“By the Numbers” is a periodic look at data on the travel economy from sources outside of the U.S. Travel Association, examining how the numbers align with U.S. Travel’s own research and analysis. This iteration looks at the World Travel & Tourism Council’s annual Economic Impact Report for the U.S. travel and tourism sector.
On April 20, the World Travel & Tourism Council (WTTC) released its annual Economic Impact Report for the United States. The report revealed that the U.S. travel and tourism industry suffered a total GDP loss of $766 billion in 2020, a 41% decrease from the sector’s 2019 GDP contribution of $1.9 trillion. Domestic travel saw less dramatic losses, falling 37% due to less stringent restrictions on domestic travel. International visitor spending dropped by 76.7% in 2020– from $181.2 billion in 2019 to just $42.2 billion in 2020.
The report also found that the total number of travel-supported jobs fell from 16.5 million in 2019 (10.5% of total U.S. employment) to just 11.1 million in 2020 (7.5% of total U.S. employment).
While these figures generally align with U.S. Travel’s own 2020 estimates, there are a few discrepancies:
U.S. Travel estimates that travel spending fell by nearly $500 billion (42%), from $1.1 trillion in 2019 to just $680 billion in 2020. The difference between this figure and the higher figure quoted by WTTC (decline of $766 billion) is simply that WTTC is focusing on travel’s contribution to GDP and includes indirect and induced impacts spurred by travel in their total figure. U.S. Travel’s figure only includes direct travel spending.
U.S. Travel estimates that domestic spending fell 36%, which is similar to the 37% decline estimated by WTTC. The slight difference is due to WTTC calculating the growth rate in real terms, whereas U.S. Travel’s figures are calculated in nominal terms.
Also, U.S. Travel mentions that international travel spending in the U.S., including passenger fares, fell by 79% to $38.1 billion. This is directly based on BEA data, specified in nominal terms. It differs slightly from WTTC’s release since they specify their figures in real terms.
Contribution to GDP versus total economic output
As mentioned above, WTTC focuses on the decline of travel’s contribution to GDP, which they estimated at 41% (a loss of $766 billion). U.S. Travel, on the other hand (in addition to direct travel spending losses as discussed above), looks at the total economic output decline due to the loss in travel spending, which was estimated to decline by $1.1 trillion in 2020 or 42%. GDP contribution and economic output are different concepts. In short, GDP contribution only reflects “value added” of goods and services and excludes the value of intermediate inputs. Economic output measures the value of all sales of good and services. As such, economic output is always a larger number.
U.S. Travel estimates that total travel-supported jobs declined 34%—down from 16.7 million in 2019 to just 11.1 million in 2020. Though they calculate it slightly differently—and WTTC starts with 16.5 million jobs in 2019 due to a slightly different methodology—WTTC reaches the same 11.1 million in travel-supported jobs in 2020 as U.S. Travel.
With such steep losses in the U.S. travel industry, it is clear that an overall U.S. economic recovery hinges on a revival within the travel sector. Further, as WTTC noted, the global tourism economy’s recovery will also heavily rely on the U.S. sector’s recovery as the U.S. has the largest tourism economy in the world.
Smart, effective policies to restart widespread travel can jumpstart the recovery process.
“Our research shows that if mobility and international travel resumes by summer this year, the sector’s contribution to global Travel & Tourism GDP could rise sharply in 2021,” said WTTC President and CEO Gloria Guevara.
U.S. Travel will continue to engage the Biden administration and Congress on the need to safely reopen international travel, restart professional meetings and events, and pass the Hospitality and Commerce Job Recovery Act to spur demand and rehiring, among other key priorities.