Monthly Travel Indicators Summary - May 2024

Executive Summary Domestic

Forecast (updated February, June & October)

• California is forecast to receive $156.B 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

• Key indicators for the U.S. economy remained strong, with inflation on the right track, declining to 3.3%. Consumer sentiment around the economy was more negative for the month, likely driven by persistent high interest rates and prices.
• Inflation for the month was 3.3%, declining for the second month in a row. The national average retail price for a gallon of gas was $3.73 (flat compared to the previous month). The California equivalent price was $5.12 (compared to $5.26 the preceding month).
• Approximately 272,000 jobs were added to the economy, an increase over last month’s 165,000. The unemployment rate was 4.0%, the highest since January 2022 but still historically low.
• The University of Michigan tracked U.S. consumer sentiment on the economy to 69.1, down from the 77.2 measurement in April.

Consumer Sentiment

• Intent to travel domestically remained slightly down from tracking in the spring. California travel consumers were feeling somewhat more negative about their future financial situation. At the same time, American travelers say they are budgeting for leisure travel and are excited to travel at record rates. Outbound international leisure travel intent is likely competing with domestic travel demand, driven by a strong dollar.
• According to YouGov, the incidence of U.S. consumers planning domestic leisure travel in the next 12 months was 47%, down a second month in a row. The price of travel continued to be the primary barrier, with 43% of domestic consumers citing this factor (on par with the prior month's reading of 43%).
• Consumer tracking from Future Partners showed that just under a third of American travelers (30%) felt optimistic about their current financial situation relative to a year ago (California residents were more optimistic at 37%). However, they are more confident about their future economic situation (46% of the U.S. and 50% of California residents expect more positive). These measurements are relatively on par with the previous month’s measurements. However, California travel consumers have been feeling more negative relative to earlier in the year.
• American travelers were excited about future travel, with 88% of U.S. travelers (and 90% of California residents) saying they were excited about leisure travel in the next 12 months.
• Nearly a third of American travelers are considering international leisure travel in the next 12 months, and the rate is higher among California residents.

Lodging

• May lodging metrics reversed the flat to negative growth trends seen in the first four months of the year, but year-over-year growth was still modest. Room demand grew by 2% on a year-over-year basis, with strong growth in the San Francisco Bay Area region. Average daily rates for the state remained flat, holding RevPAR growth to 1% for the month.
• Hotel room demand growth in the state for the month was +2% year over year, but room demand was down 5% from 2019 levels. Regions with year-over-year growth include San Francisco Bay Area (+5%), North Coast (+5%), San Diego County (+4%), Shasta Cascade (+3%), Gold Country (+2%), and Inland Empire (+1%). Looking at the year-to-date figures, room demand for the state has been down 1% year over year and 8% from 2019 through May.
• California’s monthly occupancy rate was 69% (+1% YOY), the first month of growth in over twelve months. The state's ADR was $189 (+.1% YOY), and RevPAR was $130 (+1% YOY).
• Group room demand in the state was up 4% yearly and down 24% from 2019. The San Francisco Bay Area region saw group room demand increase by 14% year over year for the month.
• Short-term vacation rentals in the state saw occupancy rates increase by 2% for the month, but ADRs were flat, leading to a modest +2% growth in RevPAR year over year.

Airlift

• Passenger traffic measured by TSA checkpoints hit record levels in May as the summer travel season begins.
• Eighty million passengers were screened at TSA checkpoints for the month (+8% YOY), a postpandemic high. Nearly 10 million travelers were screened at California airports (+5% YOY).
• There were 9.7 million non-stop seats to California destinations for the month (flat 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 is forecast to 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

• The 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, flat with the prior month but up from 39% a year ago.
• Travel prices remained the primary barrier to travel (44% citing travel price, -1 pt MOM). Canada (52%), South Korea (51%), and Australia (50%) 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 continued to grow by double digits year over year in May. Arrival numbers from California’s priority markets saw more robust growth in May relative to April, up 16% year over year. Arrivals from China continue to grow with a 61% growth rate relative to May 2023, but the recovery rate of arrivals to 2019 declined for the second month in a row.
• For the month, 1.6M non-stop seats were available from California’s 13 priority markets, a 10% year-over-year growth rate. Airlift from China grew again in May with 70K seats, up 400% from the same period in 2023.
• Arrivals through California’s ports of entry were up 16% year over year but down 19% from 2019 levels for California’s priority markets. China arrivals recovered to 59% for the month.