TECHNICAL BRIEFING: Further explanation of the United States Travel
Association Economic Impact Model
James Orr, New Mexico Tourism Department Research Coordinator
December 2012
The Tourism Department often gets questions regarding the $5.436 billion (2009) New Mexico Travel
spending figure from the United States Travel Association (USTA) that is referenced in some of our
public documents. How is that number determined? How does it compare with other estimates?
In this document we provide more information about how the USTA arrives at these numbers.
First, we have attached the explanation of USTA’s methodology that is posted on their website in the file
(USTA_Economic_Impact_Model_Explanation 9-2010).1 This document provides an overview of the
methodology USTA uses to arrive at their numbers.
In addition, we have received queries that compare USTA numbers to other data sources. For example,
U.S. Commerce Department data for accommodation, and arts, entertainment and recreation
employment and spending in New Mexico collectively has much lower numbers than USTA. Why is
that? The following is an edited excerpt of USTA’s response:
From Tien X. Tian, Vice President & Chief Economist, U.S. Travel Association:
1100 New York Avenue NW, Suite 450|Washington, D.C. 20005
Phone: 202.408.2178| Fax: 202.408.1255
Our spending estimates include travel spending on all related categories including not only lodging and
entertainment but also transportation, food and beverage, and retail shopping. Accordingly,
employment generated by spending in these related industries is included in our estimates. Although
only some part of employment in these industries is attributable to travel employment, the total could
be much larger than the two industries mentioned (lodging and recreation). Therefore, comparisons to
U.S. Commerce data may not be proper.
Secondly, I am not sure what spending by industry data was used in the comparison. As I know, 2008
and 2009 industry sales or output data at the state level are not available so far. State GDP by industries
data may have been used. If that is the case, state GDP by industry cannot be used to directly compare
with spending or sales due to the different concepts. State GDP by industry is measured in value added,
which is the sum of compensation of employees, taxes on production and imports less subsidies, and
gross operating surplus (or total gross output of an industry less its intermediate inputs). Travel
spending occurs when travelers purchase products and services related to any travel related activities
during their trips. It is the total sales for the related industries providing these products and services.
While the value added (the way to measure the GDP by industries) is only a part of total sales or output
of the industry. For example (using national data), total sales of U.S. lodging industry was $194.2 billion
(US total) and the value added of this industry was $108.7 billion (2009 BEA data). The value added
1
This document can be found under the Research section at NMIndustrypartners.org
accounted for about 56% of total sales of lodging industry. Therefore, it is not proper to compare travel
spending (sales) with the GDP (value added).
It is also important to recognize that the tax receipts cited by USTA include Federal, State and Local
taxes. The following is their breakdown of tax sources for 2009:
2009
New Mexico
U.S. and International Travel-Generated Tax Receipts
Federal
($ Million)
State
($ Million)
Local
($ Million)
Total
($ Million)
300.2
381.9
87.6
769.8
We also thought it would be helpful to include a question Sharon Shultz, CEO of TANM (Tourism
Association of New Mexico) asked USTA about tourism related restaurant employment numbers. A
summary of her question follows:
Can you tell me how USTA came up with the tourism job numbers for NM? The NM Restaurant
Association quotes from their national org that there are 82,000 jobs in NM and I think USTA shows
55,000 total tourism jobs in NM.
Response by Tien X. Tian, Vice President & Chief Economist, U.S. Travel Association:
1100 New York Avenue NW, Suite 450|Washington, D.C. 20005
Phone: 202.408.2178| Fax: 202.408.1255
First of all, the employment estimated by USTA includes those jobs generated by travel spending only,
while the employment reported by restaurant associations includes all employment in this industry
supported by local residents and travelers’ consumptions. Travel generated employment usually
accounts for 20-35% of total employment in food services industry. Travel shares can be different
among different industries and different areas.
Secondly, the USTA’s estimates of 55,900 jobs are those jobs directly generated by travel for NM travel
related industries such as transportation, lodging, foodservices, amusement/recreation and retails. But I
am not sure if the 82,000 jobs reported by NM restaurant association include direct and indirect jobs, or
it includes any other industry employment. According to the BLS, NM direct employment in food
services and drinking places industry (NAICS 722) industry was 62,000 in 2010.
We hope that this document helps clarify USTA’s methodology for determining the value of Tourism to
New Mexico’s economy.