Monthly Travel Indicators Summary - February 2024

Executive Summary Domestic

Macroeconomic

• Overall inflation and gas prices ticked up slightly for the month while the economy continued to hum, with new jobs added and relatively low unemployment. Consumers continued to feel better about the economic outlook.
• Inflation for the month was 3.2%, up slightly from the prior month. The U.S. average retail price for a gallon of gas ticked up this month nationally and in the state. The national average was $3.33 (vs. $3.20 the previous month). The California equivalent price was $4.54 (vs. $4.48 the preceding month).
• Approximately 275,000 jobs were added to the economy, an increase over last month’s 229,000. The unemployment rate increased to 3.9% (vs. 3.7% the previous month). The University of Michigan tracked U.S. consumer sentiment on the economy to 79.6, slightly up from the 78.8 measurement in January.

Consumer Sentiment 

• Among American travelers, consumer sentiment around the economy and travel remained positive with California residents feeling somewhat more positive than they had over the last two months. An increasing number of American travelers are saying they intend to travel domestically in the next 12 months.
• The incidence of U.S. consumers planning domestic leisure travel in the next 12 months was a record high of 51% (compared to 49% the prior month and 47% a year ago).
• According to YouGov, the price of travel continued to be the primary barrier, with 42% of domestic consumers citing this factor (flat from the prior month).
• Nearly a third of American travelers (32%) felt optimistic about their current financial situation relative to a year ago (California residents were somewhat more optimistic at 38%). They are even more confident about their future economic situation (49% of the U.S. and 57% of California residents expect more positive). California's measures rebounded after two months of decline.
• A majority of American travelers said travel was a budget priority (55%, +3 pts. from the prior month). Californians are likelier to say travel is a budget priority relative to the overall U.S. (58%).
• American travelers were excited about future travel, with 85% of U.S. travelers (and 85% of California residents) saying they were excited about leisure travel in the next 12 months.

Lodging

• The state’s lodging sector is seeing a sluggish start to the year, with room demand down 3% for the month and down 1% year to date. Weather is likely a contributing factor.
• Room demand growth in the state for the month was down 3% year over year, with the San Francisco Bay Area the only region to show growth. Room demand in the state was down 10% from 2019 levels. Winter storms impacting the state this month may have contributed to this, as coastal and mountain regions saw more negative growth rates.
• California’s monthly occupancy rate was 63% (-4% YOY), the largest decline in 12 months of tracking.
• The state's ADR was $182 (flat YOY and RevPAR was $115 (-4% YOY).
• Group room demand was up 1% year-over-year but still down 30% from 2019.

Airlift

• Passenger traffic measured by TSA checkpoints once again saw double-digit growth year over year.
• Sixty-five million passengers were screened at TSA checkpoints for the month (+11% YOY). The passenger traffic growth rate has nearly doubled from the previous month.
• There were 8.1 million non-stop seats to California destinations for the month (-1% YOY).

Forecast/Travel Spending

• Domestic visitor spending is expected to reach $130B in 2024. According to U.S. Travel, visitor spending in February was down 1% year over year.
• According to the Visit California February 2024 forecast, domestic visitor spending in California is expected to reach $130 billion in 2024, with $101 billion in leisure spending and $30 billion in business spending. Leisure spending is forecast to grow by 3%, and business spending by 10% relative to 2023.
• U.S. Travel’s estimate for California for the month showed total visitor spending of $11B, down 1% year over year. February was the first month to show negative growth since the pandemic.

Executive Summary International

Forecast

• International travel spending in California is forecasted to fully recover in 2024, driven by Mexico, Canada, and key overseas markets.
• International visitor spending in the state is forecast to reach $29B in 2024, according to the February 2024 forecast.
• North American neighbors Mexico and Canada are forecasted to be California’s largest spending markets, with spending of $4.6B and $3.9B, respectively.
• China and India are the most significant overseas markets, with visitor spending of $2.2B and $1.8B, respectively.
• While most of California’s 13 opportunity markets will have fully recovered to prepandemic spending levels in 2024, China’s recovery is forecast to reach 81%.

Consumer Sentiment

• International leisure travel intent remained robust in California’s priority markets, while travel prices remained the top barrier in all markets.
• On average, across California’s target markets, 42% of international consumers said they were planning international leisure travel in the next 12 months, down 1 point from the prior month but up from 39% a year ago. The markets with the highest propensity for travel abroad were the Nordics (62%), the Middle East (59%), and Germany (59%).
• Travel prices remained the primary barrier to travel (45% citing travel price, +1 pt MOM). South Korea (53%), Canada (52%), Australia (50%), and France (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 strongly year over year in February, with nine out of thirteen priority markets showing an increase in airlift to the state. Arrivals to the state also showed strong growth over the prior year but have yet to fully recover to 2019 levels. China’s recovery improved for the month, driven by Chinese New Year holiday travelers.
• There were 1.4M non-stop seats from California’s 13 opportunity markets for the month, a 19% year-over-year growth rate. Airlift from China grew in February with 52K seats, up 344% from 2023.
• Arrivals through California’s ports of entry were up 26% year over year but down 22% from 2019 levels for California’s priority markets. China arrivals recovered 56% for the month.