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Economic impact of tourism

PlannerByDay

Cyburbian
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1,827
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24
I'm looking for some studies or data on the economic impact tourism has on a community.

I'm looking for data on the Midwest or specifically the UP of Michigan if it is out there. That is where my client community is.

I've tried the Michigan State University Dept. of Tourism, AAA and a few other sources but what I've found is not to current (1996, 1998).

Can you help me with some ideas of how to calculate what type of economic impact tourism has on a community.
 

martini

Cyburbian
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678
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19
I know its not Michigan, but look to recreation meccas like Moab, UT, or Fruita, CO. Moab especailly, as they're well known for recretaion of ALL types. From Jeepers, to mountian bikers to rock climbers to river runners. Of course the whole economy of the town basically rests on the income derived from Tourism. Fruita would also offer a great study as they are having a battle with the BLM at thsi time. The whole fight is over MTBing on BLM lands. Look through this website for a really detailed synopsis of what's happening. Do a search for "Book Cliffs":

http://www.otesports.com/

If those don't really help you, try out the Econ Development officer in your region. I bet they've done something. Though it may not be available on the web.
 
Messages
7,649
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29
I am not sure exactly what you are looking to calculate. I cannot give you a site but I did take an Environmental Economics class winter quarter (the first 3 months) of this year. As I understand it, the formulas and concepts are fairly cutting edge. Economists are finally figuring out things like: if you pollute the environment enough, it has quantifiable negative effects on crop yields (and their dollar value). So, no, "air" and such is not simply "free".

Some of the examples we looked at were means to calculate indirect values of resources -- including tourist resources, like using a river for recreation. What is the value of the river when there is no price of admission? How do you compare dollar value of using the river for hydro versus using it for recreation when the two are in conflict? For example, producing more hydro may lower the water level of the river and make it less useful for boating, etc. How do you quantify the value of each use in order to make an informed decision?

I would be happy to give you the name of the textbook and post some formulas or whatever, if it sounds at all relevant.
 

Cardinal

Cyburbian
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10,080
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34
Michigan's Department of Tourism may have done consumer research on the spending habits of visitors to the state. I know the information exists for Wisconsin, and is updated every year. It includes information on activities in which they participate, how often they visit and how long they stay, and how much they purchase.

Other sites I recall as having good tourism information are the Center for Community Economic Development at the University of Wisconsin - Extension, the Western Rural Development Center, and the University of Illinois Extension.
 

Lee Nellis

Cyburbian
Messages
1,369
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29
The way the typically available economic data (from the BEA and Bureau of the Census) are organized makes it difficult to sort out tourism from other sectors. It can be done, but I can't tell you how, 'cuz this is the type of study I do for profit (contact me at <lee@forspecialplaces.com> if having it done for you is an option). Also be aware that because of the way data are organized, it is not easy to make the calculations for small communities, esp. if those small places are in the same county or metro area as a larger city. You will probably have to work at the county level and make some reasonable inferences if your client is not a county.

The hints you have already received may or may not help for your particular geography. National or regional data will not do much for most relatively small places. Getting good data for the contingent valuation studies Michele refers to is difficult (the results are nice, if you can). In addition to your state and local economic development people (whose data tend to represent wishful thinking, so be careful!), I suggest contacting your local national forest. They have access to an economic modeling tool that may be able to help. The Sonoran Institute has an on-line economic profiling tool that may help, but it does not sort out tourism. If you go to the Sonoran Institute's web site, you will find ordering info for The Planning for Results Guidebook. It contains a good general discussion of how to look at local economies, but does not give you a step-by-step procedure for calculating the impacts of tourism. It also warns you about the accuracy of multipliers, which should be used only where the data are robust, and only by someone who will give everyone the appropriate warnings about what they mean, IF they are accurate. Finally. the North-Central Center for Rural Development has a good "how-to" book on community economic analysis.
 

donk

Cyburbian
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6,970
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The standard number thrown around here, by the province, is $100/day (CDN) per person, excluding accomodations.
 

Cardinal

Cyburbian
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10,080
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34
donk said:
The standard number thrown around here, by the province, is $100/day (CDN) per person, excluding accomodations.
I think this may be a really good example of what Lee refers to as wishful thinking. The Wisconsin data is particularly good in that it goes into detail on spending habits for different types of travelers. For instance, a camper is likely to spend significantly less than a business traveler. The state park and national forest campgrounds should be able to tell you how many visitor nights they have each year. Room taxes will let you know how many people are staying there. What you will have a difficult time estimating is the number of passs-through visitors not staying overnight.
 

jresta

Cyburbian
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1,474
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23
I once wrote a paper on tourism, I called it "Winter-Rental Syndrome". If i can find it on my machine at home i'll try to send it to you.

I grew up around Asbury Park and sure, tourists drop a lot of money in towns like Belmar, Long Branch, Sping Lake, Sea Bright, and Point Pleasant but the boardwalk jobs it creats are sub-par to say the least.

It also created a two tiered rent system where premiums are charged in the summer time and bargain rates can be had from September - May. The people working the jobs associated with the tourism industry live in beach houses for 8 months but then when Memorial day rolls around they have to pull their kids out of school and move to motels further inland. From what i understand the pattern is the same but the migration is reversed in big ski areas.

The numbers show up clearly in income statistics with 6 of the 10 poorest towns in the state being beach towns. Surprising to many was the fact that Camden was number 4 on the list. The 3 poorest towns were Seaside Heights, Asbury Park, and Wildwood.

Like i said, i'll look for the data but it's a side you should consider representing. Having lived it i think it's about the worst economic development strategy possible - at least in its current forms. It's a nice compliment for a local economy but it's disastrous when it becomes the backbone of your economy.
 

Lee Nellis

Cyburbian
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1,369
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29
jresta's point should never be forgotten. Tourism can create ugly social and economic impacts.

On the other hand, it can also be a key component in more sustainable economic development strategies. Most people who have come to thriving western towns like Bozeman to open new businesses, came there first as tourists, liked what they saw, and returned. If your community has tourism, you need to help them figure out how to turn visitors into investors.
 
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29
Lee Nellis said:
jresta's point should never be forgotten. Tourism can create ugly social and economic impacts.

If your community has tourism, you need to help them figure out how to turn visitors into investors.
Do you have any sources?

I am working with a friend who is a community activist in an unincorporated community that has been a dumping ground for NIMBY projects. It has fairly recently been given a historical designation of some sort. I have already spoken with her about how important it is for their newly formed planning board to do a visioning process and figure out what kind of economic development they want to promote and that tourism is one potential source of economic development but tends to be seasonal and that has a big downside.

Anyway, I am very interested in the turn this thread has taken. We want to put up some stuff on my website about her community and begin using that as a place for them to make announcements and so forth. We are shooting for January, to coordinate with some filing date related to the community development work she is doing.
 
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Lee Nellis

Cyburbian
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1,369
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29
There are a lot of sources on the various impacts of tourism. I suggest starting with Balancing Nature and Commerce in Gateway Communities, a book written by Luther Propst, Ed McMahon, and Jim Howe. It is an excellent springboard to these issues. Since you are talking about a place with an historic designation, I would also browse the offerings on heritage tourism available from the National Trust for Historic Pres.
 

Cardinal

Cyburbian
Messages
10,080
Points
34
The phenomenon Lee mentions is a part of our economic development strategy. Southeastern Wisconsin's lake country has always been a destination for well-off residents of the Chicago and Milwaukee regions. The Kettle Moraine State Forest, a couple miles outside my front door, is attracting numerous second-home owners, and many ultimately move in on a permanent basis. Anecdotally, a developer I had an opportunity to work with in Illinois showed up in my office one day. It turns out he has a second home in the area. I have worked on projects with other people on the lakes or in the forest, who are self-employed professionals. Our stretegy is to appeal to these people, who will spend, invest, and bring their businesses to the region.
 

Chet

Cyburbian Emeritus
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10,623
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34
Lee Nellis said:
jresta's point should never be forgotten. Tourism can create ugly social and economic impacts.
[HIJACK]
As yes, like the Wisconsin Dells


...and its Gallery of Huge Beings:




...Its multi-modal transportation system that rivals the likes of Toronto:


....And its Context Senitive Sign Design Guides:




...Not to mention its always-active street life.



[/HIJACK]
 

SkeLeton

Cyburbian
Messages
4,853
Points
26
Here in Valdivia at least, the economic impact of tourism is quite good, but maybe that's because Valdivia is a medium sized city (130,000 inhabitants). Valdivia doesn't live on just tourism, it has several industries, a big University (many lodges are used by students the rest of the year) and commerce. Valdivia's municipality (that includes coastal rural comunities) is starting to get Cruises, and a mere 6 cruises are bound this summer (not much, but it's a start). Yeah, other cities like Valparaiso get 60, but they've been getting them for a while now, plus Valparaiso is a bigger city.

I could also give examples of smaller cities/towns here in the south, that do live because of tourism; like Pucón, which benefits by having a two season tourism attraction (Summer and Winter). In the summer it's the lake beaches and in the winter it's the skiing in the Volcano. I can't comment further, because I don't live there nor do I have data or papers.
 

martini

Cyburbian
Messages
678
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19
SkeLeton said:
in the winter it's the skiing in the Volcano.
Now THIS must be interesting! I my self can't imagine skiing IN a Volcano...;)

This is a really interesting dicussion. I've been to many towns the thrive on tourism, and it is interesting to see how each one deals with it differently. Communities that focus on reinvestment deserve to be in the limelight. I like the sounds of Cardinals ideas of getting people to move there, invest in the area and make the community all that much stronger through business establishment. It seems that you see this kind of care for the community in areas that promote a quality of life that is outdoor activity based that is ALSO with in driving distance to large metro areas. Duluth MN comes to mind, as does northern WI.

Conversely, look at places like Branson MO, Wisco Dells WI, Dead Wood SD, or Pigeon Forge TN. These places cater with mainly sedetary activities(gambling), and trinket shopping, niether of which provide livable wages for local residents. In college, I remember seeing these places all over campus, on the search for cheap labor(extacly what a partying college student is, I fell for it in the Black Hills).

Lee, what do you do in Paonia? Check your PM, eh?
 
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Lee Nellis

Cyburbian
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1,369
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29
I am not sure why places like Branson and Deadwood are necessary, but they seem to be. And the trend/strategy we are discussing is definitely at work in the Black Hills and Ozarks. I met a lot of interesting and enterprising folks when I was on a project in Taney County in the '80's, they just tended not to live in Branson. And while I avoid Deadwood, I find Rapid City to be among the more attractive small trade center cities in the West.

We are taking a break from re-building our house in Paonia this winter, hiding out in the East Bay, and discussing options that may include making the place in Paonia a second home. But the purchase of that place is an excellent example of what we are talking about in this thread. We were looking to relocate. That part of CO was on the list (at the time I had a project in Delta County, and I was familiar with the hiking in the West Elks from years past). Since Karen had never been there she went on a road trip. She called from Paonia and said, "we're moving here."
 

cnyOntario

Member
Messages
64
Points
4
Some cities like Syracuse are just discovering how to use tourism to help their economy. I heard it said that the next "in" thing cities will be seeking is the film making industry. Buffalo is currently trying to market itself as a film making city.
 

martini

Cyburbian
Messages
678
Points
19
Minnesota tried it with the film game for a few years, and was actually successful. Grumpy Old Men(Winona), Some christmas Governator Schwartzenagger movie(Mpls), and a few others I can grasp right now(Stillwater) were filmed in various cities around the state. While I'm sure there was an economic impact simply from the studios(movie staff, rentals et all) being in town and spending $$$, I don't think that there's been much for actual tourism in these towns as a result of the movies. Each of these towns already has tourism base of sorts. Stillwater is just east of the metro and has a quaint downtown that was stuck on the antique market theme for a while, but that is changing slowly. Winona is a river town that gets lots of boat traffic in the summers, and visitors to the bluff country for eagle viewing in fall. Mpls, is a major metro area....

Canada has been stealing lots of movie making thunder from MN lately, simply because thier peso makes our dollar go so far up there. This is forcing US cities to make incredible deals (possible money LOSING actaully) to get the studios in thier town for production.
 

Hceux

Cyburbian
Messages
1,028
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22
The role of heritage in tourism

To add to the interesting discussion, here's an interesting story.

In Moose Jaw, Saskatchewan (a city of about 30,000 located west of Regina, SK), the city built up its tourism industry as a revival of its 1980s economic decline of the agricultural and the railroad industries. But, what is interesting is the way the city did it: claiming that it has a history of hidden railroad tunnels that was used by Al Capone.

To make the long story short, the city built a system of railroad tunnels under the city to make visitors believe that Moose Jaw did have underground tunnels that remained through the 20th century. Many visit there without knowing that Moose Jaw had them, had Chinese immigrants working on these projects, and had Al Capone visiting the city, as well as other "stories." All of these claims have become the basis of the heritage tourism in Moose Jaw.

The thing is that why would anybody stop in Moose Jaw? I don't know.

The funniest thing of the story is that all these claims are entirely based on hearsay and folklore. So, did Al Capone visit Moose Jaw? I think not.

So, I'm just saying that tourism industry seem to be becoming a last resort for cities to revive or diversify their economies to the point that some of the cities are willing to promote heritage history based on lies.
 

PlannerByDay

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Hey Ya'll Thanks for all your input and thoughts. I wanted to pass something along. I came across an Michigan Tourism Economic Impact Model on the web.

It is an Excel Spreadsheet that is kinda cool. The following text is taken off the opening spreadsheet.

"The MITEIM model estimates the economic impact of visitor spending on the economy of the region. Enter number of visitors in party nights for each segment. You may select generic spending profiles for a low, medium or high spending scenario or import custom spending data. Multipliers may also be imported for a particular region or you may choose from generic multipliers for a rural area, smaller metro region, or the state as a whole. "

Even thougth is is set up for michigan I think it can easily be modifyed for other states or regions.

I cant remember what website I got it from. One of the MSU websites, but if you are interested in it I PM me and I can e-mail the spreadsheet to you.
 

Floridays

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When I worked for a consulting firm, I did a "best practices" piece on tourism. Some good resources: Travel Industry Association of America, and the World Travel & Tourism Council.
 

Cardinal

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PlannerByDay said:
Hey Ya'll Thanks for all your input and thoughts. I wanted to pass something along. I came across an Michigan Tourism Economic Impact Model on the web.

It is an Excel Spreadsheet that is kinda cool.
I thought I'd mention that I thought PbD's model looked pretty good. I passed it on to some people at the UW-Extension who have also given it good marks. If you have not bothered PbD for a copy, you might want to do it now.
 

TMullins

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0
U.P. Economic Impact

When I developed the business plan for the Superior Circle Sled Dog Race for the Superior Circle Trail Committee, I conducted some impact studies on tourism in the U.P.
To get the information you should contact the Sault Ste. Marie Ontario Economic Development Corporation.

Another contacts for economic impact information would be Hiawartha National forest. The Ontario Lottery corporation based in Sault Ste. Marie Ontario might give you the research that they have done on the Michigan market. You also might try the Sault Ste. Marie Tribe of Chippewa Indians, as they have one of the greatest economic impacts of any employersin the U.P.
I hope that helps
Cheers
T. Mullins
 

michaelskis

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Messages
20,173
Points
51
Bump

With the recent discussions about the Olympics and the Super Bowl as ways to attract new businesses, I started to wonder how important is tourism to your community? More so, when attracting tourists is it for a short term visit, or as Richard Florida would hope, to attract them as new residents?

Additionally, do you think that cities use the tourism card as a marketing tool for new non-tourist based development?
 

luckless pedestrian

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54
bizzo, i grew up in dewitt - tourism in syracuse???? you're kidding, right?

we are looking into what's termed sustainable tourism in partnership with our Chamber and Friends of Acadia - we get anywhere between 2 and 3 million people a year here as well as many cruise ships in the fall (Queen Mary, sometimes 3 a day, which is 5 to 6 thousand people bottled into our pier) - so it has its ups and downs of course - striking the balance is the key, just like any land use policy

since I'm in the middle of my comp plan, I am just now getting to this issue and in a few weeks I will have some numbers - once I have them, I will post them in here for you
 

CosmicMojo

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543
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16
PlannerByDay said:
I'm looking for some studies or data on the economic impact tourism has on a community.

Can you help me with some ideas of how to calculate what type of economic impact tourism has on a community.
Do you have a local or regional Convention and Visitors' Buerau? They should have some data or the State Tourism Department? There is hard data out there, I'll try to think of some national interest groups that have done research.

Tourism is a strong industry and brings money to the community. It's particularly popular because it's a way to increase taxes without pissing off the residents. That's why hotel taxes are so high--only nonlocals pay. The downside is the jobs tourism creates are mostly minimum wage, part time, and seasonal. Tourism doesn't produce many livable-wage jobs for residents; most of the money the tourists bring goes towards profit for business owners and tax revenue, the salaries are mostly minimum-wage. Sure that money is spread throughout the community through the multiplier effect, but job quality is left wanting. The real winners are the business owners and the state sales tax revenues; workers' salaries come in third.

The MIchigan State University Dept. of Park Recreation and Tourism Resources looks to have some good models, updated with 2004 indices, maybe you just need a more helpful contact there someone can recommend. The Money Generation model looks great, I'm assuming it was made for localities to punch in their numbers. If you haven't got anyone in your office who can do it, ask if there's a student who would do it for class credit. They have a Michigan Tourism Economic Impact Model (MITEIM); someone there can help you plug and chug.

Check the Travel Industry Association of America and the Office of Travel & Tourism Industries--U.S. Department of Commerce.

I found this analysis: Economic Impacts of Tourism (Primer) Stynes, Daniel. Michigan State Univ.
at this link:
http://www.edrgroup.com/edr1/library/lib_attractions_tourism/index.shtml

Stynes also did an economic impact of Michigan museums in 2002; you need to contact him.

Also: Michigan Hotel, Motel and Resort Association--looks like they sponsor conferences with quantitative research.

The state had impact studies of snow sports. Data a few years old is better than some general national average. You can always convert 1998 dollars to 2006 dollars.
 
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Cardinal

Cyburbian
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34
There is a need to be cautious in using models developed in a particular state, as they often embed statistical information (average ength of stay, average expenditures and distribution among economic sectors, etc.) which may not be applicable even in an adjoining state. You can typically generate an estimate of hotel nights based on lodging tax receipts and a good estimate of the average cost per room. If you know the percentage of guests who are staying in paid lodging vs. with family or friends, you can get a pretty good picture of the total number of overnight stays in the commnity. States will typically have research on the spending habits of overnight guests, and from this, you can get a rough estimate of the amount of money they spend.

In a community I am working with, their impact is about 2-3% on retail and 25% on restaurants.
 

cololi

Cyburbian
Messages
1,185
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22
I don't have any hard figures, but tourism is one of the largest industries in UT. Our state is the midst of it's largest budget surplus in history, mostly due to tourism. There was a fear that after the Olympics in SLC, a lot of the smaller hotesl, particularly those in the suburbs, would close down and be vacant. It just hasn't happened. Skier visits are setting records every single year. I red in some magazine that the average skier on vacation in UT spends close to $200 a day and the average vacation is 5 days. last year, we had something like 1.8 million skier days (the total number of skiers from each day during the entire season, with roughly half of those days done by tourists). The Salt Palace Convention Center has been expanded 3 times and is undergoing a fourth expansion right now since it was orignally completed in the mid 90's. The airport handled more passengers last year that it ever has.

I think the general concensus in UT is to have the tourits come, spend their money, and then leave.
 
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