Monthly Travel Indicators Summary - August 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 overall inflation rate and subset of energy and gas prices remained under control, declining again this month. Jobs, unemployment, and consumer confidence indicators were also signaled the economy was in solid shape for the month.
• Inflation remained below the 3% mark declining to 2.6% in August. The national average retail price for a gallon of gas was $3.51 (vs. $3.60 the previous month). The California equivalent price was $4.45 (compared to $4.59 the preceding month).
• Approximately 142,000 jobs were added to the economy, an increase from last month’s 89,000.  Over the last six months the economy averaged 164,000 new jobs compared to 229,000 the prior six months. The unemployment rate was 4.2% (compared to 4.3% in July and 3.8% in August 2023).
• The University of Michigan tracked U.S. consumer sentiment on the economy to 67.8, up somewhat from the measurement in July.

Consumer Sentiment

• California residents remained highly positive about their financial situation while the overall U.S. consumer was somewhat more cautious this month. In general, U.S. consumers were excited about travel and were considering both domestic and international travel destinations over the next 12 months.
• According to YouGov, the incidence of U.S. consumers planning domestic leisure travel in the next 12 months was 54%, up from 48% the prior month. The price of travel continued to be the primary barrier, with 49% of domestic consumers citing this factor. (up from 43% in July.)
• Consumer tracking from Future Partners showed that nearly a third of American travelers (32%) 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 (48% of the U.S. and 54% of California residents expect more positive).
• American travelers were excited about future travel, with 87% of U.S. travelers (and 87% of California residents) saying they were excited about leisure travel in the next 12 months.
• More than a third of American travelers (38%) and nearly half of California travelers (46%) said they were considering international leisure travel in the next 12 months. The U.S. measure has steadily increased over the summer months while the California resident measure declined in August

Lodging

• August was the fourth month in a row with positive room demand growth, recording a 2% growth rate for the month. Rates (ADR) across the state again declined slightly (-2%) leading to essentially flat RevPar growth.
• Hotel room demand in the state for the month grew +2% 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 August.
• California’s monthly occupancy rate was 71% (+2% YOY). The state's ADR was $194 (-2% YOY), and RevPAR was $139 (flat YOY). The week ending August 24 had a particularly strong performance with Occupancy and RevPAR at +4%.
• Group room demand in the state was up 2% relative to August 2023. The Gold Country region saw group room demand increase by 50% year over year for the month.
• The occupancy rate for short-term vacation rentals in the state was 59%, up 3% year over year, and ADRs were up 12%, leading to a +15% increase in RevPAR year over year.

Airlift

• Passenger traffic measured by TSA checkpoints continued to show year-over-year growth.
• Eighty million passengers were screened nationally at TSA checkpoints for the month (+6% YOY).  Ten million travelers were screened at California airports (+2 YOY).
• There were 10.2 million non-stop domestic seats to California destinations for the month (+1% 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. Travel costs (exacerbated by unfavorable exchange rates) appeared to weigh more heavily on Asian travel consumers this month.
• On average, across California’s priority markets, 43% of international consumers said they were planning international leisure travel in the next 12 months, up from 40% a year ago and 35% two years ago for the comparable month.
• Travel prices are the primary barrier to travel (45% citing travel price). China (53%), Canada (51%), South Korea (49%), and Japan (47%) were the markets with consumers most likely to indicate prices were a barrier to travel. Japanese and Chinese consumers were considerably more likely to cite the price of travel as barrier compared to a year ago.
• Safety and health concerns remained secondary barriers in the Asia Pacific, India, and Middle East markets.

Airlift/Arrivals

• International airlift and non-resident arrivals to California from Visit California’s 13 priority markets continued to grow in August on a year-over-year basis. India also continued to shine for the state in terms of airlift and arrivals, notching growth rates significantly above prepandemic levels. China’s visitor and airlift recovery remained stubbornly flat.
• For the month, 1.7 million non-stop seats to California were available from Visit California’s 13 priority markets, a 4% year-over-year growth rate. The U.K. and Japan had the most non-stop seats to California for the month among the overseas markets. India has seen the largest increase in airlift relative to prior year (+117%).
• Non-resident arrivals through California’s ports of entry were up 7% yearly but down 18% from 2019 levels for the 13 priority markets.
• China recovered to 36% of the prepandemic airlift and 59% of prepandemic arrivals for the month, almost no change from the prior month.