Tourism industry - Business in United States of America
Definition: Service enterprises that cater largely or primarily to tourists, including those providing transportation, lodging, food, entertainment, and souvenirs
Significance: In the United States, tourism is an enormous industry, serving millions of international and domestic tourists yearly. The industry is a major portion of America’s service sector and one of the nation’s largest employers.
The tourism industry centers on the simple premise that travel for recreation and leisure is pleasurable. Tourists—who are defined as people who travel outside their homes for not more than a year and who do not earn money in the location visited—are the industry’s clientele. The United Nations has designated that domestic tourism involves residents traveling within one’s own country. For instance, Americans traveling throughout the United States fall into this category. Inbound tourism is the name given to tourists entering a country. Tourists from other countries visiting the United States fall into this category. Outbound tourism involves tourists traveling in another country. This would apply to Americans who visit other countries. In addition, internal tourism involves both domestic tourism and inbound tourism. The number of Americans touring the United States in addition to tourists from other countries visiting the United States would be counted for this category.
National tourism involves domestic tourism and outbound tourism. Americans touring the United States and traveling overseas would fit in here. Inbound tourism and outbound tourism together constitute international tourism. The tourism industry ranks countries in terms of number of tourists admitted and the amount of money they spend. For instance, in 2006, the World Tourism Organization ranked France as the number-one tourist destination (with 79 million tourists); Spain (58 million) was second, and the United States (51 million) was third. However, that same year, the United States ranked number one in tourism revenues, with $85 billion earned, while France earned half that amount. Shopping is the primary activity of tourists, followed by outdoor recreation and visits to historical sites and museums. Tourists from abroad and Americans visit natural wonders, large cities, historic landmarks, and gambling venues—particularly Las Vegas.
Some countries, for instance, Thailand and Egypt, strongly depend on tourism to provide hotel, transportation, and restaurant service jobs for their inhabitants. Although the United States is not dependent on tourism, the tourism industry nevertheless provides necessary jobs for Americans and contributes greatly to the U.S. economy. Indeed, tourism is either the first-, second-, or third-largest employer in twenty-nine U.S. states. In the United States, the tourist industry directly employs 7.9 million people, and an additional 18 million are employed indirectly, producing annual payrolls of $174 billion. Tourism is America’s third-largest retail sales industry and contributes $98.7 billion in tax revenue. Americans traveling within the United States spend $1.5 billion per day, and international travelers, who spend an average of 15.6 nights in the country, spend $91.1 billion yearly in the United States. By 2007, the number of international tourists climbed to more than 56 million people who spent $122.7 billion dollars.
The United States benefits from varied climates that attract tourists from around the world to such holiday spots as Florida, California, and Arizona for the temperate weather. Tourists also flock to such states as Colorado and Utah in winter for their ski resorts.
History of the Industry
Before the nineteenth century, only the very wealthy traveled. Early travel generally involved pilgrimages to sacred locations, and the actual process was often arduous. Traveling for leisure or recreation was practically unheard of. Indeed, it was not until 1811 that the term “tourism” first came into vogue and not until 1840 that the word “tourist” was first used.
With the onset of the American Industrial Revolution and the subsequent upward mobility of the middle class, the idea of travel for leisure took hold, and the cultural concept that people were actually entitled to vacations became firmly rooted in the American mind. At first, people were drawn to beaches. Atlantic City, New Jersey, which drew tourists from New York City, became the first seaside resort in the United States. By the 1850’s, tourism in the United States was well-established as an industry, especially within the major cities of New York, Chicago, San Francisco, and Washington, D.C.. In addition, the development of photography in this era enhanced the appeal of travel, especially to the West.
During the nineteenth century, steam-powered locomotives revolutionized travel simply by making the process easier and quicker. The first transcontinental railroad was completed in the United States in 1869. Similarly, during the early twentieth century, the invention of the automobile yet again revolutionized travel. By 1915, tour-guide agencies and guidebook publishers were firmly established American businesses. Traveling was once again sped up with the advance of air travel after World War II. During the 1960’s, the explosive expansion of the airline industry set in place a global transportation network of airports, air traffic controllers, and the development of the U.S. Federal Aviation Administration and other regulatory agencies that allowed for the movement of large numbers of people to various locales around the world and encouraged the idea of mass travel. Mass travel made tourism Florida’s largest source of income. Theme parks were built across the state, and in 1971, the twenty eight-thousand-acre Disney World in Orlando added $14 billion to that area’s economy. By the end of the twentieth century, tourism had significantly grown throughout the world.
Various Forms of Tourism
As the idea of travel for pleasure and recreation grew in popularity, various forms of tourism emerged. Health tourism, in which ill patients traveled to milder climates to regain their health, gained in popularity in the United States during the nineteenth century after beginning in England, where inhabitants gathered at spas such as Bath to imbibe the local mineral water for their health. This form of travel has continued to grow and has become especially popular with the United States’ aging population in the form of health spas. It has come to account for a large part of the revenue generated on cruises and stays at end-destination luxury hotels.
Retiree tourism has also made a large impact in the tourism industry. Because many retirees have for years dreamt of traveling during their “golden years,” they are eager customers, and because they are able to travel year-round, they can take advantage of offseason pricing. Companies specializing in retiree tourism often own their own ships and employ their own guides, offering supervised visits to such destinations as India, China, Thailand, and Egypt.
Some countries that are already tourist destinations, such as India and Eastern Europe, have burgeoning business catering to what has been termed “medical tourism.” Because of the high cost of medical insurance in the United States, Americans often cannot afford prohibitively expensive medical procedures such as heart surgery, and they travel outside the country to have the necessary work done by qualified physicians. Before or after their surgeries, patients can take advantage of the host countries’ tourist offerings.
Americans are also interested in expanding their tourist experiences by participating on a more active level as adventurers, becoming more immersed in local life instead of passively observing. This form of tourism has been designated “adventure travel.” Traveling for educational purposes has also increased dramatically, as has geo tourism, another form of tourism that attracts socially aware, environmentally concerned older travelers who seek to emerge themselves in various cultures to gain an understanding of the society.
Before travel by air became popular during the 1960’s, ocean liners transported transatlantic travelers. However, the expansion of the airline industry saw a correlating deflation of the cruise industry. Travel by air was far more expedient and less expensive, and the cruise industry seemed to be on the way out. However, in 1974, Cunard began hiring entertainers to boost sales and increased luxurious services to all classes of passenger. Thus began the modern cruising industry, in which the ships themselves have, in part, become destinations.
Ten Cities of the United States Most Visited by Overseas Travelers in 2006
Source: Data from the Statistical Abstract of the United States, 2008 (Washington, D.C.: Department of Commerce, Economics and Statistics Administration, Bureau of the Census, Data User Services Division, 2008)
Note: Total overseas travelers was 21,668,000. Includes travel for business or pleasure, students, and passengers in transit.
By the 1980’s, enormous floating hotels carrying more than two thousand passengers transported tourists all over the world. The desire for exotic cruises continued to grow, and the 1990’s saw an increase in Americans cruising to the Amazon, Africa, and Asia. Since 2000, major cruise lines have launched sixty-four new cruise ships, some termed “megaships,” capable of carrying three thousand passengers and featuring such lavish amenities as ice-skating rinks and multistory shopping centers. Smaller ships, by contrast, attract wealthier passengers with promises of exclusivity. Plans for even larger ships, featuring Broadway-style theaters, museums, and planetariums are on the drawing board.
The Twenty-first Century
During the early twenty-first century, a trend grew toward more specialized vacations. Also, the advance of the Internet greatly increased competition and lowered prices on common carriers, hotels, and rental cars. During the 1980’s, the tourism industry relied on local travel agents who sought out vacation packages and made travel purchases for their clients. Contemporary tourists, however, can use the Internet to find the same deals that travel agents would find for them. They are able to take advantage of good pricing by comparing sites and by buying tickets and accommodations either early or at the last minute.
The tourism industry in the United States was severely disrupted after the terrorist attacks of September 11, 2001, when airline passenger numbers fell by nearly 45 percent, from9 million the week before September 11 to 5 million the week after. However, the industry began to recover over the following months, thanks to grants from the Federal Reserve and the U.S. Congress.
In response to economic, social, and political factors, some American travelers have adopted the tendency to travel to more rural destinations, take trips closer to home, and shorten the length of their trips. The U.S. economy began to slow significantly in 2007, primarily because of a decline in the real estate market and an increase in gas prices. In 2008, the World Tourism Organization estimated that Europeans would be the biggest tourist spenders because of the strength of the euro against the dollar. By the year 2020, tourism was predicted to be the world’s largest industry.
Belasco, Warren James. Americans on the Road: From Auto camp to Motel, 1910-1945. Baltimore: Johns Hopkins University Press, 1997. Documents the changing travel habits of Americans and the supportive infrastructure: motels, gas stations, souvenirs, and such.
Biederman, Paul S. Travel and Tourism: An Industry Primer. New York: Prentice Hall, 2007. Educational volume for both students interested in careers in the tourist industry and for travel professionals but accessible enough for the layperson merely interested in the industry. Contains contributions from academic and professional experts.
Goeldner, Charles, and J. R. Brent Ritchie. Tourism: Principles, Practices, Philosophies. Hoboken, N.J.: John Wiley & Sons, 2005. In addition to an analysis of the tourist industry’s major concepts, this book explores new trends in travel and demonstrates how tourism can become a factor in the wealth of any nation by explaining the social, cultural, economic and psychological aspects of travel and tourism. Contains appendixes with information about key travel industry contacts and additional information sources.
Ioannides, Dimitri. The Economic Geography of the Tourist Industry: A Supply-Side Analysis. London: Routledge, 1998. Bridges the gap between tourism research and economic geography by providing analyses of tour operators, airlines and the hotel industry from an international perspective. Covers business cycles, labor dynamics, entrepreneurship and various governmental roles in tourism.
Ramos, Alejandro D., and Pablo S. Jimenéz. Tourism Development: Economics, Management, and Strategy. New York: Nova Science, 2008. A global look at tourism that focuses on its economic side and discusses the use of public lands.
See also: American Automobile Association; automotive industry; Hotel and motel industry; Hurricane Katrina; Mexican trade with the United States; Transatlantic steamer service; Wilderness Road.
U.S. Department of Commerce: Organization
Mexican trade with the United States