US travel spending declined sharply in third quarter

In the U.S., travel and tourism spending saw a sharp decline during the third quarter – the largest quarterly decrease since 2001 – according to a government report just released.

Real spending fell at an annualized rate of 8.1 percent during the third quarter, said the Bureau of Economic Analysis of the Commerce Department.

This represented the largest decline since the last quarter of 2001, the agency noted.

During the second quarter of this year, real spending showed a growth of 2.8 percent. In comparison, the real gross domestic product declined by an annualized rate of  0.5 percent for the third quarter, after showing a growth rate of 2.8 percent for the second quarter, according to the Bureau.

Air passenger traffic experienced the greatest downturn, falling by 20.4 percent during the third quarter, after dropping by 18.7 percent for the second quarter. After two quarters of steady demand, real spending on international air services fell sharply, and spending on domestic flights dropped for the fourth quarter running.

Accommodation spending also weakened, declining by three percent during the third quarter. Occupancy rates fell and room rates increased as hotels eliminated discounts that had been intended to increase demand.

Traveler retail spending also showed a decline. Travel and tourism prices, however, increased during the third quarter, according to the Bureau’s report.

www.bea.gov