Analytics

OVERVIEW

Oxford Economics, in coordination with its Tourism Economics subsidiary company, conducted a detailed analysis of the return on investment of Brand USA’s marketing in its 2016 fiscal year (October 1, 2015-September 30, 2016). Ad tracking surveys in 16 markets, a market share analysis, and Brand USA key performance indicators of market activity informed the analysis to quantify the incremental visits and spending generated by Brand USA.

Section 1: The vital role of destination promotion

Destination marketing plays an integral and indispensable role in the competitiveness of the local and national visitor economy, and acts as a catalyst for economic development. Brand USA serves a valuable function by promoting the US collectively with the scale necessary to gain share of voice in an increasingly competitive global marketplace.

Section 2: US international inbound market performance

Last year marked the slowest growth for the global economy since the great recession. World GDP expanded a modest 2.3% with the slowdown evident in both developed and emerging markets.

The effects of the stagnant economy were compounded by the continued (and increasing) strength of the US dollar in 2016.

Against these headwinds, overseas air arrivals increased an estimated 1.7% in 2016 according to available I-94 data through August and APIS statistics for the remainder of the year. Canadian visits to the US fell 6.8% due to the combined effects of economic and local currency weakness.

Despite a recent slowdown, the US share of long haul travel from key overseas markets has increased steadily over the past four years, reaching 19.3% in 2016—up from 17.6% in 2012.

Section 3: Brand USA ROI

Across all markets, each dollar of Brand USA marketing generated $30.70 of visitor spending. Including all operating overhead, Brand USA achieved an ROI of $27.70 and generated $4.1 billion in visitor spending.

Brand USA marketing generated tallied 1.1 million visits to the US in FY2016. This was 1.6% of all visitors to the US in FY2016.

The returns on Brand USA marketing were most pronounced in the Asia Pacific and Latin American regions with a combined ROI of 60:1. Returns were more subdued from North America (where market penetration is high and spending per visitor is relatively low) and the mature (and slower growing) European markets. These mature markets demonstrated a returns of $16-to-1 and $21-to-1, respectively.

Section 4: Brand USA economic impact

Brand USA generated $4.1 billion in incremental visitor spending to the US in FY2016. Including indirect and induced impacts, a total of $8.9 billion in economic activity was generated by Brand USA.

Economic activity generated by Brand USA sustained 59,463 jobs earning $2.6 billion in personal income.

At $615 million, Brand USA generated more than four times its budget in incremental Federal taxes and another $552 million in state and local taxes.

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