Archive for June, 2013



Travel and Tourism Spending Outpaced Growth in the Overall Economy in the First Quarter of 2013

Real spending on travel and tourism accelerated in the first quarter of 2013, increasing at an annual rate of 6.8 percent after increasing 2.1 percent (revised) in the fourth quarter of 2012. By comparison, growth in real gross domestic product (GDP) increased 2.4 percent (second estimate) in the first quarter after increasing 0.4 percent in the fourth quarter.

The leading contributors to the acceleration in the first quarter were “passenger air transportation,” and “all other transportation-related commodities,” such as automotive rentals. “Passenger air transportation” turned up, increasing 19.0 percent in the first quarter after decreasing 2.7 percent, reflecting a notable upturn in “international passenger air transportation” and an acceleration in “domestic passenger air transportation.” “All other transportation-related commodities” also turned up in the first quarter, increasing 8.9 percent after decreasing 1.2 percent, primarily reflecting an upturn in “automotive rental and leasing.” Partially offsetting these upturns was slower growth in “food services and drinking places” and “traveler accommodations,” which increased 2.0 percent and 4.9 percent, respectively, in the first quarter, after increasing 8.5 percent and 9.5 percent, respectively.

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Overall growth in prices for travel and tourism goods and services slowed in the first quarter of 2013, increasing 0.3 percent following a 2.4 percent (revised) increase in the fourth quarter. The first quarter deceleration was more than accounted for by a downturn in prices for “all other transportation-related commodities,” primarily reflecting a downturn in gasoline prices.

Employment in the travel and tourism industries increased 2.3 percent in the first quarter of 2013 after increasing 2.1 percent (revised) in the fourth quarter of 2012. By comparison, overall U.S. employment increased 1.9 percent in the first quarter after increasing 1.6 percent in the fourth quarter.

Real Tourism Spending.  Real spending on “passenger air transportation” turned up, increasing 19.0 percent in the first quarter of 2013 after decreasing 2.7 percent in the fourth quarter of 2012. Real spending on “food services and drinking places” slowed, increasing 2.0 percent in the first quarter after increasing 8.5 percent in the fourth quarter.

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Tourism Prices.  Prices for “passenger air transportation” decreased 0.2 percent in the first quarter after decreasing 0.6 percent in the fourth quarter. Fuel costs remained volatile and at high levels. Prices for “traveler accommodations” turned up, increasing 5.5 percent in the first quarter after decreasing 0.5 percent in the fourth quarter. Certain hotels eliminated discounts and others raised their rates in the quarter.

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Tourism Employment.  Employment in the travel and tourism industries accelerated in the first quarter, increasing 2.3 percent after increasing 2.1 percent in the fourth quarter. The acceleration was primarily concentrated in “food services and drinking places” and “traveler accommodations.”

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Total Tourism-Related Spending  in the U.S. includes the goods and services that are purchased directly by tourists and also a portion of the goods and services produced by the supply chain that supports tourism activity; for example, a firm that supplies linens to hotels and restaurants.

In the first quarter of 2013, total current-dollar tourism-related spending was $1.5 trillion and consisted of $888.5 billion (59 percent) of direct tourism spending — goods and services sold directly to visitors — and $606.2 billion (41 percent) of indirect tourism-related spending — goods and services used to produce what visitors purchase.

Total Tourism-Related Employment was 7.9 million jobs in the first quarter of 2013 and consisted of 5.7 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 purchase.

Definitions

Tourism spending.   Tourism spending comprises all goods and services purchased by tourists (defined as people who travel for any reason). In the following tables, tourism spending is referred to as direct tourism output.

Indirect tourism-related spending.   Indirect tourism-related spending comprises all output used as inputs in the process of producing direct tourism output (e.g., toiletries for hotel guests and the plastic used to produce souvenir key chains).

Total tourism-related spending.  Total tourism-related spending is the sum of direct tourism spending and indirect tourism-related spending.

Direct tourism employment. Direct tourism employment comprises all jobs where the workers are engaged in the production of direct tourism output (such as hotel staff, airline pilots, and souvenir sellers).

Indirect tourism-related employment. Indirect tourism-related employment comprises all jobs where the workers are engaged in the production of indirect tourism-related output (e.g., employees of companies that produce toiletries for hotel guests and the plastic used to produce souvenir key chains).

Total tourism-related employment.  Total tourism-related employment is the sum of direct tourism employment and indirect tourism-related employment.

These statistics are from BEA’s Travel and Tourism Satellite Accounts (TTSAs), which are supported by funding from the Office of Travel and Tourism Industries, International Trade Administration, U.S. Department of Commerce. The current-price statistics of direct tourism output were derived from BEA’s annual TTSAs and from current-price quarterly statistics of personal consumption expenditures from the National Income and Product Accounts (NIPAs). The real statistics of direct tourism output were developed using price indexes from the Bureau of Labor Statistics (BLS) and real quarterly statistics of personal consumption expenditures from the NIPAs. The statistics of direct tourism employment were derived from the annual TTSAs (revised in June 2013) from BEA, the Quarterly Census of Employment and Wages (QCEW), and Current Employment Statistics (CES) from BLS.

Quarterly statistics are seasonally adjusted and expressed at annual rates, unless otherwise specified. Percent changes are calculated from unrounded data and annualized. Real values are in chained (2005) dollars. Price indexes are Fisher chain-type measures. Growth in overall U.S. employment is calculated using BLS total nonfarm employment from Current Employment Statistics, www.bls.gov/ces/home.htm#data.

These statistics reflect the annual TTSA revision released in the June 2013 Survey of Current Business. The annual TTSA revision incorporated revised Input-Output (IO) tables for 2009 and 2010 and the preliminary IO table for 2011. The IO revision integrated source data that were more complete and more detailed than those previously available. Additionally, these estimates reflect unique travel and tourism-specific source data available on an annual basis only.

To learn more, read the full report.

BEA’s Industry Economic Accounts to Hit Major Milestone

Roughly every 5 years, the Bureau of Economic Analysis (BEA) releases comprehensive revisions of its major economic accounts. These revisions are generally more detailed than annual revisions, implementing changes in methods, statistics and definitions to better reflect an ever-evolving economy. In December, BEA will release the 2013 comprehensive revision of the Industry Economic Accounts (IEAs), which includes two main sets of statistics, the annual industry accounts and the benchmark input-output (I-O) accounts. That will follow the release in July of a comprehensive revision of the National Income and Product Accounts (NIPAs), or GDP accounts.

The upcoming comprehensive IEA revision will mark a significant milestone: the full integration of the IEAs with the NIPAs, which was first suggested in a March 2004 article in the Survey of Current Business and later amplified in other articles. This enhanced integration, which has long been recommended by economists, will allow for a higher degree of consistency among these widely followed accounts, offering a more consistent view of industry dynamics within the overall economy.

A preview of the 2013 comprehensive revision of the IEAs was published in the June 2013 issue of the Survey.

BEA to Expand Coverage of Intellectual Property Rights

• Expenditures for research and development (R&D) and for entertainment, literary, and artistic originals provide long-lasting service to the businesses, nonprofit institutions, and government agencies that use them.
• These expenditures have many characteristics of other fixed assets—ownership rights can be established, and they are long lasting and used repeatedly in production processes.
• As part of its 14th comprehensive revision of the national income and product accounts that will be released beginning on July 31, the Bureau of Economic Analysis (BEA) will record expenditures for R&D and for entertainment, literary, and artistic originals as fixed investment. These expenditures will be grouped with expenditures for software into a new investment category, “intellectual property products.”

Why is BEA making this change?
• Currently, R&D and entertainment, literary, and artistic originals are recorded as intermediate inputs used up during the production of other goods and services. As a result, the contribution of these important innovative activities to economic growth and productivity is difficult to measure.
• By recognizing R&D and entertainment, literary, and artistic originals as investment, the contribution of these components to growth can be measured. In addition, BEA’s statistics will be more consistent with international guidelines and comparable with those in other countries.
• BEA already recognizes capital investment in other intangible assets such as software and mineral exploration. Information from the National Science Foundation on R&D spending and information on movie, TV, literary, and music production and sales allowed BEA to develop estimates of investment and consumption of fixed capital (CFC)—a measure of depreciation—for these important intangible assets.

How will this change affect BEA’s accounts?
• The dollar level of gross domestic product (GDP) will increase to reflect recognition of spending on R&D and on entertainment, literary, and artistic originals by businesses and nonprofit institutions serving households. Federal and state and local government consumption expenditures and gross investment—which is also included in GDP—will increase by the amount of CFC on the newly recognized R&D investment. Spending on R&D will be reclassified from consumption expenditures to investment within the sector.
• The dollar level of private and government CFC will increase to reflect the depreciation of the newly recognized assets in the capital stock.
• Measures of corporate profits and proprietors’ income will reflect the net effect of removing these expenditures from operating expenses and adding the depreciation of these assets to operating expenses.

For more information, go to www.bea.gov/gdp-revisions.