TOURISM IS THE QUIET HERO OF TRADE - Global Trade Magazine
  August 19th, 2019 | Written by

TOURISM IS THE QUIET HERO OF TRADE

Sharelines

  • Tourism is growing faster than global economic growth overall and is the third-largest sector in international trade.
  • The United States will remain a top destination for tourists and business travelers alike.
  • The World Travel & Tourism Council (WTTC) says business travel has a notable impact on wider trade flows.

International travelers drop big bucks in the United States

International travelers check in to their accommodations, they ride local transportation, they sightsee, they eat, and they shop. All that wonderful cross-border spending counts as an export in international trade.

Although the United States doesn’t hold the top spot in global tourism (France was most visited in 2018), its popularity still drives some 80 million visitors each year who spend more here than in any other country. In 2018, tourism brought in $256.1 billion in international travel receipts, driving 2.8 percent of U.S. GDP and supporting 7.8 million jobs in the United States.

The top five spenders on visits to the United States were China ($34.6 billion in U.S. travel spending), Canada ($27.2 billion), Mexico ($20.9 billion), followed by Japan and the United Kingdom.

Travel delivers 10% US exports

1.4 billion people are on the move

For the United States, tourism is a really important component of our trade portfolio, accounting for 31 percent of total services exports and 10 percent of all U.S. exports.

We are not alone. Globally, tourism is growing faster than global economic growth overall and is the third-largest sector in international trade. Some 1.4 billion people are on the move in the world as travel continues to grow year on year.

Is the U.S. losing global tourism market share?

Global travel exports were worth $1.7 trillion in 2018. The United States captured 15.7 percent of the total. But even as global travel is expanding, U.S. tourism growth is showing signs of slowing. France, the United Kingdom and Italy are traditional rivals, but the United Arab Emirates, Turkey, Egypt, Thailand and China are also garnering significant market share.

Aside from spending, another measure of competitiveness is the number of international visits annually. Total visits to the United States remained strong due to travel within North America, but the United States’ share of long-haul visits dropped from 13.7 percent in 2015 to 11.7 percent in 2018. Notably, visitors from Japan, South Korea, and China all fell in 2018.

While visits to the United States between 2015 and 2017 rose just 0.5 percent, the United Arab Emirates saw 20.1 percent growth, Canada experienced 19 percent growth, Australia 21.5 percent, India 24 percent, Thailand 14.1 percent and China 13.6 percent.

Travel is #2 export

Tourism and travel is so important to the economies of many countries that the OECD is working to develop a set of indicators to measure the competitiveness of destinations – how they optimize accessibility and attractiveness, deliver quality services, and gain market share while promoting efficient and sustainable use of tourism resources.

Road warriors are helping to grow trade

The tourism and travel sector isn’t strictly about the visitors who come to stroll through Istanbul’s bustling Grand Bazaar, New York’s Central Park or Beijing’s Forbidden City.

The World Travel & Tourism Council (WTTC) says business travel has a notable impact on wider trade flows. The road warriors who hop the long-haul flights to land a sale, keep existing customers, develop business partnerships, and enter into research and development deals generate travel revenue but also generate incremental trade over subsequent years through their business dealings, which in turn spur more business travel.

WTTC cites analysis by Oxford Economics estimating that business travel supported around a quarter of the growth in international trade within the Asia-Pacific region in the heady decade between 2003 and 2013.

travel global exports

Trade in global goodwill

Brand USA will not grow out of style anytime soon. The United States will remain a top destination for tourists and business travelers alike. The National Trade and Tourism Office projects annual international visits to the United States for personal and business reasons will grow to 95.5 million by 2023.

For the United States and the global economy, tourism and travel are the unsung heroes of the international trade story and not only for the billions in goods and services travelers buy directly and support indirectly. When we think about all the many forms of voluntary exchange, tourism and travel are at the top of the list for those that promote trade in international understanding and global goodwill.

 

 

Andrea Durkin is the Editor-in-Chief of TradeVistas and Founder of Sparkplug, LLC. Ms. Durkin previously served as a U.S. Government trade negotiator and has proudly taught international trade policy and negotiations for the last fourteen years as an Adjunct Professor at Georgetown University’s Master of Science in Foreign Service program.

This article originally appeared on TradeVistas.org. Republished with permission.


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