Foreign Tourists to U.S. Up in Numbers, Spending
America’s cars and television sets may not hold much allure for consumers abroad, but vacationing on its beaches and ski slopes increasingly does. Foreign travelers are flocking to the United States in record numbers, pushing the country toward a new milestone in its economic restructuring--for the first time, spending by foreign visitors is expected to outstrip American travelers’ spending abroad.
In the first nine months of last year, foreign travelers spent a little more than $33 billion in the United States, according to the U.S. Travel and Tourism Administration. That was $768 million less than what American travelers parted with abroad. But the gap has been narrowing rapidly and many analysts believe that in 1990, the United States will start taking in more from travel than it pays out.
Viewed as an export industry, tourism now ranks among the nation’s most important. Having roughly doubled in dollar terms since 1984, it is bringing in more than foreign sales of aircraft, computers or farm products.
“There is no question that tourism has become a significant industry,” said Burton Pines, senior vice president at The Heritage Foundation. Many economists view the trend as an unmitigated good for the U.S. economy. It is reducing the nation’s enormous current account deficit and creating jobs, they argue, with comparatively little investment from the U.S. side.
Others, however, while welcoming the money, see it as one more sign that the United States is slowly taking on second-class economic status in the world and is less able to compete in such key areas as high-technology manufacturing.
The Third World has long been playing host to rich foreigners as a way to spur economic development. Many countries build fancy hotels, airports and restaurants to attract foreigners whose money will both create service jobs in the short term and, in theory at least, assemble capital for longer-term development such as factories and other service companies.
For many years after World War II, international tourists in whatever country tended to be Americans, as not many other countries’ citizens had the affluence to make foreign travel a mass industry. While Americans continue to go abroad in rising numbers, they increasingly share the world’s airports with people from the newly affluent countries of East Asia and Western Europe. Many of these newcomers are choosing the United States as their destination--34 million tourists and business travelers in 1988.
“We’re a very varied country,” noted Albert Alexander of the International Trade Administration, “in terms of being able to offer urban attractions--theater and museums--as well as things like dude ranches and beaches, things out in the country.”
U.S. television and films have also built interest. The strength that many major foreign currencies have gained since 1985 against the dollar has helped make the United States a better buy as viewed from abroad. U.S. hotel rooms, airline tickets and souvenirs are all cheaper for people holding these currencies.
West German visitors, for instance, find that a fancy dinner in New York costs about half what it did five years ago. Aggressive state tourism offices have also helped tilt the scales. A decade ago, states spent about $89 million per year promoting tourism, according to Tom Berrigan of the Travel Industry Assn. of America. This year, the figure is $280 million.
U.S. airlines and hotel chains also have become more aggressive in making deals abroad that bring in foreigners, who tend to be bigger spenders than Americans. In numbers of visitors here, Canada and Mexico lead the way. But measured by spending, the Japanese are in the lead, unloading more than $4.5 billion last year. The Japanese government is encouraging its people to travel abroad as a means of offsetting its huge trade surpluses, and about 10 million are doing so each year.
Hawaii, whose fabled blue skies are only half as far away as the continental United States, in particular has become a bustling playground for Japanese vacationers. In a recent year, 1.2 million Japanese visited the islands, each spending an average of $586 a day, according to the Hawaii Visitors Bureau.
Wherever in the world tourism by foreigners grows, it engenders nationalistic grumbling that it is low-quality development, a creator mainly of unskilled, minimum-wage jobs. It employs plenty of chambermaids and bellhops, critics argue, paid at levels that will never allow them to use the facilities that they staff. For Americans, this issue has become a new chapter of the debate over whether they are becoming “a nation of hamburger flippers.”
Tourism’s proponents argue that it provides much more than minimum-wage jobs. Vacation resorts also employ construction workers and managers, accountants and consultants, they say. Tourists use the local banks and telephone systems. They take taxis. And they shop, often heavily. Their spending adds a bit to most every sector of the local economy, spreading benefits to a large portion of the population.
All this comes with comparatively small effort. For the most part, the sights, hotel rooms and airline seats are there waiting. “It requires very little new capital investment,” Berrigan said. “It requires mostly at this point promotion.” He argued that the U.S. government should be spending more to get foreigners to come. “Singapore,” he said, “spends more than us (on luring tourists).”
John Zysman, co-director of the Berkeley Roundtable on the International Economy, welcomed the rising income from tourism but argued that a prime cause for it--the lower dollar--was itself caused by lowered U.S. competitiveness in world manufacturing. What the United States needs to maintain its level of affluence, he argued, is better performance in high-technology fields. He added:
“The economy is not going to be helped quite so much by accumulating skills in hotel management. Every time anybody sees the trade deficit improve, they start to conclude that everything’s fine.
” . . . If we think this is part of a solution, as opposed to short-term palliative, a Band-Aid, then we’re misled.”
