Monthly Travel Indicators Summary - July 2024

Executive Summary Domestic

Forecast (updated February, June & October)

• California is forecast to receive $156.7B in travel spending in 2024, 4% higher than in 2023, with $129B coming from domestic visitor spending.
• According to the Visit California June forecast, domestic visitor spending in California is expected to reach $129 billion in 2024, with $101 billion in leisure and $28 billion in business spending. Domestic leisure spending is forecast to grow by less than 1%, and business spending is expected to grow by 2% relative to 2023.

Macroeconomic

• The good news in July was that inflation finally dropped below 3% further solidifying a likely interest rate cut in the coming weeks. Overall, the economy remains on a solid footing from a numbers perspective, but consumers continued to express some caution in terms of sentiment tracking.
• Inflation declined below the 3% mark to 2.9% for the first time in 40 months. The national average retail price for a gallon of gas was $3.60 (vs. $3.58 the previous month). The California equivalent price was $4.59 (compared to $4.78 the preceding month).
• Approximately 114,000 jobs were added to the economy, a slight decrease from last month’s 179,000. The unemployment rate ticked up again slightly to 4.3% (compared to 3.5% in July 2023).
• The University of Michigan tracked U.S. consumer sentiment on the economy to 66.4, down from the 68.2 measurement in June.

Consumer Sentiment

• While domestic leisure intent declined slightly in July (potentially off-set by increasing international leisure travel intent), domestic travel consumers continued to have a positive outlook on their financial situation and travel in general.
• According to YouGov, the incidence of U.S. consumers planning domestic leisure travel in the next 12 months was 48%, down from 51% the prior month. The price of travel continued to be the primary barrier, with 43% of domestic consumers citing this factor.
• Consumer tracking from Future Partners showed that ja third of American travelers (34%) felt optimistic about their current financial situation relative to a year ago (California residents were more optimistic at 41%). However, they were more confident about their future economic situation (52% of the U.S. and 56% of California residents expect more positive). These measurements have trended up in recent months.
• American travelers were excited about future travel, with 86% of U.S. travelers (and 90% of California residents) saying they were excited about leisure travel in the next 12 months.
• More than a third of American travelers (36%) and half (52%) of California travelers said they were considering international leisure travel in the next 12 months. Both measurements ticked up again this month and are considerably higher relative to the same month last year.

Lodging

• July was the third month in a row with positive growth in room demand, albeit a growth rate of 1%. Group demand has been a particular bright spot for the industry, out-pacing transient demand. Rates (ADR) across the state declined slightly as many hoteliers looked to drive higher occupancy levels and RevPAR.
• Hotel room demand in the state for the month was +1% year over year. Looking at the year-to-date figures, room demand for the state was flat year over year and down 8% from 2019 through July.
• California’s monthly occupancy rate was 74% (+1% YOY). The state's ADR was $200 (-2% YOY), and RevPAR was $147 (-1% YOY).
• Group room demand in the state was up 5% relative to July 2023. Los Angeles County saw group room demand increase by 24% year over year for the month.
• The occupancy rate for short-term vacation rentals in the state was 67%, down 1% year over year and ADRs were down 2%, leading to a -2% decline in RevPAR year over year.

Airlift

• Passenger traffic measured by TSA checkpoints hit record levels again in July.
• Eighty-four million passengers were screened at TSA checkpoints for the month (+6% YOY), setting another post-pandemic record. Nearly 11 million travelers were screened at California airports (+4 YOY).
• There were 10.3 million non-stop seats to California destinations for the month (+3% YOY).

Executive Summary International

Forecast (updated February, June & October)

• International travel spending in California is forecast to nearly fully recover in 2024 (99% of 2019 spending), driven by Mexico, Canada and key overseas markets.
• According to the June forecast, international visitor spending in the state will grow by 23% in 2024 and reach $27.8B.
• North American neighbors Mexico and Canada are forecast to be California’s largest spending markets, with visitor spending of $5B and $3.9B, respectively.
• China is forecast to be the most important overseas market, with visitor spending of $2.7B in 2024.

Consumer Sentiment

• International leisure travel intent averaged across California’s 13 priority markets remained consistent with prior months, as did the cost of travel as a barrier.
• On average, across California’s priority markets, 42% of international consumers said they were planning international leisure travel in the next 12 months, up from 38% a year ago and 32% two years ago.
• Travel prices remained the primary barrier to travel (44% citing travel price). Australia (53%), Canada (53%), and South Korea (52%) were the markets with consumers most likely to indicate prices were a barrier to travel.
• Safety and health concerns remained secondary barriers in the Asia Pacific, India, and Middle East markets.

Airlift/Arrivals

• International airlift to California from 13 priority markets continued to expand in July, although the rate of growth has been declining. Non-resident arrivals saw double-digit growth for the month (+11%) with China, Japan, and Germany seeing the largest year over year gains among the markets.
• For the month, 1.7M non-stop seats were available from California’s 13 priority markets, an 6% year-over-year growth rate. The U.K. and Japan had the most non-stop seats to California for the month in the overseas markets.
• Non-resident arrivals through California’s ports of entry were up 11% year over year but down 21% from 2019 levels for California’s priority markets.
• China arrivals recovered to 33% of prepandemic airlift and arrivals recovered to 58% for the month. These recovery indicators have held steady over the last four months.