Travelling and Tourism contributes to U.S. Economy
How travelling and tourism contribute to U.S. economy
Annotation
Websites
United States Department of Commerce
Commerce Department Data Show U.S. Travel and Tourism Exports Contributed $87.1 Billion to U.S. Economy in First Six Months of 2013
The official website of the U.S. Department of Commerce takes keen interest in finding who enters the country for the purpose of traveling and tourism and what is the impact of traveling on the economy of the country. The department oversees International Trade Administration. It is found that the international investors contribute multibillions to the economy of country every year. During the month of June this year, the international investors contribute about $14.6 billion. The contribution is increasing every year and from June 2012 to June 2013, the investment increased about 5%. The role of international travelers and tourists is positive on the economy of USA. Only in the first half of the year, the tourists contributed $87.1 billion. The international travelers contribute in the economy in form of purchases related to tourism-related goods that made up $67.0 billion that was spent on transport, food, recreation, gifts, and insurance. There was another big share that the travelers and tourists contributed in the economy in the form of air freight charges.
The competition improves in the country when there are international consumers. The increase in tourism promotes the strategy of the department and encourages local brands that they can be promoted to international market through the tourism. More jobs are created in the market because there needs to be a workforce that will be serving 100 million international visitors by next decade.
World travel and tourism council
28 February 2013
Global Travel & Tourism industry defies economic uncertainty by outperforming the global economy in 2012 — and predicted to do it again in 2013
On the official website of the World Travel and Tourism Council, it is mentioned that the traveling industry has flourished globally with the flux of information about the countries. People know where they can find best water falls, islands, beaches and shopping opportunities thus they travel. This travel and tourism has emerged as an industry and is even growing. The council stated that the tourism industry is evolving even faster than the retail, manufacturing, financial and communications services industry. In the GDP of USA, the tourism contributes around 3% and around five million new jobs have been created.
Today almost every job is connected to tourism thus the increase in tourism means increase in demand and well as production in all other segments of economy. The council’s research shows that in 2013 the contribution of tourism in world economy was over $6 trillion while the impact of the U.S. economy was multibillions too. The economies with great involvement of tourism and travelling in their GDP like USA, Europe, China, Korea and South Africa are concerned in making their visa process easier so that more tourists can be welcomed in the countries to improve their economies. While there is a climax of manufacturing and it is too had to increase the level of production and manufacturing beyond a specific limit, the technologies are tourisms are the areas that can still support as well as grow the size of economy.
International Trade Administration
10 July, 2013
Year-to-date U.S. travel and tourism exports contribute $72.6 billion to the U.S. economy
United States is counted among the countries that are most benefitted due to the international trade. In the month of May this year the country collected $14.7 billion that showed an increase of 7% as compared to May 2012. The net of $72.6 billion in the first five months of the year shows that it is the most growing sector of economy and that the country can use this segment in multiple ways. The effects of tourism are direct and induced in manufacturing, air travel, job creation, food industry and hotels and restaurants. With millions of jobs and expansion of economy, the country is likely to promote tourism by legal and social methods.
The data suggests that not only jobs but the economy as a whole is positively affected by tourism. Exports are growing and the country is taking measures so that the tourism does not become a threat to national security. The government facilitates by working on immigration side by side that ensures that people from all corners of the world are welcomed. The Visa Waiver Program is being strengthened so that law is enforced and the foreigner visitors become a social and economic benefit for the country rather being a challenge.
Press
U.S. Travel Association
2013
Economic Impact of Travel & Tourism
The association found that the trillions of dollars are associated with the tourism in global economy and China and USA are a few of those countries that are most benefitted from it. Besides the fact that the tourism offers job opportunities and increases consumption in the economy, the travelers are introduced to local goods and thus they develop taste of these local items. The tourism also offered hundreds of billion dollars in form of taxes to local, state and federal government. The travel exports are America’s biggest export worth over hundred billion dollars every year. The Guardian figures out around 14 million jobs associated with travel and tourism in USA.
The analysis of figures associated with jobs, exports, development, and GDP contribution show that the role of tourism and traveling in economy is growing. With an increasing trend, America is only next to China in terms of rate of growth while the number of tourists is still higher. The country has flexibility to accommodate the tourists by creating new jobs and offering them facilities. The Guardian also says that the government needs to make efforts to provide a more secure environment to both the locals and the tourists so that the tourism flourishes in state. Now that many industries are facing crisis including the financial industry, there should be substitutes so that new industries emerge and grow and support the economy. One such industry is tourism and traveling.
Q1 Travel and Tourism Contributes $43 B. To U.S. Economy
2013
The role of travelers and tourists is considered as a support to economy. The travellers and tourists are contributing a lot in the U.S.A. And the quarter 1 analysis in press shows that the country collected around $14.4 billion. The continuous growth in tourism related revenues is confirmed through unanimous agreement of all the bodies that the international visitors spend billions of dollars that grow the size of economy. The tourism industry in USA makes up segment of economy which is in it bigger than many economies of the world. According to surveys, the tourism is responsible for highest services exports of the country. While the one time visit of a traveller is one time economic opportunity but it is associated with many induced long-term affects. New jobs are created and people get employment that reduces the rate of unemployment of the country. After 2007-08 economic crises, it is hard to imagine where the country would be standing given no support from the tourism industry. This industry is one of the hopes of the economy which does not seem to mature in near future.
The tourists where one of the biggest consumers in the month of March, and they purchased items of worth more than $11 billion. The size may be more than doubled by 2020 and thus majority of the jobs in the economy will be supported by travel and tourism in one way or the other.
Independent
07 November, 2013
Keeping nine per cent rate good for jobs, tourism and economy
There are many press articles dating before 2008 that mention that the U.S. economy was overlooking the role of tourism. However, since then, the tourism and travel has increased in America and people have been welcomed in the country after making legal arrangements so that there are no threats for the country. The job creation associated with the tourism was a golden opportunity. Not only the employment increased but the small businesses also bloomed to serve the tourists. The services associated with provision of tourist needs also increased. Beaches are considered the most attractive tourist spots in America. Thus the services at beaches were improved so that more and more tourists are attracted.
The small businesses in form of restaurants, coffee shops and apartments have also flourished that offer cheap accommodation to the tourists. Thus, the tourists understand that it is affordable form them too to visit USA and expire living in one of the largest economies of the world. The taxes and the services in hospitality sector are the areas that are green for tourism. Thus, the economy is by all means benefitting from travel and tourism and there has been no such incidences since a decade that can tell that tourist were a problem for USA.
Journal Articles
Thea M., Sinclaira
23 November, 2007
Tourism and economic development: A survey
Sinclaria studied the literature on tourism as well as the facts available from the industry. The tourism is found to have a role in economies since history yet the impact became clearer in the second half of the 20th century. The tourism drives development of roads, railways, air transport, foreign currency, income and employment in the country. There was huge cost associated with the tourism in past as well. Some travelers used to become illegal residents of the country that was a burden on economy since these people never used to pay taxes. However, with the increase security processes, the tourism is also facilitated in countries like USA. The tour operators and travel agents are not the only direct beneficiaries of travel and tourism in America but the effects cascade down to the domestic families.
There are some environmental concerns too about tourism. Any country like USA has some limited resources that are shared and used by people of area or the inhabitants. The tourists and travelers have to share the same ecology and natural resources thus there might be an economic and environmental cost that the people are paying without noticing it. The government bodies are required to ensure that the influx of the tourists is not that high that the economic cost of the tourist is unbearable. While the contribution of tourists in job creation cannot be ignored, the costs must also be included when reporting net effect on the economy.
Ritchie, J.R.B., Molinar, C.M.A., and Frechtling
03 December, 2010
Impacts of the World Recession and Economic Crisis on Tourism: North America
While there is an opinion that travel and tourism affected the economy of USA, there are other opinions too that the economy of USA affected the tourism in country. The global tourism industry is the one that was highly affected by the economic crisis. Although the economists realize the importance of tourism and promote it, the economic conditions are often such that the lives of even local people are affected. The prices go up and an employment decrease thus the immediate impact of the crisis was that tourism was neglected.
After the economic crisis of 2008, it was expected that the tourism will be ignored in the long run but the reality was opposite. The tourism went up again and more jobs were provided in the economy. Consumption increased again and exports were accelerated. The GDP of USA increased only 1% after the attacks of 9/11 but after that the economy increased and tourism played its role. However, the second but short-term halt in tourism occurred at the time of economic crisis. Now the tourism is one of the fastest growing sectors and the economy hopes that tourism will be the sector that will support millions and millions of jobs in America.
Stynes, D.J. And Propst, D.B.
A system for estimating local economic impacts of recreation and tourism in measuring tourism impacts at the community level
There are several different aspects of understanding various approaches to estimating the economic impacts of tourism. There are some practical and some theoretical aspects of tourism and its effect of economy. The visitors spend money in the host country that influences the overall spending and consumption. The article suggests that the spending and the benefit coming from the tourist to the economy is based on many parameters like the area he visits, days he spends and number of visits he pays. While the impact of tourism can be counted through the number of visits but the final impact is studied by knowing dollar amount each tourist contributes. The per-visitor spending in an economy also tells which country’s citizens are more beneficial for an economy as tourists.
The economy is a complex system thus the various different methods can be used to find out how the economy can be influenced so that the most effective parameters of benefitting the economy are adopted. The tax a tourist pays to the local and state government is another parameter to find the benefit derived from each tourist. The spending categories can also help because it tells which products should be produced more in a system and where are the opportunities for employment. The research on hotels and restaurants also shows that almost every category of hotels benefits from restaurants thus their qualities are improved to make is attractive for tourists.
Guido Candela and Paolo Figini
2012
The Economics of Tourism Destinations
Tourism is neither as simple as planning and leaving for a country/city nor as cheap as simply buying fishing rod for the fishing experience at the bay alone. Tourism has far reaching effects on economics, sociology, geography, management and history of a country. The economy however experience fastest effect that can be seen in terms of dollars and contribution in the GDP of a state. While around 9% of global GDP is contributed by tourism, it also makes up huge portion of big economies and their GDP. The demand in a country like America is greatly impacted by the spending of the travelers. The tourists spend money in travel, accommodation and food and the development also takes place to make an area attractive for people. From visas to tickets, medical insurance to food; everything a traveler does is benefit for the economy thus economies are suggested to understand the role of tourism and should make efforts to grow it.
The tourism should be analyzed in terms of costs and benefits. It should however be recognized that it is not possible to count all the induced effects of tourism. These can be positive or negative. The direct impact of tourism should be at least understood to establish what are associated costs and benefits.
Research Paper
Introduction
The tourism is an activity that shows a process by which people travel places other than that they live in. The tourism can be in one’s own country or abroad. When a person travels other areas for the purpose of entertainment or work, this involves some expenses that might be a cost for the person (tourist or traveler) but for the country or area he travels, it is the earning. Tourism’s impact on the economy is a field of study that is investigated in this paper. It is found how tourism might affect economy of an area and whether this impact is in form of benefit or the burden. The paper also finds out different opinions about role of tourism on economies and how American economy has generally and over last decade particularly affected from tourism. During different times different impact was found on U.S. economy but this year after the end of first half, the statistics have shown that the tourism revenue increased and the contribution of tourism and travel in GDP increased as well.
Summary
In order to study the impact of tourism on the economy of USA, different sources including web, journals, newspapers and books were studied. It was found that there are many costs and benefits associated with the influx of travelers and tourists in the country but the economic benefits are very high. The websites mentioned that the international tourists spend billions of dollars each year in USA (United States Department of Commerce). Every year the contribution of the tourism is increasing. This is also creating jobs in the industries that deal with food, transport, air travel, recreation and entertainment. This improves the competition in the economy and thus the quality of goods increase as well. World travel and tourism council says that the it is not USA alone that is benefitting from a positive trend in tourism but globally there is rise in tourism all over. However, USA is among few those countries that have biggest number of international tourists and whose tourism is one of the most rapidly growing industries. The country offers beaches, historical and natural places that attract people from all over the world and with people comes the spending that increases consumption in economy and supports it. Around $15 billion are already collected in USA this year by the month of May through travel and tourism. The exports of the company are growing as well (International Trade Administration) which is a very positive sign.
The popular press is filled with the news of contribution of tourism in the economies. The U.S. Travel Association says that trillions of dollars are connected to the global tourism industry. This is bigger than biggest economies. The travel and tourism goods, products and services make up a great opportunity for the locals and that creates jobs that reduce the rate of unemployment. Since the employment is one of indicators of the development in an economy it can be said that the tourism is involved in economy in this manner as well. The growth in economy of USA trough tourism is not something unusual but it has been increasing since a past few years (Q1 Travel and Tourism Contributes $43 B. To U.S. Economy). After the economic crisis, the tourists helped the economy through their spending and thus the level of consumption was maintained in the economy that grew afterwards. It is found through press that the U.S. economy did not really and practically considered tourism as important as they consider it today (Independent). With the economic problem in the system, the country explored new and ignored industries and found that the tourism was one such industry that could boost the economy. The visa processes were made easier though highly secure so that the travellers and tourists are encouraged to visit America. Thus millions of new jobs emerged and the economy was supported. The businesses that benefitted the most from the tourism include restaurants, hotels, travel agencies and agents, airlines, sea surfers, etc.
The press’ news is based on the existing data but the journals offered a detailed analysis and investigation on the topic. Data belonging to years was analyzed and theoretical background of tourism was studied to find out how tourism affects economy and what have been the past trends in this respect. Sinclaira (1-51) mentions that impact of tourism on economies is not a news. It is a fact established over time. It is since past known that tourism brings development in roads, air transport, railways, currency, income and employment. The costs of tourism include the tourists turning into illegal residents. If the country avoids this problem, a lot of good can be reaped from tourists. This should be done in such a way that the tourists are not discouraged but they are screened in using technology so that they find it easier to enter and visit a country in secure and legal manner. Ritchie, Molinar and Frechtling (515) say that the tourism and economy have both impacts on each other. While the tourism is helping today to support the economy, in past, the recession in economy also discouraged tourism. The U.S. economy has realized the importance of tourism in the economy and thus the traveling and tourism is promoted. Stynes and Propst say that the effect of tourism on economy is far reaching and there are different parameters that can be studied to find in which ways the economy actually benefits from tourism. The tourists contribute in form of taxes, food, accommodation and much more.
In their book, Guido and Paolo suggest that the economist, unlike an ordinary man, analyzes tourism deeply. The tourism brings spending as well as fees that are revenue of America. The contribution of a tourist starts since the day he pays his fee for visa. The contribution grows as he enters the land and spends on other goods and services. Thus, the contributions of travelers should be appreciated and their areas of interest in spending should be traced to find opportunities in economy. The research suggests that without identifying each major and minor impact of tourism on the economy, it is not exactly possible to get its benefits.
Assessment
The sources studied in the research are very helpful in offering a statistical overview of how the impact of tourism grew on the U.S. economy. Within a year, the tourism revenue grew more than 6%. However, there was no such indication in these papers and articles as how much the United States paid to attract and accommodate these tourists and travelers. The data is found a little inconsistent since the reports are being finalized for this year thus the tourism revenues are quoted differently in different newspapers and articles however they lie in same range. The data analysis should be carried on by researchers in such a way that it covers all the recent past year data and the future impact of tourism on economy is also anticipated.
Gaps
The data available of impact of tourism and its contribution in GPD of USA is either too current or too old that a link cannot be developed between the two. It is not known how exactly the size of tourism contribution grew by the comparative growth in the economy. This will help get an overview of how tourism was carried out during different times in the history of USA. The literature on the tourism and its impact on the economy also miss the comparison on what is the contribution of tourism on other major economies. For example, the role of tourism and its size in China, Europe and Asia can be compared.
Conclusion
The tourism evolved as an industry where people are not only fascinated by the Pyramids and Great Canyon alone but also the Empire State Building and want to visit and live in places that are filled with the wonders of men. While tourism is the source of ‘dream come true’, it is the dreams of economists and state administrators too today. The tourists contribute in the economy directly and indirectly. While on one hand they purchase goods and avail transport and accommodation facilities directly, they also indirectly influence the manufacturing and production process and support an economy.
The level of tourism is highly based on the legal processes of the country and it is so important in today’s economic world that while many industries are vanishing, it is important to grow tourism that is around 10% of the global economy. The increase in tourism will be the hope for economists. It will not only help increase the manufacturing and production but also jobs. The future of tourism will be even brighter if countries recognize its role in economy.
References
Guido, C., and Paolo, F. “The Economics of Tourism Destinations,” Springer. (2012).
International Trade Administration. Year-to-date U.S. travel and tourism exports contribute $72.6 billion to the U.S. economy, (2013). Retrieved from: http://trade.gov/press/press-releases/2013/year-to-date-us-travel-and-tourism-exports-contribute-72-billion-to-the-us-economy-071013.asp
Independent. Keeping nine per cent rate good for jobs, tourism and economy, (2013). Retrieved
from: http://www.independent.ie/irish-news/keeping-nine-per-cent-rate-good-for-jobs-tourism-and-economy-29674268.html
Q1 Travel and Tourism Contributes $43 B. To U.S. Economy. (2013). Retrieved from:
http://gcbusinessjournal.com/index.php?option=com_content&view=article&id=2282:q1-travel-and-tourism-contributes-43-b-to-us-economy&catid=108:government&Itemid=142
Ritchie, J.R.B., Molinar, C.M.A., and Frechtling, D.C. “Impacts of the World
Recession and Economic Crisis on Tourism: North America, Journal of Travel Research, 49(1), 5-15. (2010).
Stynes, D.J. And Propst, D.B. “A system for estimating local economic impacts of recreation and tourism in measuring tourism impacts at the community level,” Economic impact approaches. (1992).
Sinclaira, T.M. “Tourism and economic development: A survey,” The Journal of Development Studies, 34(5), 1-51. (2007).
U.S. Travel Association. Economic Impact of Travel & Tourism, (2013). Retrieved from:
http://www.ustravel.org/government-affairs/travel-industry-economic-impact
United States Department of Commerce. Commerce Department Data Show U.S.
Travel and Tourism Exports Contributed $87.1 Billion to U.S. Economy in First Six Months of 2013, Retrieved from: http://www.commerce.gov/blog/2013/08/07/commerce-department-data-show-us-travel-and-tourism-exports-contributed-871-billion-
World travel and tourism council. Global Travel & Tourism industry defies economic uncertainty by outperforming the global economy in 2012 — and predicted to do it again in 2013, Retrieved from: http://www.wttc.org/news-media/news-archive/2013/global-travel-tourism-industry-defies-economic-uncertainty-outpe/
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