Why Inbound Travel Benefits the Economy

Attracting international visitors and making it easy to travel to the United States are good for businesses and consumers. Whenever the United States government passes new legislation to make travel to the country easier, or attract more foreign travelers, there’s a net benefit for everyone living here. But why, exactly, is this the case? How does inbound travel benefit the economy?

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The State of Tourism in the United States

Let’s start by looking at just how significant the travel and tourism in the U.S. truly is. The U.S. travel industry is estimated to generate more than $2.5 trillion in total economic output, thereby generating a $70 billion trade surplus, which can help reduce the national debt. It also supports 15.7 million jobs, including those in restaurants and hotels. Second only to transportation equipment, travel is the U.S.’s second-largest industry export, and accounts for roughly 10 percent of all U.S. exports.

So let’s dig into how this works.

Products and Exports

Products purchased as a result of travel and tourism are technically considered an export. For example, let’s say someone from Germany comes to visit a friend in the United States. In their course of travel, they buy $300 of food and $100 of souvenirs. Because this person has brought money from Germany into the U.S. to pay for U.S. goods, it’s a kind of international trade on a micro-scale. With millions of visitors spending hundreds or thousands of dollars, it’s easy to see why this is beneficial; these are dollars coming from citizens of other countries to ultimately stay in our economy.

Job Growth and Support

Tourism and travel are also exceptional at creating jobs, and as you’re likely aware, jobs and the economy are tightly interlinked. When there are more new jobs created, there tend to be more people working, they make more money, and they spend more money because they’re confident in their financial position. When job growth slows and people become unemployed, it decreases spending, leading to further recession.

The travel industry has a positive influence on job growth. When people travel to the U.S., they need a place to stay. They need a way to travel. They need to eat food. They need translators, tour guides, and people to maintain tourist attractions like parks. Ultimately, these demands warrant the creation of millions of jobs across the country.

National Debt Reduction

In sufficient volumes, travel and tourism tend to produce a trade surplus—which is rare and valuable for the U.S. economy. The billions of dollars of excess generated by travelers from different countries of the world can be put toward the national debt. This puts us in a much better position on an international level and keeps our debt in check.

Cultural Cross-Pollination

It’s also worth noting that attracting lots of visitors and tourists from different countries encourages a kind of cultural cross-pollination; people from other cultures can share their language, their perspectives, and their habits with us, and we can share it with them. On a small scale, this can range from entertaining to personally enlightening, but in an exchange of millions of people, it can lead to something much more significant. The free exchange of ideas between countries is a good thing for both countries, ultimately allowing both to achieve more.

Attracting More People to the United States

As you can see, the United States (and other countries) are incentivized to attract as many people as possible through travel and tourism; it has an enormous and positive impact on the economy, on both an international and local scale. So what steps can we take to encourage more travel and tourism?

  • Travel friendliness at the legislative level. Though beyond most of our control, we can start by making it increasingly easier for people to travel here. We can soften travel restrictions, improve international relations, and give more flexibility for how long people can stay here.
  • Travel friendliness at the business level. We can also make it easier for people to travel on a more personal and immediate level. Offering services and assistance in multiple languages is an example of an easy step that can make international travel less intimidating to people in other countries.
  • Industry and attraction creation. There’s a recursive effect to consider; better attractions invite more travelers, and the presence of more travelers encourages more attraction creation. Any link in this chain that encourages new businesses or new attractions is a net positive.
  • International advertising. Businesses and the federal government can also spend more time and money advertising in other countries to invite more people here.

Ultimately, tourism remains a foundational economic contributor in the United States (and many other countries). The more we do to attract international travelers, and make it easy for them to come here, the better.



About the Author

Brendan Byrne
While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. To contact Brendan or give him an exclusive, please contact him at theflask@gmail.com