U.S. Travel and Tourism Growth Slowed in Fourth Quarter

March 20th, 2011
in econ_news

suitcase Econintersect:  The BEA (Bureau of Economic Analysis) reported Friday (March 18) that real spending on travel and tourism increased at an annual rate of 2.5% in the fourth quarter of 2010, following an increase of 8.6% (revised) in the third quarter.  Real travel and tourism spending turned up in 2010, increasing 3.4% (that is, from the 2009 annual level to the 2010 annual level), after two consecutive years of decline.

Follow up:

Real tourism expenditures returned to 2005 levels in 2010.

tourism 3-18-11 (1)

Real Tourism Spending. Real spending on passenger air transportation decelerated, increasing 3.6% in the fourth quarter of 2010 after increasing 30.2% in the third quarter.  This slowdown reflected an upturn in prices. Prices declined in the third quarter, primarily on international flights.  Real spending on traveler accommodations increased 5.8% in the fourth quarter after increasing 9.4% in the third quarter.  Though occupancy was strong, room rates declined in the fourth quarter.

tourism 3-18-11 (2)
Tourism Prices. Prices for passenger air transportation turned up, increasing 3.6% in the fourth quarter after decreasing 12.0% in the third quarter.  International passengers paid nearly ten percent more in the fourth quarter as carriers began increasing fuel surcharges to offset rising fuel costs .  Prices for traveler accommodations turned down, decreasing 8.2% in the fourth quarter after increasing 4.0% in the third quarter.  Group rates negotiated during the recession, remained a hurdle to raising rates.

tourism 3-18-11 (3)
Tourism Employment. Employment in air transportation services increased 1.6% in the fourth quarter.  This increase was offset by decreases in traveler accommodations of 3.3% and recreation and entertainment of 5.2%.

tourism 3-18-11 (4) 

Total Tourism-Related Spending. The U.S. production generated by tourism spending not only includes the goods and services that are purchased directly, but also the inputs used to produce these goods and services — indirect tourism-related spending. In the fourth quarter of 2010, total current-dollar tourism-related spending was $1.4 trillion and consisted of $802.8 billion (59%) of direct tourism spending — goods and services sold directly to visitors — and $558.2 billion (41%) of indirect tourism-related spending — goods and services used to produce what visitors buy.

Total Tourism-Related Employment.  In the fourth quarter of 2010, total tourism-related employment was 7.7 million and consisted of 5.5 million (71%) direct tourism jobs — jobs where workers produce goods and services sold directly to visitors — and 2.2 million (29%) indirect tourism-related jobs — jobs where workers produce goods and services used to produce what visitors buy.

Direct tourism-related employment was unchanged in the fourth quarter of 2010, after increasing 0.6 percent (revised) in the third quarter.  By comparison, overall U.S. employment increased 0.7% in the fourth quarter of 2010 after decreasing 0.2% in the third quarter.  For the year 2010, direct tourism-related employment decreased 1.0% after decreasing 5.0% in 2009.

Source:  BEA 

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