CBRE examined government statistics and STR data to get a surprising picture of the impact that international visits have on hotel demand in the U.S.
ATLANTA—If you ask a person on the street how many people from outside the U.S. visit the country each year, the answer would likely be “a lot!” Pose the same question to a hotel industry expert, and you may get a number close to the actual total of 77,501,282, reported by the U.S. Department of Commerce for 2015.
However, few experts could accurately translate international visitation into actual roomnights, and likely would have difficulty assigning international visitation and roomnight totals to cities. The difficulty in making these estimations is that many international travelers stay in the U.S. multiple nights in multiple cities—often more than one person to a room—and sometimes they stay with friends or family rather than in hotels.
International occupancy is generally an important component of the hotel market mix, both nationally and in large cities. Exactly how important is not well-established by data from trusted industry sources. In this article, we used U.S. government statistics, city travel and tourism reports, and a set of assumptions to come up with proportional allocations of international guest stays in the U.S. and selected large cities.
We found that the number of hotel roomnights consumed by international visitors exceeds our expectations.
Data with disclaimers
The U.S. Department of Commerce produces a wide variety of statistics derived from surveys (the latest using 2014-15 data) related to inbound travel to the U.S., including types of lodging selected by international travelers. Because these reports do not provide a complete picture of hotel demand by international travelers, selected data are extracted and married with data from STR (parent company of Hotel News Now) to refine our estimates. Missing information needed to complete the estimations comes from thoughtful, conservative assumptions.
For example, much of the federal government-published information for the U.S. and its cities references overseas travel, while visitation from Canada and Mexico is only reported for the entire U.S. Local data and assumptions therefore are needed to arrive at total (i.e., inclusive of Canadian and Mexican visitors) international visitation for cities.
Visitor agency reports from leading cities provide guidance for some of our estimates. Most of these local reports provide information at high levels of aggregation regarding international travel behaviors without much detail. The notable exception is the 2017 annual report from Miami, which includes many characteristics about international visitations.
Estimating international hotel occupancy by nation and city
The process of determining the shares of total rooms sold in a year to domestic and international travelers begins with estimating total international visitation.
First, we collected the total number of overseas international visitors to the U.S. and the top-20 city destinations.
Next, we added to these statistics the number of visitors coming from Canada and Mexico. Statistics for the U.S. come from the Commerce Department, but city data on these travelers is scarce.
We captured actual numbers of Canadian and Mexican visitors for the following markets: Miami, New York, Los Angeles, Oahu and San Diego. These visitors add between 14% (New York) to 72% (Los Angeles) to the overseas totals.
For the total U.S. in 2015, Canadian and Mexican visitors (38,391,932) nearly equaled the number of overseas visitors (39,118,350). For cities with missing data on visitation from Canada and Mexico, we computed the average percentages from the five cities and nation for which we have actual numbers. This average is 27%, meaning that total visitation for the 15 cities without hard data equals their overseas visitor totals times 1.27.
Finally, from STR, we assembled annual 2015 demand data for the total U.S. and the 20 cities, and calculated the ratio of international visitation to hotel demand for reference purposes, recognizing that visitation does not equal hotel stays.
To convert international visitation to hotel rooms we needed three key inputs:
- the percentage of visitors who select hotels versus other types of occupancy, such as staying with friends and relatives;
- the number of visitors who occupy one room; and
- the duration of the hotel stays (i.e., number of roomnights consumed), including the number of cities visited.
The Commerce Department does not report on the percent of international visitors (overseas) who select hotels for lodging. The Miami report shows five years of data (2012-2016) for which this percentage ranges from 47% to 73.6%. Given that the 73.6% recorded in 2014 appears to be somewhat of an outlier, we elected to use the most recent level of 58%.
Our investigation revealed travel-party sizes range from 1.8 persons for overseas travelers to the U.S. to 2.28 persons for all international travelers to Miami. We leaned toward the Miami number because it includes Canadian and Mexican visitors and because the attractions offered in Miami are representative of those available in other large city destinations that encourage leisure travel. Therefore, our assumption is 2.2 persons.
Our two main sources of data reported length of stays by international visitors of between five and nearly 10 days. One Commerce Department report indicates that overseas international visitors are in the U.S. for an average of 9.7 days and go to 1.6 states. Adjusting visitation totals for length of hotel stay in one city for all international travelers is somewhat problematic, so we err on the conservative side by using five days as our duration assumption.
The chart below presents our ranking of the highest-to-lowest ratios of international travel to number of rooms occupied in 2015 for the U.S. as whole and for the top 20 city markets. Two cities—Miami and New York—have ratios exceeding 30%. The national ratio is 6.6%.
In the next chart, we show how international visitation totals are deflated by party size, inflated by duration of stay and deflated by lodging choice. The results from this series of adjustments are then divided by annual hotel demand to arrive at estimates of the contributions of international hotel guests to total demand. The adjustments have the effect of meaningfully increasing the contribution ratios from international visitation to international hotel stays.
We estimate that 8.2% of all hotel guests in the U.S. come from foreign countries. Hotel demand in several cities—mostly along the coasts and led by Miami at 57.5%—are highly dependent on international guests. Because the large city numbers tend to skew the national contribution ratio, international travel appears inconsequential to the health of most U.S. hotel markets.
To assess the robustness of our city international visitation estimates, we refer to the results from comparable research by Tourism Economics, a unit of Oxford Economics. Tourism Economics uses a proprietary database (i.e., Global City Travel) that analyzes 50 U.S. and 300 global cities. Its estimates of total annual visitors to each city come from an aggregation of intended address from customs forms, length-of-stay plans, OAG destination data and local Convention Visitors Bureau subscribers to its service. While the sources of the data are clearly presented for the Tourism Economics analysis, the methods by which the firm arrived at its conclusions are unknown.
A parallel examination of Tourism Economics estimates (show in the chart below) and our own reveals many similarities. After removing Oahu, which Tourism Economics does not include, the order of cities in the two lists matches up quite well when arranged from highest percentage international hotel stays to lowest.
New York City, for example, is No. 2 on our list with 45.8% international stays; Tourism Economics lists New York City as number three with 44% international stays. Miami is No. 1 on both lists, although we estimate more than 10% more international stays (57.5% vs. 46%). The second opinion derived from Tourism Economics provides confidence regarding the integrity of our approach and reported numbers.
Are we surprised by the size of the international contribution ratios of hotel demand? Yes!
Greater Miami and the Beaches 2016 Visitor Industry Overview (2017). Greater Miami and the Beaches.
Los Angeles Tourism and Convention Board, Discover Los Angeles (2017). Los Angeles Tourism by the Numbers.
Nahoopii, D., J. Chun, MC. Chun, and L. Liu (2017). Visitor Statistics. Visitor Statistics | Annual Visitor Research Report. Hawaii Department of Business, Economic Development & Tourism,
NYC and Company (2017). NYC Visitation Statistics. Nycgo.com.
Ryan, A., Sacks, A. (2017). The Impact of Trump on Global Travel. Tourism Economics.
San Diego Tourism Authority (2017). San Diego County 2017 Visitor Industry General Facts.
U.S. Department of Commerce, International Trade Administration (2015). 2014 Sector Profile: Lodging.
U.S. Department of Commerce International Trade Administration (2016a). Top 10 Markets International Markets: 2015 Visitation and Spending.
U.S. Department of Commerce International Trade Administration (2016b). International Visitation to the United States: A Statistical Summary of U.S. Visitation (2015p).
Washington.org (2016). Washington, DC Visitor Research. DC Press.
The assertions expressed in this article do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Please feel free to comment or contact an editor with any questions or concerns.