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Arrivals in the US were down 14% in the first three months of this year, with those from Western Europe and Asia Pacific falling significantly. Among the top 20 source markets to the US, only France, Brazil, China (get used to this one), and Argentina showed increases. Few American destinations escaped the fall in demand, with New York now expecting a 5% decline for 2009, based on trends in the first quarter of this year.

Hawaii’s tourism industry has suffered from a number of factors, including last year’s collapse of Aloha and ATA airlines and big cuts in airline capacity generally; the removal by Norwegian Cruise Line of two ships from the inter-island market; and financial contractions making long distance leisure travel far less affordable.

Overall, arrivals in Canada dipped 5% in the first four months of 2009. US overnight arrivals have gained some ground (+1.6% through April), but same day trips are still down 3% despite the easing of the exchange rate and fuel prices. Travel from some long haul markets, such as China and Germany, has recovered, but not from the UK and Japan.

In May the US Travel Association said that Americans were expected to take 322 million domestic leisure trips during the summer of 2009 as compared to 329 million in 2008.

This represents only a 2.2% decline. Not bad for the worst year of the worst recession since the great depression.

The introduction of the latest phase of the Western Hemisphere Travel Initiative (WHTI) might have also discouraged travel by Americans to neighboring destinations. In effect, the move means that Americans crossing back over the land border after trips to Mexico and Canada must now show passports or specially issued identification cards.

In fact, air travelers have had to show passports when returning from the bordering nations since 2006, but complaints from the travel industry, and a backlog of passport applications, prompted a delay in the requirement for those arriving by land or sea.

On the positive side, the good news is that the US House of Representatives has passed legislation that will help America attract more international visitors through an improved visa program. This includes a provision for a two year pilot program using secure remote videoconferencing technology to conduct tourist visa interviews. The result, proponents argue, will be a process that is more convenient for foreign travelers.

LATIN AND CENTRAL AMERICA

Preliminary figures for arrivals in the Americas in the first four months of 2009 suggest that tourism in this part of the world in weathering the recession slightly better than in other key regions, dropping by 5% on the same period last year.

But as in other parts of the world, there is a preoccupation with the downturn, especially with regards to the situation in the US, both the principal source market and main destination in the area.

Tourism in Central America throughout 2008 was riding high on the world economic boom and the regional integration associated with the formation of the Central American Free Trade Area. But allied to the economic situation and political and social unrest in some countries, trends in the first months of this year were mixed, resulting in an overall 4% decline, with two of the most visited destinations, Costa Rica and El Salvador, impacted by a drop in arrivals from nationals residing abroad. There were, however, modest increases in the other countries, with the exception of Belize: while Nicaragua went against the trend with 11% growth through May, benefiting from the elimination of visa requirements for nationals from neighboring Costa Rica and currency depreciation.

South America is the only sub region in the Americas, and the only one in the world apart from North and Sub Saharan Africa, to resist the downward trend. Arrivals were flat in the first four months of the year, but there was a marked acceleration in April (+11%), partly ascribed to Easter falling in that month.

Given the easing of their exchange rates, many of the leading destinations might have expected a recovery in long haul arrivals in recent months, but this has been prevented by the caution of consumers in North America and Europe.

Most countries report that domestic and intra-regional demand is sustaining growth. This applies particularly to Brazil, whose economy seems to be coming through the recession relatively better than others. The increasingly popular north east of the country, for example, reports a continued increase in domestic demand.

Chile (+4% through May), which has achieved notable success in recent years with nature and adventure based attractions for intercontinental visitors, has seen a decline in the long haul market.

This has been more than balanced, however, by Chileans choosing to take their holidays at home this year, and by the continued growth in intra-regional travel, including a reversal in the previous decline in arrivals from Argentina.

Uruguay (+7%) and Paraguay (+6%) have also seen a continued increase in arrivals from Brazil and a recovery from Argentina. Bolivia has been less favored, with social and political tensions and reports of dengue fever in the west of the country.

Peru (+1.5%) and Ecuador (-1%) also report diminishing interest from North America and Europe, but arrivals in Colombia have continued to grow (+11%), with the exceptional success in adventure and cruise products.

The only South American destinations which has so far reported a significant decline is Argentina (-9%) in the first quarter of this year), mostly due to the drop of arrivals from North America and Europe. The hope is that an extraordinarily favorable exchange rate will improve the situation.

The decline in spending power in mature North American and European markets has inevitably undermined growth for the Americans overall, even for countries more dependent on business from neighboring markets, such as those in Central and South America.

Positive developments include new and renovated hotel capacity in many Caribbean destinations, and the permission given by the US Administration for unlimited travel to Cuba by Cuban Americans.

In contrast to the situation in most of the region, there is a general sense of optimism in much of South America, which hopes to come out of a relatively shallow recession fairly quickly; a hope encouraged by recent improvement in the commodities prices on which so many South American countries depend.

It is worth mentioning for our Brazilian members that China has overtaken the US as Brazil’s most important export market, which will surely fuel business traffic between the two countries.

Thank you to the US Travel Association, the UNWTO and the World Travel Market for their statistics on our great region; the Americas.

Scott MacScott CTM

Chairman IATM

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