Revenues would be used to fund the Maine Department of Education.

A bill introduced into the Maine House - LD 225 (HP 148) - by Rep. Michael Brennan (D-Portland) with numerous cosponsors would create an additional 3% lodging tax - on top of the current 9% - with the proceeds going to the Maine Department of Education to fund school construction and K-12 education.

The new tax would become effective 1 January 2026.

Per the title of this Bill, one purpose is to "reduce property taxes," but it's not clear how that would necessarily come about.

At 12%, Maine's state lodging tax rate would be second-highest in the US.

And at least in part for reasons related to the US economy, visitation to Maine was down by 9% year-on-year in the summer of 2024.

Because a higher lodging tax rate puts Maine lodging places at a competitive disadvantage to other destinations, the Maine Tourism Association opposes this legislation.

UK ETA expansion sparks tourism concerns

UK Home Secretary Yvette Cooper recently announced that 2 April 2025 will be the start date of an expansion of the country's Electronic Travel Authorisation (ETA) scheme which will require all foreign nationals to pay a fee of 10 GBP to enter the UK.

Intent is to collect better data on who is entering the UK, for security purposes.

But those in the travel and tourism industry have expressed concerns about adverse effects on tourism, particularly to Northern Ireland, which tour operators frequently include in itineraries that feature the Republic of Ireland.

The Northern Ireland Tourism Alliance estimates that visitors to NI from Europe and North America could decrease by up to 25% because tour operators may find the added cost and hassle of the ETA to be offputting.

And UK airlines are concerned the expanded ETA could be a barrier to UK visitation, especially for travelers whose itineraries involve only a short stay or layover in the UK.

Schengen Area citizens could choose to travel seamlessly within its borders, skipping the UK, and Americans could be wooed away by competing European destinations.

How will this play out next year? Watch this space for updates.

WTTC Top 5 Tourism Markets

The World Travel & Tourism Council (WTTC) has released its 2024 Economic Impact Trends Report revealing which countries have contributed the most to the world economy through travel/tourism spend:

1. USA: $2.36 trillion
2. China: $1.30 trillion, with YOY growth of 135.8% despite late reopening post-COVID
3. Germany: $487.6 billion
4. Japan: $297.0 billion
5. UK: $295.2 billion

However, WTTC predicts that over the next 10 years:

• China will overtake the US as #1.
• India will move up to #4.
• Travel/tourism investment will return to 2019 level by 2025 despite worldwide high interest rates.
• Technological advances, particularly in AI, will enhance the travel experience and drive future growth.

2024 global travel & tourism statistics:

• % of global GDP: 10.0%
• YOY spend growth: +12.1%
• Global employment: 348 million jobs, 10.4% of total
• YOY job growth: + 18 million

In a major milestone in the Fed's fight against inflation and consumers' fight against higher cost of living, the Federal Open Market Committee on Wednesday announced a greater than expected 0.5 point interest rate cut to a range of 4.75%-5%.

Fed Chairman Jerome Powell said:

“We concluded that this was the right thing for the economy and the people we serve."

The FOMC said they reduced interest rates because they are confident that inflation is coming back down to their 2% goal, and they want to prevent the job market from softening further.

Analysts speculate that the big cut comes now because the Fed was "behind the curve" in July when the decision to leave intertest rates as-is was taken just 2 days prior to a disappointing jobs report being issued.

On Wednesday, the S&P 500 and Nasdaq both surged on the Fed announcement, but at the end of the day closed on a modest drop.

The value of the USD abroad fell slightly, but because the rate cut had been forecast for so long it had likely already been priced into the value of the dollar.

US consumers with big variable-rate credit-card balances stand to benefit most from the rate cut.

Because mortgage lenders generally anticipate Fed policy changes, recent mortgage rate drops likely already reflect the September rate cut by the Fed. Some homeowners may be able to refinance in order to lock in a lower interest rate and reduce monthly payments.

Savings account interest rates will likely fall, making CDs and money market accounts more attractive.

August international air arrivals to US up 5.2% to 91.6% of 2019 level

Newly released data from the US National Travel and Tourism Office (NTTO) show that in August there were 5.750 million non-citizen air arrivals to the US, up 5.2% vs. August 2023 to 91.6% of the pre-pandemic August 2019 figure.

Overseas visitor air arrivals (international minus Canada and Mexico) totaled 3.595 million in August, which was 88.5% of 2019 level.

US citizen departures to foreign countries totaled 6.309 million in August - up 9.4% vs. August 2023 and up 18.7% vs August 2019.

Also in August, although arrivals to the US from South and Central America and the Caribbean were up 13.5% vs. 2019, arrivals of European citizens to the US were down 12.6%, and arrivals of Asian citizens were down 34.7%.

Top US ports for international traffic (inbound and outbound) were:

1. New York JFK 3.768M
2. Los Angeles LAX 2.250M
3. Miami MIA 2.168M
4. Newark EWR 1.562M
5. San Francisco SFO 1.526M

Top foreign ports serving US destinations were:

1. London Heathrow LHR 1.758M
2. Toronto YYZ 1.171M
3. Paris CDG 914K
4. Cancun CUN 904K
5. Frankfurt FRA 776K

Comment: Recovery of US inbound travel from Asia continues to lag as Asians do their leisure traveling in Asia. Travel industry execs blame US passport/visa hassles, US-China trade conflicts and reports of US crime and violence appearing in Asian media. I don't foresee any dramatic recovery in inbound from Asia happening in 4Q2024. Let's try to get a meaningful head start on 2025 before it's too late.