TRAVEL & TOURI$M
DIRECT & INDIRECT SPENDING
Perhaps, the most underappreciated industry of the US economy is Travel & Tourism (T&T). While GDP growth has been stodgy over the last few years, Travel & Tourism expenditures have grown on avg at slightly better than 6% per yr. T&T’s DIRECT ECONOMIC IMPACT to the US economy in 2014 was worth $927.9 B with over 85% of it being domestic travel spending. While we pine for those BIG SPENDING TRAVELERS from China, Japan, Italy, UK etc.. the truth is that about ½ of our foreign visitors come from Canada and Mexico, and about ½± of ALL US travelers to foreign lands have our NAFTA trade partners as their destinations. The story gets better and BIGGER when we recognize the inputs or Travel & Tourism’s INDRIECT IMPACT on our economy (Indirect T&T spending is the spending that is used to produce the gds & services purchased by travelers & tourists). This is THE multiplier impact on the US economy. The TOTAL related Travel & Tourism o/p for 2014 was $2.1 T±. T & T’s, further contribution to the US economy is noted by the fact that 15 M jobs (1 in 9 US non farm jobs directly and indirectly) depend on the Travel & Tourism industry. (For more info see US Travel Assn.)
AAA TRAVEL FORECAST 2015
- 2 M Americans will become travelers during the Memorial Day holiday 2015, a 4.7% growth from last yr. It is the 2nd biggest number in the 2000s (2005 was the highest with 44 M expected travelers).
- 6% (33 M) of those travelers will be driving on the road, a 5.3% increase from 2014. Given AAA data we assume that Mem Day road warriors must travel at least 50 miles by car with a max trip of 400 miles. An avg trip will therefore be 200 miles. Using the current 91.6¢ lower gas price (for all shades/all grades of gas) vs Mem Day 2014 , we estimate that our 33 M roadies will save almost $241 M YOY, or $7.328 each. With all shades/all grades avging $2.827 last mon that’s almost 23/5 gals of gas or 2 medium Starbucks’ lattes. DRINK UP!!
- Air travel is also expected to grow 5% from last yr (2.6 M travelers).