Broken State Budget Systems Hurt Tourism Industry

In his “On My Mind” column, Leisure Group Travel publisher Jeff Gayduk, points to the budget crises facing many states, contending that “tourism is the piggy bank that’s being raided to pay for years of mismanagement and misappropriation.” Tourism tax dollars, he says, are being diverted for other purposes, thus undercutting the travel industry.

This broken system means that funds for tourism promotion are drying up. With lack of promotion, “fewer people are inclined to travel, which leads to a drop in tourism, which of course leads to less taxes, only exacerbating the hole we’re in,” he says. “It’s a vicious cycle that must stop.”

Read more about tourism as a driver in our economy

Travel Spending Growth Outpaces Economy in General

The U.S. Department of Commerce just announced that real spending (adjusted for changes in price) on travel and tourism increased at an annual rate of 3.9 percent in the first quarter of 2010, following a decrease of 1.5 percent (revised) in the fourth quarter of 2009. By comparison, real gross domestic product (GDP) increased 2.7 percent in the first quarter of this year after increasing 5.6 percent in the fourth quarter of last year.

•    Real Tourism Spending. Real spending on traveler accommodations increased 11.0 percent in Q1 2010 after declining 7.9 percent in Q4 2009. Spending on passenger air transportation increased 4.5 percent in Q1 2010 after a decline of 9.8 percent in Q4 2009.

•    Tourism & Prices. Prices for passenger air transportation increased for the third straight quarter, rising 13.3 percent in Q1 2010, 36.3 percent in Q4 2009, and 2.4 percent in Q3 2009. Prices for traveler accommodations turned down in Q1 2010, declining 6.4 percent after increasing 3.1 percent in Q4 2009. Overall, average prices of all travel and tourism goods and services rose 3.5 percent in Q1 2010.

•    Tourism Employment. Direct travel and tourism employment remained unchanged (0.0%) in Q1 2010 with gains in food services (1.0%) and shopping (1.1%) helping to offset losses in air transportation services (-1.4%) and traveler accommodations (-1.5%).
Source: U.S. Department of Commerce, Bureau of Economic Analysis (June 2010).

Travel and Tourism Satellite Accounts form an indispensable statistical instrument that allows the United States to measure the relative size and importance of the travel and tourism industry, along with its contribution to gross domestic product (GDP).

Approved by the United Nations in March 2002 and endorsed by the U.N. Statistical Commission, TTSAs have become the international standard by which travel and tourism is measured. More than 50 countries around the world have embraced travel and tourism satellite accounting as the only comprehensive, comparable, and credible measure of travel and tourism and its impact on national economies.

For more information on TTSAs, visit www.bea.gov/industry/iedguide.htm#ttsa_ou.
To view the Q1 2010 release in its entirety, visit www.bea.gov/newsreleases/industry/tourism/2010/tour110.htm