Transcript released economic impact figures - Wisconsin Department of Tourism

The Economic Impact of
Tourism in Wisconsin
April 2015
State Overview
Headline results
 The Wisconsin visitor economy strengthened in 2014 with a
5.3% increase in visitor spending. This follows a 4.5% gain in
2013.
■ Visitor spending tallied $11.4 billion in 2014.
■ Wisconsin visitor volumes reached 102.4 million in 2014.
■ With improvements in the overall economy and moderating gas
prices, both day and overnight visitor volumes grew around 2%.
■ Per trip spending increased as personal income and consumer
confidence strengthened in 2014.
■ Visitor spending growth was led by spending on recreational
activities along with lodging.
3
Headline results
 Visitor spending of $11.4 billion generated $18.5 billion in total
business sales in 2014 as traveler dollars flowed through the
Wisconsin economy.
 Visitor activity sustained 187,650 jobs in 2014, both directly and
indirectly.
 These jobs represent 7.9% of total employment in Wisconsin;
1 in every 12.7 jobs in the state is sustained by tourism activity.
 Including indirect and induced impacts, tourism in Wisconsin
generated $1.4 billion in state and local taxes and $1.05 billion in
Federal taxes last year.
 In the absence of the state and local taxes generated by tourism,
each Wisconsin household would need to pay $620 to maintain
the current level of government services.
4
Industry indicator summary

Visits to Wisconsin destinations grew 2.0% between 2013 and
2014.

Lodging metrics strengthened in 2014, posting their strongest
numbers since 2011.

State sales tax revenue on lodging properties grew 6.9% in
2014 (source: State Revenue Office).

Tourism-related employment grew on par with overall state
employment growth, increasing 1.1% from the prior year.
5
Lodging industry
 The hotel sector expanded
robustly in 2014, with room
demand growing 3.5%.
Lodging metrics reflect a strong 2014
 The occupancy rate increased
from 55.1% in 2013 to 56.8% in
2014.
% change
8%
7%
6%
5%
 Tighter occupancy boosted
average room rates 3.7%.
Demand
4%
Revenue
3%
ADR
2%
 Rising demand and higher
prices generated growth in
room revenues of 7.4%.
1%
0%
2011
2012
2013
Source: Tourism Economics
All lodging metrics posted their best
results since the post-recession spike.
6
2014
Sales taxes
 Sales tax collections in tourism-related industries were robust in
2014 with the exception of retail sales.
 Strength in 2014 is evident across several visitor spending
categories with lodging and F&B at 5-year highs.
Taxable sales in tourism-related industries
% change
8%
7%
6%
5%
4%
3%
2%
1%
0%
2010
2011
Lodging
7
Source: WI Dept. of Revenue
2012
F&B
Recreation
2013
Retail
2014
Visitor Spending
Overview
 Wisconsin visitor
volumes reached
102.4 million in 2014.
Visitors spent a total of
$11.4 billion.
Wisconsin Visits and Spending
Millions
US$ Billions
$
12
104
102
11
100
10
98
9
 Visits grew 2.0% while
spending increased
5.3% in 2014.
96
94
8
92
7
90
6
88
2010
2011
Visitor Spending, bls (L)
2012
2013
Person-Stays, mls (R)
Sources: Longwoods International, OTTI, Stats Can, Tourism Economics
9
2014
Visitor spending
Visitor Spending
2009
2010
2013
2014
Lodging
Other Transport
Air
$1,685
$834
$384
$1,840
$958
$388
$1,995
$1,057
$405
$2,087
$1,195
$408
$2,182
$1,244
$407
$2,339
$1,285
$421
7.2%
3.3%
3.6%
Food & bev.
$2,146
$2,252
$2,447
$2,569
$2,729
$2,905
6.4%
Retail
$1,850
$2,066
$2,200
$2,222
$2,272
$2,328
2.4%
Recreation
2nd home rental
$1,162
$462
$1,155
$540
$1,225
$569
$1,311
$584
$1,393
$613
$1,502
$638
7.8%
4.2%
TOTAL
% Change
$8,522
$9,199
7.9%
$9,899
7.6%
$10,376
4.8%
$10,840
4.5%
$11,419
5.3%
5.3%
 Wisconsin visitor
spending reached $11.4
billion in 2014, posting
5.3% growth.
 Recreational spending
surged, followed by
lodging and spending on
food & beverages.
10
% Change
Tourism Industry Sales & Growth Rate
US$ Billions
12
10
$ Billions
Sector
(US$ Million)
2011
2012
$
$9.2
$9.9
$10.4
$10.8
$11.4
9%
8%
7%
8
6%
5%
6
4%
4
3%
2%
2
1%
0
0%
2010
2011
Spending (L)
2012
2013
% Change (R)
Sources: Longwoods International, OTTI, Stats Can, Tourism Economics
2014
Visitor spending by sector
 Traveler spending neared
$3.0 billion on food &
beverages.
$ Million, 2014 values shown
 The lodging sector passed
the retail sector to become
the second largest
spending category with
$2.3 billion in sales.
3,500
3,000
2,905
2013
2014
2,339
2,500
2,328
2,000
1,706
1,502
1,500
1,000
638
500
2nd Home
Rental
Recreation
Transportation
Retail
Lodging
Food & bev.
0
Note: In this chart Transportation includes local and air
transportation
11
 In 2014, visitor spending
increased 7.8% on
recreation & entertainment,
6.4% on food and
beverage, and 7.2% on
lodging.
Visitor spending distribution
 With strong growth in
leisure visits, the share of
spending on recreational
activities now exceeds 13%
of all visitor spending.
Visitor Spending by Sector
Retail
20.4%
Food & bev.
25.4%
Recreation
13.2%
Air
3.7%
Other Transport
11.3%
Lodging
26.1%
Sources: Longwoods International, OTTI, Stats Can, Tourism Economics
12
 The share of the traveler
dollar spent on lodging, the
largest sector, grew to
26.1% in 2014.
 Food & beverage spending
ranks second, capturing a
quarter of visitor spending,
followed by retail at 20%.
Visitor spending trends
Wisconsin's Visitor Spending
by Year, Billions of $
$12
$10
$1.2
$1.3
$1.2
$8
$2.2
$2.2
$1.4
$2.3
$1.5
$2.3
Retail
$2.1
$6
$4
$2.9
$2.6
$2.7
$0.4
$1.0
$0.4
$1.1
$0.4
$1.2
$0.4
$1.2
$0.4
$1.3
$2.4
$2.6
$2.7
$2.8
$3.0
2010
2011
2012
2013
2014
$2.3
$2.4
 Lodging sales
have increased
Other Transport
25% since 2010.
Lodging
Food & bev.
Air
$2
$0
Sources: Longwoods International, OTTI, Stats Can, Tourism Economics
13
Recreation
 Visitor spending
has grown an
average of 5.6%
annually since
2010.
Visitor spending by market segment
 Leisure tourism represents 88% of visitor spending in Wisconsin.
 Overnight visitors spend $7.7 billion in Wisconsin, 67% of the total.
 Day visitor spending added $3.8 billion in 2014.
 Domestic visitors to Wisconsin spent $10.8 billion in 2014, 94% of all
visitor spending.
Visitor Spending in 2014
(US$ Billion)
Purpose
Stay
Business
Leisure
$1.4
$10.0
Day
Overnight
Total
$11.4
Total
14
$3.8
$7.7
$11.4
Share
Stay
Purpose
Business
Leisure
Market
12.2%
87.8%
Day
Overnight
Domestic
Overseas
Canada
$10.8
$0.6
$0.1
Total
$11.4
Market
32.9%
67.1%
Domestic
Overseas
Canada
94.3%
5.0%
0.7%
Visitor spending by market segment
0.7%Canada
5.0% Overseas
100%
90%
Percentage distribution
80%
Overnight
67.1%
70%
60%
Leisure
87.8%
Domestic
94.3%
50%
40%
30%
Day
32.9%
20%
10%
Business
12.2%
0%
Purpose
Stay
Market
Sources: Longwoods International, OTTI, Stats Can, Tourism Economics
15
Seasonality of lodging
Wisconsin Hotel Room Revenue
$ millions
2010
2011
2012
2013
2014
600
500
400

Tourism is a year-round
industry in Wisconsin. Its
peak is in the third quarter
with nearly one-third of all
rooms rented. In 2014, room
demand in each quarter is at
least 20% of all rooms
rented.

In 2014, growth was spread
throughout the year, with all
but Q2 posting room revenue
growth of 7% or higher. And
Q2 revenue growth only
dipped to 5.4%.
300
200
100
0
Q1
Q2
Q3
Q4
Source: Smith Travel Research
Wisconsin Hotel Rooms and Revenue
Quarterly Share, 2013
40%
Revenue
35%
Rooms
30%
25%
20%
15%
10%
5%
0%
Q1
Q2
Source: Smith Travel Research
16
Q3
Q4
Seasonality of visitor spending


In 2014, total visitor
Wisconsin Quarterly Visitor Spending
$ Millions
spending peaked in the 4,000
$3,645
3rd quarter with $3.6
3,500
billion in visitor sales. 3,000
$2,862
Spending growth was
3.5% or higher in all
four quarters with Q1
posting spending
growth of 6.8%.
2,500
2014
$2,631
$2,280
2,000
1,500
1,000
500
0
Q1
Business
2013
Q2
Q3
Q4
Source: Tourism Economics
Day
Visitor Spending by Quarter
Wisconsin
Q1
2013
2014
% Chn
17
Q2
Q3
Q4
$2,135.6
$2,766.2
$3,454.1
$2,484.3
$2,279.9
$2,862.4
$3,645.3
$2,631.5
6.76%
3.48%
5.54%
5.93%
Seasonality of visitor spending


Tourism spending
has grown in every
quarter since 2011.
Growth did hit a slow
patch in the second
half of 2012 and first
part of 2013 before
rebounding in the 2nd
half of 2013.
Business

18
The upward trend in
quarterly tourism
spending growth
continued in 2014.
Wisconsin Tourism Spending Growth
Y-o-Y Growth Rates by Quarter
12%
$
10%
8%
6%
4%
2%
0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Day
2011
2012
Source: Tourism Economics
2013
2014
State Tourism Impacts
How visitor spending generates impact
•
Travelers create direct economic value within a discrete group of sectors (e.g. recreation,
transportation). This supports a relative proportion of jobs, wages, and taxes within each
sector.
•
Each directly affected sector also purchases goods and services as inputs (e.g. food
wholesalers, utilities) into production. These impacts are called indirect impacts.
•
20
Lastly, the induced impact is
generated when employees
whose incomes are generated
either directly or indirectly by
tourism, spend those incomes
in the local economy.
Tourism sales by industry
Tourism Sales
(US$ Million)
Direct
Agriculture, Fishing, Mining
Construction and Utilities
Manufacturing
Wholesale Trade
Air Transport
421.5
Other Transport
447.1
Retail Trade
2,327.9
Gasoline Stations
837.9
Communications
Finance, Insurance and Real Estate
638.5
Business Services
71.4
Education and Health Care
Recreation and Entertainment
1,236.0
Lodging
2,339.3
Food & Beverage
2,904.6
Personal Services
195.0
Government
TOTAL
11,419.1
Growth Rate
5.3%
* Direct sales include cost of goods sold for retail sectors
21
Indirect
32.3
300.0
480.1
102.7
4.5
154.8
16.0
1.3
252.0
740.4
775.2
5.9
62.2
2.7
128.6
124.8
122.2
3,305.8
5.7%
Induced
24.8
112.6
253.7
154.4
7.5
63.4
293.9
19.6
123.8
1,195.7
244.4
727.3
40.5
2.3
238.2
179.1
69.3
3,750.7
5.7%
Total
57.1
412.6
733.8
257.1
433.5
665.3
2,637.9
858.8
375.8
2,574.6
1,091.0
733.2
1,338.7
2,344.3
3,271.3
499.0
191.5
18,475.6
5.5%
Tourism sales by industry
 All business
sectors of the
Wisconsin
economy benefit
from tourism
activity directly
and/or indirectly.
Tourism Sales by Industry
$ million
3,500
Induced
3,000
Indirect
2,500
Direct
2,000
1,500
22
1,000
500
Air Transport
Personal Serv.
Other Transp
Education
Manu
Gas
Bus. Services
Recreation
Lodging
FIRE
Retail Trade
0
F&B
 Sectors that serve
the tourism
industry, like
business services,
gain as suppliers
to a diverse
tourism industry.
Total tourism employment
Tourism Economy Employment
Direct
Agriculture, Fishing, Mining
Construction and Utilities
Manufacturing
Wholesale Trade
Air Transport
Other Transport
Retail Trade
Gasoline Stations
Communications
Finance, Insurance and Real Estate
Business Services
Education and Health Care
Recreation and Entertainment
Lodging
Food & Beverage
Personal Services
Government
TOTAL
Growth Rate

23
1,812
2,195
15,459
1,672
3,495
463
24,337
32,755
48,380
2,353
132,920
1.1%
Indirect Induced
382
1,014
1,303
624
16
1,487
231
20
1,026
4,190
8,136
84
1,274
44
2,499
1,329
922
24,582
1.4%
270
344
545
938
26
611
4,352
307
426
4,086
2,658
7,183
911
38
4,662
2,420
364
30,142
1.3%
Total
653
1,357
1,848
1,562
1,854
4,293
20,042
1,999
1,452
11,770
11,257
7,267
26,522
32,837
55,541
6,103
1,285
187,643
1.2%
The tourism sector directly and indirectly supported 187,643 jobs, or 7.8% of all
employment in Wisconsin last year.
Total tourism employment
24
Thousands
60
Induced
50
Indirect
40
Direct
30
Significant indirect and induced benefits
20
10
Manu
Air Transport
Gas
Other Transp
Personal Serv.
Education
Bus. Services
FIRE
Retail Trade
Recreation
0
Lodging
 The unemployment
rate in Wisconsin
was 5.5% in 2014.
Without the
187,643 tourism
supported jobs, the
unemployment rate
would nearly
double to 10.9%.
Tourism Employment by Industry
F&B
 Secondary benefits
are realized across
the entire economy
through the supply
chain and incomes
as they are spent.
Tourism employment intensity

Tourism is a significant part of several industries – 92% of lodging, 34% of
recreation, and 23% of food & beverage employment is directly supported by
tourism spending.
Tourism Employment Intensity by Industry
Lodging
92.4%
Recreation
33.8%
Food & bev.
22.8%
Retail
4.1%
Total
3.7%
0%
25
20%
40%
60%
80%
100%
Tourism personal income
Tourism Labor Income (Compensation)
(US$ Million)
Direct
Agriculture, Fishing, Mining
Construction and Utilities
Manufacturing
Wholesale Trade
Air Transport
Other Transport
Retail Trade
Gasoline Stations
Communications
Finance, Insurance and Real Estate
Business Services
Education and Health Care
Recreation and Entertainment
Lodging
Food & Beverage
Personal Services
Government
TOTAL
Pch Change
26
99.0
108.0
346.8
42.6
60.9
22.5
414.3
660.1
776.9
79.8
2,610.9
3.9%
Indirect
5.9
80.9
76.1
44.1
0.9
70.5
6.7
0.5
58.2
137.0
386.9
3.1
23.2
0.7
39.4
57.3
68.6
1,060.0
3.9%
Induced
5.2
28.9
32.1
66.3
1.4
27.8
120.4
7.7
26.3
138.8
125.5
384.8
14.9
0.6
82.8
71.2
24.4
1,159.0
3.1%
Total
11.1
109.9
108.1
110.4
101.2
206.3
473.8
50.8
84.5
336.7
534.9
387.9
452.4
661.4
899.0
208.3
93.0
4,829.9
3.7%
Tourism personal income
27
1,000
900
800
700
600
500
400
300
200
100
0
Induced
Indirect
Direct
Manu
Construction
Wholesale Tr.
Other Transp
Personal Serv.
FIRE
Education
Recreation
Retail Trade
Bus. Services
Significant indirect and induced benefits
Lodging
 Business services
and the FIRE
(finance, insurance
and real estate)
sectors depend on
tourism activity as
suppliers to tourism
companies and their
employees.
Tourism Labor Income by Industry
$ million
F&B
 Substantial
employment in F&B
and recreation
supports significant
labor income in
those industries.
Tourism tax generation
 Taxes of $2.5 billion were directly and indirectly generated by tourism in
2014.
 State and local taxes alone tallied $1.4 billion.
Traveler Generated Taxes
(US$ Million)
Tax Type
Federal Taxes Subtotal
Corporate
Indirect Business
Personal Income
Social Security
State and Local Taxes Subtotal
Corporate
Personal Income
Sales
Bed
Property
Excise and Fees
State Unemployment
TOTAL
2010
2011
2012
2013
2014
917.6
944.5
977.0
1,011.0
1,052.3
81.9
104.8
212.6
518.2
87.4
112.0
216.8
528.4
91.5
117.2
223.5
544.8
95.6
122.4
230.7
562.3
100.8
129.1
239.2
583.1
1,202.1
1,269.8
1,312.3
1,356.3
1,412.3
113.2
101.9
425.3
72.7
370.9
108.5
9.6
120.9
103.9
453.1
77.3
391.7
113.0
9.8
126.6
107.2
473.4
80.9
397.8
116.4
10.1
132.2
110.6
490.4
84.6
408.3
119.9
10.4
139.4
114.7
514.8
90.7
417.5
124.4
10.8
2,119.6
2,214.3
2,289.3
2,367.3
2,464.6
In 2014, each household in Wisconsin would have been taxed an additional
$620 to replace the tourism taxes received by state and local governments.
28
Tourism tax generation – state & local government
2012
(US$ Million)
2013
2014
706.0
731.8
767.1
 Of the $1.4 billion collected
by state and local
governments from traveler
activity, $767 million (54%)
accrued to state
government.
126.6
107.2
438.0
0.0
0.0
24.2
10.1
132.2
110.6
453.7
0.0
0.0
25.0
10.4
139.4
114.7
476.3
0.0
0.0
25.9
10.8
 Local government revenues
from visitor activity grew to
$647 million.
606.3
625.5
647.3
0.0
0.0
35.4
80.9
397.8
92.2
0.0
0.0
0.0
36.7
85.6
408.3
95.0
0.0
0.0
0.0
38.5
92.7
417.5
98.5
0.0
Traveler Generated Taxes - State and
Local Government Revenues
Tax Type
State Tax Subtotal
Corporate
Personal Income
Sales
Lodging
Property
Excise and Fees
State Unemployment
Local Tax Subtotal
Corporate
Personal Income
Sales
Lodging
Property
Excise and Fees
State Unemployment
29
 Property tax revenue, along
with local excise and fees
and lodging taxes, comprise
the major revenue streams
for local governments.
How important is tourism?
 Were the Wisconsin tourism industry a
single business, it would rank #242 on the
Forbes 500 list, similar in size to Visa, Inc.
and CarMax and larger than Norfolk
Southern or Office Depot.
 Visitor spending of $11.4 billion is equal to
the total revenue of the Wisconsin Lottery…
since 1988.
 Total sales in supported by tourism in
Wisconsin reached $18.5 billion in 2014.
By comparison, worldwide revenue of
Wisconsin’s 4th largest company – Kohl’s – was
$19 billion in 2014
30
How important is tourism?
 Were the 133,000 direct tourism
jobs located all in one county, it
would be enough jobs for EVERY
resident in Washington County – the
11th largest county in the state.
 The total tourism employment of
187,643 is more than the total
employment of the Appleton AND
Janesville-Beloit MSA’s.
31
How important is tourism?
 Each household in Wisconsin benefits from
tourism, saving $620 in 2014 in taxes as visitor
activity supports state and local governmental
revenue.
■ That is enough for a annual golfing membership at
Christmas Mountain Village or
■ 20-Game Fan's Choice Plan in the outfield for the
Milwaukee Brewers or
■ About 20 separate admissions to a waterpark in
Wisconsin Dells (assuming average price of $30).
32
Methodology and Background
Why quantify the tourism economy?
 By monitoring tourism’s economic impact, policy makers
can make informed decisions regarding the funding and
prioritization of tourism development.
 It can also carefully monitor its successes and future
needs.
 In order to do this, tourism must be measured in the
same categories as other economic sectors – i.e. tax
generation, employment, wages, and gross domestic
product.
34
Why is this a challenge?
 Most economic sectors such as financial services,
insurance, or construction are easily defined within a
country’s national accounts statistics.
 Tourism is not so easily measured because it is not a
single industry. It is a demand-side activity which affects
multiple sectors to various degrees.
 Tourism spans nearly a dozen sectors including lodging,
recreation, retail, real estate, air passenger transport, food
& beverage, car rental, taxi services, travel agents…
35
Methods and data sources
•
Domestic visitor expenditure estimates are provided by Longwoods International’s
representative survey of US travelers. These are broken out by sectors (lodging,
transport at destination, food & beverage, retail, and recreation), by purpose
(business and leisure), and by length of stay (day and overnight).
•
Tourism Economics then adjusts these levels of spending based on a range of
known measures of tourism activity:
36
•
Overseas visitor spending (source: OTTI, TE)
•
Canada visitor spending (source: Statistics Canada, TE)
•
Sales tax receipts
•
Spending on air travel which accrues to all airports and locally-based airlines
•
Gasoline purchases by visitors (source: TE calculation)
•
Smith Travel Research data on hotel revenues
•
Industry data on employment, wages, GDP, and sales (source: BEA, BLS,
Census)
Methods and data sources
•
An IMPLAN model was compiled for the State of Wisconsin. This traces
the flow of visitor-related expenditures through the local economy and
their effects on employment, wages, and taxes. IMPLAN also quantifies
the indirect (supplier) and induced (income) impacts of tourism.
•
All results are benchmarked and cross-checked and adjusted based on
the following:
•
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•
US Bureau of Labor Statistics and Bureau of Economic Analysis
(employment and wages by industry)
•
US Census (business sales by industry)
The source of the employment and wage data is the Regional Economic
Information System (REIS), Bureau of Economic Analysis, U.S.
Department of Commerce. All employment rankings are based on Bureau
of Labor Statistics (ES202/QCEW) data.
Selected recent economic impact clients
Associations / Companies
Center for Exhibition Industry
Research (Economic Impact
of Visa Restrictions)
DMAI (Event Impact
Calculator for 80 CVBs)
US Travel Association (Impact
of travel promotion)
InterContinental Hotels
States
California
Georgia
Maryland
New York
North Carolina
Ohio
Pennsylvania
Wisconsin
Cities
Baltimore, MD
Columbus, OH
Kansas City, MO
London, United Kingdom
New York City
Omaha, NE
Orlando, FL
Philadelphia, PA
Pittsburgh, PA
Rockford, IL
Countries / Provinces
Bahamas
Bermuda
Cayman Islands
Dubai
Ontario Canada
St. Lucia
United Kingdom
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About Tourism Economics

Tourism Economics, headquartered in Philadelphia, is an Oxford Economics
company dedicated to providing high value, robust, and relevant analyses of the
tourism sector that reflects the dynamics of local and global economies. By
combining quantitative methods with industry knowledge, Tourism Economics
designs custom market strategies, project feasibility analysis, tourism forecasting
models, tourism policy analysis, and economic impact studies.

Our staff have worked with over 300 destinations to quantify the economic value
of tourism, forecast demand, guide strategy, or evaluate tourism policies.

Oxford Economics is one of the world’s leading providers of economic analysis,
forecasts and consulting advice. Founded in 1981 as a joint venture with Oxford
University’s business college, Oxford Economics is founded on a reputation for
high quality, quantitative analysis and evidence-based advice. For this, it draws
on its own staff of 90 highly-experienced professional economists; a dedicated
data analysis team; global modeling tools; close links with Oxford University, and
a range of partner institutions in Europe, the US and in the United Nations
Project Link.

For more information: [email protected].
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For more information:
Adam Sacks, President
[email protected]
Christopher Pike, Senior Economist
[email protected]
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