The majority of institutions recognize the benefits that workers derive from having time off from work. The organizations realize that the time they provide for their employee to be out of work promote strong workplace morale, higher, productivity, improve workers health and lead to higher employee retention. Along with other national and international holidays, employees’ holidays tends to support tourism, thereby promoting export, job creation and lead to economic prosperity (Allen, 2017). A single holiday offers a significant opportunity for a nation to develop its economy, culture, and environment. Allen (2017) holds that holidays create approximately $160 billion in business sales, $21 billion in tax revenue and 1.2 million jobs from various sector ranging from manufacturing to transportation to retail in the U.S. Thus, a small increase in the number days spend in holiday would earn the united states billions of dollars. The paper discusses the impact of a holiday on the economy. The paper will focus on the effects of the holiday season on increased retail shopping, increased employment, investment, as well as increased economic growth at large.
Shopping experience
Holiday season contributes to increased shopping experience and growth of local and national economies. During major holidays such as the Black Friday, Cyber Monday, and Small Business Saturday have contributed to increasing retail purchases. The shopping experiences provide by business as part of business Saturdays, and the online offer available on Cyber Monday have offered numerous opportunities for the customer to spend their hard-earned money on shopping for families and friends. A monthly survey carried out by the U.S. Census Bureau in 2016 estimate the impact of increased shopping (Hait, 2017). According to the study, 8.5% of the approximately $5.5 trillion worth of food and retail services sales generated in 2016 occurred during the holiday in November, and 9.8% occurred in December.
The holiday months of November and December are also crucial for specific industries. The hobby, toy and games stores in the U.S made approximately $18.8 billion in sales in 2016 (Hait, 2017). Out of the $18.8 billion, 12.3% were generated in of November, and 18.9% were made in December. The departmental stored made $56.4 billion in sales in 2016. Out of these, 15.7% were generated in November while 19.8% in December. The holiday season is particularly important for retail stores because it can mean a firm stay in business or leaves business (Hait, 2017). The U.S Census Bureau indicate that online sales pay an essential role in the overall increase in shopping during the holiday. The report by the Bureau shows that in the fourth quarter of 2016, online shopping contributed 9.4% or $122.5 billion of the $1.3 trillion in total retail sales (see Figure 2). The increase was 32.2 % of the online retail shopping made in the third quarter of 2016. According to Deloitte, the total sales during November and December is estimated to increase by more than 5% from $1.05 trillion recorded in 2017 to more than $1.1 trillion. Most of these sales would take place in physical stores and online stores (Hait, 2017). The cyber sales will rise by $134 billion during the holiday of 2018 alone. The effect of the holiday season is shown in Figure 1 below.
Figure 1: Sales revenues of toy, hobby and games stores during holiday seasons
Source: North American Industry Classification System (NAICS 45112). https://www.census.gov/newsroom/blogs/random-samplings/2017/11/holiday-shopping.html
Figure 2: Online Traffic and Revenue by a device, November 2017.
Source.: Bureau of Economic and Business Research https://www.bebr.ufl.edu/survey/website-article/economic-impact-2017-holiday-shopping-season.
A survey carried out by Forbes indicates that people are willing to increase their holiday spending by more than 6% in 2018 holiday season than in 2017 (Barr, 2018). Consumers noted they were ready to shop both online and in stores. The responded indicate that they were willing to visit stores to try on clothing and find more details about goods and services. One group of customer especially young generation of age 13 to 16 years love brick-and-mortar shopping. The young generation surveyed showed that they would shop in the stores during the holiday (Travel Facts and Figures, 2018).
Hiring and Jobs
Holiday seasons also lead to an increase in seasonal employment. The holiday retails depend on the employee’s new workers to support the increase in demand during these seasons. The impact of the holiday season could be seen on Amazon retail during 2017. Amazon indicates that it employed 120,000 workers in the United States during this holiday season (Travel Facts and Figures, 2018). The retail giant increases the number of workers to cater for the increased picking, packaging, and shipping of orders. The U.S. economy is currently growing strong, and unemployment is low. The retail firms are expected to employ more than 700,000 workers during the December holiday of 2018 (Berr, 2018). The intense demand for workers during this high worker demand holiday is driving other firms to increase wages and parks to the level of full-time employees. A retail giant Target indicated that it would hire 120,000 workers for the holiday season of November and December. The new hires would represent a 20% increase from 2017 (Berr, 2018). Kohl's has also indicated that it will hire 90,000 employees while Macy’s will add additional 80,000 seasonal workers in November and December holiday alone. The JCPenney will add 18,000 while Michael's will hire 15,000 seasonal employees. The travel and tourism activities during the holiday season will also boost employment. The tourism and travels account for 5 million permanent jobs. The sector is likely to recruit an additional 397, 000 new employees in 2018 (Travel Facts and Figures, 2018). Figure 2 shows the direct contribution of travels and tourism in employment 2018.
Figure 3: Travel Facts and Figures 2018 (Source: U.S travels).
Retrieved from https://www.ustravel.org/research/travel-facts-and-figures
The rise in the number of employees during the holiday season would influence economic growth. Many Americans would previous were unemployed would income to spend on investment opportunity and consumption. The increase consumptions would increase spending, production and hence increased GDP growth. The living condition of most American will also improve because many will afford to purchase goods and services of their choices. The access to education, health, and other social amenities will improve (Allen, 2017). Further employment increases distribution of income, thereby minimizing inequality in the society.
Visitors Export and Investment
The holiday season results to an increased influx of many visitors to the U.S. Most of these visitors to contribute to increasing shopping particularly those from Asian countries. They may also invest regarding increase foreign currency inflows. Visitors may also take advantage of investment opportunity in the U.S such investment in a viable business. The overall effect of the inflow of visitors is the increased spending and thus improved GDP (Evelyne, 2018; Travel Facts and Figures, 2018)). In 2017, the direct value of export tourism and travel is USD 200.7bn. In 2018 visitors a total of 77, 580,000 will be expected within the country. Figure 4 shows the trend in the number of visitors’ exports and international tourism travels in the U.S.
Figure 3: Travel Facts and Figures 2018 (Source: U.S travels).
Retrieved from https://www.ustravel.org/research/travel-facts-and-figures
The holiday season also induced the government to invest. The government spend on various social amenities and structures such as securities, expand of the road, and health services (Evelyne, 2018). Besides, the holiday season activities will attract capital investment which amounted to $176.3bn and $184.3bn expected in 2018 (see Figure 5. The holiday season will also increase domestic investments. Hoteliers and other investment institutions will establish structures in anticipation of increased visitors during the season.
The transport sector also develops as a result of the holiday season. The airlines and commuter vehicles increase the fares they charge for travelling services. The result is the increase in revenues of these sector and subsequently their growth. Therefore, the increase in the number of established structures and social amenities such as hotel, accommodation faculties to facilitate the visitor's experience would contribute to increasing employment, spending and economic growth. According to the National Retail Federation, the increase in income leads to high consumer spending. The consumer spending makes contribute to approximately 70 % of gross domestic product (Light, 2016). National Retail Federation holds that most of the consumer spending takes place during the holiday season, particularly in November and December in the form of purchase of a gift.
More infrastructures in the economy is a sign of improved economic growth as it will be more productive and contribute to earning to both local citizens as well as the government.
Figure 5: Capital investment in the U.S due to travel and Tourism (Source: U.S travels)
https://www.wttc.org/-/media/files/reports/economic-impact-research/countries-2017/unitedstates2017.pdf
Sustained Impact
The holiday shopping has led to increased business activities. The shopping experience among retail and small business has increased during the holiday seasons leading to increased sales. The increased business activities have contributed to the rise in demand for more work during the holiday seasons. Retail firms have not only planned to employ more temporary worker but also to raise their wages and park to the level of permanent employees. The level of investment within the tourism sector has continued to increase in the form of structure and social amenities. A summary of holiday contribution to the United States economy in Figure 6.
Figure 6: Estimates and forecast of Holiday contribution in U.S
Holidays, travel and tourism support many economic activities. The activities have induced and direct economic impact. Figure 7 shows the direct, indirect and induced positive effects of these activities.
Figure 7: Direct, Indirect and Induce positive effect of the holiday season on the economy
(Source: Author 2018)
The Investment that occurs during holidays seasons such as travels and tourism have a significant role in the growth of GDP. The holiday season improves the transport sector. The purchase of new airline, vehicles, and construction of hotels (Evelyne, 2018). The establishment of the social amenities enhances food and cleaning services, catering and fuel service by airplanes as well as information technology by travel agents. The holidays season direct contribution to GDP stood at 2.6%. Figure 8 shows that by the end of 2018, the effect of travel and tourism during the holiday season would contribute 526.9B.
Figure 8: Direct impact of holiday Travel and Tourism on the economy
Source: U.S travel https://www.ustravel.org/system/files/media_root/document/Research_Fact-Sheet_Travel-Impact-US-Economy.pdf
Conclusion
In conclusion, the holiday had a significant effect on the growth and development of the U.S economy. Holiday seasons lead to increased retail shopping that contributes to increased revenues of the firms and improved consumer spending. The increase in consumer spending leads to a rise in GDP. The number of capital investment also improved during the holiday season. The investment in social amenities and structures would increase when high holiday months are anticipated. Schools, hotels and health centers would be constructed to accommodate the needs of tourists. The increase shopping and investment lead to increased seasonal employment. The strategic impact of this development includes growth in individual and national incomes, as well as improvement in wellbeing.
References
Allen, F. L. (2017). The Big Change: America Transforms Itself, 1900-50. Routledge.
Barr, S. (2018). The Store, Reimagined. Retrieved from https://www.forbes.com/sites/stevenbarr/2017/10/03/the-store-reimagined/#4382f4ae50e1
Berr, J. (2018). Holiday hiring is set to hit a multiyear high in 2018. Retrieved from https://www.cbsnews.com/news/holiday-hiring-2018-is-set-to-hit-a-multiyear-high/
Freiermuth, E. (2018). The economic impact of Travel and Tourism. Retrieved from https://www.wttc.org/-/media/files/reports/economic-impact-research/countries-2017/unitedstates2017.pdf
Hait, A. (2017). Measuring the Holiday Shopping Season. Retrieved from https://www.census.gov/newsroom/blogs/random-samplings/2017/11/holiday-shopping.html
Light, L. (2016). Why holiday shopping is so important for the U.S. economy. Retrieved from https://www.cbsnews.com/news/why-holiday-shopping-is-so-important-for-the-economy/
Travel Facts and Figures. (2018). U.S Travels. Retrieved from https://www.ustravel.org/research/travel-facts-and-figures
