U.S. travel exports continued to slip in March, as potential visitors from overseas continue to feel the sting of the ongoing financial crisis.

This is the second consecutive month in which net exports fell, signaling that the travel industry has quite a few more miles to travel before a recovery is in sight. March punctuates a brutal quarter, when foreign spending on trips to the United States took a double-digit hit.

Visits to the U.S. from abroad fell 14 percent in the first quarter of 2009 over the same period in 2008. Travel in March was down 20 percent alone. Since travel and tourism is the country's top services export, this represents a serious blow to an ailing industry. What began at the end of 2008 has only gained momentum.

Just 3.8 million international visitors visited the U.S. in March, spending $9.9 billion -- off 16 percent from March 2008 -- according to the Department of Commerce, For the first quarter, international visitor spending reached $30.6 billion: a 12 percent year-over-year decline.

While part of the plunge can be attributed to Easter's having fallen in March this year, broader market forces continue to drive the decline of U.S. travel exports. Continued blowback from the global financial crisis -- from a decline in disposable income to a strengthening U.S. dollar in markets consuming U.S. travel exports -- have pushed the results lower (often substantially).

Arrivals from Canada and Mexico dropped precipitously, a trend that may be exacerbated by the stricter passport regulations recently passed. Canadian visitation declined 13 percent in March over a year earlier, with land arrivals down 16 percent for the month and 14 percent for the quarter.

Travel from Mexico was down as well, down 26 percent for the first quarter this year -- 24 percent for land arrivals and 33 percent for air arrivals. The decrease was sharper in March than for the quarter as a whole: Land arrivals fell 42 percent, with air off 46 percent.

Visits from overseas also didn't fare well. Overall, travel to the United States from countries other than Canada and Mexico has fallen five months in a row (through March) and is off 13 percent for the first quarter of 2009. Only three of the top 20 countries for sending guests to the U.S. posted gains in March: France (1 percent), Argentina (0.4 percent) and Israel (strong at 15 percent). Argentina barely kept its 32-month streak of increased U.S. travel export consumption alive. For the first quarter, China and Brazil can be added to the list of increased U.S. visitation.

For many of the country's international travel trade partners, the results were dismal. U.S. visitation from the 27 countries in the European Union fell 23 percent in March and 17 percent for the first quarter. Western Europe, which accounts for 46 percent of all overseas arrivals, sent 24 percent fewer people in March and 18 percent fewer for the quarter. Travel from the U.K. was down 31 percent for March and 26 percent for the quarter -- continuing the trend of decline for seven months. For the first quarter of 2009, the United Kingdom represented more than a third of all Western European arrivals.

Double-digit declines were also posted by Italy, Germany, Spain, the Netherlands, Ireland, Sweden and Switzerland.

While airlines are acting to counter the revenue trend that comes from fewer people in seats with a variety of new fees, it's difficult to imagine that paid baggage and other crazy schemes, as well as the variety of travel deals that has hit the market, will fill the loss of approximately $4 billion in travel revenue in the first quarter alone. Ultimately, there is no substitute for carting passengers across borders, leaving few ways to replace the lost revenue.


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