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BEA 06-41

Tourism Satellite Accounts, Second Quarter 2006

REAL TOURISM OUTPUT GREW 1.4 PERCENT IN SECOND QUARTER 2006

Available for this release: Full Release (PDF) | Tables (XLS)

Growth in real tourism output slowed to an annual rate of 1.4 percent in the second quarter of 2006, according to data released today by the U.S. Bureau of Economic Analysis. In the first quarter of 2006, real tourism output grew 5.0 percent (revised). By comparison, real gross domestic product (GDP) grew at an annual rate of 2.9 percent in the second quarter of 2006, and 5.6 percent in the first quarter of 2006.

Chart 1. Real Tourism Output and Tourism Employment, First Quarter 2002 through Second Quarter 2006

Tourism employment rose 3.1 percent in the first quarter of 2006, the largest quarterly increase in direct tourism employment in two years. By comparison, overall U.S. employment grew 1.7 percent in the first quarter of 2006.

Other highlights from this release of the travel and tourism satellite accounts include:

Prices for tourism goods and services rose 7.4 percent in the second quarter of 2006, while the overall GDP price index
rose 3.3 percent in the second quarter.
Total current-dollar tourism-related output increased to $1.2 trillion in the second quarter of 2006.
Total tourism-related employment accounted for 8.3 million jobs in the first quarter of 2006.

Changes in Real Tourism Output. Passenger air transportation posted a second consecutive quarter of strong growth, increasing 7.8 percent in the second quarter of 2006, following an increase of 9.3 percent in the first quarter (revised). In contrast, traveler accommodations experienced a fourth consecutive quarter of slower growth, with output actually declining 0.9 percent in the second quarter of 2006.

Chart 2. Quarterly Growth in Real Tourism Output, Second Quarter 2005 through Second Quarter 2006

Changes in Tourism Prices. Prices for passenger air transportation grew 17.3 percent in the second quarter of 2006 – the fastest of all tourism commodities – due largely to higher fuel costs and reduced supply (fewer flights). In the first quarter of 2006, passenger air transportation prices declined 3.3 percent (revised). Prices for traveler accommodations rose an additional 3.4 percent in the second quarter of 2006, after having increased 7.8 percent (revised) in the first quarter.

Chart 3. Quarterly Growth in Prices for Tourism Goods and Services, Second Quarter 2005 through Second Quarter 2006

Changes in Tourism Employment. Although overall direct tourism employment rebounded strongly in the first quarter of 2006 (the latest period for which data are available), results across tourism industries were mixed. While the traveler accommodations industry added 5.1 thousand jobs, employment in the air transportation industry declined for the fifth consecutive quarter, a decrease of 2.7 thousand jobs.

Chart 4. Quarterly Growth in Direct Tourism Employment, Second Quarter 2005 through Second Quarter 2006

Total Tourism-Related Output. In the second quarter of 2006, total current-dollar tourism-related output of $1.2 trillion consisted of $661.4 billion of direct tourism output - output of goods and services sold directly to visitors, and $504.5 billion of indirect tourism-related output - output of goods and services used to produce what visitors buy.

Chart 5. Composition of Tourism-Related Output, Second Quarter 2006

Total Tourism-Related Employment. In the first quarter of 2006 (the most recent period for which data are available), total tourism-related employment of 8.3 million consisted of 5.7 million direct tourism jobs - jobs where workers produce goods and services sold directly to visitors, and 2.6 million indirect tourism-related jobs - jobs where workers produce goods and services used to produce what visitors buy.

Chart 6. Composition of Tourism-Related Employment, First Quarter 2006

Definitions

Direct tourism output. Direct tourism output comprises all output consumed by visitors (e.g., traveler accommodations, passenger air transportation, souvenirs).

Indirect tourism-related output. Indirect tourism-related output comprises all output used as inputs in the process of producing direct tourism output (e.g., toiletries for hotel guests, the various ingredients used to make the meals served airline passengers, and the plastic used to produce souvenir key chains). Indirect tourism-related output is estimated using commodity-by-commodity output multipliers from the Current Industry Analysis Division.

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

Direct tourism employment. Direct tourism employment comprises all jobs where the workers are engaged in the production of direct tourism output (e.g., 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, the various ingredients used to make the meals served airline passengers, and the plastic used to produce souvenir key chains). Indirect tourism-related employment is estimated using industry-by-industry employment multipliers from the Regional Economic Analysis Division.

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

These estimates are from the 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 estimates of direct tourism output were derived from BEA's annual TTSAs (revised in June 2006) and current-dollar quarterly estimates of personal consumption expenditures from the NIPAs. The constant-price estimates of direct tourism output were developed using price indexes from the Bureau of Labor Statistics (BLS) and constant-price quarterly estimates of personal consumption expenditures from the NIPAs. The estimates of direct tourism employment were derived from the annual TTSAs (revised in June 2006) and the Quarterly Census of Employment and Wages from BLS. Employment data are available five to six months after the end of the reference quarter.

Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise specified. Percent changes are calculated from unrounded data and annualized. "Real" estimates are in chained (2000) dollars. Price indexes are chain-type measures. Growth in overall U.S. employment is calculated using BLS Total nonfarm employment from Current Employment Statistics, http://www.bls.gov/ces/home.htm#data.

Next release – Travel and Tourism estimates for third quarter 2006 will be released on Thursday, December 14, 2006 at 8:30 a.m. EST.

BEA's national, international, regional, and industry estimates; the Survey of Current Business; and BEA news releases are available without charge on BEA's Web site at www.bea.gov. By visiting the site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements.

PDF Format: U.S. Travel and Tourism Satellite Accounts Full Release (PDF)

XLS Format of Tables in the U.S. Travel and Tourism Satellite Accounts Release (Excel)

News Media

Ralph Stewart

(202) 606-2649

Peter Kuhbach

(202) 606-9543

Bradlee Herauf

(202) 606-9978

Background Information on Tourism Satellite Accounts

Over the past several years, the Bureau of Economic Analysis (BEA) has developed several sets of extensions to the U.S. input-output (I-O) accounts known as satellite accounts. These accounts are rearrangements of information from the national economic accounts and other sources for the purpose of more completely analyzing specific economic activities. The Travel and Tourism Satellite Accounts (TTSA’s) were developed and are maintained with the support of the Commerce Department’s International Trade Administration. Because tourism data are not separately identified in the national accounts, the TTSA’s are particularly useful for assessing the impact of events such as September 11, 2001. The TTSA’s provide estimates of tourism-related output by commodity (goods and services) and tourism-related employment by industry.

Current-Dollar Output by Commodity

Table A. provides estimates of direct and indirect (current-dollar) tourism-related output of tourism commodities in 2006. Direct tourism output represents all output consumed directly by visitors. Visitors are defined as people whose travel for pleasure or business takes them 50 miles or more away from home, or outside of their usual environment. Indirect tourism-related output includes all output used as inputs in the process of producing direct tourism output. Table A. shows that the direct tourism output of $700.4 billion in 2006 resulted in total direct and indirect output of $1.2 trillion.

Commodity Examples

Traveler accommodations. Direct tourism output of traveler accommodations in 2006 were $122.6 billion. Each dollar of direct tourism output required indirect output of $0.54, or $66.2 billion, resulting in a combined $188.8 billion in direct and indirect tourism-related output. The largest indirect output included purchases of real estate services, financial services, and utilities.

Passenger air transportation. Direct tourism output of passenger air transportation in 2006 was $104.4 billion. Each dollar of direct tourism output required indirect output of $0.70, or $73.0 billion, resulting in a combined $176.8 billion in direct and indirect tourism-related output. The largest indirect output included purchases of petroleum products, food services, and other transportation equipment manufacturing.

Employment by Industry

Table B. provides estimates of direct and indirect tourism-related employment by the tourism industry for 2006. Direct tourism employment includes all jobs where the workers are engaged in the production of direct tourism output. Indirect tourism-related employment includes all jobs where the workers are engaged in the production of indirect tourism-related output. Table B. shows that direct tourism employment in 2006 was 5.8 million employees. This level of direct employment required an additional 2.7 million employees in other industries for the production of indirect tourism-related output.

Industry Examples

Traveler accommodations. Direct tourism employment in the traveler accommodations industry in 2006 consisted of 1.373 million employees. This level of direct tourism employment required indirect employment of 315 thousand, resulting in combined direct and indirect tourism-related employment of 1.687 million.

Air transportation services. Direct tourism employment in the air transportation services industry in 2006 consisted of 449 thousand employees. This level of direct tourism employment required indirect employment of 347 thousand, resulting in combined direct and indirect tourism-related employment of 796 thousand.