Commerce secretary Carlos Gutierrez's March 26 report oninternational tourism states 2007 was an all-time record forinternational tourism, with more than 56 million foreign visitors,an increase of 14% more than '06 estimates. Foreign travelerspumped $122 billion into the US economy on business and pleasurevisits.

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Michael Fishbin, national director of hospitality and leisureservices for Ernst & Young in New York City, tells GlobeSt.comthat from a "market perspective we're seeing foreign travelersfavoring urban, gateway (cities ) and prominent resortmarkets…(and) business travelers are combining business withpleasure by front-ending or back-ending their trips, adding days,and bringing their families along.''

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The collapse in the dollar is also forcing the US traveler tostick to home, but not cancelling vacations, despite worsening USeconomic news and consumer economic fears rising as reflected inconsumer confidence reports. "I'm a big believer indemographics…and psycho-graphics. The shear number of (theAmerican) population, aging travelers with money and families withdual incomes'' means they may not go overseas but will vacation inthe states, Fishbin says. "There's a preference for experiences andcultural activity and learning (about cities) that's not going togo away. There's a passion around our society for those experiencesand while we may see some down-trading (to less expensiveproperties by US travelers) the demographics supporting thisindustry is just huge," he says.

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"The drop in the dollar is working the other way, making travellike Europe prohibitive'' for many US consumers, Fishbin says.Hotels are not the only ones benefiting from the surge. "Again, thefavorable exchange rates (are beneficial) not just from the retailand lodging perspective. It's like the US is on sale, so to speak."That's also reflective in the dramatic increase of foreigninvestment in the hospitality sector, Fishbin tells GlobeSt.com."We started to see more interest in the US from internationalinvestment funds, sovereign wealth funds and private equityfunds,'' Fishbin says.

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While the underlying hospitality fundamentals remain relativelystrong for potential recessionary times, the value of the hotelsector from a real estate perspective is dropping or growing slowerthan in previous years, though certainly not on the scale of theresidential market collapse or the spreading of valuation declinesto some commercial real estate sectors. Most major hoteliers areturning away from owning their asset, instead franchising ormanaging the property, curtailing their risk exposure in realestate values. Foreign investors are betting against that trend"These (foreign investors) see some opportunities over the nearterm and they don't think (the market) is in major distress,"Fishbin says. "And they have different investment criteria (than USinvestors/lenders). They take a much longer term view'' at owningthe properties. But in some situations there are disconnectsbetween buyers and sellers on values, he says.

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With the housing crash, credit crunch and rising costs in foodand energy, hospitality remains a sector the US Commerce Departmentinsists is one of the ongoing positive economic engines stillpumping on most cylinders. "The standards are still good but(growing) slower than we haven't seen'' for several cycles, Fishbinagrees. But are we in a recession, headed there, and won't thatchange travel fundamentals? "God Knows. I don't,'' Fishbin tellsGlobeSt.com

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Gutierrez's release points out that US travel and tourism is a$1.2 trillion industry that translates into a trade surplus of$17.8 billion for 2007, or a 144% increase over 2006. It's the 19thconsecutive year travel and tourism has been counted as a balanceof trade surplus. The industry employs 8.5 million "which is morethan other major industries such as construction, the business andfinancial service industries, agricultural and education,''according to the written statement.

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The Office of Travel and Tourism Industries (OTTI) compiled thestatistics released March 26 for the US Travel and TourismStatistical System, which are used in the federal report. The bulkof foreign visitors came from Canada and Mexico, while overseastravelers totaled 23.9 million, a 10% increase more than 2006 butstill 8% below the record levels of foreign visitors in 2000 beforetravel crumbled in the wake of Sept. 11, 2001.

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Travelers by nation coming to the US , according to the commercedepartment, were: Canada, 17.7 million; Mexico, 15 million; UnitedKingdom, five million; Japan, 3.5 million; Germany, 1.5 million;France, 997,000; South Korea, 806,000; Australia, 670,000, andItaly, 634,000. In mid-afternoon trading March 28, the US dollarwas worth 63 cents against the Euro, $1.01 against the Canadiandollar and 50 cents to the British pound.

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