Travel Spending Lagged GDP Growth in First Quarter

Real spending on travel and tourism increased at an annual rate of 0.6 percent in the first quarter of 2011, following an increase of 2.6 percent (revised) in the fourth quarter of 2010, according to the U.S. Department of Commerce. By comparison, real gross domestic product (GDP) increased 1.8 percent in the first quarter, after increasing 3.1 percent in the fourth quarter. The slowdown in real spending on tourism reflected a downturn in both domestic and international passenger air transportation as passengers faced higher ticket prices.

• Real Tourism Spending. Real spending on passenger air transportation turned down, decreasing 9.9 percent in the first quarter of 2011 after increasing 3.4 percent in the fourth quarter of 2010. Capacity grew faster than demand, especially on international routes, while prices rose to cover significantly increased fuel costs. The downturn in air passenger transportation was partially offset by an acceleration in real spending on traveler accommodations which increased 12.9 percent in the first quarter after increasing 5.8 percent in the fourth quarter. Occupancy rates increased as room prices continued their decline from the previous quarter.
  
• Tourism Prices. Prices for passenger air transportation accelerated steeply, increasing 21.4 percent in the first quarter of 2011 after increasing 3.5 percent in the fourth quarter of 2010. Domestic and international passengers continued to pay more in the first quarter due to rising fuel costs. Prices for traveler accommodations decreased 3.2 percent in the first quarter after decreasing 8.2 percent in the fourth quarter. Group rates, negotiated in prior quarters, continued to suppress overall traveler accommodations prices.
  
• Tourism Employment. Direct employment in the travel and tourism industries increased 2.0 percent in the first quarter of 2011. All industries saw increases in employment with the exception of recreation and entertainment which turned down slightly in the first quarter, decreasing 0.5 percent in contrast to an increase of 0.8 percent in the prior quarter.
  
• 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 first quarter of 2011, total current-dollar tourism-related spending was $1.2 trillion and consisted of $782.7 billion (68 percent) of direct tourism spending – goods and services sold directly to visitors – and $417.3 billion (32 percent) of indirect tourism-related spending – goods and services used to produce what visitors buy.
  
• Total Tourism-Related Employment. In the first quarter of 2011, total tourism-related employment was 7.6 million and consisted of 5.4 million (71 percent) direct tourism jobs – jobs where workers produce goods and services sold directly to visitors – and 2.2 million (29 percent) indirect tourism-related jobs – jobs where workers produce goods and services used to produce what visitors buy.