Interesting exchange between Sen. Dan Akaka and Fed Chairman Ben Bernanke today about how tourism — in Hawaii and elsewhere — has been a bright spot and helps balance the trade deficit.

Akaka noted record numbers for Hawaii tourism this year, and asked about how to encourage further growth. Bernanke’s response:

Well, first, Senator, tourism has been something of a bright spot.  We’ve seen improvements in tourism, not just Hawaii, but a number of places around the country.

And you mentioned the international trade deficit.  People may not appreciate that when a foreigner comes and visits Hawaii, that actually counts as a U.S. export because we’re exporting the tourism services.  And the export of tourism services has actually been growing very quickly, something like 14 percent last year, faster than other types of exports.  And so it contributes to our trade balance, as well as to overall economic activity.  So it is a positive. 

With respect to policies that address it, you know, I think there’s a lot of incentive.  We see that individual states, for example, compete with each other to try to attract visitors.  But we can consider issues like visa policies.  We can, you know, look at any tax or other implications that might affect the cost of tourism.

So, it’s an area where I think there’s a lot of benefit, a lot of scope for economic benefit to Hawaii and the rest of the country. And it has so far been, as I said, a bright spot among the various service industries that we have.

The discussion occurred at at a hearing of the Senate Committee on Banking, Housing, and Urban Affairs on the Fed’s Semiannual Report to Congress, and was shared with the media by Akaka’s office.

— Michael Levine

(Photo by Flickr user Medill DC)