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Economic impact of the travel and tourism industry

Teresa Cederholm

The airline industry's growth and impact on economic prosperity (Part 1 of 16)

Global travel and tourism

Travel and tourism is one of the largest and fastest growing global service industries. According to the World Travel and Tourism Council (or WTTC), the travel and tourism industry’s total contribution to the global economy rose to $6,990 billion, or 9.5% of the GDP (gross domestic product), and is expected to grow by 4.3% to $7,289 billion, or 9.6% of the GDP, in 2014. The growth in travel expenditure was driven by changing lifestyles and higher disposable incomes.

 

Travel expenditure in the United States

In the United States, travel and tourism attributed to 2.7% of the US GDP in 2013. Total travel expenditure amounted to $2.1 trillion; $887.9 billion of that was incurred directly on travel, and $1.2 trillion was the impact of travel on other industries. In addition, the industry contributed 14.9 million jobs and tax revenues of $134 billion. Leisure travel and business travel are the broad categories under which travel expenditures are analyzed. Classifying travel expenditures based on the purpose of travel will help identify the important drivers of growth in the industry. We’ll have more details on this in part seven of this series.

Businesses that cater to the growing demand for travel include airlines, trains, buses, hotels, casinos, cruise ships, and tour operators. In the next article, we’ll discuss the impact of the air transport industry on the US economy. Transportation ETFs such as iShares Transportation Average ETF (IYT) and SPDR S&P Transportation ETF (XTN) hold shares of major US airline companies, including Delta Air Lines, Inc. (DAL), United Continental Holdings Inc. (UAL), American Airlines (AAL), Alaska Air Group, Inc. (ALK), JetBlue Airways Corporation (JBLU), Southwest Airlines Co. (LUV), and companies from many other transport subsectors such as ground freight and logistic companies, aerospace and defense, and air freight and courier services.

Continue to Part 2

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