The US tour operators industry has turned the corner over the last few years, with tour operators' revenue growing at a compound annual growth rate (CAGR) of 4.0% and 2.1% in 2010 and 2011, respectively. This is after a struggle in 2009, when industry revenue declined 11.3% as the recession decimated industry demand.
Falling domestic travel and international arrivals into the US also hurt the industry. In 2009, inbound travel declined, with 5.2% fewer people visiting the United States than in 2008. Domestic travel also declined 5.1% that year. With fewer people coming and going, tour operators' revenue dropped.
However, domestic and inbound travel rates have improved over the course of 2010 and 2011. In 2012, domestic and inbound travel are forecast to grow an additional 3.3% and 5.4%, respectively. Improving domestic and international travel rates have led to higher demand for tour operators' services.
The industry is expected to grow an additional 3.8% in 2012 to $3.8 billion. None the less, the industry's overall performance in the five years to 2012 will not be positive, with revenue decreasing at an average annual rate of 1.3%.
The US tour operators industry is experiencing increased competition from consumers directly booking travel accommodations online. Many tourists want flexible tour packages and itineraries: more travellers desire self-discovery time in line with their own interests, which requires them to travel at a relaxed pace.
Given this trend, the demand for niche and special-interest tours is rising, which often command a premium. In light of these conditions, over the five years to 2017, US travel operators industry revenue is expected to increase at a CAGR of 2.8% to $4.4 billion.
For more information on the US tour operators industry, see the latest research: US Tour Operators Industry Report
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