Tuesday, 1 September 2009

How "typical" is long-term travel?

When we think of international “travel”, our instinct is to think of a short “vacation”, or a business “trip”. But when we travel abroad, outside of a few of the most-touristed places at the most-touristed times of the year, we often find that most of the other U.S. citizens we meet are people who haven’t been back in the USA in weeks or months or years, and/or who are living abroad.

So is the typical American abroad a short term traveller? Or a long-term traveller or expatriate?

It’s a question that’s become critical in the long-running lawsuit about undisclosed for credit, debit, and ATM card transactions in foreign currencies. At the hearing on 6 August 2009 on the proposed division of the US$250 million settlement (not counting another $75 million to the lawyers), I finally got a chance to explain my objections to the judge. I think he took me seriously, both as an individual and a consumer advocate, despite my not being a lawyer.

But the lawyers are trying to justify a 90% reduction in awards from the settlement to people who spent more time abroad, on the theory that the “typical” American abroad is a short-term traveller (or, if they are an expatriate, typically a military person, the lawyer for the class claimed) and that they only need to estimate “typical” patterns of travel and card usage.

In reality, almost all long-term travellers, and even most of the people actually living abroad, don’t have a local bank account abroad, and rely cash obtained at ATM’s abroad (in local currency but from from their US-dollar bank account. Here’s a typical story I got from Selwyn Berg, one of the other objectors to the settlement algorithm and claims reduction for long stays abroad:

We are the retirees who have found that one can live much better on Social Security income in European countries like Portugal, but have a retirement monthly income in U.S. Dollars on which we live. Often, it takes years to be able to resettle in a European country as a resident, and so for several years (which included the years of this case), we lived on ATM withdrawals, and that summed up to our total income for the several years…. Europe does not make it easy for any foreigner to resettle since the EU has so many benefits that the US does
not. Many European banks will not give you a credit account unless you can show residence, which makes sense. Residence is not just handed out.

My friend Erin Van Rheenen detailed the difficulty of figuring out how many Americans actually live abroad in one of her columns recently:

When I wrote Living Abroad in Costa Rica , I had the devil of time finding a reliable number for how many Americans made that very livable Central American country their home.

Estimates ranged from 200,000 to almost four times that, but there didn’t seem to be any credible sources with accurate numbers.

It’s just as hard, if not more so, to nail down the number of Americans living abroad in general.

And even harder, I might add, to figure out how many long-term travellers there are. But fortunately, I was able when I worked at Airtreks.com to commission a custom breakdown by trip duration of the U.S. government’s large-scale travel survey data. From that data, census data on military and civilian U.S. government employees and their families abroad, and State Department estimates of resident private (non-governmental) U.S. expatriates by country, I got the following figures for 1998-2000:

  • U.S.-resident “travellers” abroad at any one time: 954,000 (plus those in Canada and Mexico, from 1998 survey)
  • Government employees, military personnel, and dependents abroad: 576,367 (Census 2000)
  • Private U.S. citizens residing abroad: 3,784,693 (State Department estimate, 1999)

Of the “travellers”, there are a quarter of a million trips overseas (plus those to Canada and Mexico) each year by U.S. residents of more than 100 nights duration, and more than three-quarters of a million of 60 nights or longer.

Obviously, these statistics are far from precise. But the interesting thing is that they bear out the impression we get as soon as we venture off the tourist track: long-term travellers and expatriates far outnumber short-term travellers. Although there are more short-term travellers, their typical trips are so short that there are relatively few of them abroad, on average, at any given time. In most of the world, the statistics support the greater likelihood of meeting an American expat or long-term traveller than an American on a short trip.

I’ve sent the judge a letter with much more detail and citations, responding to his request for more evidence about this issue. He made no rulings during the hearing on August 6th, but said he would give this case his “top priority” for a decision once he completed some current trials.

Link | Posted by Edward on Tuesday, 1 September 2009, 19:59 ( 7:59 PM)

Thank you for spending your time, energy, and money to advocate for all of us.

I have two daughters going to college in Montreal and my daughters and I have traveled all over the world so this is of particular interest to me.

Posted by: gayle owens, 8 September 2009, 06:09 ( 6:09 AM)
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