Destinations across North America are at different stages of tourism development, according to data and analytics company GlobalData, whose latest report, “Tourism Destination Market Insight: North America (2021),” found that total international arrivals to the region declined 67 percent year over year in 2020 while inbound expenditure dropped 74.1 percent.
North America’s forecast recovery follows the general global travel consensus that domestic tourism will recover first in 2022, but international arrivals will not recover until 2024. Forecasts for inbound tourism expenditure, however, suggest this will not surpass pre-pandemic levels until after 2025.
“COVID-19 can still be identified as the greatest threat to growth within the travel sector, and in North America this is no different,” said Johanna Bonhill-Smith, travel and tourism analyst at GlobalData. “The loss of inbound tourist spending in 2020 (-74.1 percent) to North America was significant. GlobalData’s forecast suggest this is not expected to fully recover until after 2025, and this will be one of the greatest factors affecting economic recovery for the region over the next few years.”
One of the major benefits of inbound tourism is spending, which can boost economic revenues, stimulate employment and act as a catalyst for infrastructure development. Each destination does hold a strong domestic tourism offering, but this cannot be relied upon alone to offset the collapse of international travel, according to the report.
“Travel to North America from other destinations worldwide can be expensive,” Bonhill-Smith said. “GlobalData’s survey found that 23 percent of global respondents have reduced their household budgets in the past year and 27 percent have ‘somewhat’ reduced them. Reduced budgets mean less expenditure on recreation affecting the ability to travel. Budget constraints are going to be more important in purchasing travel experiences over the next few years, which could jeopardize North America’s tourism recovery in comparison to other regions worldwide.”
The report pointed out that due to proximity, connectivity and competing low-cost carrier operators, travel between the U.S., Canada and Mexico can be relatively low-cost, spurring travel across the destinations, which is important because each destination already relies heavily on neighboring destinations as important sources for economic income.
Bonhill-Smith cited “a wide range of pull factors” that attracts global visitors to North America for leisure and business: “In addition to attractive destinations to visit, its sizable VFR (visiting friends and relatives) market is also a strong feature. Collaboration between destination marketing organizations and government bodies will be vital to ensure economic relief for the region going forward.”