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Chris Jones

Fewer Foreign Tourists Expected

24 October 2003

Fewer foreign travelers are expected to visit the United States for the third consecutive year, but federal agencies and local tourism officials remain confident international visitor figures will rebound beginning in 2004.

This week, the U.S. Commerce Department's Office of Travel and Tourism Industries released its updated 2003 international travel forecast, which said an estimated 40.1 million foreigners will visit the United States this year. That total would represent a 4 percent drop from 2002 and a nearly 18 percent decline from its 2000 peak, when 50.9 million foreign visitors were reported.

The United States' share of the world travel market has also dipped markedly over the last decade, the World Tourism Organization reports. The WTO said the United States now receives only 6 percent of global travel arrivals; in 1992, it claimed a 9.4 percent market share.

Given the many challenges faced by the global travel industry this year, a 4 percent decrease isn't cause for much concern, said Rossi Ralenkotter, executive vice president for the Las Vegas Convention and Visitors Authority.

"With all the things that happened so far this year -- the war in Iraq, SARS, bad economies in certain countries and the exchange rate in Canada -- all of those things have had an impact on all international travel, as well as international travel to the United States," Ralenkotter said.

"The positive is that the key markets, especially the key markets that we're in, are showing strong returns to previous levels of business," he added.

Though U.S. inbound international travel figures are expected to dip again in 2003, estimates for 2004 and beyond project continued growth.

Led by an expected 7 percent jump in Asian travel, the Commerce Department expects international visitor figures to top 42.1 million next year, a 5 percent improvement from this year's estimate. By 2007, the overall U.S. total is expected to top 48.7 million inbound foreign travelers.

Ralenkotter said Las Vegas is in a strong position to build upon the expected turnaround because it also enjoys strong marketing relationships -- and in some cases direct air service -- from leading international markets.

For example, U.S. inbound travel from the United Kingdom is projected to top 5 million visitors per year in 2007, up 33 percent from last year's reported 3.8 million figure.

Las Vegas already has three nonstop flights from London operated by Virgin Atlantic Airways; a fourth is scheduled to begin service next spring, Ralenkotter said.

The nation's No. 2 overseas market, Japan, is expected to report a 17 percent decline in tourism this year, thanks largely to the severe acute respiratory syndrome scare and the war in Iraq. But inbound Japanese numbers are expected to top 3.2 million visitors next year before improving to 3.9 million in 2007.

Additional high-growth markets include Germany (projected to top 1.4 million annual visitors in 2007, a 25 percent improvement from last year); Korea (830,000 by 2007, up 30 percent from '02); and Australia (484,000 by '07, up 19 percent compared with last year).

The convention authority has marketing offices in all three countries, which could boost Las Vegas' overseas visitor volume despite the current lack of scheduled direct air service linking McCarran International Airport and those three nations.

"We targeted those areas because they were producing the most visitors or had strong growth patterns," said Ralenkotter, who also cited a Commerce Department plan to spend $50 million to improve travel from Canada, Germany, Japan, Mexico and the United Kingdom.

The Las Vegas convention authority does not release projected international visitor statistics by country, but a study released earlier this year showed local international visitor volume was about 2.8 million last year, down 30 percent from its 2000 peak of approximately 4 million foreign visitors.

Twice a year, the Commerce Department releases projections of tourism arrivals to the United States from more than 30 primary and secondary international markets. Its latest forecast was released Tuesday during a Travel Industry Association marketing conference in Austin, Texas.