U.S. international transactions in 2007

Survey of Current Business, April, 2008 by Christopher L. Bach

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Travel receipts increased $11.4 billion, or 13 percent, in 2007, following an increase of $3.9 billion, or 5 percent, in 2006. Visitors from overseas spent $76.8 billion in the United States in 2007, an increase of 13 percent from 2006. Spending by overseas visitors in 2007 reached a record high, exceeding the previous high in 2000. Strong appreciations in both the euro and the pound over 2006 and 2007 were major factors encouraging travel to the United States. Visitors from Europe increased 12 percent in 2007, following a decrease of 2 percent in 2006, visitors from the euro area increased 17 percent, following a decrease of 1 percent, and visitors from the United Kingdom increased 8 percent, following a decrease of 4 percent. The number of visitors from Asia was up only 4 percent, following a 1 percent decrease in 2006.

Travel payments increased $4.4 billion, or 6 percent, in 2007, following an increase of $3.1 billion, or 4 percent, in 2006. Depreciation of the dollar and rising prices abroad contributed to an increase in expenditures abroad and to a slowing in the increase in the number of travelers to overseas areas to 3 percent in 2007 from 5 percent in 2006. The 3 percent increase in 2007 was the lowest annual increase in the number of travelers to overseas areas since 2002. Travelers to Europe slowed to a 2 percent increase from a 3 percent increase and travelers to Asia slowed to a 7 percent increase from an 8 percent increase.

Travel receipts from Canada increased $2.7 billion, or 26 percent, in 2007, following an increase of 14 percent in 2006. As in 2006, sizable appreciation of the Canadian dollar against the U.S. dollar in 2007 encouraged greater spending in the United States, although the increase in the number of travelers was unchanged at 6 percent. Travel receipts from Mexico increased $0.1 billion, or 2 percent, in 2007, down from a 6 percent increase in 2006.

Travel payments to Canada decreased $0.1 billion, or 1 percent, in 2007, following an increase of 2 percent in 2006. The sizable decline of the U.S. dollar against the Canadian dollar discouraged travel to Canada and led to an 11 percent decline in the number of travelers in 2007, following a 9 percent decline in 2006. Travel payments to Mexico increased $0.7 billion, or 7 percent, in 2007, up from a 2 percent increase in 2006.

Passenger fare receipts increased $3.1 billion, or 14 percent in 2007, following an increase of $1.2 billion, or 6 percent, in 2006. The increase in 2007 reflected a 12 percent increase in the number of foreign visitors on U.S.-flag carriers. Passenger fare payments increased $1.1 billion, or 4 percent, following an increase of $1.4 billion, or 5 percent. The increase in 2007 reflected a less than 1 percent increase in the number of U.S. travelers on foreign-flag carriers. Sizable price increases in airfares resulted from a 7 percent rise in jet fuel prices after an 18 percent increase in 2006 and affected both receipts and payments. These price pressures more than offset the impact of a significant expansion in airline capacity for both inbound and outbound flights and a significant improvement in average load factors.