While the latest figures show the overall U.S. trade deficit at almost $50 billion in the month of June, at least one sector, tourism, is increasing its trade surplus.
For June 2010, tourism receipts totaled $11.08 billion, up 2 percent from May and 15 percent from June in 2009. In the first half of 2010, tourism exports, i.e. money foreign tourists spend traveling in the U.S., totaled $64.6 billion, a 7 percent increase first half of 2009.
Tourism exports (or foreign travellers coming to the U.S. and spending money here) bottomed in June 2009 with receipts of about $9.6 billion and has steadily recovered since then. June 2010’s figure of $11.08 billion is approaching the pre-recession high of $12,591.
Tourism imports (or what American spend traveling to foreign countries) has recovered more modestly. Therefore, U.S. tourism trade surplus has increased by 29 percent in the first half of 2010 from the first half of 2009.
Even before the Great Recession, tourism has consistently been a trade surplus for the U.S. in the past two decades. Indeed, there were only 7 months of tourism trade deficits since January 1992. One factor responsible for this surplus is that compared to other countries, Americans travel more domestically, said David Goodger, senior economist at Tourism Economics.
This surplus is obviously beneficial to the U.S. economy, said Goodger. Currently, the U.S. government is looking to derive more benefits from it. In March 2010, President Obama signed into law the Travel Promotion Act, which is aimed at promoting U.S. tourism to foreigners. The bill will also collect more fees from certain foreign tourists entering the U.S.
While global tourism has grown in the past decade, tourism to the U.S. has stagnated comparatively, said Goodger. Now, the U.S. is trying to catch up.
Perceptions on the ease of entry, especially after 9/11, and some of the unpopular U.S. foreign policies are two factors responsible for the relatively poor performance in the last ten years, said Goodger.
Correlation with U.S. dollar weakness
U.S. tourism trade surplus is correlated with the weakness of the U.S. dollar versus a basket of foreign currencies. The chart above shows this relationship.
This correlation holds up pretty well except in October 2001, in the aftermath of the 9/11 terrorist attacks; and in April 2003, after the initial U.S. invasion of Iraq. In these two distressed times, tourism to the U.S. plunged and U.S. tourism showed trade deficits.