Just a month after taking office, Bill de Blasio will become our first mayor to host the world’s premier sporting event: the Super Bowl. The event is expected to inject $550 million into the local economy and draw more than 100,000 visitors to the region. It will also serve as a clear reminder to the new administration that travel and tourism is a cornerstone of our city’s economy.
Last year, New York City drew a record 53 million visitors. According to NYC & Company, those visitors spent $37 billion, supporting thousands of hotels, restaurants, retail stores, museums, theaters and other businesses.
This is not just a Midtown Manhattan story; travel boosts the entire city, spurring hotel openings in all four outer boroughs as well.
The benefits of traveler spending ripples through our economy, extending to all New Yorkers, not just the 363,000 employed in travel and tourism-related jobs. In 2012, visitor spending generated $9.3 billion in total tax revenue.
De Blasio has made creating middle-class jobs a key priority. Promoting travel and tourism is a great place to start, because jobs in this industry serve as the gateway to the middle class for millions. According to a report by the U.S. Travel Association, the travel industry is one of the top 10 employers of middle-class wage earners in the U.S. — more than finance, insurance and real estate. And two out of five workers who started in travel eventually earn more than $100,000 annually.
So what’s holding New York back from drawing even more visitors and creating more middle-class jobs? The single biggest obstacle: the region’s infrastructure cannot handle the visitors we have today, much less the ones we expect in the future.
Exhibits A, B and C are our region’s three major airports, which rank first, second and third in the nation for worst delays. If that’s true now, how are we going to deal with an estimated 50% jump in airline traffic over the next 15 years? If these delays continue or worsen, they could cost our regional economy a cumulative $79 billion by 2025, according to the Partnership for New York City.
It gets grimmer when you consider how New York compares to our international competitors in seamlessly transporting visitors from gateway airports to downtown destinations. At Hong Kong International Airport, you can travel the 20 miles to downtown in just 20 minutes by rail.
Does anyone seriously believe New York City offers a comparable experience traveling from JFK, LaGuardia or Newark to Midtown?
The new mayor needs to be innovative in advocating for our infrastructure needs, because Washington won’t be stepping forward anytime soon. Sen. Jay Rockefeller, Chairman of the Commerce, Science and Transportation Committee, recently acknowledged that Congress is “stuck in an ad hoc, short-term” mode when it comes to infrastructure and suggested “look[ing] beyond just the federal ledger.”
Okay, let’s. What are some potential ways for de Blasio to build a firm foundation for next-generation tourism jobs?
First, tap into private capital. One 2011 study estimated $250 billion in private capital is available for infrastructure investments, including funds from leading investment banks, private equity firms and union pensions. Through public-private partnerships, these funds could be leveraged to $625 billion.
Second, push for faster deployment of the FAA’s NextGen navigation system to replace our current World-War-II-era technology. Through GPS technology, NextGen is reducing delays and boosting capacity at some airports across America, including Memphis, where capacity increased by 17%.
Flight delays at New York-area airports impact the entire system, causing nearly three-quarters of all holdups nationwide, so fast-tracking NextGen in New York will also deliver national benefits.
Third, develop a long-term infrastructure strategy that prioritizes expanding travel and tourism as a major driver of growth, jobs and tax revenues.
Attracting international visitors is especially important, because they comprise approximately just 20% of our visitors but account for half of traveler spending. By 2030, Ernst & Young predicts the global middle class will expand by another three billion people. That could easily translate into millions of additional visitors every year and thousands of additional jobs.
The travel and tourism industry can play a leading role in fulfilling the new mayor’s promise to increase middle-class jobs. But the Big Apple needs to lay the groundwork for that growth.
Tisch is chairman of Loews Hotels & Resorts and co-chairman of the NY/NJ Super Bowl Host Committee.
