Real spending on tourism, or spending adjusted for inflation – decreased at an annual rate of 3.7% in the first quarter of 2008, indicating the travel and recreation industry is being hurt worse than the economy as a whole by declining consumer confidence and rising gas prices, data released Wednesday by the Bureau of Economic Analysis show.


The decline reflected a steep drop in spending on accommodations and passenger air transportation. The BEA also revised its estimates of real spending on tourism for the fourth quarter of 2007 to an increase of 2.3 percent. By comparison, real gross domestic product (GDP) grew at an annual rate of 0.9 % (preliminary) in the first quarter and 0.6 % in the fourth quarter of last year.


Real spending on accommodations turned down sharply, decreasing 10.8% in the first quarter after increasing 12.1% (revised) in Q4 of 2007. Real spending on passenger air transportation also turned down, decreasing 5.6 % in the first quarter after increasing 2.1% at the end of 2007.


Prices for accommodations increased 0.9% in Q1 after declining 1.9% in the previous quarter. Prices for passenger air transportation accelerated, increasing 4.7% in the first quarter after increasing just 1.3 % (revised) the previous quarter.


Real spending on recreation and entertainment slowed further, declining 6.6 % in the first quarter after declining 3.6 % (revised) in the fourth quarter.

 

Prices for all tourism goods and services continued to increase steadily – 4.8% in Q1 of 2008, 4.8% in Q4 of 2007 and 4.7% in Q3 of 2007.
Retail shopping by travelers grew slightly in the first quarter.