We've said it before: Travel is bigger than anyone gives it credit for.
The U.S. tourism industry directly supported 5.3 million jobs in 2014—almost six times more than the automotive manufacturing sector—and accounted for 8% of the national GDP, according to the new U.S. Benchmarking Report by the World Travel & Tourism Council (WTTC).
Launched last month at the annual Destination Marketing Association International (DMAI) conference, the benchmarking study is designed to impress upon local and regional U.S. governments the often underappreciated value of tourism as a driver of economic growth.
Helen Marano, VP of government & industry affairs for the WTTC, unveiled the report at DMAI. She said tourism is actually one of the best drivers of economic growth for the foreseeable future. The sector’s contribution to the U.S. GDP is estimated to grow at an annual average of 4.4% over the next ten years, outpacing the overall economy forecasted to increase by 2.3% per annum over the next decade.
“We are dedicated to informing governments on the economic and social value of travel and tourism,” said Marano. “The bedrock of our organization is research, and the best way to talk about that to governments is to compare our industry to what other sectors are commanding attention. It was over 25 years ago when Secretary of State Henry Kissinger said, ‘What we need in order to be heard by government and understood better by government is good solid economic data.’”
Adding another layer to that data, the total number of U.S. jobs supported by travel and tourism jumps to 13.7 million, or 9.3% of overall employment in the U.S., when you add in the indirect and induced impact of the visitor economy.
Indirect impact relates to spending in the travel industry supply chain that provides products and services for travel companies such as technology providers and linen manufacturers.
Induced impact calculates the value of travel industry employee spending in their local economy.
“The induced figures are important for the community to see and understand the value that you provide as employees of the travel and tourism industry when you go and buy sneakers in town for your kids,” explains Marano. “So it’s about the money spent in the town derived from tourism and how it comes back around.”
The WTTC report compares the economic impact of tourism against other primary U.S. business industry sectors including: agriculture, automotive manufacturing, chemical manufacturing, banking, education, financial services, mining and retail.
The following charts show the impact by each individual sector on both jobs and the GDP.
Marano explained that the purpose of showing comparative data like this is designed to show the economic impact of tourism within the wider context of the national economy, versus just standalone numbers that are difficult to put into perspective on their own.
She also explained how governments are often willing to subsidize industries that are easily identifiable in the public arena. When a factory closes, for example, the jobs lost and negative economic impact can be immediately quantified. That makes for powerful headlines that governments fear.
On the other hand, the extent of the tourism industry is much murkier in the minds of the voting public—especially the meetings and convention sector—because it’s decentralized and embedded in so many different segments among a wide variety of disparate businesses.
“The point is that these other industries are heavily invested in by governments for procurement, to get them into our economies, and/or they’re sources of new revenue,” said Marano. “[Whereas] travel and tourism is sort of this transparent, amalgamous industry that they don’t really see standing up against some of the bigger ones, which have actually receded even with great attention from their governments.”
Here is a breakdown of the projected growth for each industry annually over the next ten years:
Here is a bulleted list of economic metrics supplied in the WTTC U.S. Benchmarking Report:
- Travel & Tourism generated a total impact of $1.4 trillion of the United States’ GDP in 2014.
- Travel & Tourism GDP is larger than that of the education, agriculture, automotive manufacturing, and mining sectors.
- In terms of its direct GDP, Travel & Tourism is larger than that of the education, agriculture, automotive manufacturing, and chemicals manufacturing sectors.
- Based on its direct, indirect, and induced GDP impact, Travel & Tourism generated 8.0% of the United States’ GDP in 2014. This is larger than automotive manufacturing’s and agriculture’s GDP impacts at 5.8% and 3.9%, respectively.
- Travel & Tourism sustained a total of 13.7 million direct, indirect, and induced jobs in the United States in 2014.
- Travel & Tourism in the United States directly employs more people than the mining, agriculture, auto manufacturing, education, banking, and chemicals manufacturing sectors.
- Of note, Travel & Tourism directly supports nearly six times as many jobs as the automotive manufacturing sector and directly supports nearly the same amount of jobs as the financial services sector in the United States.
- Travel & Tourism generated, either directly or indirectly, 9.3% of employment in the United States in 2014.
- Travel & Tourism’s share of employment in the United States is larger than the shares of the automotive manufacturing and chemical manufacturing sectors, which stand at 5.5% and 6.1%, respectively.
- Travel & Tourism direct industry GDP expanded 47% between 1995 and 2014 while the total economy expanded 58%. The education industry grew 56%, and the mining sector grew 80% over this 19-year period.
- Travel & Tourism GDP is expected to grow at an annual average of 4.4% over the next decade. In comparison, the total economy is expected to expand 2.3% per annum while financial services and chemicals manufacturing are forecast to grow 2.8% and 2.3%, respectively, per annum in real, inflation-adjusted terms.
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Photo credit: A promotional photo of Kimpton Hotels staff. Kimpton Hotels