1998 Year of the Ocean Coastal Tourism and Recreation 



Balance of Payments Contributions of International Travel and Tourism 



In 1994, the Wall Street Journal estimated that the United States receives over 45 percent 

 of the developed world's travel and tourism revenues and 60 percent of its profits (Houston, 

 1996). While the United States runs a substantial merchandise trade deficit, it has a trade surplus 

 in the service sector, with travel and tourism accounting for the largest and most rapidly growing 

 part of this surplus. According to Business Week, "foreign visitors spend about $80 billion a year 

 in the United States, producing a $26 billion U.S. trade surplus in travel and tourism" (quoted in 

 Houston, 1996). Likewise, this publication reports 1.4 million U.S. jobs are supported by foreign 

 tourism — ten times the number of jobs in the U.S. steel industry. 



Foreign tourism to the United States in 1995 was expected to generate a trade surplus of 

 $26 billion compared to a surplus of $17 billion in 1992 and a deficit of $7 billion in 1986. U.S. 

 employment due to international tourism has been projected to grow by as much as 1 8 percent 

 annually during the 1995-2000 period, doubling the number of tourism-related jobs every four 

 years. The Department of Commerce has estimated that foreign tourist spending in the United 

 States will rise to $132 billion dollars in the year 2000 (Houston, 1996). 



Tax Revenue Contributions of International Travel and Tourism 



It has been estimated that travel and tourism produces tax revenues for all levels of 

 government of about $58 billion annually (Houston, 1996). Of this total, foreign tourism is 

 responsible for tax revenues of about $7.5 billion, about $4 billion of which goes to the federal 

 government. Houston has observed that federal expenditures for beach re-nourishment have 

 averaged only $34 million a year between 1950 and 1993 (in 1993 dollars), noting that the 

 federal government receives tax revenues from foreign tourism that are 1 80 times its expenditure 

 on the nation's beaches. 



Promotion of International Tourism to the United States 



The United States lags far behind other nations on spending on tourism promotion. 

 Ronald Allen, chairman of Delta Air Lines, Inc., notes "...The Republic of Ireland, with a ,^ 



population of less than 4 million people, spends $45 million in public funds annually to promote 

 tourism. This country, with 260 million people, spends less than $17 million in federal money" 

 Wildavsky, 1995, p. 2280). Spain, with its attractive beaches and climate, spends 10 times more 

 than the United States in advertising to attract international tourists. The United States ranks 3 1 st 

 in the world in international tourist market advertising (Houston, 1996, p. 3). 



Indeed, there has been a debate at the national level in the United States on whether a 

 greater national presence concerning tourism promotion is needed, with industry advocates 

 arguing for a greater role to eliminate "creeping neglect [of the industry] by public policy 

 makers" (Wildavsky, 1995, p. 2280). Opposition to this has been expressed by economists and 

 others who argue that private companies, not taxpayers, should bear the costs of promotional 

 activities that benefit the U.S. tourism industry (Wildavsky, 1995). 



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