Tourism tops trade, but some have reservations

Tourism has surpassed international trade as Los Angeles County’s top industry in a new ranking that reflects the growing effect of hotels, shops and restaurants as job creators in Southern California.

“This just goes to show that tourism is not just touring the stars’ homes and visiting Disneyland,” said economist Jack Kyser, author of the report for the Los Angeles County Economic Development Corp.

But the news also has a darker side. The new standing of tourism and hospitality as the county’s No. 1 job generator comes at the expense of trade, in part because of the decline in cargo traffic at the ports of Los Angeles and Long Beach. Trade and manufacturing generally pay higher wages than tourism.

“It’s not necessarily good news,” said Esmael Adibi, director of the A. Gary Anderson Center for Economic Research at Chapman University. “That particular industry does not give out as much in wages and salaries as other industries.”


Kyser said the ranking corrects past surveys done by the state by giving full weight to the spinoff benefits of tourism, including restaurants, retail and printing, such as travel brochures.

Using this data, tourism and hospitality were responsible for the creation of 456,000 jobs in Los Angeles County in 2007, compared with 288,000 jobs for professional and business services, and 281,000 jobs for international trade.

Kyser’s approach differs from the methodology used by the state, which still ranks trade as Los Angeles County’s top industry based on a more narrow interpretation of job classifications. Still, economists have long worried that the region’s employment base is in danger of getting too many low-paying jobs.

“A tourist-based economy is not so ideal from that standpoint,” said Ed Leamer, a UCLA professor at the Anderson School of Management. He said manufacturing jobs have long been the backbone of a stable middle-class while lower-paying hospitality jobs don’t always offer the same opportunities.


Still, tourism industry leaders point to the new ranking as proof that Los Angeles County government leaders should put more resources and energy into promoting its top job creator.

“These are difficult times and budgets are tight,” said Mark S. Liberman, chief executive of LA Inc., the Los Angeles Convention and Visitors Bureau. “But we are hopeful we will see an increase in our funding as our economy improves.”

Los Angeles County still boasts one of the nation’s most diverse economies, with tens of thousands of jobs coming from manufacturing plants, film and TV studios, aerospace firms and colleges and universities.

International trade, however, has been the top job creator for years, driven by the ports of Los Angeles and Long Beach, the busiest port complex in the country.


Tourism has long ranked second or third behind international trade, relying on such tourist hot spots as Grauman’s Chinese Theatre, Disneyland, Universal Studios and the Hollywood Walk of Fame to draw foreign and national visitors.

Los Angeles County recorded a strong year in 2007, with a record 25.9 million visitors, including 4.8 million foreign tourists. Visitor spending that year totaled $14.2 billion, also a record high. In 2008, the county drew 25.6 million visitors and $13.8 billion in spending, according to an estimate by LA Inc.

Kyser wouldn’t categorize the new ranking as good or bad news, saying the study simply provides a clearer picture of the economy in Los Angeles County. He added that tourism jobs include a wide range of pay scales, from high-paying hotel managers, for example, to part-time food service jobs.

“We just do this to educate people,” he said.


To come up with the new ranking, Kyser took state employment numbers for 2007, the most recent numbers for which such detailed data are available. He then counted a portion of various tourism-related jobs, such as car rentals, retail sales, printing and restaurants, into the category of tourism and hospitality.

For example, he counted 35% of air passenger jobs, 25% of certain retail jobs and 10% of printing and office support jobs under the tourism and hospitality category.

In 2007, tourism and hospitality generated 2.4% more jobs over the previous year, jumping into the top spot over international trade, which declined by 0.6%, Kyser said. Although the state has yet to release detailed data for all of 2008, he said estimates show tourism and hospitality hold the top spot through 2008.

Juan Millan, a labor market information consultant for the state Employment Development Department, said Kyser’s technique creates “industry clusters” that allow a closer analysis of certain industries.


Although the state uses a different method, that doesn’t necessarily mean the data are contradictory, he said.

“He’s just taking it to the next level,” Millan said.