United States Travel & Tourism Industry in 2012
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United States Travel & Tourism Industry in 2012
BUS 630
Individual Paper
United States Travel & Tourism Industry in 2012
According to the International Trade Administration (2012), the Travel & Tourism industry accounted for 2.7% of the total 2011 Gross Domestic Product (GDP) of the U.S. In 2011, roughly 7.6 million jobs in the United States were in the Travel & Tourism industry. Approximately 5.4 million jobs were in direct businesses such as airlines, hotels, and souvenirs and 2.22 million jobs were in businesses indirectly connected to the industry, like those in the supply chain that supply directly to the direct businesses, for example such as the suppliers of the hotels. (ITA Office of Travel & Tourism Industries, 2012) These numbers indicate that this industry is a significant contributor to the growth of the U.S. economy. Therefore, this study will aim to forecast the U.S. Travel & Tourism industry in 2012. It will include forecasting foreign visitor spending and domestic spending to and within the U.S. in 2012.
Foreign Visitor Spending
According to the International Trade Administration, 62.3 million visitors visited the United States in 2011. (ITA Office of Travel & Tourism Industries, 2012) In 2011, the top 20 countries, in terms of number of people, that visited the U.S. (Table A) accounted for about 82% of the total amount of foreign visitors. The total spending to get to and within the U.S. from 2000 to 2011, as shown in Table B, had changed in the same direction with the number of in-bound visitors. Therefore, there is strong evidence that using the number in-bound visitors to predict the foreign visitor spending can be reliable.
Table A: Top 20 Tourist-Generating Countries
Source: ITA Office of Travel & Tourism Industries
Table B: U.S. Spending and Visitors (2000 – 2011)
Source: ITA Office of Travel & Tourism Industries
To forecast the total visitor spending to and within the U.S. in 2012, the total non-U.S. resident arrivals to the U.S. from March 2012 to December 2012 first needed to be forecasted by using the following model.
*Y = Total spending to and within the U.S., X1 = Time trend, X2 = February, X3 = March, X4 = April, X5 = May, X6 = June, X7 = July, X8 = August, X9 = September, X10 = October, X11 = November, and X12 = December
The forecasted numbers from the above model then will be used to forecast the total spending to and within the U.S. for March 2012 to December 2012. The model below is used to forecast the total spending. Taking seasonal data into account within the model (using dummy variables), instead of using only one variable (total non-U.S. resident arrivals to the U.S.), shows a more accurate result in predicting the outcome.
**Y = Total non-U.S resident arrivals to the U.S., X1 = total non-U.S. resident arrivals to the U.S., X2 = Time trend, X3 = February, X4 = March, X5 = April, X6 = May, X7 = June, X8 = July, X9 = August, X10 = September, X11 = October, X12 = November, and X13 = December
Using the formula above, the forecast for the foreign spending to and within the U.S for 2012 is