveler characteristics data collected in this survey and may be used by travel planners to better understand what the traveler wants. Nine new profiles were added to the markets reported in 2002: Chile, Colombia, India, New Zealand, a combined People’s Republic of China and Hong Kong profile, Poland, Spain and Singapore. Unfortunately, there are no profiles available for Belgium as there is insufficient sample from this market due to lack of participation from their key foreign flag carriers in this voluntary survey. As the foreign flag carriers dominate in Korea for generating non-resident arrivals from their country to the United States, yet do not currently participate, OTTI combined the sample collected for 2002 and 2003 to develop a profile for this country for the first time since 2000. OTTI also combined 2002 and 2003 sample to develop profiles for Sweden, Switzerland, and Chile. Using a combined sample from 2002 and 2003, a profile was produced for Ireland for the first time. OTTI will continue to utilize this methodology and track the results of the combined sample to ensure the profiles offered provide quality estimates for visitation from these markets.

CUSTOM RUNS
Another option that OTTI would like to encourage the major destinations to investigate is the development of a custom run, for a fee, based upon the survey respondents for the particular destination by the 35 traveler characteristics. The custom run may provide additional insights into who your travelers are and how they are changing over time. Once you receive your custom report, OTTI would like to encourage comparing your destination results to the overall travel characteristics of all overseas visitors to the United States as reported in the 2002 and 2003 In-Flight Survey on Overseas Travelers to the United States. This level of analysis will provide more detailed information on the changes in the market locally compared to the national level. By comparing destination results to the national average, you will have data that illustrates what distinctively happened in your market compared to the travel that occurred overall to the country. These differences will hopefully help explain the changes in your visitation estimates. They will also assist in differentiating your destination from others visited. By knowing what makes you unique, you can develop targeted marketing campaigns to attract visitors to that destination. To learn more about the custom report options, visit the OTTI web site at Custom reports.

Please contact us with any questions related to this data or our programs. The staff at OTTI tries to assist the industry to use research to make decisions on how to approach the changing international market. Please contact us by e-mailing: tinet_info@ita.doc.gov