Impact of Travel On State Economies 2000

Transcription

1 Impact of Travel On State Economies 2000 (Including Preliminary 2001 Impact of Travel On U.S. Nation-wide Economy) Prepared by The Research Department of The Travel Industry Association of America Washington, D.C. October 2002 Two Hundred Ninety-five Dollars ISSN:

2 The mission of the Travel Industry Association of America (TIA) is to represent the whole of the U.S. travel industry to promote and facilitate increased travel to and within the United States. TIA s Research Department seeks to meet the research needs of TIA members and the travel industry by gathering, conducting, analyzing, publishing and disseminating economic, marketing and international research that articulates the economic significance of the travel and tourism industry at national, state and local levels; defines the size, characteristics and growth of existing and emerging travel markets; and provides qualitative trend analysis and quantitative forecasts of future travel activity and impact. Tien X. Tian Director, Economic Research Dr. Suzanne Cook Senior Vice President, Research & Technology Planning 2002 Travel Industry Association of America Confidential: This report is for use within the purchaser s organization only. Travel Industry Association data or information may not be communicated or given to other people, organizations or to the media without prior written permission from the Travel Industry Association of America.

3 TRAVEL INDUSTRY ASSOCIATION OF AMERICA The recognized source for domestic travel and tourism research. The Travel Industry Association of America (TIA) is the national unifying organization of the U.S. travel and tourism industry. Through its research department, TIA provides the industry with a dedicated resource for current travel statistics and economic and survey research. RESEARCH PUBLICATIONS... TIA provides a variety of reports that detail U.S. resident travel in the United States. Reports include the economic impact of travel on a national and state level, trip characteristics and forecasting information. Also available through TIA are special segment studies that address such topics as the business traveler, historic/cultural traveler, mature traveler, minority traveler, domestic hotel/motel traveler, and travelers use of the Internet. ECONOMIC STUDIES... The Travel Economic Impact Model (TEIM) is the only national model that produces estimates of the economic impact of travel at the national, state, and local levels. The model provides states, cities, and regions with reliable estimates of economic impact and enables government officials and legislators to make intelligent policy decisions concerning the travel and tourism industry. TRAVELSCOPE... TravelScope, the cooperative travel survey, provides each participant with detailed trip and traveler characteristics data through its monthly mail sample of over 25,000 U.S. households. TravelScope is unique in that market research is now available on a state/city destination level at a very reasonable cost. IVIS IVIS, the International Visitor Information System on TIA's web site, provides the travel and tourism industry with an expanding menu of international travel data and analyses for the top tourism generating countries to the United States. IVIS includes the Market Share Indicator Report, now called MSI Online, allowing users to generate custom tables and graphs of key travel and economic indicators. IVIS give users the information they need to leverage international marketing dollars. PUBLICATION SUBSCRIPTIONS... TIA offers four annual Research Subscription Packages: Domestic Basic Package: $750 member/$1,200 non-member Domestic Comprehensive Package: $1,300 member/$2,100 non-member International Package: $750 member/$1,200 non-member Premier Package: $2,050 member/$3,300 non-member To find out more about these subscriptions, refer to For additional information on membership in TIA or our research and publication services, call the Publications Department at (202) or

4 TABLE OF CONTENT INTRODUCTION...1 EXECUTIVE SUMMARY TRAVEL IMPACT ON U.S. ECONOMY...5 TRAVEL EXPENDITURES IN TRAVEL EMPLOYMENT IN U.S. ECONOMY AND TRAVEL INDUSTRY OVERVIEW TRAVEL EXPENDITURES IN THE U.S TRAVEL-GENERATED PAYROLL IN THE U.S TRAVEL-GENERATED EMPLOYMENT IN THE U.S TRAVEL-GENERATED TAX REVENUE IN THE U.S MULTIPLIER IMPACT OF TRAVEL SPENDING IN THE U.S...28 STATE PROFILES...30 APPENDICES...83 APPENDIX A: REVISED 1999 ECONOMIC IMPACT OF TRAVEL IN THE U.S...84 APPENDIX B: TRAVEL ECONOMIC IMPACT MODEL...87 APPENDIX C: GLOSSARY OF TERMS...90 APPENDIX D: TRAVEL-RELATED INDUSTRY MEASUREMENT...92 APPENDIX E: SOURCES OF DATA...95 APPENDIX F: RIMSII...96

5 LIST OF TABLES TABLE 1: 2001 U.S. DOMESTIC TRAVEL EXPENDITURES BY PRIMARY PURPOSE OF TRIP...6 TABLE 2: TRAVEL EXPENDITURES IN THE U.S TABLE 3: TRAVEL-GENERATED EMPLOYMENT IN THE U.S TABLE 4: 2000 TRAVEL EXPENDITURES IN THE U.S. BY INDUSTRY SECTOR...13 TABLE 5: TRAVEL EXPENDITURES BY STATE TABLE 6: 2000 TRAVEL-GENERATED PAYROLL IN THE U.S. BY INDUSTRY SECTOR...17 TABLE 7: TRAVEL-GENERATED PAYROLL BY STATE TABLE 8: 2000 TRAVEL-GENERATED EMPLOYMENT IN THE U.S. BY INDUSTRY SECTOR...21 TABLE 9: TRAVEL-GENERATED EMPLOYMENT BY STATE TABLE 10: 2000 TRAVEL-GENERATED TAX REVENUE IN THE U.S. BY LEVEL OF GOVERNMENT...25 TABLE 11: TRAVEL-GENERATED TAX REVENUE BY STATE TABLE 12: MULTIPLIER IMPACT OF TRAVEL SPENDING ON THE U.S. ECONOMY, TABLE 13: REVISED ECONOMIC IMPACT OF TRAVEL IN THE U.S. BY STATE, TABLE 14: MULTIPLIER IMPACT OF TRAVEL SPENDING ON THE U.S. ECONOMY, REVISED

6 INTRODUCTION This is the sixth issue of the Impact of Travel on State Economies containing estimates of travel spending and related economic impact by both domestic and international visitors in the United States. This report provides the estimates of travel impact in 2000 for 50 states and Washington, DC. A brief discussion of travel impact in 2001, in particular, the impact of the 9/11 terrorist attacks on travel and tourism and an economic downturn, is added to this report. Since 2001 data for most states are not available at this moment, the discussion is focused on the national level. All the estimates of the economic impact of travel contained in this volume are the product of TIA's Travel Economic Impact Model (TEIM), a proprietary economic model developed expressly to indicate the expenditures, employment, payroll, and tax revenue generated by travel away from home in the United States. The Travel Economic Impact Model (TEIM) was initially developed in 1975 for the U.S. Department of the Interior to indicate the economic value of travel and tourism to states and counties. The original TEIM has been revised substantially based upon more accurate and targeted input data available from governments and the private sector. The domestic component of TEIM is based on national surveys conducted by TIA and other travel-related data developed by TIA, various federal agencies and national travel organizations each year. A summary of the methodology is provided in Appendix B. The international travel expenditure estimates are based on the Office of Travel and Tourism Industries (OTTI) In-Flight Survey and data provided to OTTI from Canada and Mexico. Other estimates of the economic impact of international visitors to the U.S. are generated by the TEIM by incorporating the estimated international travelers expenditures with the data series utilized to produce the domestic estimates. For the first time this year, the economic impact of Indian gaming is incorporated in the relevant travel categories in this report. Due to previous data limitations, Indian gaming was not included in TIA s studies in previous years. TIA would like to express its gratitude to Connecticut s Mystic & More Convention and Visitors Bureau, Mohegan Sun Casino, Foxwoods Resort Casino, the National Indian Gaming Association and the American Gaming Association for helping TIA collect and providing TIA with the data needed for the estimates of traveler impact of Indian gaming. It is hoped that this publication will stimulate discussion of the economic impact of travel in the United States. Users of these data are encouraged to communicate their reactions, both positive and negative, to TIA in the interests of progress in travel research. Lastly, the individual state estimates should not necessarily be viewed as substitutes for major state research projects on the impact of travel and tourism. Rather, the user should compare the methodologies and results, and draw his/her own conclusions regarding the validity of differing approaches and estimates. 1

7 EXECUTIVE SUMMARY Direct Impact of Travel Total domestic and international travel expenditures in the U.S. declined 5.9 percent in the first year decline during the last two decades. Business travel was off 11.8 percent from The airline industry was severely hit by the 9/11 attacks and the weak economy in A total of 321 thousands people directly working in the travel and tourism lost their jobs in 12 month following September Direct travel spending, by both domestic and international travelers, in the United States totaled $567.5 billion during 2000, up 7.1 percent over Domestic travelers spent $488.2 billion on travel-related goods and services in the U.S. during 2000, while international travelers spent $79.3 billion. Please note: total international traveler spending in this report does not include international passenger fare payments, international traveler spending in the U.S. territories, and Canadian traveler spending not allocated to states. California led all 50 U.S. states and the District of Columbia with $78.1 billion in direct travel expenditures during 2000, 13.8 percent of the U.S. total. Florida ranked second with $59.8 billion in direct travel expenditures, 10.5 percent of the U.S. total, followed by New York with $39.3 billion (6.9 percent). Fourteen states indicated over $10 billion each in domestic travel expenditures in Twelve states enjoyed more than $1 billion each in international travel expenditures in the same year. Wages and salaries directly generated by domestic and international travel expenditures within the United States reached $174.6 billion during 2000, increasing 7.4 percent from More than 7.9 millions jobs were directly generated by domestic and international traveler spending. This comprised 6.0 percent of total non-agricultural employment in the United States in Without these jobs generated by travel, the nation s unemployment rate of 4.0 percent would have been 5.7 percentage points higher, or 9.7 percent of the total civilian labor force in the U.S. during On average, every $71,478 spent by domestic and international travelers in the United States directly supported one job in Total direct travel expenditures in the U.S. generated $103.1 billion in tax revenue for federal, state and local governments during Domestic travelers generated $89.5 billion in taxes, while international travelers generated $13.7 billion. 2

8 Executive Summary Total Impact of Travel and Tourism in 2000 Total travel spending within the U.S., including direct and indirect or multiplier spending, reached nearly $1.3 trillion in Indirect and induced spending generated from direct traveler expenditures totaled $723.2 billion in This spending benefited a wide-range of firms supplying goods and services to hotels, restaurants, airlines, and other travel-related establishments. Total wage and salary income generated by the direct and indirect impact of travel spending reached $377.2 billion in Nearly 18.3 million jobs were supported by the direct and indirect impact of travel spending in

9 2001 TRAVEL IMPACT ON U.S. ECONOMY The year 2001 marked its uniqueness in the history of the travel and tourism industry. The contracted economy coupled with the September 11 terrorist attacks severely hampered the travel and tourism industry in 2001, particularly in the fourth quarter. The factors affecting travel in 2001 went beyond the events of September 11. The U.S. economy entered a recession in The business downturn began even before that, with declines in the stock market indices. Real GDP growth was essentially negative in three consecutive quarters in 2001 and increased just 0.3 percent annually over 2000, the smallest annual increase since At the same time, the nation's unemployment rate hit 4.8 percent. This brought the total number of jobs lost in 2001 to 1.1 million, the largest annual job loss in two decades. Reflecting these trends, the Consumer Confidence Index decreased sharply in Business travel was particularly sensitive to the weakening economy. TIA's TravelScope survey shows that 2001 marked the third consecutive annual decline in business travel. Although leisure travel increased slightly in 2001, leisure trips in the 4th quarter were significantly shorter in duration with lower average spending levels compared to the same period in Gains earlier in the year in leisure travel and the modification in travel patterns following the attacks (shorter distances, shorter trip duration and more auto-travel or other-mode transportation travel) aided the annual growth of leisure travel. Travel Expenditures in 2001 The September 11 terrorist attacks severely hit the travel and tourism industry, in particular airlines and hotels. The industry experienced significant losses in sales and revenues. The decreases in air and business travel, along with shortened average trip duration and generally lower prices of tickets, hotel rooms and other travel activities, caused the dramatically decline in travel expenditures in International travel to the U.S., both in terms of arrivals and expenditures, indicated even sharper declines. TIA estimates that total domestic and international travel expenditures in the U.S. declined 5.9 percent in the first year decline during the last two decades. Growth of Travel Expenditure % % change from previous year 12% 8% 4% 0% -4% -8% Source: TIA, BLS 5

10 2001 Travel Impact on The U.S. Economy While comprising 19 percent of U.S. person-trips, business travel generates about 30 percent of total U.S. resident s travel spending. Thus, declines in business travel had a disproportionate impact on profitability for some travel sectors. In 2001, total U.S. business travelers expenditures declined 11.8 percent from Leisure travel, in spite of the slight increase in volume, generated 1.7 percent less expenditures in The modification in travel patterns following the attacks, along with generally lower prices of travel activities, affected the level of leisure travel expenditures. TABLE 1: 2001 U.S. DOMESTIC TRAVEL EXPENDITURES BY PRIMARY PURPOSE OF TRIP Travel Spending Travel Spending % Change In The U.S. in The U.S. Over 2000 ($Billion) ($Billion) (%) Leisure Traveler % Business Travelers % Total % Source: TIA The U.S. airline industry was most severely affected by the attacks and the weak economy. Air passenger transportation registered a steep decline after 9/11. While total domestic and international enplanements fell 18.3 percent in the last quarter of 2001 compared to the same period of 2000, total airline revenues declined 33.5 percent in the same period. For the whole year 2001, domestic traveler spending on public transportation plunged 12.1 percent from TABLE 2: TRAVEL EXPENDITURES IN THE U.S Travel Spending Travel Spending % Change in The U.S. in The U.S. Over 2000 Industry Sector* ($Billion) ($Billion) (%) Public Transportation $99.0 $ % Auto Transportation % Lodging % Foodservice % Entertainment % General Retail % Domestic Travelers $464.1 $ % International Travelers** $70.5 $ % Total $534.6 $ % Source: TIA * See page 30 for definitions of industry sectors. ** Total international traveler spending does not include international passenger fare payments, international traveler spending in the U.S. territories, and Canadian traveler spending not allocated to states. 6

11 2001 Travel Impact on The U.S. Economy The U.S. hotel industry suffered from losses in sales and revenues as well, particular in the fourth quarter of The demand for hotel rooms (i.e., room nights sold) dropped almost 15 percent in September and fell 7.2 percent in the fourth quarter of 2001, compared to the same period of The weak demand brought a much lower average price for hotel rooms. Compared to 2000, domestic traveler spending on lodging away from home declined by 3.8 percent in With the shift to more driving destinations, however, other types of lodging, such as private homes and campgrounds became more popular in Helped by leisure travel and the shifts to driving destination, other travel industry-related sectors, such as retail trade, gaming and other entertainment/recreation services and auto transportation, indicated smaller declines in expenditures in The impact of the 9/11 terrorist attacks on international travel to the U.S. was even more severe. According to the Office of Travel and Tourism Industries, U.S. Department of Commerce, international arrivals to the U.S. in 2001 decreased 11 percent from 2000 and U.S. international travel receipts lost almost $12 billion in 2001 (including international passenger fares). With the moderation in airline fares and lodging prices caused by reduced travel demand, 2001 was the first year since 1994 that the Travel Price Index (TPI) increased less than the overall Consumer Price Index (CPI). Weak travel volumes and falling energy prices continue to exert downward pressure on travel prices in Travel Employment in 2001 TABLE 3: TRAVEL-GENERATED EMPLOYMENT IN THE U.S Travel-Generated Travel-Generated % Change Employment Employment Over 2000 Industry Sector* (thousands) (thousands) (%) Public Transportation 1, , % Auto Transportation % Lodging 1, , % Foodservice 2, , % Entertainment 1, , % General Retail % Travel Planning % Domestic Travelers 6, , % International Travelers % Total 7, , % Source: TIA * See page 30 for definitions of industry sectors. 7

12 2001 Travel Impact on The U.S. Economy Reflecting the relative strength of leisure travel and of the economy in the first several months of 2001, employment in most of the travel-related industries continued to grow through August of last year. This contributed to the 12-month average travel employment in 2001 being only slightly below 2000 s level, although significant lay-offs occurred after the terrorist attacks. Total travel generated employment in 2001 declined 0.5 percent from Employment in travel agent services was off 4.4 percent from 2000, the worst decline among all travel industry sectors covered by this report. The September 11 terrorist attacks, however, distorted severely the employment situation in the travel industry during the fourth quarter of 2001 and the first eight months of Substantial declines in certain types of domestic travel and in international travel to the U.S. during this period forced most travel related sectors to cut their employment rolls significantly. Travel Employment (Not Seasonally Adjusted) Percent Change from the Same month of the Previous Year 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% Jan 2001 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2002 Feb Mar Apr May Jun Jul Aug Source: TIA, BLS Travel employment started its downturn in September 2001 and dramatically declined in November and December. Travel employment in December 2001 was down almost 5 percent compared to the same month of Average travel employment in 2001 s fourth quarter was off 3.9 percent from the same quarter of The employment situation became even worse in In August 2002, for example, total travel employment was 4.4 percent less than in August According to TIA's estimates (based on BLS employment data), more than 296 thousand employees, working directly for the travel industry, lost their jobs in the last four months of Among those, 119 thousand jobs were cut by airlines and 55 thousand were cut by the lodging industry. Other travel related industries, such as amusement and recreation services, eating & drinking places, and retail establishments, have also lost thousands of employees since September

13 2001 Travel Impact on The U.S. Economy The following figure shows the number of travel-generated jobs in the U.S. during each month from January 2001 to August 2002 based on seasonally adjusted data. Seasonally Adjusted Travel Employment January 2001 to August thousands Jan 2001 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2002 Feb Mar Apr May Jun Jul Aug Source: TIA, BLS The lay-off process continued in most travel related sectors in From December 2001 through August 2002, an additional 49 thousand jobs were lost in the industry. This suggests that a total of 345 thousand people directly working for travel and tourism have lost their jobs during the 12 months since September Although the employment situation in 2002 stabilized in comparison to the last four months of 2001, employment levels are still lower than they were in December 2001 and far below their level prior to the September attacks in

14 2000 U.S. ECONOMY AND TRAVEL INDUSTRY OVERVIEW Cautious Optimism Prevails The year 2000 was a much better year. The U.S. economy continued its expansion, with real GDP increasing 4.1 percent over Consumer spending on durable goods, a driving force for continued expansion of the U.S. economy, remained strong, with a 9.5 percent increase over Consumer confidence began to wane, however, toward the latter part of the year due to increasing weakness in the manufacturing and technology sectors -- raising the prospect of an impending overall economic slowdown. The Conference Board s Consumer Confidence Index lost 14 points during the fourth quarter of 2000, ending the year at (1985=100). Additionally, inflationary concerns began to surface toward year-end, with consumer prices edging upward, as reflected in the Consumer Price Index. The CPI rose at an annual rate of 3.4 percent in 2000, the largest single year increase since The Travel Price Index (TPI) also posted its largest increase in nearly a decade, rising 6.1 percent. Rising gasoline prices and airfares throughout the year contributed to this growth. Significant Contributions of Travel and Tourism to the U.S. Economy in 2000 Stimulated by the strong U.S. economy and growing world economies, the U.S. travel and tourism industry reached its peak economic performance in 2000, which in turn, contributed enormously to the overall U.S. economy. Total U.S. domestic person-trips was nearly 1.0 billion during 2000, an increase of 1.0 percent over Pleasure travel contributed mostly to this growth. Domestic travelers spent $488.2 billion in the U.S. during 2000, registering an increase of 6.7 percent over domestic travel expenditures in International travelers to the United States proved to be a real bright spot in the 2000 economy. Total international visitors to the U.S. increased 4.9 percent over Spending in the U.S. by international visitors totaled $79.3 billion. This represented an increase of 9.8 percent over The diversity of the travel and tourism industry provided substantial benefits to a large number and wide range of businesses and their employees. Increased travelers spending in 2000 supported robust growth in employment and payroll income. During 2000, domestic and international travel spending created more than 7.9 million jobs for the U.S. economy. This represents a 2.9 percent increase over Payroll income continued to grow rapidly in Total payroll income generated by domestic and international travelers spending in the U.S. increased 7.4 percent over 1999, reaching almost 10

15 2000 Travel Impact on The U.S. Economy $174.6 billion. Strong sales combined with a tight labor market continue to contribute to this above-average gain in travel payroll. Tax revenues generated by travel represent another significant contribution of travel to the U.S. economy. U.S. and international travelers spending in the U.S. generated a total of $103.1 billion for federal, state and local governments in 2000, up nearly 8.0 percent over Tax revenue is produced through various taxes on travel activities and travel-related receipts, such as excise taxes, sales taxes, income taxes and property taxes. The following chart summarizes the direct contributions of the travel and tourism industry to the U.S. economy in Direct Travel Impact in the United States in 2000 Travel Expenditures* $567.5 Billion Business Receipts Corporate Taxes Gross Receipts Tax Sales Tax Excise Tax Property Tax Payroll $174.6 Billion Employees 7.9 Million Payroll Taxes Tax Revenue $103.1 Billion Federal: $61.8 Billion State: $26.0 Billion Local: $15.3 Billion Source: TIA * Total international traveler spending does not include international passenger fare payments, international traveler spending in the U.S. territories, and Canadian traveler spending not allocated to states. 11

16 2000 TRAVEL EXPENDITURES IN THE U.S. Direct travel spending in the United States, including by both domestic and international, totaled $567.5 billion during 2000, up 7.1 percent over Please note: total international traveler spending in this report does not include international passenger fare payments, international traveler spending in the U.S. territories, and Canadian traveler spending not allocated to states. This comprised 5.7 percent of the nation s Gross Domestic Product (GDP) in Domestic travelers spent $488.2 billion on travel-related goods and services while away from home during 2000, accounting for 86 percent of the total U.S. travel spending. Domestic travel spending increased 6.7 percent in International traveler spending in the United States increased by 9.8 percent to total $79.3 billion in 2000 (not including international airfare payments and spending in the U.S. territories). Travel spending on foodservice, including restaurants, grocery stores, and other food establishments, led all expenditure categories in 2000 with $130.9 billion, comprising 23.1 percent of the U.S. total. Travel spending on auto transportation indicated a 9.5 percent increase during 2000, the greatest growth among all expenditure categories included in this report. This increase was largely due to a sharp increase in gasoline prices during California ranked first among all states and the District of Columbia with $78.1 billion in travel expenditures during 2000, 13.8 percent of the total U.S. market. Florida received over $59.8 billion from domestic and international travelers during 2000 to rank second. New York ranked third in travel spending with $39.3 billion in 2000, followed by Texas with $36 billion. In 2000, the top five tourism states in the United States (California, Florida, New York, Texas, and Illinois), in terms of travel expenditures, received nearly $237 billion from domestic and international travelers. This accounted for 41.8 percent of all U.S. travel expenditures in New Hampshire posted the greatest increase in total travel spending (11.4%) among all states and the District of Columbia in

17 2000 Travel Expenditures in the U.S. TABLE 4: 2000 TRAVEL EXPENDITURES IN THE U.S. BY INDUSTRY SECTOR Domestic International U.S. Total Expenditures Expenditures** U.S. Total Percent of % Change Industry Sector* ($ Billions) ($ Billions) ($ Billions) U.S. Total from 1999 Public Transportation % 7.4% Auto Transportation % 9.5% Lodging % 7.1% Foodservice % 5.9% Recreation & Amusement % 6.1% Retail % 7.3% Total % 7.1% * See page 30 for definitions of industry sectors. ** Total international traveler spending does not include international passenger fare payments, international traveler spending in the U.S. territories, and Canadian traveler spending not allocated to states. The following figure shows the growth of total travel expenditure in the U.S. during the last decade. The 2001 preliminary estimate is included here to show the trends. Growth of Total Travel Expenditures in the U.S p 9.0% % change from Previous Year 6.0% 3.0% 0.0% -3.0% % 13

18 2000 Travel Expenditures in the U.S. TABLE 5: TRAVEL EXPENDITURES BY STATE Travel Expenditures Domestic International State Total Share of U.S. Total State ($ Millions) ($ Millions) ($ Millions) (Percent) State Total % Change over 1999 Alabama $5,201.0 $90.2 $5, % 3.6% Alaska 1, , % 2.4% Arizona 8, , , % 7.8% Arkansas 3, , % 5.1% California 63, , , % 8.6% Colorado 9, , % 8.3% Connecticut 6, , % 7.2% Delaware 1, , % 4.9% Florida 41, , , % 7.3% Georgia 14, , , % 6.5% Hawaii 7, , , % 6.3% Idaho 2, , % 9.9% Illinois 21, , , % 7.0% Indiana 6, , % 6.5% Iowa 4, , % 4.5% Kansas 3, , % 5.4% Kentucky 5, , % 5.2% Louisiana 8, , % 7.5% Maine 1, , % 2.3% Maryland 8, , % 9.3% Massachusetts 10, , , % 7.8% Michigan 12, , % 6.6% Minnesota 7, , % 9.6% Mississippi 4, , % 5.0% Missouri 9, , % 4.7% Montana 1, , % 8.0% Nebraska 2, , % 4.8% Nevada 19, , , % 6.7% New Hampshire 2, , % 11.4% New Jersey 14, , % 4.2% 14

19 2000 Travel Expenditures in the U.S. TABLE 5: TRAVEL EXPENDITURES BY STATE 2000 (CONTINUED) 2000 Travel Expenditures Domestic International State Total Share of U.S. Total State ($ Millions) ($ Millions) ($ Millions) (Percent) State Total % Change over 1999 New Mexico $3,795.2 $114.9 $3, % 5.4% New York 29, , , % 7.9% North Carolina 12, , % 6.8% North Dakota 1, , % 6.4% Ohio 12, , % 6.5% Oklahoma 3, , % 5.5% Oregon 5, , % 4.7% Pennsylvania 14, , , % 8.1% Rhode Island 1, , % 7.4% South Carolina 6, , % 4.6% South Dakota 1, , % 5.2% Tennessee 9, , % 5.8% Texas 32, , , % 8.3% Utah 3, , % 7.1% Vermont 1, , % 6.2% Virginia 13, , % 6.3% Washington 8, , % 5.4% West Virginia 1, , % 6.5% Wisconsin 6, , % 6.1% Wyoming 1, , % 8.7% Washington DC 4, , , % 10.7% U.S. Total $488,224.9 $79,265.9 $567, % 7.1% Note: Total international traveler spending does not include international passenger fare payments, international traveler spending in the U.S. territories, and Canadian traveler spending not allocated to states. 15

20 2000 TRAVEL-GENERATED PAYROLL IN THE U.S. Travel-generated payroll is the wage and salary income paid to employees directly serving the traveler within the industry sectors from which travelers purchase goods and services. A dollar of travel spending generates different amounts of payroll income within the various travel industry sectors depending on the labor content and the wage structure of each sector. For example, the public transportation sector accounts for 21.7 percent of the total U.S. travel spending but 35.4 percent of travel-generated payroll. This difference reflects the relatively high wage structure in public transportation and the importance of labor in producing this service. Auto transportation, on the other hand, requires less labor per dollar of receipts, and gasoline service station employees receive relatively low wages. Consequently, auto transportation comprises 13.5 percent of the total U.S. travel spending yet only 3.2 percent of travel-generated payroll. It is important to note that in certain sectors such as foodservice, tip income is not reported as part of wages and salaries. Therefore, the total income of selected occupations in these sectors is underreported. Payroll (wages and salaries) paid by U.S. travel-related firms and directly attributable to domestic and international travel spending reached $174.6 billion in 2000, up 7.4 percent compared to The higher growth in payroll income as compared to expenditure growth was due to a relatively tight labor market in the U.S. economy during On average, every dollar spent by domestic and international travelers in the U.S. produced 30.8 cents in wage and salary income for Americans during Payroll directly attributable to domestic visitor spending totaled $152.9 billion during 2000, while international travelers spending generated $21.6 billion in payroll income for the U.S. workers during The public transportation sector posted $61.9 billion in payroll income during 2000, the largest payroll generated by domestic and international traveler spending. Travel-generated payroll in this sector consisted of 35.4 percent of the U.S. total in California ranked first among all 50 U.S. states and the District of Columbia in travelgenerated payroll with almost $22.1 billion, 12.6 percent of the U.S. total. Florida ranked second in travel-generated payroll with almost $16.5 billion (9.5%), followed by Texas with $13.4 billion (7.7%). 16

21 2000 Travel-Generated Payroll in the U.S. TABLE 6: 2000 TRAVEL-GENERATED PAYROLL IN THE U.S. BY INDUSTRY SECTOR Domestic International U.S. Total Payroll Payroll U.S. Total Percent of % Change Industry Sector* ($ Billion) ($ Billion) ($ Billion) U.S. Total from 1999 Public Transportation $57.3 $4.6 $ % 7.6% Auto Transportation % 4.0% Lodging % 7.3% Foodservice % 6.7% Recreation & Amusement % 8.2% Retail % 8.4% Travel Planning % 8.9% Total $152.9 $21.6 $ % 7.4% Note: International travel-generated payroll does not include wages and salaries generated by international passenger fare payments, international traveler spending in the U.S. territories, and Canadian traveler spending not allocated to states. * See page 30 for definitions of industry sectors. The following figure shows the growth of total travel-generated payroll income in the U.S. during the last decade. The 2001 preliminary estimate is included here to show the trends. Growth of Total Travel-Generated Payroll in the U.S % Chang from Previous Year 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0%

22 2000 Travel-Generated Payroll in the U.S. TABLE 7: TRAVEL-GENERATED PAYROLL BY STATE Travel-Generated Payroll Domestic International State Total Share of U.S. Total State ($ Millions) ($ Millions) ($ Millions) (Percent) State Total % Change over 1999 Alabama $1,129.7 $21.0 $1, % 3.5% Alaska % 3.9% Arizona 2, , % 8.9% Arkansas % 3.7% California 18, , , % 8.6% Colorado 3, , % 10.3% Connecticut 1, , % 5.3% Delaware % 7.4% Florida 11, , , % 7.5% Georgia 6, , % 9.1% Hawaii 2, , , % 5.4% Idaho % 7.5% Illinois 7, , % 6.9% Indiana 2, , % 5.9% Iowa % 3.6% Kansas % 5.0% Kentucky 2, , % 8.1% Louisiana 1, , % 7.3% Maine % 2.3% Maryland 2, , % 7.7% Massachusetts 3, , % 9.4% Michigan 3, , % 6.5% Minnesota 3, , % 9.9% Mississippi 1, , % 3.1% Missouri 2, , % 3.1% Montana % 5.2% Nebraska % 4.9% Nevada 6, , % 8.7% New Hampshire % 9.1% New Jersey 5, , % 5.2% 18

23 2000 Travel-Generated Payroll in the U.S. TABLE 7: TRAVEL-GENERATED PAYROLL BY STATE (CONTINUED) 2000 Travel-Generated Payroll Domestic International State Total Share of U.S. Total State ($ Millions) ($ Millions) ($ Millions) (Percent) State Total % Change over 1999 New Mexico $799.1 $27.4 $ % 3.9% New York 9, , , % 7.8% North Carolina , % 8.2% North Dakota % 8.0% Ohio 3, , % 6.5% Oklahoma 1, , % 4.6% Oregon 1, , % 4.3% Pennsylvania 4, , % 7.4% Rhode Island % 10.4% South Carolina 1, , % 4.7% South Dakota % 3.6% Tennessee 4, , % 5.4% Texas 12, , , % 8.1% Utah 1, , % 6.9% Vermont % 5.5% Virginia 4, , % 7.7% Washington 2, , % 8.1% West Virginia % 7.4% Wisconsin 1, , % 6.2% Wyoming % 6.8% Washington DC 1, , % 15.3% U.S. Total $152,929.4 $21,628.8 $174, % 7.4% Note: International visitor-generated payroll does not include wages and salaries generated by international passenger fare payments, international traveler spending in the U.S. territories, and Canadian traveler spending not allocated to states. 19

24 2000 TRAVEL-GENERATED EMPLOYMENT IN THE U.S. One of the most impressive contributions that the travel industry makes to the U.S. economy is the number of businesses and jobs it supports. Due to the diversity of the industry segments that comprise the travel industry as a whole in the U.S., a wide variety of multi-level jobs are supported. These jobs include a large number of executive and managerial positions, as well as service-oriented occupations. Domestic and international travel spending generated over 7.9 million jobs, including full-time and seasonal/part-time positions, in the U.S. during This represented an increase of 2.9 percent over On average, every $71,476 spent by domestic and international travelers in the U.S. during 2000 directly supported one job within the country. The 7.9 million travel-generated jobs comprised 6.0 percent of total non-agricultural employment in the U.S. in Without these jobs generated by domestic and international travel, the nation s unemployment rate of 4.0 percent would have been 5.7 percentage points higher, or 9.7 percent of the labor force in The foodservice sector, including restaurants and other eating and drinking places, provided more jobs than any other industry sector. During 2000, nearly 2.7 million jobs were supported by this industry by domestic and international travelers spending, accounting for 33.8 percent of all travel-generated employment. The labor-intensiveness of these businesses and the large proportion of travel expenditures spent on food service contribute to the high level of travel employment. The public transportation sector is another important sector to support travel-generated employment, with nearly 1.6 million jobs created during 2000, and comprising 19.7 percent of the total. This sector indicated the greatest employment growth in 2000 at 4.3 percent over Increases in the demand for air travel boosted the job creation in this industry. California and Florida ranked as the top two states for travel-generated employment in 2000, with thousand and thousand, respectively. The two states comprised 21.8 percent of the total travel-generated employment. In all, twenty-seven states enjoyed more than one hundred thousand jobs generated by domestic and international travel during Nevada and Hawaii were the most dependent on tourism for jobs, with 34.8 percent and 31.3 percent, respectively, of all state non-farm employment being travel-related in

25 2000 Travel-Generated Employment in the U.S. TABLE 8: 2000 TRAVEL-GENERATED EMPLOYMENT IN THE U.S. BY INDUSTRY SECTOR Domestic International U.S. Total Employment Employment U.S. Total Percent of % Change Industry Sector* (Thousands) (Thousands) (Thousands) U.S. Total from 1999 Public Transportation 1, , % 4.3% Auto Transportation % 0.2% Lodging 1, , % 2.6% Foodservice 2, , % 2.4% Recreation & Amusement 1, , % 3.9% Retail % 2.9% Travel Planning % -0.6% Total 6, , , % 2.9% Note: International travel-generated employment does not include jobs generated by international passenger fare payments, international traveler spending in the U.S. territories, and Canadian traveler spending not allocated to states. * See page 30 for definitions of industry sectors. The following figure shows the growth of total travel-generated employment in the U.S. during the last decade. The 2001 preliminary estimate is included here to show the trends. 8.0% 6.0% 4.0% 2.0% 0.0% Growth of Total Travel-Generated Jobs in the U.S % Change from Previous Year -2.0%

26 2000 Travel-Generated Employment in the U.S. TABLE 9: TRAVEL-GENERATED EMPLOYMENT BY STATE Travel-Generated Employment Domestic International State Total Share of State Non-Farm Employment State (Thousands) (Thousands) (Thousands) (Percent) State Total % Change over 1999 Alabama % -0.3% Alaska % -0.6% Arizona % 2.8% Arkansas % 2.0% California % 2.9% Colorado % 3.6% Connecticut % 0.9% Delaware % 1.4% Florida % 3.5% Georgia % 3.8% Hawaii % 2.5% Idaho % 2.5% Illinois % 3.7% Indiana % 2.6% Iowa % 1.3% Kansas % 2.5% Kentucky % 3.8% Louisiana % 2.9% Maine % -1.5% Maryland % 4.2% Massachusetts % 3.1% Michigan % 2.7% Minnesota % 4.8% Mississippi % 0.3% Missouri % -0.4% Montana % 2.5% Nebraska % 1.7% Nevada % 3.7% New Hampshire % 2.4% New Jersey % 2.0% 22

27 2000 Travel-Generated Employment in the U.S. TABLE 9: TRAVEL-GENERATED EMPLOYMENT BY STATE (CONTINUED) 2000 Travel-Generated Employment Domestic International State Total Share of State Non-Farm Employment State (Thousands) (Thousands) (Thousands) (Percent) State Total % Change over 1999 New Mexico % 1.2% New York % 2.4% North Carolina % 4.1% North Dakota % 3.1% Ohio % 2.4% Oklahoma % 1.8% Oregon % 0.8% Pennsylvania % 3.6% Rhode Island % 3.5% South Carolina % 1.5% South Dakota % 0.5% Tennessee % 2.2% Texas % 3.9% Utah % 2.6% Vermont % 2.1% Virginia % 2.9% Washington % 0.5% West Virginia % 4.5% Wisconsin % 2.9% Wyoming % 2.5% Washington DC % 13.2% U.S. Total 6, , , % 2.9% Note: International travel-generated employment does not include jobs generated by international passenger fare payments, international traveler spending in the U.S. territories, and Canadian traveler spending not allocated to states. 23

28 2000 TRAVEL-GENERATED TAX REVENUE IN THE U.S. Travel-generated tax receipts include the federal, state and local tax revenues attributable to travel spending within the United States. Travel-generated tax revenue is a significant economic benefit of travel in the United States, as governments use these funds to support travel infrastructure throughout the country, and also to help support a variety of public programs. Domestic and international travel expenditures generated $103.1 billion in tax revenue for federal, state and local governments in Total travel-generated tax revenue increased by 8.0 percent from 1999, reflecting steady growth in travel sales and income during Federal tax revenue generated by travel and tourism continued to show rapid growth in Total travel spending in the U.S. generated $61.9 billion for the federal government during 2000, 60.0 percent of all travel-generated tax collections in the U.S. Each dollar spent by domestic and international travelers in the U.S. produced 10.9 cents for federal tax coffers. State governments received $26.0 billion in tax revenue during 2000 through state sales and excise taxes, and taxes on personal and corporate income. This comprised 25.2 percent of the total travel-generated tax revenue in the U.S. in On average, each travel dollar produced nearly 4.6 cents for state tax coffers. Local governments directly benefit from travel as well. During 2000, total travel spending generated $15.3 billion in sales and property tax revenue for municipal governments, 14.8 percent of the U.S. total. Each travel dollar produced 2.7 cents for local tax coffers. California collected $13.3 billion in travel-generated tax revenue, which accounted for 12.9 percent of the total tax revenue generated by travel in the U.S. during 2000 and led all 50 U.S. states and the District of Columbia. Florida ranked second with nearly $9.6 billion in travelgenerated tax revenue in

29 2000 Travel-Generated Tax Revenue in the U.S. TABLE 10: 2000 TRAVEL-GENERATED TAX REVENUE IN THE U.S. BY LEVEL OF GOVERNMENT Domestic International U.S. Total Tax Revenue Tax Revenue U.S. Total Percent of % Change Level of Government ($Billions) ($Billions) ($Billions) U.S. Total from 1999 Federal $53.7 $8.1 $ % 8.3% State % 7.3% Local % 7.6% Total $89.5 $13.7 $ % 8.0% Note: International travel-generated tax revenue does not include tax revenue generated by international passenger fare payments, international traveler spending in the U.S. territories, and Canadian traveler spending not allocated to states. The following figure shows the growth of total travel-generated government revenues in the U.S. during the last decade. The 2001 preliminary estimate is included here to show the trends. Growth of Total-Generated Tax Revenue in the U.S % % Change from Previous year 15.0% 10.0% 5.0% 0.0% -5.0% % 25

30 2000 Travel-Generated Tax Revenue in the U.S. TABLE 11: TRAVEL-GENERATED TAX REVENUE BY STATE Travel-Generated Tax Revenue Domestic International State Total Share of U.S. Total State ($ Millions) ($ Millions) ($ Millions) (Percent) State Total % Change over 1999 Alabama $715.5 $12.3 $ % 3.8% Alaska % 1.7% Arizona 1, , % 8.8% Arkansas % 5.2% California 10, , , % 9.8% Colorado 2, , % 8.6% Connecticut 1, , % 6.6% Delaware % 6.5% Florida 6, , , % 7.9% Georgia 3, , % 9.2% Hawaii 1, , , % 7.2% Idaho % 8.4% Illinois 4, , % 7.0% Indiana 1, , % 5.8% Iowa % 4.0% Kansas % 5.4% Kentucky 1, , % 7.1% Louisiana 1, , % 8.3% Maine % 3.2% Maryland 1, , % 10.1% Massachusetts 1, , % 9.0% Michigan 2, , % 7.1% Minnesota 2, , % 11.3% Mississippi % 5.2% Missouri 1, , % 2.8% Montana % 6.2% Nebraska % 5.9% Nevada 2, , % 8.6% New Hampshire % 11.9% New Jersey 2, , % 5.4% 26

31 2000 Travel-Generated Tax Revenue in the U.S. TABLE 11: TRAVEL-GENERATED TAX REVENUE BY STATE (CONTINUED) 2000 Travel-Generated Tax Revenue Domestic International State Total Share of U.S. Total State ($ Millions) ($ Millions) ($ Millions) (Percent) State Total % Change over 1999 New Mexico $543.7 $16.0 $ % 3.8% New York 6, , , % 8.8% North Carolina 2, , % 8.8% North Dakota % 6.8% Ohio 2, , % 7.5% Oklahoma % 4.6% Oregon % 6.6% Pennsylvania 2, , % 8.1% Rhode Island % 9.8% South Carolina 1, , % 6.0% South Dakota % 4.5% Tennessee 2, , % 5.4% Texas 6, , % 9.1% Utah % 6.1% Vermont % 7.1% Virginia 2, , % 7.2% Washington 1, , % 7.2% West Virginia % 6.1% Wisconsin 1, , % 7.5% Wyoming % 7.1% Washington DC % 14.7% U.S. Total $89,464.0 $13,665.5 $103, % 8.0% Note: International travel-generated tax revenue does not include tax revenue generated by international passenger fare payments, international traveler spending in the U.S. territories and Canadian traveler spending not allocated to states. 27