Tourism, Travel Still Short of 2019 Though Rising, Says Moody’s

(Bloomberg) -- Tourism and travel across the U.S. are increasing but still falling short of pre-pandemic 2019 levels, affecting revenues of states and cities dependent on the sectors, Moody’s Investors Service analysts said Friday. 

“We have a subset of credits particularly reliant on convention business or international travel that are still performing well below the kind of median hotel or tourism tax” revenues once anticipated, Moody’s analyst Valentina Gomez said at an analyst webinar hosted by Bloomberg Intelligence.

“We have seen a lot of improvement,” Gomez said, adding, “we are still short of 2019 levels.”

International travel is lagging as the outbreak of the delta variant of Covid keeps tourism restrictions in place. The persistence of the pandemic and resulting labor shortages and supply-chain disruptions are clouding the outlook for travel in 2022.   

For example, Hawaii, which depends on tourism to support its economy, in August saw a 8.9% decline in visitor spending from August 2019. The state said total visitor spending for the first eight months of this year was $7.98 billion, almost 34% below August 2019.

“We need to see international and business travel kind of make a come-back to get back up toward those 2019 levels,” Gomez said.  

Big cities like New York and Chicago also rely on tourism and may be able to attract more domestic travelers if all indoor leisure activities, such as theaters, reopen, Moody’s senior credit officer Earl Heffintrayer said.  

 “There is the potential that if high-yielding international travel is gone, you might see some of those revenues not come back,” he said.

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