Brazilians and Chinese Rediscover America as Tourist Spending Surges

Brazilians Chinese Tourist Spending Surges in U.S.
Brazilians Chinese Tourist Spending Surges in U.S.

Brazilian and Chinese visitors led a resurgence in foreign tourism spending within the U.S. in the first half of the year, giving hope to domestic hoteliers, airline companies and others that the travel-spending slump of 2008 and 2009 is over, according to a report released Wednesday.

Foreign tourists spent about 20% more here during the first six months of 2010 than they did a year earlier, Visa (V) reported. American citizens also boosted their spending abroad, increasing travel purchases on their Visa cards by 9.3% compared to the same period in 2009, the company said.

The spending increase from overseas reflects what travel industry members are hoping is a rebound in foreign tourism spending, which dropped 12% in 2009 to $32.9 billion. Europeans in particular appeared to cut back substantially on U.S. travel last year, when British citizens decreased their spending in the U.S. by 26% and Germans cut spending by 15%, according to Visa.

Brazilian and Chinese tourists showed the largest increases in this year's surge, combining to spend more than $1.1 billion during the first half of the year and boosting spending by more than 70% each. Canadians remained the biggest foreign contributors to U.S. tourism, outspending the citizens of No. 2 Great Britain by an almost a four-to-one margin. Tourists from Mexico increased spending by 24% after cutting it by 19% last year, while Australians increased their spending by 44% to $490 million, Visa said.

Gulf Oil Spill Putting a Dent in the Numbers

The gains appear to be reflected in steadily improving U.S. hotel results. Revenue-per-available room (RevPAR) for U.S. hotels during the first half of the year increased 2.3% from a year earlier, as occupancy improvements more than offset a slight drop in average daily rates, STR Global said in a July report. New York hotel RevPAR increased 15% during the first half of the year, while Boston RevPAR was up 14%, according to STR Global.

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"We didn't expect it to go negative two, three or four years in a row," said Jan Freitag, vice president at STR Global, "It's great to see the Chinese traveling again." Freitag added that Australia appears to have come through the global financial slowdown particularly unscathed.

Whether the spending boost will hold for the second half of the year remains to be seen, especially with the massive BP oil spill in April hampering Gulf Coast tourism. June tourism spending in the U.S. from overseas was down 9% from a year earlier as Florida, Louisiana and Mississippi each experienced substantial declines.

Still, the apparent economic recoveries in parts of Southeast Asia and South America are providing a much-needed cash infusion to much of the rest of the country, according to Visa.

"The growth in inbound spending in early 2010, particularly from source markets such as China and Brazil, reinforces how Asia-Pacific and South America are seemingly the first to emerge and rebound from the challenging environment that defined 2008 and 2009," said Bill Sheedy, Visa's group president for the Americas, in a statement.