In a positive sign for the economic recovery, tourism spending increased in the first quarter, according to the Bureau of Economic Analysis. It was up an annualized rate of 3.9% last quarter, which was a big improvement from the 1.5% decline in the final quarter of 2009.
Here's the chart from BEA:
This shows tourism spending has returned to approximately its fourth quarter 2008 level. While this is a positive move, the chart also shows that spending still has a long way to go to climb back up to its 2007 high. It would need to rise by an annualized rate of 19.2% to get there. Assuming healthy spending growth continues that will still take several more quarters.
Traveler accommodations (lodging) made up the biggest portion of the growth, rising by an annualized rate of 11.0%, after a decline of 7.9% in the last quarter of 2009. Food services spending was up 6.5%. Recreation, entertainment, and shopping expenditures were up by 3.9%.
The only category without much growth was transportation, which was essentially flat, declining by 0.1%. Within that, however, air transportation was up 4.5%. Other transportation spending fell by 2.6%.
This news all seems to all point at the same conclusion: consumers are feeling more comfortable spending on non-necessity goods and services. The shift in transportation to air from presumably cheaper forms (trains and cars) shows this most clearly. Otherwise, spending on tourism increased across-the-board.
Of course, everybody knows the first quarter was pretty good. How consumers actually feel this quarter, however, isn't so clear. We should look to see if tourism growth continues through the next several quarters to determine just how resilient consumer spending will be during the recovery.