TRAVEL AND TOURISM:
AN OVERLOOKED INDUSTRY IN THE U.S. AND TENTH DISTRICT

Prior to the onset of a recession in early 2001 and the terrorist attacks that occurred later that year, travel and tourism’s role in both the national economy and the economy of the Tenth Federal Reserve District had been rising steadily for decades, yet there is little comprehensive analysis of how the industry performs over time and across areas.

Chad Wilkerson, policy economist at the Federal Reserve Bank of Kansas City, explores the economic importance of travel and tourism in “Travel and Tourism: An Overlooked Industry in the U.S. and Tenth District.” The article is featured in the third quarter edition of the Economic Review.

Among other findings, Wilkerson notes that the travel industry has become at least as important to the economy as several sectors that often receive greater focus from policymakers and researchers. In the late 1990s, travel and tourism contributed more to gross output in the Tenth District than either agriculture or oil and gas extraction – the region’s defining industries for the 20th century. He also notes that the travel and tourism industry in the Tenth District was able to largely withstand the last two recessions due to less reliance on business and international travelers in the district.

The author writes that with travel and tourism likely becoming even more significant to the U.S. economy, due to its tendency to grow rapidly during expansions and hold up during recessions, analysts need more and better data about the industry. He also finds that state and local officials need to be realistic about the potential of the industry in their area.

            The article is available on the Bank’s Web site at www.kansascityfed.org.

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