International tourism is by far the largest services export of the US, ranking behind only capital goods and industrial supplies when all exports are counted. Spending by foreign tourists visiting American destinations such as Orlando or Anaheim is roughly double that spent by foreign airlines on Boeing’s commercial jets. Worldwide tourists spent some $3.5 trillion last year and an agency of the United Nations projects that number will grow to four times that by 2020. The industry employs some 200 million people all around the world. That same agency predicts that China will be followed by the United States, France, Spain, Hong Kong, Italy, Britain, Mexico Russia and the Czech Republic as the most popular destinations in the next century. Currently France Spain, the United States, Italy and China are numbers one through five in the order. Most tourists will be, as they are today, Germans, Japanese and Americans; Chinese will be the fourth largest group. Currently Japanese tourists contribute the most to US tourism income, at some $20 billion. SARS and the conflicts in the Middle East have had their temporary impacts on otherwise viable tourist destinations. But overall the business is still expected to grow at its traditionally brisk pace.
The dramatic growth in tourism has prompted American firms and institutions to respond by developing new travel services. For example, the Four Seasons hotel in Philadelphia offers a two day package including local concerts and museum visits. In addition to its attraction for kids, Orlando, Florida now sells is Opera Company with performances by world class singers. The cities of Phoenix, Las Vegas, and San Diego have formed a consortium and put together a $500,000 marketing budget specifically appealing to foreign visitors to stop at all three destinations in one trip. Even the smallest hotels are finding a global clientele on the Internet.
Other top consumer services exports include transportation, financial services, education, telecommunications, entertainment information and health care, in that order. Consider the following examples of each:
1) American airlines are falling all over themselves to capture greater shares of the fast expanding Latin American travel market through investments in local carriers.
2) Insurance sales are also burgeoning in Latin America, with joint ventures between local and global firms making the most progress.
3) Financial services in China are undergoing a revolution with new services being offered at an incredible pace – new sources of investor information and National Cash Register ATMs popping up very where. Poles are just getting acquainted with ATMs as well.
4) Merrill Lynch is going after the investment trust business that took off after Japan allowed brokers and banks to enter that business for he first time in 1998.
5) Almost 600,000 foreign students (63,000 from China) spend some $ 11 billion a year in tuition to attend American universities and colleges. Executive training is also a viable export for US companies.
6) Currently, phone rates in markets such as Germany, Italy, and Spain are so high that American companies cannot maintain toll free information hotlines or solicit phone order catalog sales. Other telecommunications markets are deregulating creating opportunities for foreign firms. Wireless communications are taking Japan and Europe by storm.
7) Buffy the Vampire slayer, Xena, Hercules and comparably dumped down (i.e. heavy on action, violence, and sex) video game heroes are conquering electronic screens worldwide. Even movies on Pearl Harbor are successfully being exhibited in Japan
8) Cable TV is exploding in Latin America
9) The latest Gall up poll in China indicates that 43 percent of Beijing residents are aware of the Internet.
10) Sporting events are being sold all over the world – Mexican football in Los Angeles. American football in Scotland, America baseball in Mexico, and professional soccer in China.
11) Finally, not only are foreigners coming to the United States for healthcare services in fast growing numbers, but North America firms are building hospitals abroad as well. Recently two infants one from Sweden and one from Japan, received heart transplants at Loma Linda Hospital in California — laws in both their countries prohibit such life saving operations. Beijing Toronto International Hospitals will soon open its doors for some 250 Chinese patients; the services include a 24 hour satellite link for consultations with Toronto. Asian and Mexican competitors are also now competing for this global market as well. Of course the negative side of this trend is represented by the growing illegal global trade in organs or transplant.