November 4, 2002

Travel and tourism generated $272 billion in gross metropolitan product (GMP) within the top 100 metros in 2000. In 2001, this figure fell to $259 billion and is expected to fall further to $245 billion in 2002. This equates to a 10.1 percent decline over this two year period.

New York, Las Vegas, Chicago, Los Angeles-Long Beach, and Atlanta head up the list in absolute terms composing $71 billion in travel and tourism GMP in 2000. Travel and tourism in New York generated $17.6 billion; in Las Vegas, $14.8 billion; in Chicago, $14.0 billion; in Los Angeles, $13.6 billion; and in Atlanta, $11.2 billion.

In terms of percentage of GMP in 2000, travel and tourism generated 27.3 percent of economic production in Las Vegas; 13.9 percent in Honolulu; 12.3 percent in Orlando; 8.8 percent in Miami; and 7.6 percent in San Francisco. These cities are the most reliant on travel and tourism activity and have also been among the most affected economies during the travel downturn of the past thirteen months.

International visitors spent $90 billion traveling in the U.S. in 2001 while U.S. residents spent $82.3 billion traveling abroad. Accordingly, the U.S. economy realized a $7.7 billion travel trade surplus last year. The overwhelming majority of this trade surplus is accounted for the U.S. metro areas. It is estimated that 90 percent, or $82 billion of international visitor receipts in the U.S. occurred in U.S. metro areas.

The combined effects of a global economic slow down and 9/11-induced travel declines were felt most acutely by U.S. metro areas. Due to international visitor travel declines only, Metro economies suffered a loss of $10.7 billion in 2001 — an 11.6 percent decline — of which it is estimated $7.5 billion is attributable to the terrorist attacks. An additional $12 billion is expected to be forfeited in 2002. After the global economic slowdown is factored out, $5.0 billion of this is attributable to last year's tragedies. The cumulative impact of international visitor declines due to 9/11 on GMP for the top 100 metro areas is $12. 5 billion through 2002.

Barring a concerted effort on the part of the public and private sectors, international visits to the United States are not expected to recover to 2000 levels until 2004. International visitor spending levels are not expected to recover until 2005.

The report estimates that if the nation had a federal international destination marketing campaign and implemented strategic travel policies, an additional $100 billion of international traveler spending could be achieved between 2003 and 2007 in the top 100 metro areas.

In terms of total impact of 9/11 on travel and tourism, the top 20 tourism metro economies have been severely affected by events of the past year. Losses attributable to 9/11 exceeded $11 billion, or 8.0 percent, in 2001 and will reach $19 billion, or 15 percent, in 2002. This does not mean that travel and tourism will decline by this amount in 2002, but that in the absence of 9/11 an additional $19 billion would have been realized.

New York, for example, loses $2..33 billion in 2002 and $1.63 billion in 2001 due to 9/11; Chicago loses $1.74 billion in 2002 and $1.19 billion in 2001; Los Angeles loses $1.51 billion in 2002 and $.94 billion in 2001; and San Francisco loses $1.4 billion in 2002 and $.89 billion in 2001.

Travel and tourism generated an average 7.1 percent of total GMP in the top 20 metro areas in 2000. For the purpose of comparison, health services are 5.5 percent of U.S. GDP, construction is 4.7 percent, banking is 3.7 percent, communications is 2.9 percent, and electronic equipment manufacturing is 1.8 percent of U.S. GDP. In fact, no other (2-digit industry) sector contributes as much to GDP as travel and tourism does to GMP for the top 20 metro areas.

The report contains the Travel and Tourism Gross Metropolitan Product of the top 100 metro areas. Travel and Tourism GMP is calculated by the economic forecasting firm of DRI-WEFA. The methodology used to calculate travel and tourism BMP includes the effects on traveler spending tourism-related sectors and their direct suppliers but excludes any "multiplier" or income effect. Thus these estimates are in conformity with gross metro product definitions and should be recognized as conservative. Spending estimates were allocated across the following nine industrial sectors: local transit, air transport, transport services, eating and drinking places, hotels, motion pictures, retail, amusement and recreation, and entertainment.

Estimates in the report assume that a major terrorist event or a war with Iraq will not occur in 2003-2007.

The complete report, "U.S. Metro Economies: Travel and Tourism Fuels the Nation's Economy" can be found on the U.S. Conference of Mayors website, usmayors.org. The study was sponsored by the U.S. Conference of Mayors, the International Association of Convention and Visitor Bureaus, and the Travel Business Roundtable.