I attended the Southern California Visitor Industry Outlook Conference in downtown Los Angeles last week, where several research firms reported their insights of the 2016 travel outlook and trends in California and in the U.S.

As follows, I am going to share some important information I marked down during the conference. At the same time, I will insert my comments where it is applicable with a dash:

The facts

  • The labor markets in the U.S. and California are nearly healed, with unemployment rate reaching 5.1 percent in the U.S. and 6.1 percent in California.
  • Growth in nonfarm jobs remains stable in the U.S. and California — But remember some positions could have been filled with machines instead of human beings.
  • Occupancy in California reached 72.8 percent in 2014.
  • Positive percent change has been found in hotel occupancy, ADR (average daily rate), and RevPAR (revenue per available room) in all regions of California for several years.
  • Travelers spent $117 billion in California in 2014, creating 1.027 million tourism-related jobs in California and contributing $9.3 billion to state and local tax revenues.
  • Out of all travelers visiting California, 7 percent are international (vs. 93 percent domestic), but they contribute to 20 percent of all travel spending.
  • The top three international visitors to California in 2014 included: Mexico (7,572,000 visitors), Canada (1,625,000) and China (996,000).
  • Growth in inbound travel was led by the Middle East (33.3 percent change), Central America (excluding Mexico; 22.8 percent change), Africa (15.3 percent change) and Asia (6.8 percent change).
  • Among different generations, millennials plan to travel the most — No wonder hotels and restaurants are responding to shifting customer base.
  • Strong U.S. dollar has had a big (negative) impact on inbound travel in 2015, especially to travelers from Mexico and Canada.

The outlook and the trends

  • Positive changes are projected for the next five years in California in regards to gross state product, nonfarm jobs gains, unemployment rate, and personal annual income.
  • Supply, demand, occupancy, ADR, and RevPAR for all U.S. hotels will continue to perform better in 2015 than they did in 2014; so will 2016 do as compared to 2015.
  • Domestic travel is forecasted to grow 2 – 3 percent annually through 2018.
  • Projected growth of international visits between 2015 and 2018 are led by China (13 percent change) and India (7 percent change) — That's why we need to get ready to welcome the Chinese tourists.
  • New jobs in leisure and hospitality are expected to increase by 53,300 in California in 2016 — While more employers are hiring, check out what we need to prepare for career fairs.

Some concerns

  • Falling travel prices are the result of lower fuel costs — Cheaper fuel costs also push travelers to take more short road trips.
  • Strong U.S. dollar against foreign currencies may slow down inbound travel.
  • China is experiencing slower growth than before and only 5 percent of the Mainland Chinese have a passport for international travel — Do we still need to prepare to welcome more Chinese tourists in the future? Probably, but make sure we do not repeat the mistakes of Hong Kong.
  • Real estates and constructions are bouncing back (finally), which increases the costs of building or converting hotels/restaurants.
  • Supply of hotels (and hotel rooms) continues to grow, at a point about to reach the peak numbers of new hotels entering the market recorded in 1999 and 2009 — In fact, today's investors are after all kinds of lodging products. The question is: Will travel demand continue to grow to sustain the market?

Concluding remarks

Looking forward, 2016 seems to be another good year for the travel and tourism industry. With quite a few uncertainties floating in the air, however, we need to diversify our investments, products and service provided, as well as the markets we serve.

What are your projections for 2016? Are there any trends that the industry needs to pay special attention?