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Background Information on Tourism Satellite Accounts

Tables A-D

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 most recently developed extension--the Travel and Tourism Satellite Accounts (TTSA’s)--was supported by 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 the events of September 11, 2001. Total tourism sales continue to exceed the fourth quarter 2001 trough of $661.4 billion by 13.0 percent, yet they remain 0.5 percent below the fourth quarter 2000 peak of $751.3 billion.

Tables A through D provide estimates of the total sales and the tourism-related sales of tourism industries during the third quarter of 2003. Tourism industries are those identified in BEA’s TTSA’s as industries whose primary products are typically purchased by out-of-town visitors. Tourism-related sales represent the portion of an industry’s total sales typically purchased by visitors. Visitors are people whose travel for pleasure or business takes them 50 miles or more away from home, or outside of their usual environment. For each tourism industry, table A presents direct total sales and the portion of those that are tourism-related sales in billions of dollars at an annual rate. Direct total sales of tourism industries (sales to end-users) were over $2.2 trillion, whereas direct tourism-related sales by these industries (sales to end-users that are out-of-town visitors) were $400.7 billion in the third quarter of 2003. Tourism-related sales vary considerably as a percentage of total industry sales, ranging from 80 percent for hotels and lodging places to 3 percent for railroads and related services. These percentages were obtained from BEA’s 1997 TTSA’s.

Tables B through D extend the analysis by providing both direct and indirect sales for tourism industries. When an industry is affected by external events, not only its direct sales but the sales of its supplying industries—“indirect sales”—are also affected. Therefore, the full impact consists of gains or losses of both direct and indirect sales. For example, table B shows that the direct total sales of hotels and lodging places were $144.4 billion, and the indirect sales by other industries were $114.1 billion, for a total of $258.5 billion in combined direct and indirect sales. Indirect sales in other industries represent purchases needed by hotels to run their business. For all tourism industries combined, total direct and indirect sales amounted to nearly $3.9 trillion. Table C presents the same information for tourism-related sales. Direct tourism sales of $400.7 billion resulted in total direct and indirect sales of $747.8 billion. More than 70 percent of these sales were attributable to three tourism industries: hotels and lodging places, eating and drinking places, and air transportation. Table D shows, for each dollar of direct tourism-related sales, the indirect and total sales that are generated. For hotels, each dollar of direct tourism-related sales required $0.79 of sales by (purchases from) supplying industries, resulting in total sales of $1.79.

Industry Examples

Hotels. Total sales for the third quarter of 2003 were $144.4 billion (annual rate), of which $115.5 billion were tourism-related (table A). The direct total sales required purchases of $114.1 billion from other industries, resulting in total direct and indirect sales of $258.5 billion (table B). Direct tourism sales of $115.5 billion led to purchases from other industries of $91.3 billion, resulting in a combined $206.8 billion in total direct and indirect tourism-related sales (table C). Each dollar of sales by the hotel industry required $1.79 in total sales directly and indirectly throughout the economy, including the sales by hotels (table D). The largest purchases by hotels from other industries included maintenance and repair construction work, electricity, and various financial and business services.

Air transportation. Total sales for the third quarter of 2003 were $129.8 billion (annual rate), of which $98.7 billion were tourism-related (table A). The direct total sales required purchases of $115.6 billion from other industries, resulting in total direct and indirect sales of $245.4 billion (table B). Direct tourism sales of $98.7 billion led to purchases from other industries of $87.8 billion, resulting in a combined $186.5 billion in total direct and indirect tourism-related sales (table C). Each dollar of sales by the airline industry required $1.89 in total sales directly and indirectly throughout the economy, including the sales by airlines (table D). The largest purchases by airlines from other industries included refined petroleum products, aircraft repair parts, and the services of freight forwarders and travel agents.

Notes on Procedures

With the exception of air transportation, industry sales were estimated by extrapolating BEA’s gross output estimates for 2000 using personal consumption expenditures (PCE) data from BEA’s November 25, 2003 release of preliminary estimates of GDP for the third quarter of 2003. Thru the second quarter of 2003, industry sales for air transportation were extrapolated using data on scheduled air passenger revenues for U.S. carriers provided by the Department of Transportation; third quarter estimates were extrapolated, using PCE data from BEA’s November 25, 2003 release. Following standard input?output accounting methodology, the sales figures for the two retail industries, gasoline service stations and retail excluding restaurants and gas stations, reflect only the retail margins on sales–i.e., the costs of goods sold are excluded to avoid double counting. Total indirect sales and tourism?related indirect sales were estimated using the industry?by?industry total requirements coefficients from the 1997 annual I?O accounts.

Last updated December 9, 2003