U.S. Tourism Industry Grew in Q3 Despite Plunge in Airfares

The U.S. tourism industry grew 1.1 percent in the third quarter as sales of food, recreation and entertainment spending outweighed a 17.6-percent plunge in airfares, the government said on Monday.

The Commerce Department's (search) Bureau of Economic Analysis (search) said third-quarter tourism sales rose to $973.3 billion from $970.7 billion in the prior quarter.

The travel industry, which has recorded eight straight quarters of growth, has handily exceeded the significant pullback it felt in consumer travel spending after the Sept. 11, 2001, attacks (search) in the United States.

Hotel accommodations, airfares and souvenirs, or direct tourism sales, accounted for $550.9 billion of the total. Indirect tourism-related sales that include toiletries for hotel guests, airline meals and the materials used to make souvenirs provided $422.4 billion of the total.

Food and drink sales rose 7.4 percent in the third quarter to $101.1 billion while recreation and entertainment spending jumped 7.8 percent to $73.7 billion. Retailers also posted a bright quarter with sales surging 6 percent to $86.5 billion.

Passenger air transportation, which grew 16.6 percent in the second quarter, dropped 17.6 percent to $92 billion, led by a decline in airfares and a drop in passenger volume. The decline was the largest since it posted a 48.4 percent drop in the fourth quarter of 2001.

Employment in the tourism industry grew 0.5 percent to 5.4 million in the second quarter of 2004. Direct tourism-related employment grew by 7,300 with most of the increase found in the food services and drinking industry.

The Commerce report is available on the BEA's Web site at http://www.bea.gov