Home Economy NY state travel and tourism sector rides economic wave

NY state travel and tourism sector rides economic wave

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Travel and tourism jobs in New York typically rise and fall with the seasons, but the sector volatility conceals a larger pattern.

Spending on travel and tourism reached a new high in 2016, at $65 billion. Employment and wages have grown two to three times faster than the overall state economy in recent years, and now the sector ranks in the top five statewide. Some of the explanations are obvious.

New York City continues to be a popular destination. The city accounted for more than half of the sector’s 414,100 jobs in 2015, according to a 2017 state Department of Labor report, and more than two-thirds of the wages.

 hospitality tourismInternational travel is significant. More overseas travelers visited New York than any other state in 2016, including a growing cadre of middle-class Chinese.

Less obvious are the economic, demographic and psychological components that bolster the industry.

The sector is “income-elastic,” explained Department of Labor market analyst Kevin Jack. That means that when the economy grows, travel and tourism grow even faster. The underlying idea is that consumers have more discretionary income during an expansion, so they tend to increase spending on services. Nearly nine years of economic expansion has lifted tourism higher than the rest of the economy.

An aging population is the demographic component. As people accumulate wealth, they want to spend it. Some will save their money for the next generation, Jack said, but some “want to have fun.”

The fun factor is directly linked to the demographic and psychological components. Older people are shifting their interests from accumulating goods to accumulating experiences. They want to check off their bucket lists, visiting the seven wonders of the world or, in the case of Jack’s parents, visit every U.S. capital.

They see experience as something tangible. Instead of showing off a new car, they share Facebook images of themselves in front of the Taj Mahal.

Travel and tourism also rely heavily on workers. Manufacturers, for instance, are replacing workers with mechanization. But service industries are built on offering personal attention. “People staying at a 4-star hotel expect to be taken care of by people,” Jack said, “not robots.”

All these factors bode well for New York. International visitors and domestic travelers can get here easily to enjoy the allures of New York City or the idylls of the Hudson Valley.

Hotels are at the center of leisure and entertainment, according to a Department of Labor report in August.

From 2006 to 2016, the job count in New York hotels grew by 15,000 — more than 20 percent — to 88,000. Wages grew by almost $1.6 billion, or 63 percent, to $4.1 billion.

Travelers spent more than $19.3 billion on lodging in the state in in 2016. A total of 100 hotels were built. For every $100 that hotel guests spent on lodging, they spent another $221 at their destination.

While the Big Apple gets a disproportionate slice of the revenues, the Hudson Valley gets a fair piece of the pie. The seven-county region supported 36,400 travel and tourism jobs in 2015, with an average annual wage of $31,200. Besides the big city, only Long Island did better.

In the broader leisure and hospitality sector, the Hudson Valley supported an estimated 88,600 jobs in 2016, according to state labor data. That was an increase of 15,700 jobs, or 22 percent, since 2007. The lower Hudson Valley — Orange, Rockland and Westchester counties — saw job growth of 13,400 positions, or 27 percent, over the same period.

Visitors to Westchester generated $1.8 billion in 2016, according to the county, including $221.8 million in tax revenues.

Proximity to New York City is a plus, Jack said. The region also has a lot of corporate travel. Woodbury Commons outlet mall in Orange County attracts busloads of international travelers on the hunt for bargains.

West Point, Culinary Institute of America, Dia: Beacon and a slew of historic mansions have year-round attendance, said Johny Nelson, the state’s labor market analyst for the Hudson Valley. He said the Resorts World Catskills Casino is expected to employ about 1,400 people when it opens in February.

Travel and tourism, however, have a notable downside. In a recession, income-elastic industries decline more sharply than the overall economy, as consumers shift from discretionary services to necessities.

Until then, New York travel and tourism are riding an economic wave.

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