US and Canada nationals retain their propensity to travel despite local and global market uncertainties

3 April, 2019

Many observers talk about a slowing in air and tourism growth as economic uncertainty and geopolitical issues start to hit the global travel industry. But latest data shows no immediate sign of any slowdown with the latest Hotel Price Index (HPI) from showing the prices travellers paid for overnight accommodation rose 3% globally in 2018, hitting new highs for the 15 year old rating.

It is true that this growth has been achieved despite uncertainty such as Brexit, the wildfires in California, drought in South Africa and earthquakes in Japan and shows that travellers are showing resilience. There is renewed confidence in destinations touched by unrest like Paris, Egypt and Turkey, regions experiencing currency fluctuations like South America, as well as areas in North America affected by natural disaster.

The HPI is viewed as a good barometer on the industry and provides a good insight into global travel trends. After being set at 100 in its inaugural year, 2004, the index is able to clearly display year-over-year variations in actual prices paid per night by travellers without foreign exchange fluctuations distorting the picture.

The performance levels recorded in 2018 showed growth in every regional index, with the exception of the Pacific. The Caribbean HPI continued its nine-year growth trajectory in 2018, setting an all-time high by rising eight points to 151, an increase of 5%, and retaining its perception as an aspirational holiday destination.

At the other end of the scale, the Asia HPI remained the lowest regional HPI at 102, showing little growth since 2013 and continuing to offer incredible value to travellers. Meanwhile, despite recording no change in its HPI of 126 since 2017, the Pacific still had the third-highest regional index, behind the Caribbean and Latin America, as a premium holiday destination, particularly for families.

Looking more closely at North American travel trends, despite the impact of the California wildfires and two major hurricanes hitting the Carolinas and Florida, the US hotel industry saw growth among domestic travellers with average prices rising in 27 of the top 50 destinations.

Las Vegas once again topped the list of most popular domestic destinations for American travellers, with New York coming in second. Orlando, San Diego and Chicago rounded out the top five respectively.

Overseas guests paid 2% more for their hotel accommodations in the US per night than in 2017, as averages rose in 33 of the top 50 destinations for international travellers.

In Canada international travellers surpassed 21 million (21.13 million) for the first time ever in 2018. A record-breaking 14.44 million US travellers visited their neighbour during the year, the highest recorded since 2004. Toronto topped the most popular Canadian destinations for international travellers, with Vancouver coming in second. Montreal, Niagara Falls and Calgary rounded out the top five most popular.

Among the destinations on the rise for American and Canadian travellers last year were Ireland, Japan and Turkey. Flexible visa requirements in some markets and a visit from Pope Francis in Aug-2018 helped Ireland bring in more than 10 million travellers in 2018, a record high. American travellers paid 10 % more for accommodations in Dublin, an average of USD207 per night.

In Japan, Tokyo, Osaka and Kyoto, visitor numbers grew by almost 9% for a record high of almost 32 million. Osaka and Kyoto both rose more than 10 spots on the list of the US and Canada's most popular international destinations.

In Turkey, Istanbul also jumped more than 10 spots in the top 50 most popular destinations for travellers from both the US and Canada. International visitors went up by 22 percent in Turkey and Istanbul recorded the highest rise in price paid by American travellers in 2018.

The index also highlights that American and Canadian travellers paid quite a bit less to enjoy four-star and five-star luxury in 2018, both at home and internationally. For American travellers, three destinations saw their five-star rates drop by 13%: Charlotte (USD282 per night) and Louisville (USD226 per night) in the US, and Reykjavik, in Iceland, where the tourism boom of the past few years has slowed and brought down the average price paid per night to USD478.

For Canadian travellers, three U.S. destinations saw their five-star rates drop considerably: Nashville by 24% (USD321 per night), Portland by 15% (USD251 per night) and New Orleans, also down by 15% (USD325 per night).