With Foreign Visitors Come Jobs, Revenues

May 10, 2012

Tourists and travelers are important for increasing sales and supporting business growth. Over the last decade, however, the number of people visiting the United States has not kept pace with global tourism trends. Attracting foreign visitors to the United States has become increasingly difficult since 2001, given stringent security processes and the global economic downturn. A nationwide effort to reverse this negative trend began May 5 – the annual National Travel and Tourism Week.

According to the U.S. Travel Association, in 2010, tourism in the United States created $1.8 trillion in economic impact, generating $118 billion in tax revenue and supporting 14 million jobs, both directly related to the travel industry or in other related industries. In 2011, 62 million international travelers to the United States spent a record $153 billion on travel- and tourism-related goods and services, according the Department of Commerce.  In December 2011 alone, foreign visitors spent $12.6 billion, a 9 percent increase over a year earlier. This growth in tourists visiting the United States led to an increase in more than 100,000 jobs in 2011 in tourism-related industries that employ 7.6 million Americans overall.

The Commerce Department also reports, however, that the U.S. share of the word’s travel market has fallen sharply – down from 17 percent in 2000 to 12.4 percent in 2010. Stringent security and screening processes put in place after the 9/11 terrorist attacks have detered some foreign travelers.

The economic downturn also impacted tourist travel. The countries from which America draws the majority of its foreign tourists – including Canada, Japan, and the UK – have experienced difficult economic times.

An International Effort to Attract Tourists

To support U.S. travel and tourism, Brand USA – a tourism marketing public-private partnership – is launching a $150 million campaign to attract foreign tourists to American shores. Brand USA’s marketing blitz is presented on billboards, in magazines, and in online videos and television commercials.

“Other countries around the world have prioritized tourism efforts for years,” said Brand USA Board Chairman Stephen Cloobeck. “Yet in the 236 years since the United States of America was founded, this country has never had a nationally coordinated effort dedicated to inviting travelers to come visit us.”

Canadians make up the largest percentage of tourists to America, which is part of why the new ads will first run in Canada, as well as in the United Kingdom and Japan. Advertising in Brazil, South Korea, India and Germany will follow.

To be sure, Brand USA is not the only group advocating for a resurgence in tourism to the United States. In April, for example, Visit California – a non-profit organization that partnered with the state's travel industry to promote California as a travel destination – joined the Los Angeles Tourism & Convention Board to host the International Pow Wow (IPW) trade show focused on the travel and tourism industry. In California, this industry creates nearly 900,000 jobs, generating $6.3 billion in tax revenue. International tourism specifically made up 20 percent of total visitor spending, injecting $20 billion  into the California economy.

“California competes globally for [foreign tourists], who stay longer and spend more than domestic travelers,” said Visit California president and CEO Caroline Beteta. “As the global economy continues to improve, the competition will get even fiercer. Visit California will continue to look for high-impact opportunities like IPW to attract these high-value customers.”

Las Vegas has also focused efforts on drawing more visitors. While some 18 percent of Las Vegas visitors in 2010 came from foreign countries, the Las Vegas Convention and Visitors Authority has set an ambitious goal of having foreign citizens make up 30 percent of the city’s annual visitors. The logic in attracting foreign tourists is straightforward. According to the Authority, on average, international travelers to Las Vegas  stay in the city for longer than four days and spend about $1,000 per visit.. (Domestic tourists spend only $645 per visit and stay about three days.)

Other associations, organizations, and business groups across the country are also championing the need to encourage business professionals and tourists to visit the United States. Last month, U.S. Chamber President and CEO Thomas Donohue testified before the U.S. Senate, advocating for more efficient travel policies for international businesspeople and for visa reforms that would make visiting the United States from abroad easier, while still maintaining high levels of security.

“The travel and tourism industry currently employs 7.4 million Americans and generates more than $700 billion in revenue,” says Donohue. “And when foreign visitors spend their money here, it’s counted as an export. But we are leaving travel-related jobs and revenues on the table because we’re not laying out the welcome mat for business visitors and tourists.”

Back in 2000, U.S. tourism was much stronger than it is today, and if America could regain that level of overseas visitors, it would create 1.3 million jobs and generate $860 billion in economic activity, says Donohue. Promoting tourism is a key part of the Chamber’s six-point jobs plan.

Action in Washington Could Spur Tourism

Even as Brand USA, the U.S. Chamber, and other organizations push for ways to draw more visitors to the United States, there is legislation pending in Washington that could expedite the effort. The Jobs Originated through Launching Travel Act (JOLT Act) introduced in the Senate last month focuses on improving visa processing and expanding international travel. The bill offers longer visa stays and eases the process through which citizens from specific countries gain tourism visas to the United States.

The State Department, noting that the current visa fees are insufficient to cover the cost of processing nonimmigrant visas, increased the cost of visitor visas to $160. A higher cost for visa applications could deter tourism, but the U.S. Visa Waiver Program (VWP) eliminates costs for some foreign citizens, granting them the opportunity to travel to the United States for tourism or business for up to three months without obtaining a visa. There are currently 36 countries in the VWP, eliminating some barriers to travel and stimulating tourism.

The State Department has also announced plans to facilitate visa processing by increasing consular and embassy staff in countries where foreign citizens are showing a growing desire to visit the United States. The number of Chinese tourists is expected to increase by 135 percent by 2016; Brazil, by 274 percent. These visitors could spend on average $6,000 and $5,000 respectively during each trip.

“Speeding up the visa process is one of the quickest ways to boost the U.S. economy," says President and CEO of the National Retail Federation Matthew Shay. "There are millions of citizens of nations with growing economies who want to come to the United States to shop for brands that are known around the world."

These and other efforts have the potential to help grow America’s businesses. As the United States heads into the tourism season, it remains to be seen how the international advertising campaign, legislative plans, and ongoing efforts to spur tourism will attract foreign visitors.

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