Arizona Travel Impacts 1998-2005p photo by George Stocking April 2006 Prepared for the Arizona Office of Tourism Phoenix, Arizona ARIZONA TRAVEL IMPACTS 1998-2005P Arizona Office of Tourism Primary Research Conducted By: Dean Runyan Associates Portland, Oregon April 2006 EXECUTIVE SUMMARY • Total direct travel spending in Arizona in 2005 was $17.5 billion. This represents a 9.9 percent increase over 2004, and it follows a 7.4 percent increase the preceding year. In constant (inflation-adjusted) dollars, travel spending has increased by 4.5 percent from 2003 to 2004 and 5.7 percent from 2004 to 2005. • Much of the increased travel activity in Arizona was related to increased passenger air travel. Approximately 7.7 million domestic visitors traveled to Arizona in 2005 by air. This is 5.7 percent increase over 2004. • Visitors that stayed overnight in lodging establishments accounted for 42.3 percent of all visitor spending in 2005. Visitors that stayed in the private homes of friends or relatives accounted for 28.8 percent. Day travelers accounted for about 21.5 percent. • More than one-half (52.7 percent) of all spending by visitors was for leisure and hospitality services (arts, entertainment, recreation, accommodations, food service). Retail spending (which includes food and beverages purchased for off-premise consumption) amounted to 23.3 percent. Transportation (including motor fuel) comprised the remaining 24 percent. • In 2005, direct travel spending generated $456 million in local taxes, $583 million in state taxes and $1.1 billion in federal taxes. The total of $2.1 billion in tax revenues generated by direct travel spending in Arizona is equivalent to $850 dollars of tax revenue for each household in the state. • Direct travel spending in Arizona generated 168,100 jobs with earnings of $4.5 billion in 2005. Three-fourths of these jobs were in the accommodations, food services, and arts, entertainment and recreation industries. • Travel spending in Arizona generated a total (direct and secondary) impact of 313,000 jobs with earnings of $9.3 billion in 2005. Most of the secondary impacts were in professional and business services. • As a percentage of Gross State Product, the tax receipts generated by the travel industry are high relative to other industries (13.2 percent for the travel industry versus 7.8 percent for all industries in the state). And in contrast to other industries, most of the taxes generated by travel industry taxes are imposed on visitors rather than residents. • The employment, earnings, and tax revenues generated by travel spending are relatively more important for the non-urban areas of the state, than for the more urbanized areas of greater Phoenix and Tucson. DEAN RUNYAN ASSOCIATES PAGE I TABLE OF CONTENTS page I. Introduction 1 Direct Impacts Secondary Impacts Preliminary Estimates Types of Travel Impacts Included Transportation Impacts Impact Categories Visitor Categories Reporting Format Interpretation of Impact Estimates 1 1 2 2 2 3 3 4 5 II. National Travel Trends III. Arizona Travel Impacts PAGE II 7 11 Impacts of Travel in Arizona: A Summary Travel Trends Visitor Spending by Type of Traveler Accommodation Visitor Spending by Type of Commodity Purchased Travel-Generated Employment Visitor Origin Travel Industry Gross State Product Secondary Impacts 12 13 15 16 16 17 20 21 IV. State and Local Government Revenue Generated by Travel Spending V. County Travel Impacts VI. Appendices 25 31 53 DEAN RUNYAN ASSOCIATES LIST OF TABLES AND FIGURES page II. National Travel Trends Direct Travel Spending in U.S., 1998-2005 U.S. Travel Spending in Current & Constant Dollars, 1998-2005 Overseas Arrivals to the United States, 1996-2005 U.S. Domestic Passenger Air Arrivals U.S. Travel-Generated Employment, 1998-2005p III. Arizona Travel Impacts Arizona Travel Trends, 1998-2005p Direct Travel Spending in Arizona Adjusted for Inflation Domestic Air Passenger Visitor Arrivals to Arizona Visitor Spending by Type of Traveler Accommodation Visitor Spending by Commodity Purchased Direct Travel-Generated Employment by Industry Arizona Travel Impacts by Origin of Visitor Visitor Spending in Arizona by Origin of Visitor Arizona Direct Travel Impacts, 1998-2001 Arizona Direct Travel Impacts, 2002-2005p Arizona Travel Spending and Gross State Product Total Employment and Earnings Secondary Employment & Earnings IV. State and Local Government Revenue Generated by Travel Spending Arizona State & Local Tax Revenue, 2001-02 FY Arizona State & Local Travel-Generated Tax Revenue, 2005p Selected Industries, GSP & Taxes State Transaction Privilege Taxes V. County Travel Impacts Travel-Generated Earnings Shares Travel-Generated Employment and Earnings Shares by County County Impact Summary Tables County Impact Detail Tables DEAN RUNYAN ASSOCIATES 7 7 7 8 9 9-10 11 13 14 14 15 16 16 17 17 18 19 20 21 23-24 25 25 26 27 28-29 31 32-33 34 35-38 39-52 PAGE III PREFACE The purpose of this study is to document the economic significance of the travel industry in Arizona from 1998 to 2005. These findings show the level of travel spending by visitors traveling to and within the state, and the impact this spending had on the economy in terms of earnings, employment and tax revenue. Dean Runyan Associates prepared this study for the Arizona Office of Tourism. Dean Runyan Associates has specialized in research and planning services for the travel, tourism and recreation industry since 1984. With respect to economic impact analysis, the firm developed and currently maintains the Regional Travel Impact Model (RTIM), a proprietary computer model for analyzing travel economic impacts at the state, regional and local level. Dean Runyan Associates also has extensive experience in project feasibility analysis, market evaluation, survey research and travel and tourism planning. Many individuals and organizations provided data and assistance for this report. State agencies include the Department of Revenue, Department of Commerce, Gaming Commission and State Parks. Information was also provided by the College of Business and Public Administration at the University of Arizona and the School of Hotel and Restaurant Management at Northern Arizona University. Federal agencies that provided essential data for this report include the Bureau of Economic Analysis, the Department of Labor, the Department of Transportation, the U.S. Forest Service, and the National Park Service. Special thanks are due to AnnDee Johnson, Director of Research & Strategic Planning for the Arizona Office of Tourism. Without her support and assistance, this report would not have been possible. Dean Runyan Associates 833 SW 11th Ave., Suite 920 Portland, OR 97205 (503) 226-2973 info@deanrunyan.com www.deanrunyan.com PAGE IV DEAN RUNYAN ASSOCIATES I. INTRODUCTION This report describes the economic impacts of travel to and through Arizona and each of its 15 counties over the time period 1998 to 2005. The estimates for 2005 are preliminary. This introductory section provides a brief overview of methodology, terminology and limitations of these impact estimates. The various appendices in this report provide greater detail for many of these topics. DIRECT IMPACTS The estimates of the direct impacts associated with traveler spending in Arizona were produced using the Regional Travel Impact Model (RTIM) developed by Dean Runyan Associates. The input data used to detail the economic impacts of the Arizona travel industry were gathered from various local, state and federal sources. Travel impacts consist of estimates of travel spending and the employment, earnings and tax receipts generated by this spending. These estimates are also broken out by type of traveler accommodation and by the type of business in which the expenditures occur. A description of RTIM methodology is included in Appendices A and B. SECONDARY (INDIRECT AND INDUCED) IMPACTS Direct impacts are reported for all counties within Arizona. Secondary employment and earnings impacts over and above direct impacts are reported at the state level only for the year 2005. These indirect and induced impacts are generated from the direct impacts produced by the RTIM, discussed above, and an input-output model of the Arizona economy prepared by the Minnesota IMPLAN Group, Inc. Indirect impacts represent the purchases of goods and services from other firms by businesses that directly receive expenditures from travelers. Hotels, for example, purchase maintenance services from independent contractors. Induced impacts represent the purchase of goods and services by employees whose earnings are in part derived from travel expenditures. The sum of the direct, indirect and induced impacts equals the total impact of all spending by visitors in the state. The “multiplier” refers to the ratio of the total impacts to the direct impacts for employment or earnings. DEAN RUNYAN ASSOCIATES PAGE 1 PRELIMINARY ESTIMATES Preliminary estimates for 2005 were prepared at the state and county level. These estimates take advantage of the most current available data. However, because fullyear data was not available in all cases, these estimates are subject to subsequent revision as additional information relating to travel and its economic impact in 2005 becomes available. TYPES OF TRAVEL IMPACTS INCLUDED Most of the travel that occurs in Arizona is included in the scope of this analysis. The purpose of such travel can be for business, pleasure, shopping, to attend meetings, or for personal, medical or educational purposes. All trips to Arizona by U.S. residents and foreign visitors are included. The travel of Arizona residents to other destinations within Arizona is included, provided that it is neither commuting nor other routine travel. Travel to non-Arizona destinations by Arizona residents is not included as a component of visitor spending. Outbound air travel impacts and spending on travel arrangement services are included in the “Other Travel” category. The impacts associated with both overnight and day travel are included if the travelers remain at the destination overnight or the destination is over 50 miles, oneway, from the traveler's home. These definitions are used to screen and, if necessary, to interpret and adjust local data used for travel impact measurements. The most conservative interpretation is employed where data limitations cause deviations from the above definition. TRANSPORTATION IMPACTS The focus of this analysis is on the destination-specific impacts of visitors. This is straightforward with respect to the spending on commodities such as accommodations, food services, recreation and retail purchases. It is less obvious with respect to ground and air transportation services, in that transportation provides a link between an origin and destination. In this report, the impacts related to spending on transportation are allocated to the location (i.e., county) in which those spending impacts occur, regardless of whether that location is the ultimate destination of the visitor. For this reason, urban counties will tend to have relatively greater transportation impacts even though some of that spending on transportation will be related to visits at other destinations. PAGE 2 DEAN RUNYAN ASSOCIATES IMPACT CATEGORIES The specific categories of travel impacts included in this analysis are as follows: Impact Category Description Expenditures Purchases by travelers during their trip, including lodging taxes and other applicable local and state taxes, paid by the traveler at the point of sale. Earnings The earnings (wage and salary disbursements, earned benefits and proprietor income) of employees and owners of businesses that receive travel expenditures. Only the earnings attributable to travel expenditures are included; this typically is only a portion of all business receipts. Employment Employment associated with the above earnings; this includes both fulland part-time positions of wage and salary workers and proprietors. Local Tax Receipts Tax receipts collected by counties and municipalities, as levied on applicable travel-related purchases, including lodging, food and beverage service, retail goods and auto rental. The local share of the state transaction privilege tax is also included in this category. Property taxes are not included. State Tax Receipts The state share of the transaction privilege tax, personal and business income taxes, motor fuel tax and contributions from tribal gaming revenue is included in state tax receipts. VISITOR CATEGORIES Travelers are classified according to the type of accommodation in which they stay. The types of visitors are as follows: Type of Visitor Description Hotel/Motel Travelers staying in hotels, motels, resorts, bed & breakfast establishments, and other commercial accommodations, excluding campgrounds, where a transient lodging tax is collected. Campground Travelers staying in a privately owned (i.e., commercial) or publicly managed campgrounds. Private Home Travelers staying as guests with friends or relatives. Vacation Home Travelers using their own vacation home or timeshare and those borrowing or renting a vacation home where a transient lodging tax is not collected. Day Visitor Both in-state and out-of-state residents whose trip does not include an overnight stay at a destination in Arizona. DEAN RUNYAN ASSOCIATES PAGE 3 REPORTING FORMAT A description of the headings and categories of the detailed direct impact tables is provided below. • Total Direct Travel Spending includes the total visitor spending at destination, described above, plus spending on travel agencies and resident air travel (other spending). Total direct travel spending does not include secondary (indirect and induced) effects. • Visitor Spending by Type of Traveler Accommodation refers to the total direct spending of each category of visitor at that destination (county or state). For example, the spending of visitors that stayed at hotels or motels includes their spending on accommodations, food & beverage service, recreation, transportation and all other visitor related commodities. • Visitor Spending by Commodity Purchased refers to the total spending on each commodity for all types of visitors. For example, the total spending on Food & Beverage Services includes spending by visitors staying in hotels, private campgrounds, private homes and the other types of accommodation. The total spending on commodities is identical to the total spending by type of accommodation. The next two sections, Travel-Generated Earnings and Employment by Industry, provide estimates of travel-generated earnings and employment that are based on an industry, rather than a commodity, classification. A business that is classified in a particular industry may include more than one commodity. For example, a resort that is classified in the accommodation industry may provide accommodations, food and beverages, and recreation. • Industry Earnings Generated by Travel Spending includes the payroll, other earned benefits and proprietor income of all employees in that industry classification. • Industry Employment Generated by Travel Spending includes all full- and part-time employees. This includes payroll employees covered by unemployment insurance and those that are not, as well as proprietors. The final section provides an estimate of tax receipts generated by travel spending. • Tax Revenues Generated by Travel Spending provides a breakout of local, state and federal tax receipts at the state level, and local and state tax receipts at the county level. Local taxes include all room taxes, local sales taxes and local auto rental taxes plus the local share of the state transaction privilege tax. The state share of the transaction privilege tax, personal and business income taxes, motor fuel tax and contributions from tribal gaming revenue are included in state tax receipts. Federal taxes include income and payroll taxes, the motor fuel excise tax and airline ticket taxes. PAGE 4 DEAN RUNYAN ASSOCIATES INTERPRETATION OF IMPACT ESTIMATES Users of this report should be aware of several issues regarding the interpretation of the impact estimates contained herein. • The monetary estimates in this report are expressed in current dollars. There is no adjustment for inflation, with the exception of the graphs on pages 7 and 14. • The employment estimates in this report are estimates of the total number of full- and part-time jobs directly generated by travel spending, rather than the number of individuals employed. Both payroll jobs and self-employment are included in these estimates. Caution should therefore be used in comparing these estimates with other employment data series. • In general, estimates of small geographic areas (e.g., rural counties) are less reliable than estimates for regions or metropolitan counties. Trend analysis and comparisons of counties with relatively low levels of travel-related economic activity should therefore be interpreted cautiously. • The estimates of travel impacts published in this report will necessarily differ somewhat from estimates generated from different models, methodologies and data sources. Nonetheless, it should be emphasized that all credible estimates of direct travel impacts at the state level, including those of Dean Runyan Associates, are of similar magnitude. DEAN RUNYAN ASSOCIATES PAGE 5 II: NATIONAL TRAVEL TRENDS Travel spending by domestic and international visitors in the United States was $611 billion in 2005. This represents a 7.6 percent increase over 2004. Direct Travel Spending In U.S., 1998-2005 ($Billions) Domestic International 1998 $387 $71 1999 $406 $75 2000 $434 $82 2001 $421 $72 2002 $428 $67 2003 $455 $64 2004 $491 $74 2005 $529 $82 Annual Percentage Change 98-05 4.5% 2.1% 04-05 7.6% 10.7% Total $459 $480 $516 $493 $495 $520 $566 $611 Pct. Int'l. 16% 16% 16% 15% 13% 12% 13% 13% 4.2% 8.0% Source: Dean Runyan Associates and Bureau of Economic Analysis (BEA). Travel spending in inflation-adjusted constant (2005) dollars is shown in the graph below. The 2004-2005 annual increase in travel spending in constant dollars was 4.8 percent, following a 6.2 percent increase from 2003 to 2004. U.S. Travel spending in Current and Constant Dollars, 1998-2005 ($Billions) 650 $Billions 600 550 Constant Current 500 450 98 99 00 01 02 03 04 05 Source: Dean Runyan Associates and Bureau of Economic Analysis. Constant (2005) travel spending estimates derived from BEA constant (2000) dollar estimates. DEAN RUNYAN ASSOCIATES PAGE 7 The recent changes in travel spending can be considered in terms of three factors: • International visitation • Air travel • Economic conditions affecting business and leisure travel. With respect to the first factor, the decline in international travel spending was steeper from 2000 to 2001 and has been slower to recover than domestic travel spending. During 2005, travel spending by international visitors in current dollars was $82 billion – the same level as in 2000. If the share of travel spending by international visitors was at the same 16% level as is it was in 2000, it would amount to $98 billion. Most of the decline in international travel spending is due to a general decline in overseas visitation, as is shown in the graphic below. Note that arrivals from all three places of origin (Western Europe, Asia, and all other) are below their 2000 levels. However, arrivals for all three segments have been increasing over the past two years. Overseas Arrivals to the United States, 1996-2005 (Millions) 30 7.2 Millions of Arrivals 25 6.4 5.8 6.7 6.7 6.4 20 15 10 7.5 9.4 7.8 6.7 6.9 5.2 7.6 6.3 10.0 10.3 10.8 5.7 5.2 4.7 5.8 6.2 5.0 11.2 9.1 5.6 8.2 8.3 02 03 9.3 9.9 04 05 Other Asia W. Europe 5 0 96 97 98 99 00 01 Source: Dean Runyan Associates and U.S. Department of Commerce, International Trade Administration, Office of Travel and Tourism Industries. Approximately 90% of all overseas arrivals are visitors. Canada and Mexico are not included (less than 20 percent of all international visitor spending). Domestic air travel was also profoundly affected by the events of September 11, 2001. As shown in the graph on the following page, domestic air travel has recovered (even if the industry has not). This is an indication that the volume of both domestic leisure and business travel has increased in recent years. PAGE 8 DEAN RUNYAN ASSOCIATES U.S. Domestic Passenger Air Arrivals, 1996-2005 700 Millions 650 600 550 500 96 97 98 99 00 01 02 03 04 05 Source: Bureau of Transportation Statistics (U.S. Department of Transportation). T-100 domestic market data. Although travel-generated employment began to recover in 2004, it is still substantially below its peak level attained in 2000. U.S. Travel-Generated Employment, 1998-2005p (Millions of Jobs) 5.75 Millions of Jobs 5.70 5.65 5.60 5.55 5.50 5.45 5.40 98 99 00 01 02 03 04 05p Source: Dean Runyan Associates and Bureau of Economic Analysis (BEA). Preliminary 2005 estimate based on data for 3 quarters of year. There are several reasons for the lag in employment in relation to travel spending. Many of the jobs in the travel industry are entry-level and part-time positions. Because of this, employers will generally increase the hours worked by individual employees before hiring new employees. DEAN RUNYAN ASSOCIATES PAGE 9 In addition, there have been significant structural changes in the travel industry that have affected the overall level of employment. The emergence of lower-cost air carriers and the impact of new information technology on travel arrangement services have resulted in structural employment losses in these two industries. Employment in travel accommodations has also not fully recovered despite strong growth in lodging sales over the past two years. This is primarily due to the fact that the increase in lodging sales has been driven by prices (room rates) rather than the construction and operation of new lodging establishments. US Travel-Generated Employment, Selected Travel Industries, 1998-2005p Air Passenger Transportation Traveler Accommodations 1,420 650 Thousands of Jobs Thousands of Jobs 1,400 600 550 500 1,380 1,360 1,340 1,320 450 1,300 98 99 00 01 02 03 04 05p 98 99 00 01 02 03 04 05p All Other Direct Travel-Generated Employment 3,740 Thousands of Jobs 3,720 3,700 3,680 3,660 3,640 3,620 3,600 98 99 00 01 02 03 04 05p Source: Dean Runyan Associates and Bureau of Economic Analysis, Payroll Employment only. PAGE 10 DEAN RUNYAN ASSOCIATES III: ARIZONA TRAVEL IMPACTS 1998-2005P Employment (Thousands) Induced 106 34.0% Direct 168 53.8% Indirect 38 12.2% DEAN RUNYAN ASSOCIATES PAGE 11 The multi-billion dollar travel industry in Arizona is an important part of the state and local economies. The industry is represented primarily by businesses in the leisure and hospitality sector, transportation, and retail. The money that visitors spend on various goods and services while in Arizona produces business receipts at these firms, which in turn generate earnings and employment for Arizona residents. In addition, state and local governments collect taxes that are generated from visitor spending. Most of these taxes are imposed on the sale of a goods and services to visitors, thus avoiding a tax burden on local residents. The economic impacts directly generated by visitor spending also contribute to significant secondary impacts. A portion of the business receipts generated by visitor spending is spent within Arizona for other goods and services. Visitor generated earnings are also spent by employees for goods and services produced in Arizona. This re-spending of visitor-generated revenues creates indirect and induced (secondary) impacts. IMPACTS OF TRAVEL IN ARIZONA: A SUMMARY • Total direct travel spending in Arizona in 2005 was $17.5 billion. This represents a 9.9 percent increase over 2004, and it follows a 7.4 percent increase the preceding year. In constant (inflation-adjusted) dollars, travel spending has increased by 4.5 percent from 2003 to 2004 and 5.7 percent from 2004 to 2005. • Much of the increased travel activity in Arizona was related to increased passenger air travel. Approximately 7.7 million domestic visitors traveled to Arizona in 2005 by air. This is 5.7 percent increase over 2004. • Visitors that stayed overnight in lodging establishments accounted for 42.3 percent of all visitor spending in 2005. Visitors that stayed in the private homes of friends or relatives accounted for 28.8 percent. Day travelers accounted for about 21.5 percent. • More than one-half (52.7 percent) of all spending by visitors was for leisure and hospitality services (arts, entertainment, recreation, accommodations, food service). Retail spending (which includes food and beverages purchased for off-premise consumption) amounted to 23.3 percent. Transportation (including motor fuel) comprised the remaining 24 percent. • In 2005, direct travel spending generated $456 million in local taxes and $583 million in state taxes. • Direct travel spending in Arizona generated 168,100 jobs with earnings of $4.5 billion in 2005. Three-fourths of these jobs were in the accommodations, food services, and arts, entertainment and recreation industries. • Travel spending in Arizona generated a total (direct and secondary) impact of 313,000 jobs with earnings of $9.3 billion in 2005. PAGE 12 DEAN RUNYAN ASSOCIATES TRAVEL TRENDS Total direct travel spending in Arizona in 2005 was $17.5 billion. This represents a 9.9 percent increase over the preceding year. Travel industry employment also increased by 3.3 percent from 2004 to 2005. This is the third consecutive year of positive growth in employment after several years of contraction. Arizona Travel Trends, 1998-2005p Spending ($Billion) Earnings Employment ($Billion) 1998 12.3 1999 13.3 2000 14.2 2001 13.8 2002 14.0 2003 14.8 2004 15.9 2005p 17.5 Annual Percentage Change 04-05p 9.9 98-05p 5.2 (Thousand) 3.3 3.6 3.8 3.8 3.8 4.0 4.3 4.5 155 161 163 159 157 159 163 168 6.0 4.6 3.3 1.2 Tax Revenue ($Million) Local State Federal Total 348 391 647 1,386 368 429 712 1,509 391 454 743 1,588 372 457 795 1,623 379 484 853 1,716 391 503 914 1,808 413 535 987 1,936 456 583 1,064 2,104 10.6 3.9 8.9 5.9 7.8 7.4 8.7 6.1 Note: p = preliminary. The percent change for 1998-2005p refers to the average annual percentage change. Direct Travel Impacts do not include secondary (indirect and induced) impacts. All visitor spending, airfares and local spending on travel agencies are included. Total Earnings include wage and salary disbursements, other earned income, and proprietor income. The employment estimates in this report are estimates of the total number of full- and part-time jobs directly generated by travel spending, rather than the number of individuals employed. Both payroll jobs and self-employment are included in these estimates. In terms of inflation-adjusted (constant) dollars, travel spending was also strong, despite increases in room rates and gasoline. In constant (inflation-adjusted) dollars, travel spending increased by 5.7 percent from 2004 to 2005, following a 4.5 percent from 2003 to 2004. A comparison of travel spending trends in current and constant dollars is shown on the following page. Since 1998, travel spending has increased at an average annual rate of 2.8 percent in constant dollars. DEAN RUNYAN ASSOCIATES PAGE 13 Direct Travel Spending in Arizona Adjusted for Inflation $18 $17 Billions $16 $15 $14 Constant $13 Current $12 $11 $10 98 99 00 01 02 03 04 05p Year Note: Constant dollar travel spending was deflated by a composite of the West Urban CPI and room rates reported by Smith Travel. The average annual increase in travel spending in constant dollars for 1998-2005p is 2.8 percent. In 2005, almost 7.7 million domestic visitors traveled to Arizona by air. This represents more than one-fourth of all overnight visitors to Arizona. 1 Since the trough of 2002, domestic air travel to Arizona has increased on average 8.2 percent per year. Domestic Air Passenger Visitor Arrivals to Arizona Millions of Domestic Air Visitors 8.0 7.5 7.0 6.5 6.0 5.5 5.0 98 99 00 01 02 03 04 05p Year Source: Dean Runyan Associates and Airline Origin and Destination Survey, U.S. Bureau of Transportation Statistics. Note: These estimates are for air arrivals only. They do not include return travel of Arizona residents or connecting flights normally reported in air passenger statistics. 1 Visitors that travel to Arizona by air also stay longer and spend more. According to the 2001 National Household Transportation Survey, about 45 percent of all visitor nights by domestic travelers can be attributed to visitors that traveled by air. PAGE 14 DEAN RUNYAN ASSOCIATES VISITOR SPENDING BY TYPE OF TRAVELER ACCOMMODATION The pie chart below provides a breakout of total visitor spending in Arizona (all spending on leisure and hospitality services, transportation, and retail) by the type of accommodation in which the visitor stayed. As is indicated, the three primary categories for Arizona (as well as most other states) are (1) the hotel, motel category (this also includes B&B’s, Dude Ranches, and other commercial lodging facilities with the exception of campgrounds), (2) the private homes of friends or relatives, and (3) visitors that do not stay overnight away from home. Arizona is somewhat atypical in two respects. First, a relatively high portion of visitor spending (28.8 percent) is generated by visitors that stay in the homes of friends and relatives. In part, this is probably due to the large influx in recent decades of residents from other states. A “visit” with these transplants by friends and family members entails a visit to Arizona. Such visits are often attractive due to Arizona’s many attractions and its warm winter season. Second, much of the spending by day travelers in Arizona is generated by Mexican travel across the border. The primary purpose of most of this travel is for retail goods and groceries. 2 Visitor Spending by Type of Traveler Accommodation 2005p (Billions) Day Travel $3.5 Vacation Home $0.5 21.5% 42.3% Hotel, Motel $6.9 3.1% 28.8% 4.3% Private Home $4.7 Campground $0.7 2 Approximately one-fourth of all spending by day travelers is of Mexican origin. See page 17 of this report. DEAN RUNYAN ASSOCIATES PAGE 15 VISITOR SPENDING BY TYPE OF COMMODITY PURCHASED The following pie chart provides a breakout of visitor spending for all types of travelers by the type of commodity (good or service) purchased. Approximately one-half (52.7 percent) of all spending by visitors was for leisure and hospitality services (arts, entertainment, recreation, accommodations, food service). Retail spending (which includes food and beverages purchased for off-premise consumption) amounted to 23.3 percent. Transportation (including motor fuel) comprised the remaining 24.0 percent. Visitor Spending by Type of Commodity Purchased, 2005p (Billions) Air Transportation $1.3 Ground Tran/Gas $2.6 Lodging $2.5 8.0% 15.3% 16.0% 22.1% Food/Bev. Serv. $3.6 23.3% 15.3% Retail/Food Stores $3.8 Arts/Entertain./Rec. $2.5 TRAVEL-GENERATED EMPLOYMENT While about one-half of all visitor spending is in leisure and hospitality services, about three-fourths of all travel-generated employment is in the accommodations, food service, arts, entertainment and recreation industries. This is because leisure and hospitality is more labor-intensive than retail trade (including gasoline service). Direct Travel-Generated Employment by Industry, 2005p (Thousands) Other Visitor Tran. 9.5 Retail/Gas Serv. 19.9 Other Travel 7.9 5.7% 4.7% 11.8% 51.2% 26.7% Accomm./Food Serv. 86 Arts/Entertain./Rec. 44.8 Note: Other Visitor Transportation includes passenger air travel and all local ground transportation excluding motor fuel. Other Travel includes travel agencies and resident air travel. Gasoline Service is included in the Retail Industry category. PAGE 16 DEAN RUNYAN ASSOCIATES VISITOR ORIGIN More than three-fourths of the visitor impacts in Arizona are generated by out-ofstate travelers. Visitors from other states are the largest segment (over 64 percent of spending), while international travel comprises more than 13 percent of visitor impacts. Mexican day travel (4.3% of spending) is especially significant for the counties on the national border. Arizona Travel Impacts by Origin of Visitor, 2005p Origin Spending Arizona Other U.S. International All Visitors Other Travel Total Travel Earnings Employment Tax Receipts ($ Million) ($ Billion) ($ Billion) (Thousand) Local State Federal 3.6 10.5 2.2 16.3 1.2 17.5 0.8 2.8 0.5 4.0 0.5 4.5 33 108 20 160 8 168 90 303 64 456 0 456 133 368 76 577 6 583 145 616 71 833 232 1,064 Sources: Dean Runyan Associates, International Trade Administration and Bureau of Economic Analysis (U.S. Dept. of Commerce), 2001 Household Transportation Survey (U.S. Dept. of Transportation), Statistics Canada, and A.H. Charney and V.K. Pavlakovich, “The Economic Impacts of Mexican Visitors to Arizona, 2001” (Karl Eller College of Business and Public Administration, University of Arizona). Other travel includes travel agencies and resident air travel. Visitor Spending in Arizona by Origin of Visitor, 2005p (Billions) Mexican Day $0.7 Overseas & Canada $1.5 Arizona $3.6 4.3% 9.2% 22.1% 64.4% Other U.S. $10.5 Sources: See table note, above. Detailed direct travel impacts for the state of Arizona, 1998-2005p, are reported on pages 18 and 19. DEAN RUNYAN ASSOCIATES PAGE 17 Arizona Direct Travel Impacts, 1998-2001 1998 1999 2000 Total Direct Travel Spending ($Billion) Visitor Spending at Destination 11.4 12.4 13.2 Other Travel* 0.9 1.0 1.0 Total Direct Spending 12.3 13.3 14.2 Visitor Spending by Type of Traveler Accommodation ($Billion) Hotel, Motel 5.0 5.4 5.8 Campground 0.5 0.5 0.6 Private Home 3.1 3.4 3.6 Vacation Home 0.4 0.4 0.4 Day Travel 2.4 2.7 2.9 Spending at Destination 11.4 12.4 13.2 Visitor Spending by Commodity Purchased ($Billion) Lodging 1.9 2.0 2.1 Food & Beverage Services 2.4 2.6 2.8 Food Stores 0.7 0.7 0.7 Ground Tran. & Motor Fuel 1.2 1.5 1.8 Arts, Entertainment & Recreation 1.7 1.9 2.0 Retail Sales 2.5 2.6 2.7 Air Transportation (visitor only) 1.0 1.0 1.0 Spending at Destination 11.4 12.4 13.2 Industry Earnings Generated by Travel Spending ($Billion) Accommodation & Food Services 1.4 1.5 1.6 Arts, Entertainment & Recreation 0.7 0.7 0.8 Retail** 0.5 0.5 0.5 Auto Rental & other ground tran. 0.1 0.1 0.1 Air Transportation (visitor only) 0.4 0.4 0.4 Other Travel* 0.4 0.4 0.4 Total Direct Earnings 3.3 3.6 3.8 Industry Employment Generated by Travel Spending (Thousand jobs) Accommodation & Food Services 78.3 82.4 84.8 Arts, Entertainment & Recreation 35.8 36.9 36.7 Retail** 20.0 20.8 20.8 Auto Rental & other ground tran. 2.4 2.3 2.3 Air Transportation (visitor only) 8.5 8.8 8.3 Other Travel* 9.8 10.1 10.1 Total Direct Employment 154.8 161.3 163.0 Government Revenue Generated by Travel Spending ($Million) Local 348 368 391 State 391 429 454 Federal 647 712 743 Total Direct Gov't. Revenue 1,386 1,509 1,588 2001 12.9 0.9 13.8 5.3 0.6 3.7 0.4 2.9 12.9 1.9 2.8 0.7 1.7 2.0 2.7 1.0 12.9 1.6 0.8 0.5 0.1 0.4 0.4 3.8 80.4 38.4 20.0 2.1 8.3 9.4 158.6 372 457 795 1,623 Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. PAGE 18 DEAN RUNYAN ASSOCIATES Arizona Direct Travel Impacts, 2002-2005p 2002 2003 2004 Total Direct Travel Spending ($Billion) Visitor Spending at Destination 13.2 13.8 14.8 Other Travel* 0.9 1.0 1.1 Total Direct Spending 14.0 14.8 15.9 Visitor Spending by Type of Traveler Accommodation ($Billion) Hotel, Motel 5.2 5.6 6.1 Campground 0.6 0.6 0.7 Private Home 3.8 4.1 4.3 Vacation Home 0.4 0.5 0.5 Day Travel 3.1 3.1 3.2 Spending at Destination 13.2 13.8 14.8 Visitor Spending by Commodity Purchased ($Billion) Lodging 1.9 2.0 2.2 Food & Beverage Services 3.0 3.1 3.3 Food Stores 0.8 0.8 0.8 Ground Tran. & Motor Fuel 1.6 1.9 2.2 Arts, Entertainment & Recreation 2.1 2.2 2.4 Retail Sales 2.8 2.7 2.8 Air Transportation (visitor only) 1.0 1.1 1.2 Spending at Destination 13.2 13.8 14.8 Industry Earnings Generated by Travel Spending ($Billion) Accommodation & Food Services 1.6 1.7 1.8 Arts, Entertainment & Recreation 0.8 0.9 0.9 Retail** 0.5 0.5 0.5 Auto Rental & other ground tran. 0.1 0.1 0.1 Air Transportation (visitor only) 0.4 0.4 0.5 Other Travel* 0.4 0.4 0.5 Total Direct Earnings 3.8 4.0 4.3 Industry Employment Generated by Travel Spending (Thousand jobs) Accommodation & Food Services 80.1 80.8 82.6 Arts, Entertainment & Recreation 38.4 41.2 43.1 Retail** 20.5 19.7 19.7 Auto Rental & other ground tran. 2.2 2.2 2.2 Air Transportation (visitor only) 7.1 7.1 7.3 Other Travel* 8.3 8.0 8.0 Total Direct Employment 156.5 158.9 162.8 Government Revenue Generated by Travel Spending ($Million) Local 379 391 413 State 484 503 535 Federal 853 914 987 Total Direct Gov't. Revenue 1,716 1,808 1,936 2005p 16.3 1.2 17.5 6.9 0.7 4.7 0.5 3.5 16.3 2.5 3.6 0.8 2.6 2.5 2.9 1.3 16.3 1.9 1.0 0.6 0.1 0.5 0.5 4.5 86.0 44.8 19.9 2.2 7.3 7.9 168.1 456 583 1,064 2,104 Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. DEAN RUNYAN ASSOCIATES PAGE 19 TRAVEL INDUSTRY GROSS STATE PRODUCT In concept, the Gross State Product (GSP) of a particular industry is equal to gross output (sales or receipts) minus intermediate inputs (the goods and services purchased from other industries). GSP is always smaller than output or sales because GSP measures only the “value added” of an industry and does not include the cost of the inputs that are also necessary to produce a good or service. Alternatively, GSP can be thought of as the sum of earnings, indirect business taxes (primarily excise and property taxes) and other operating surplus (including profits). Estimates of travel spending and travel industry GSP are shown in the chart below. Travel industry Gross State Product (GSP) amounted to $6.4 billion in 2005. This represents 3.0 percent of the total Arizona GSP. Nationally, the travel industry comprises 2.6 percent of Gross Domestic Product. About 63 percent of all travel spending in Arizona is attributed to intermediate inputs and goods resold at retail. Intermediate inputs cover a range of goods and services that are purchased by travel industry businesses for the purpose of creating a product or service for the traveler. For example, lodging establishments purchase cable television services. Restaurants purchase food and beverages from vendors. In both cases, these inputs are classified as the GSP of other industries. In addition, travel spending occurs at many retail establishments where the goods purchased from the retailer are purchased as finished goods from suppliers. These resold goods are also counted as products of other industries. This would include motor fuel, groceries and most of the commodities sold at retail establishments. 3 Arizona Travel Spending and Gross State Product, 2005p $20 11.0 $11.0 Inputs $4.5 Earnings $1.9 Surplus & Taxes $15 $10 $5 4.5 4.5 1.9 1.9 Spending ($17.5) GSP ($6.4) $0 Source: Dean Runyan Associates, Bureau of Economic Analysis, and Minnesota Implan Group. 3 About 38 percent of the $11 billion of inputs and goods resold are purchased from other Arizona businesses. The total direct and indirect travel industry gross state product is $10.6 billion. PAGE 20 DEAN RUNYAN ASSOCIATES SECONDARY IMPACTS Travel spending within Arizona brings money into many Arizona communities in the form of business receipts. Portions of these receipts are spent within the state for labor and supplies. Employees, in turn, spend a portion of their earnings on goods and services in the state. This re-spending of travel-related revenues creates indirect and induced impacts. To summarize: • Direct impacts represent the employment and earnings attributable to travel expenditures made directly by travelers at businesses throughout the state. • Indirect impacts represent the employment and earnings associated with industries that supply goods and services to the direct businesses (i.e., those that receive money directly from travelers throughout the state). • Induced impacts represent the employment and earnings that results from purchases for food, housing, transportation, recreation, and other goods and services made by travel industry employees, and the employees of the indirectly affected industries. Total Employment and Earnings Generated by Travel Spending in Arizona, 2005p Earnings (Billions) Employment (Thousands) Induced 106 34.0% Induced $3.5 37.6% Direct $4.5 48.4% Direct 168 53.8% Indirect 38 12.2% Indirect $1.3 14.0% Source: Dean Runyan Associates and Minnesota Implan Group. DEAN RUNYAN ASSOCIATES PAGE 21 The impacts in this section are presented in terms of the employment and earnings of eleven major industry groups. These industry groups are similar, but not identical to the business service (or commodity) categories presented elsewhere in this report. (The specific industries that comprise these major groups are listed in Appendix D.) Direct travel impacts, such as those discussed in the first part of this section and the regional and county impacts presented elsewhere in this report are found in the following industry groups: • Accommodations & Food Services • Arts, Entertainment, and Recreation • Retail Trade • Transportation As is indicated in the following tables and graphs, the total direct employment and earnings of these four industry groups is identical to the total direct employment and earnings shown in the first part of this section. The only difference is that these industry groups represent industry groupings (firms) rather than commodity or business service groupings. The indirect and induced impacts of travel spending are found in all eleven-industry groupings shown in the following tables and graphs. The remainder of this section summarizes the secondary impacts of travel spending in the primary industry groups. • Professional Services (31,000 jobs and $1,479 million earnings). Legal, medical, educational and other professional services are utilized by travel businesses (indirect effect) and by employees of these firms (induced effect). • Other Services (13,000 jobs and $324 million earnings). Employees of travel-related businesses purchase services from various providers, such as dry cleaners and repair shops. Similarly, travel businesses utilize a number of service providers, such as laundry, maintenance, and business services. • Government (23,000 jobs and $1,060 million earnings). Employees of travel-related businesses pay fees to attend public educational institutions and to operate motor vehicles. • Finance, Real Estate (11,000 jobs and $421 million earnings). Employees and businesses use the services of financial institutions, insurers, and real estate businesses. • Construction (11,000 jobs and $512 million earnings). Structures that house travel-related businesses, such as hotels and restaurants, require ongoing maintenance. (Note: this category does not include new construction premised on future travel activity.) PAGE 22 DEAN RUNYAN ASSOCIATES Direct and Secondary Employment Generated by Travel in Arizona, 2005p Accomm. & Food Serv. Arts, Entertain., Rec. Retail Trade Prof. Services Transportation Government Other Services Finance, Ins., & Real Estate Construction Mining & Manufacturing Direct Agric.& Food Processing 0 20 40 Secondary 60 80 100 120 Direct & Secondary Employment (Thousands) Direct and Secondary Earnings Generated by Travel in Arizona, 2005p Accomm. & Food Serv. Prof. Services Transportation Arts, Entertain., Rec. Government Retail Trade Construction Finance, Ins., & Real Estate Other Services Mining & Manufacturing Direct Agric.& Food Processing $0 $500 $1,000 Secondary $1,500 $2,000 $2,500 Direct & Secondary Earnings (Millions) Source: Dean Runyan Associates and Minnesota Implan Group. Industry Groups are defined in appendix. Detailed estimates are reported in the following table. It should be emphasized that the estimates of indirect and induced impacts reported here apply to the entire state of Arizona and do not necessarily reflect economic patterns for individual counties, regions or sub-regions within the state. While total economic impacts can be calculated on a county or regional level, such a detailed analysis is not included in this study. In general, geographic areas with lower levels of aggregate economic activity will have smaller secondary impacts within those same geographic boundaries. DEAN RUNYAN ASSOCIATES PAGE 23 Direct & Secondary Visitor-Generated Employment in Arizona, 2005p (thousand jobs) Industry Group Accommodation & Food Services Arts, Entertainment & Recreation Retail Trade Professional Services Transportation Government Other Services Finance, Ins., & Real Estate Construction Mining & Manufacturing Agriculture & Food Processing All Industries Direct 86 45 20 0 17 0 0 0 0 0 0 168 Secondary Indirect Induced 4 9 5 2 3 18 8 23 5 4 1 22 5 8 4 7 1 10 1 2 1 1 38 106 Total 13 8 21 31 9 23 13 11 11 4 2 145 Grand Total 99 53 41 31 26 23 13 11 11 4 2 313 Direct & Secondary Visitor-Generated Earnings in Arizona, 2005p ($ Million) Industry Group Accommodation & Food Services Professional Services Transportation Arts, Entertainment & Recreation Government Retail Trade Construction Finance, Ins., & Real Estate Other Services Mining & Manufacturing Agriculture & Food Processing All Industries Direct 1,938 0 1,042 979 0 564 0 0 0 0 0 4,523 Secondary Indirect Induced 61 138 436 1,043 103 31 165 47 71 990 10 118 41 471 147 274 156 168 91 150 27 30 1,308 3,458 Total 199 1,479 134 211 1,060 128 512 421 324 241 57 4,766 Grand Total 2,138 1,479 1,176 1,190 1,060 692 512 421 324 241 57 9,289 Source: Dean Runyan Associates & Minnesota Implan Group. Industry Groups are defined in Appendix E. PAGE 24 DEAN RUNYAN ASSOCIATES IV. STATE AND LOCAL GOVERNMENT REVENUE GENERATED BY TRAVEL SPENDING This section of the report provides an analysis of the state and local government revenue generated by visitor spending. Most major sources of government revenue, including sales and income taxes are included. 4 However, due to data limitations it is not possible to provide reliable estimates of property tax receipts attributable to travel nor taxes and fees based on a variety of selective goods or activities (e.g., tobacco taxes, license taxes). Hence, the travel-generated tax impacts reported here are generally conservative. Furthermore, these estimates are for tax revenues generated directly from visitor spending. Estimates of total tax revenues (direct, indirect and induced) are necessarily greater (see pages 21 through 24 for secondary employment and earnings impacts). The pie chart below, adapted from the Bureau of the Census’ State and Local Government Finance, shows the broad sources of tax revenue in Arizona. About one-half of all state and local tax revenue in Arizona is derived from excise or sales taxes. The next largest category is property taxes -- paid primarily by homeowners to local governments. Income taxes (which are primarily personal rather than business) comprised 16.7 percent of all state and local taxes in the 2001-02 fiscal year. Arizona State and Local Government Tax Revenues, 2001-02 Fiscal Year All Other 4.2% St./Loc. Property St. Gen. Sales 29.9% 29.9% 16.7% 10.4% 9.0% Loc. Gen. Sales St. Income St./Loc. Select. Sales Source: Dean Runyan Associates and Bureau of the Census, State and Local Government Finance. The state transaction privilege tax is designated as a general sales tax. Over 90 percent of all property taxes are local. About 85 percent of all income tax receipts are personal (vs. corporate). Selective sales taxes include taxes on lodging, motor fuel, alcohol, tobacco and public utilities. Other taxes include license taxes. State tax receipts comprised 59 percent of all state and local tax receipts in the 2001-02 fiscal year. 4 The state transaction privilege tax is considered a sales tax for the purposes of this report. DEAN RUNYAN ASSOCIATES PAGE 25 The distribution of taxes generated by travel spending is shown in the next pie chart. Although property taxes are not included, their contribution would not substantially affect the fact that the overwhelming majority of travel-generated taxes – probably about 90 percent -- are attributable to general and special purpose sales taxes. 5 This is a significantly higher proportion than the 50 percent share for all Arizona state and local tax revenues. Arizona State and Local Travel-Generated Tax Revenues, 2005p (Million) Room Taxes $249 24.0% 50.2% 5.1% Sales Taxes $522 19.0% Income Taxes $53 Gaming $18 1.7% Gas & Auto Rental Taxes $197 Source: Dean Runyan Associates. Property taxes and fees and taxes on selective goods and activities not included. “Other sales” includes the state transaction privilege tax and other municipal and county sales or transaction taxes. Total State and Local Tax revenues generated by travel spending were $1,039 million in 2005. Because the tax impacts of the travel industry are primarily realized through general and special purpose sales taxes, the industry generates proportionately more tax revenue than would be expected based on the industry earnings or gross state product. The Gross State Product of the Arizona Travel industry is about 3.1 percent of total state GSP (see page 20); travel industry earnings are about 3.3 percent of total state earnings (see page 34), the tax revenues generated by travel spending are between 5 and 6 percent of total state and local tax revenues. 6 The following figures further illustrate this point through a comparison of the travel industry with some other major industry sectors in the state. The basis of comparison is Gross State Product (see pages 20 and 61-62), Indirect Business Taxes (IBT) and Personal Income Taxes (PIT). Indirect business taxes are primarily state 5 Property taxes paid by businesses and travel industry employees would probably be similar to the share of income taxes (about 5 percent). The majority of property taxes are paid by homeowners, rather than commercial properties. Travel industry employees are, on average, younger and less likely to own homes than the general population. 6 According to the Census Bureau’s State and Local Finance, state tax revenues represent 59 percent of all state and local tax revenues in Arizona in the 2001-02 fiscal year. Gross state tax revenue for the 2004-05 fiscal year was $11.3 billion. The estimate for total state and local tax revenues based on the 59 percent share for state taxes is $19.2 billion. Travel-generated tax receipts (excluding property taxes) are $1 billion, or 5.2 percent of the total. PAGE 26 DEAN RUNYAN ASSOCIATES and local excise or sales taxes (such as the transaction privilege tax). Also included are property taxes and other fees. Corporate income taxes are not included. Personal Income taxes (PIT) are the state income taxes paid by employees. As can be seen, only the retail sector has a greater tax impact than the travel industry in terms of taxes as a percentage of GSP. It should also be emphasized that the taxes generated by the travel industry are primarily paid by visitors rather than residents. As indicated in the previous section (page 17), most of the visitor spending in Arizona (about 80 percent) is made by international visitors and residents of other states. In this regard, the local and state tax revenue generated by travel spending is truly a net benefit to Arizona residents. Selected Arizona Industry Sectors, 2004 Gross State Product and Indirect Business & Personal Income Taxes ($Millions) Gross State Indirect Personal Sum of Product Business Tax Income Tax IBT & PIT Construction 13,214 279 134 413 Health Care 12,357 100 181 281 Manufacturing 17,871 427 210 637 Retail 16,284 3,677 95 3,772 Travel 6,059 763 34 797 All Industries 194,246 13,233 1,913 15,146 Indirect Business Tax and Personal Income Tax as Percent of Gross State Product, Selected Arizona Industry Sectors, 2004 Construction IBT PIT Health Care Manufacturing Retail Travel All Industries 0% 5% 10% 15% 20% 25% Percent of Gross State Product Source: Dean Runyan Associates and Bureau of Economic Analysis. Earnings and Indirect Business Tax (IBT) derived from Bureau of Economic Analysis. Indirect business taxes include property taxes, fees, and all local, state and federal excise taxes. The vast majority of indirect business taxes are state and local sales taxes. Personal Income tax (PIT) estimated by Dean Runyan Associates. DEAN RUNYAN ASSOCIATES PAGE 27 It is also important to recognize that the local and state tax revenues generated by travel spending are proportionately more important for non-urban areas. There are two reasons for this. First, the travel industry generally comprises a larger proportion of the economy in non-urban areas. Second, counties and municipalities impose special excise taxes on visitors (lodging, eating and drinking establishments, auto rentals) that are disproportionately borne by visitors, rather than residents. The first point is illustrated in the chart below, where the percentage of the state transaction privilege tax generated by travel spending for two groups of counties is displayed. Maricopa and Pima counties – the most urbanized counties in the state – generate relatively lower tax impacts from visitor spending than do the less urbanized counties in the state. State Transaction Privilege Taxes Generated By Direct Travel Spending, 2005p Maricopa & Pima All Other 0% 5% 10% 15% Percent Travel-Generated Source: Dean Runyan Associates and Arizona Department of Revenue. Detailed estimates for each county are also shown. The visitor-related share of local excise taxes would generally be somewhat higher, due to local taxes on lodging, eating and drinking, and auto rentals, as noted above. PAGE 28 DEAN RUNYAN ASSOCIATES State Transaction Privilege Taxes Generated by Direct Travel Spending, 2005p Apache Cochise Coconino Gila Graham/Greenlee La Paz Maricopa Mohave Navajo Pima Pinal Santa Cruz Yavapai Yuma 0% 5% 10% 15% 20% 25% 30% 35% Percent Travel-Generated Source: Dean Runyan Associates and Arizona Department of Revenue. These estimates represent the total state transaction privilege tax receipts generated by travel spending. Counties and municipalities generally are allocated a portion of these receipts based on resident population. Other county and municipal excise taxes are also imposed on visitors. To summarize this analysis of the state and local government revenue generated by travel spending in Arizona: • Most of the taxes generated by travel industry taxes are imposed on visitors rather than residents. • As a percentage of Gross State Product, the tax receipts generated by the travel industry are high relative to other industries (13 percent for the travel industry versus 7.5 percent for all industries in the state). • The tax revenues generated by the travel industry are relatively more important for the non-urban areas of the state than for the more urbanized areas of greater Phoenix and Tucson. DEAN RUNYAN ASSOCIATES PAGE 29 V. DEAN RUNYAN ASSOCIATES COUNTY TRAVEL IMPACTS 1998-2005P PAGE 31 The analysis of travel impacts at the county level provides a valuable overview of how the economic benefits of travel and tourism are distributed throughout the state. Urban areas, such as Maricopa county, tend to have highly developed travel industry infrastructure consisting of large inventories of amusement and recreation opportunities, commercial accommodations, and well-developed transportation links. Hotel/motel guests are important to these areas and, hence, a large proportion of travel expenditures are spent on overnight lodging. In many of the less urbanized areas of Arizona, however, the economic significance of travel and tourism is actually relatively more important. The infrastructure that serves visitors to Maricopa county also serves local residents. Most of the spending on recreation and food services in Maricopa county is by local residents. This is not the case in most other less urbanized areas of the state – leisure and hospitality businesses are generally much more dependent on visitor spending rather than local residents. In the graph below, the two most populous counties in Arizona, Maricopa and Pima, are compared with the thirteen other counties in the state with respect to their share of total earnings – more than three-fourths of all travel-generated earnings occur within the two most populous counties in the state. Share of Travel-Generated Earnings, 2004p Maricopa & Pima Compared with Other Arizona Counties Maricopa & Pima All Other Counties 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Percent of State Direct Travel-Generated Earnings Source: Dean Runyan Associates, U.S. Bureau of Labor Statistics, and U.S. Bureau of Economic Analysis. Total and travel-generated earnings estimates by Dean Runyan Associates. PAGE 32 DEAN RUNYAN ASSOCIATES However, as a group the less urbanized counties in the state actually have a higher proportion of travel-generated earnings in relation to total earnings. This is shown graphically below. About three percent of all earnings in Maricopa and Pima counties are travel-generated. By contrast, the proportion is over five percent in all other Arizona counties. Percentage of Total Earnings Generated by Travel Spending, 2005p Maricopa & Pima All Other Counties 0% 1% 2% 3% 4% 5% 6% Percent of Total Earnings that is Travel-Generated Source: Dean Runyan Associates, U.S. Bureau of Labor Statistics, and U.S. Bureau of Economic Analysis. Total and travel-generated earnings estimates by Dean Runyan Associates. In general, the earnings estimates provided in the preceding figures are probably the best measure at the county level of the relative importance of travel and tourism for local economies. The following table provides estimates for individual counties. Total employment includes all full-time and part-time salaried employees and proprietors. Because total employment includes all jobs, regardless of the hours worked or the average annual earnings of the job, this indicator may less useful than earnings estimates. Nonetheless, the distribution of counties is similar. The ranking of the seven most tourism dependent counties – La Paz, Santa Cruz, Coconino, Gila, Yavapai, Navajo, and Mohave – are the same for earnings and employment. DEAN RUNYAN ASSOCIATES PAGE 33 Travel-Generated Employment and Earnings as Percent of Total, 2005p Employment Apache Cochise Coconino Gila Graham/Greenlee La Paz Maricopa Mohave Navajo Pima Pinal Santa Cruz Yavapai Yuma Arizona Total 26,310 60,370 79,860 21,550 16,830 8,200 2,111,160 69,480 38,220 484,720 66,570 17,370 84,050 87,370 3,172,040 Travel 1,730 4,190 10,740 2,860 860 1,430 91,160 5,110 3,040 25,550 4,400 2,280 8,780 5,990 168,130 Percent Travel 6.6 6.9 13.5 13.3 5.1 17.4 4.3 7.4 8.0 5.3 6.6 13.1 10.4 6.9 5.3 Earnings (Million) Percent Total Travel Travel $874 $27 3.0 $2,346 $71 3.0 $2,594 $222 8.6 $609 $56 9.1 $574 $9 1.5 $244 $31 12.6 $97,691 $2,981 3.1 $2,194 $99 4.5 $1,248 $58 4.6 $18,666 $544 2.9 $2,677 $84 3.1 $630 $50 8.0 $2,535 $166 6.5 $2,963 $127 4.3 $135,844 $4,523 3.3 Source: Dean Runyan Associates, U.S. Bureau of Labor Statistics, and U.S. Bureau of Economic Analysis. Total and travel-generated employment estimates by Dean Runyan Associates. Detailed direct travel impact estimates for 1998 through 2005p can be found on the following pages. As noted in the introductory section to this report, county level estimates are necessarily less reliable than the statewide estimates. Furthermore, estimates for the smallest counties are less reliable than those for larger counties due to survey sample sizes and other data limitations. For this reason, small changes in year-to-year estimates are less important than longer-term trends. PAGE 34 DEAN RUNYAN ASSOCIATES 2005p Arizona County Travel Impacts Travel Spending Total Visitor Apache Cochise Coconino Gila Graham/Greenlee La Paz Maricopa Mohave Navajo Pima Pinal Santa Cruz Yavapai Yuma Arizona Earnings Related Travel-Generated Impacts Employment Local Taxes State Taxes Total Taxes ($Million) ($Million) ($Million) (jobs) ($Million) ($Million) ($Million) 128.5 322.4 836.5 232.6 36.4 205.9 10,960.6 434.3 259.1 2,198.3 359.6 282.3 638.1 566.3 17,460.9 128.5 321.6 834.1 232.5 36.3 205.9 9,824.1 432.6 258.8 2,170.0 359.2 282.2 637.0 563.2 16,285.9 26.6 70.9 222.4 55.6 8.7 30.8 2,980.6 98.6 57.7 543.8 83.9 50.3 165.8 127.3 4,523.0 1,730 4,190 10,740 2,860 860.0 1,430 91,160 5,110 3,040 25,550 4,400 2,280 8,780 5,990 168,130 2.9 10.6 24.1 2.9 0.9 2.1 311.5 9.2 5.5 47.2 6.6 5.5 14.0 13.4 456.4 5.1 11.3 31.0 6.4 1.5 8.5 345.9 17.4 9.8 82.3 13.6 8.7 20.7 20.5 582.8 8.0 21.9 55.0 9.4 2.4 10.6 657.4 26.5 15.3 129.5 20.2 14.2 34.8 33.9 1,039.2 DEAN RUNYAN ASSOCIATES PAGE 35 Arizona County Total Travel Spending, 1998-2005p ($ Millions) Annual Percent Chg. Apache Cochise Coconino Gila Graham/Greenlee La Paz Maricopa Mohave Navajo Pima Pinal Santa Cruz Yavapai Yuma Arizona 1998 1999 2000 2001 2002 2003 2004 2005p 83.1 95.9 109.2 104.7 105.2 107.8 113.2 128.5 215.2 238.3 257.7 261.6 283.7 280.2 301.8 322.4 678.8 714.1 733.9 697.5 699.6 735.9 780.5 836.5 181.2 190.3 205.9 205.9 207.8 213.6 220.5 232.6 24.9 27.1 31.2 29.6 29.7 30.7 31.8 36.4 127.7 147.1 160.0 162.7 161.8 173.5 184.2 205.9 7,630.4 8,166.8 8,770.5 8,486.0 8,464.8 9,125.4 9,886.4 10,960.6 261.7 298.2 320.9 328.6 336.5 362.7 396.7 434.3 183.5 215.5 238.4 224.5 228.0 229.2 236.5 259.1 1,620.5 1,764.7 1,874.0 1,805.3 1,892.4 1,897.8 2,019.4 2,198.3 219.4 244.1 262.7 271.5 278.6 293.8 323.3 359.6 207.6 227.2 236.8 237.9 299.7 262.2 272.2 282.3 437.8 583.9 555.6 554.5 558.9 581.3 588.2 638.1 379.0 410.3 439.9 442.5 498.7 498.1 527.5 566.3 12,250.8 13,323.5 14,196.7 13,812.7 14,045.4 14,792.3 15,882.3 17,460.9 DEAN RUNYAN ASSOCIATES 04-05p 98-05p 13.5 6.4 6.8 5.9 7.2 3.0 5.5 3.6 14.6 5.6 11.8 7.1 10.9 5.3 9.5 7.5 9.5 5.0 8.9 4.5 11.2 7.3 3.7 4.5 8.5 5.5 7.3 5.9 9.9 5.2 PAGE 36 Arizona County Travel-Generated Earnings, 1998-2005p ($ Millions) Annual Percent Chg. Apache Cochise Coconino Gila Graham/Greenlee La Paz Maricopa Mohave Navajo Pima Pinal Santa Cruz Yavapai Yuma Arizona 1998 19.7 48.1 187.0 43.5 6.6 22.0 2,173.2 63.5 44.7 411.5 53.0 37.5 113.6 85.5 3,309.3 DEAN RUNYAN ASSOCIATES 1999 22.3 53.1 196.1 45.4 7.0 24.6 2,313.2 71.3 52.7 447.7 58.2 40.9 156.1 91.8 3,580.3 2000 25.2 57.2 200.8 49.4 8.0 25.9 2,508.0 75.4 58.1 475.2 61.8 42.2 146.4 98.3 3,832.1 2001 24.2 58.6 191.0 49.4 7.6 27.0 2,478.6 78.8 54.1 457.4 65.1 42.0 146.6 99.5 3,779.7 2002 25.0 63.3 193.2 50.2 7.8 27.6 2,455.3 82.5 56.0 476.5 68.2 52.4 148.9 111.2 3,818.1 2003 24.3 62.7 202.2 51.5 7.8 28.4 2,619.1 87.1 54.5 478.5 70.8 46.2 153.8 113.0 3,999.8 2004 24.5 67.7 214.1 53.0 7.9 28.9 2,811.5 94.1 54.8 510.0 77.4 48.4 154.9 119.8 4,267.0 2005p 26.6 70.9 222.4 55.6 8.7 30.8 2,980.6 98.6 57.7 543.8 83.9 50.3 165.8 127.3 4,523.0 04-05p 8.4 4.7 3.9 4.9 10.7 6.7 6.0 4.8 5.3 6.6 8.5 3.8 7.0 6.2 6.0 98-05p 4.3 5.7 2.5 3.6 4.1 4.9 4.6 6.5 3.7 4.1 6.8 4.3 5.6 5.9 4.6 PAGE 37 Arizona County Travel-Generated Employment, 1998-2005p Annual Percent Chg. Apache Cochise Coconino Gila Graham/Greenlee La Paz Maricopa Mohave Navajo Pima Pinal Santa Cruz Yavapai Yuma Arizona 1998 1999 2000 2001 2002 2003 2004 2005p 04-05p 98-05p 1,490 1,560 1,650 1,750 1,560 1,590 1,680 1,730 3.0 2.2 3,670 3,940 4,000 3,970 4,120 3,970 4,060 4,190 3.2 1.9 11,230 11,260 11,110 10,410 10,220 10,480 10,630 10,740 1.0 -0.6 2,730 2,720 2,850 2,990 2,970 2,980 2,820 2,860 1.4 0.7 510 520 560 680 730 810 790 860 8.9 7.8 1,390 1,460 1,460 1,440 1,430 1,440 1,390 1,430 2.9 0.4 87,580 88,820 90,400 85,490 82,290 84,610 87,410 91,160 4.3 0.6 4,030 4,410 4,530 4,610 4,740 4,830 5,000 5,110 2.2 3.5 3,210 3,520 3,750 3,440 3,310 3,210 3,070 3,040 -1.0 -0.8 22,290 23,840 24,420 23,410 24,000 23,910 25,120 25,550 1.7 2.0 2,990 3,160 3,180 3,900 3,900 4,080 4,110 4,400 7.1 5.7 2,070 2,130 2,140 2,120 2,520 2,260 2,270 2,280 0.4 1.4 6,910 9,140 8,070 8,830 8,870 9,010 8,620 8,780 1.9 3.5 4,660 4,800 4,940 5,590 5,870 5,770 5,830 5,990 2.7 3.7 154,770 161,300 163,040 158,630 156,530 158,940 162,790 168,130 3.3 1.2 DEAN RUNYAN ASSOCIATES PAGE 38 Apache County Travel Impacts, 1998-2005p 1998 2000 2001 Total Direct Travel Spending ($Million) Visitor Spending at Destination 83.1 109.2 104.7 Other Travel* 0.0 0.0 0.0 Total Direct Spending 83.1 109.2 104.7 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 39.9 57.5 52.1 Campground 8.5 10.8 11.1 Private Home 20.4 23.8 24.4 Vacation Home 11.7 13.6 13.8 Day Travel 2.6 3.5 3.4 Spending at Destination 83.1 109.2 104.7 Visitor Spending by Commodity Purchased ($Million) Lodging 14.7 20.0 18.2 Food & Beverage Services 16.4 21.2 20.3 Food Stores 7.5 8.1 8.1 Ground Tran. & Motor Fuel 16.3 26.5 25.7 Arts, Entertainment & Recreation 11.7 14.8 14.7 Retail Sales 16.6 18.5 17.7 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 83.1 109.2 104.7 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 10.6 14.0 13.2 Arts, Entertainment & Recreation 4.9 6.2 6.1 Retail** 4.1 4.8 4.7 Auto Rental & other ground tran. 0.2 0.2 0.2 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 19.7 25.2 24.2 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 900 1,010 1,030 Arts, Entertainment & Recreation 310 320 420 Retail** 290 310 290 Auto Rental & other ground tran. 10 10 10 Air Transportation (visitor only) 0 0 0 Other Travel* 0 0 0 Total Direct Employment 1,490 1,650 1,750 Government Revenue Generated by Travel Spending ($Million) Local 2.2 2.9 2.6 State 3.5 4.5 4.3 Total Direct Gov't. Revenue 5.7 7.3 7.0 2002 2003 2004 2005p 105.2 0.0 105.2 107.8 0.0 107.8 113.2 0.0 113.2 128.5 0.0 128.5 53.1 10.7 24.3 13.7 3.4 105.2 51.7 12.3 25.7 14.5 3.6 107.8 52.3 14.0 27.4 15.5 4.0 113.2 62.9 15.4 29.1 16.5 4.5 128.5 18.5 21.3 8.3 24.3 15.1 17.7 0.0 105.2 17.3 20.9 8.3 29.4 15.1 16.9 0.0 107.8 17.3 20.9 8.4 34.8 15.4 16.4 0.0 113.2 20.0 23.5 8.6 42.7 16.3 17.3 0.0 128.5 13.6 6.3 4.9 0.2 0.0 0.0 25.0 13.0 6.3 4.8 0.2 0.0 0.0 24.3 13.0 6.4 4.9 0.2 0.0 0.0 24.5 14.4 6.8 5.1 0.3 0.0 0.0 26.6 950 300 300 10 0 0 1,560 860 430 290 10 0 0 1,590 820 550 300 10 0 0 1,680 890 540 290 10 0 0 1,730 2.7 4.5 7.1 2.6 4.6 7.2 2.6 4.7 7.4 2.9 5.1 8.0 Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. DEAN RUNYAN ASSOCIATES PAGE 39 Cochise County Travel Impacts, 1998-2005p 1998 2000 2001 Total Direct Travel Spending ($Million) Visitor Spending at Destination 214.3 256.8 260.8 Other Travel* 0.9 0.8 0.8 Total Direct Spending 215.2 257.7 261.6 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 40.2 54.4 53.8 Campground 35.5 41.8 42.6 Private Home 46.3 53.0 54.8 Vacation Home 5.0 5.6 5.7 Day Travel 87.3 102.0 103.9 Spending at Destination 214.3 256.8 260.8 Visitor Spending by Commodity Purchased ($Million) Lodging 22.2 27.8 27.7 Food & Beverage Services 46.1 55.5 57.1 Food Stores 49.8 56.0 57.3 Ground Tran. & Motor Fuel 16.9 27.6 26.6 Arts, Entertainment & Recreation 25.8 31.4 32.9 Retail Sales 53.4 58.5 59.2 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 214.3 256.8 260.8 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 21.2 25.9 26.4 Arts, Entertainment & Recreation 11.4 13.9 14.5 Retail** 14.7 16.6 16.9 Auto Rental & other ground tran. 0.2 0.2 0.2 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 48.1 57.2 58.6 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 1,700 1,960 1,960 Arts, Entertainment & Recreation 1,170 1,160 1,160 Retail** 750 840 820 Auto Rental & other ground tran. 10 10 10 Air Transportation (visitor only) 0 0 0 Other Travel* 40 30 30 Total Direct Employment 3,670 4,000 3,970 Government Revenue Generated by Travel Spending ($Million) Local 7.4 8.6 8.8 State 7.4 8.7 9.1 Total Direct Gov't. Revenue 14.8 17.4 17.9 2002 2003 2004 2005p 282.8 0.8 283.7 279.4 0.8 280.2 301.0 0.8 301.8 321.6 0.9 322.4 54.2 41.8 55.6 5.8 125.4 282.8 57.3 44.8 57.8 6.0 113.5 279.4 69.4 47.5 60.3 6.3 117.6 301.0 78.9 50.0 63.1 6.5 123.0 321.6 27.8 63.0 69.8 25.2 33.8 63.2 0.0 282.8 28.8 62.3 62.2 30.5 35.3 60.2 0.0 279.4 33.6 67.4 63.3 36.1 38.5 61.9 0.0 301.0 37.6 72.2 64.0 44.4 39.8 63.5 0.0 321.6 28.4 14.9 19.2 0.2 0.0 0.0 63.3 28.4 15.6 17.9 0.2 0.0 0.0 62.7 31.6 17.0 18.3 0.2 0.0 0.0 67.7 33.7 17.6 18.7 0.3 0.0 0.0 70.9 2,010 1,190 890 10 0 20 4,120 1,960 1,180 800 10 0 20 3,970 2,040 1,190 810 10 0 20 4,060 2,120 1,230 820 10 0 20 4,190 9.4 10.1 19.5 9.2 10.0 19.3 9.9 10.7 20.6 10.6 11.3 21.9 Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. PAGE 40 DEAN RUNYAN ASSOCIATES Coconino County Travel Impacts, 1998-2005p 1998 2000 2001 2002 2003 2004 2005p Total Direct Travel Spending ($Million) Visitor Spending at Destination 678.6 730.2 694.0 697.7 734.8 778.4 834.1 Other Travel* 0.2 3.7 3.5 1.9 1.1 2.2 2.4 Total Direct Spending 678.8 733.9 697.5 699.6 735.9 780.5 836.5 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 486.4 515.1 477.9 478.7 505.8 538.1 580.3 Campground 37.8 45.0 46.4 46.2 48.1 50.4 52.2 Private Home 50.0 54.7 56.7 59.1 61.6 64.0 67.3 Vacation Home 23.4 26.1 26.9 27.4 28.2 29.4 30.7 Day Travel 80.9 89.2 86.1 86.3 91.1 96.4 103.6 Spending at Destination 678.6 730.2 694.0 697.7 734.8 778.4 834.1 Visitor Spending by Commodity Purchased ($Million) Lodging 186.0 198.6 183.3 180.9 188.6 203.0 220.6 Food & Beverage Services 173.5 186.8 178.7 184.3 194.7 205.7 220.2 Food Stores 37.9 39.9 39.5 40.1 41.2 42.3 43.2 Ground Tran. & Motor Fuel 29.5 47.3 45.6 43.4 52.2 61.5 75.3 Arts, Entertainment & Recreation 100.9 111.4 108.9 111.0 117.6 124.8 128.8 Retail Sales 147.5 146.1 138.0 136.1 137.5 138.8 143.3 Air Transportation (visitor only) 3.3 0.0 0.0 1.8 2.9 2.3 2.5 Spending at Destination 678.6 730.2 694.0 697.7 734.8 778.4 834.1 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 118.5 127.1 119.3 120.5 126.3 134.7 140.3 Arts, Entertainment & Recreation 41.2 45.5 44.5 45.3 48.0 50.9 52.6 Retail** 25.4 26.1 25.1 25.1 25.5 26.0 26.9 Auto Rental & other ground tran. 0.5 0.6 0.6 0.6 0.6 0.6 0.7 Air Transportation (visitor only) 1.2 0.0 0.0 0.8 1.2 0.9 0.9 Other Travel* 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Direct Earnings 187.0 200.8 191.0 193.2 202.2 214.1 222.4 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 7,310 7,230 6,680 6,650 6,790 6,820 6,690 Arts, Entertainment & Recreation 2,540 2,590 2,520 2,400 2,550 2,690 2,910 Retail** 1,320 1,230 1,150 1,110 1,090 1,070 1,090 Auto Rental & other ground tran. 20 20 20 20 20 20 20 Air Transportation (visitor only) 30 0 0 10 20 10 10 Other Travel* 0 30 30 20 20 20 20 Total Direct Employment 11,230 11,110 10,410 10,220 10,480 10,630 10,740 Government Revenue Generated by Travel Spending ($Million) Local 20.2 21.3 20.0 19.9 21.3 22.5 24.1 State 24.1 26.0 25.6 26.6 27.8 29.2 31.0 Total Direct Gov't. Revenue 44.2 47.3 45.5 46.6 49.1 51.7 55.0 Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. DEAN RUNYAN ASSOCIATES PAGE 41 Gila County Travel Impacts, 1998-2005p 1998 2000 2001 Total Direct Travel Spending ($Million) Visitor Spending at Destination 181.0 205.7 205.7 Other Travel* 0.2 0.2 0.2 Total Direct Spending 181.2 205.9 205.9 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 32.0 36.9 32.4 Campground 10.9 12.3 12.5 Private Home 14.9 16.9 17.5 Vacation Home 10.3 11.4 11.7 Day Travel 112.9 128.2 131.6 Spending at Destination 181.0 205.7 205.7 Visitor Spending by Commodity Purchased ($Million) Lodging 13.4 15.5 13.7 Food & Beverage Services 32.4 37.2 36.9 Food Stores 11.0 11.8 11.9 Ground Tran. & Motor Fuel 5.9 9.6 9.3 Arts, Entertainment & Recreation 75.0 86.5 89.5 Retail Sales 43.3 45.0 44.4 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 181.0 205.7 205.7 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 16.4 18.8 18.2 Arts, Entertainment & Recreation 19.2 22.2 22.9 Retail** 7.7 8.2 8.1 Auto Rental & other ground tran. 0.1 0.1 0.1 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 43.5 49.4 49.4 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 1,210 1,330 1,270 Arts, Entertainment & Recreation 1,100 1,090 1,300 Retail** 410 420 400 Auto Rental & other ground tran. 0 0 0 Air Transportation (visitor only) 0 0 0 Other Travel* 10 10 10 Total Direct Employment 2,730 2,850 2,990 Government Revenue Generated by Travel Spending ($Million) Local 2.1 2.3 2.2 State 2.6 3.0 2.9 Total Direct Gov't. Revenue 4.6 5.3 5.1 2002 2003 2004 2005p 207.6 0.2 207.8 213.4 0.1 213.6 220.4 0.1 220.5 232.5 0.1 232.6 32.3 12.6 17.8 11.8 133.0 207.6 34.0 13.1 18.2 12.1 136.1 213.4 35.0 13.6 18.8 12.4 140.6 220.4 42.5 14.0 19.4 12.7 143.8 232.5 13.5 38.1 12.1 8.8 91.3 43.8 0.0 207.6 14.0 39.2 12.3 10.7 94.1 43.1 0.0 213.4 14.6 40.5 12.5 12.6 97.6 42.6 0.0 220.4 17.3 43.8 12.8 15.5 99.3 43.8 0.0 232.5 18.6 23.3 8.1 0.1 0.0 0.0 50.2 19.1 24.1 8.1 0.1 0.0 0.0 51.5 19.8 25.0 8.1 0.1 0.0 0.0 53.0 21.6 25.5 8.3 0.1 0.0 0.0 55.6 1,310 1,260 380 0 0 10 2,970 1,270 1,330 360 0 0 10 2,980 1,250 1,200 360 0 0 10 2,820 1,290 1,210 360 0 0 0 2,860 2.2 3.0 5.2 2.3 4.0 6.3 2.4 5.1 7.6 2.9 6.4 9.4 Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. PAGE 42 DEAN RUNYAN ASSOCIATES Graham & Greenlee Counties Travel Impacts, 1998-2005p 1998 2000 2001 Total Direct Travel Spending ($Million) Visitor Spending at Destination 24.8 31.1 29.5 Other Travel* 0.1 0.1 0.1 Total Direct Spending 24.9 31.2 29.6 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 12.1 16.0 14.1 Campground 1.0 1.2 1.2 Private Home 9.2 10.7 11.0 Vacation Home 0.7 0.8 0.8 Day Travel 1.9 2.4 2.4 Spending at Destination 24.8 31.1 29.5 Visitor Spending by Commodity Purchased ($Million) Lodging 4.3 5.5 4.8 Food & Beverage Services 6.5 8.0 7.6 Food Stores 1.1 1.2 1.2 Ground Tran. & Motor Fuel 3.4 5.6 5.4 Arts, Entertainment & Recreation 3.8 4.6 4.5 Retail Sales 5.7 6.2 5.9 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 24.8 31.1 29.5 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 3.5 4.4 4.0 Arts, Entertainment & Recreation 1.9 2.3 2.3 Retail** 1.1 1.3 1.2 Auto Rental & other ground tran. 0.0 0.0 0.0 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 6.6 8.0 7.6 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 300 340 370 Arts, Entertainment & Recreation 140 140 240 Retail** 70 70 70 Auto Rental & other ground tran. 0 0 0 Air Transportation (visitor only) 0 0 0 Other Travel* 0 0 0 Total Direct Employment 510 560 680 Government Revenue Generated by Travel Spending ($Million) Local 0.7 0.8 0.7 State 1.1 1.3 1.3 Total Direct Gov't. Revenue 1.8 2.1 2.0 2002 2003 2004 2005p 29.6 0.1 29.7 30.6 0.1 30.7 31.7 0.1 31.8 36.3 0.1 36.4 14.3 1.1 11.1 0.8 2.3 29.6 14.4 1.2 11.6 0.9 2.5 30.6 14.4 1.4 12.3 0.9 2.7 31.7 17.9 1.5 12.9 1.0 3.1 36.3 4.8 8.0 1.2 5.1 4.7 5.9 0.0 29.6 4.7 8.1 1.2 6.2 4.7 5.7 0.0 30.6 4.7 8.1 1.2 7.3 4.8 5.6 0.0 31.7 5.9 9.1 1.2 9.0 5.2 5.9 0.0 36.3 4.2 2.3 1.2 0.0 0.0 0.0 7.8 4.2 2.4 1.2 0.0 0.0 0.0 7.8 4.2 2.4 1.2 0.1 0.0 0.0 7.9 4.7 2.6 1.3 0.1 0.0 0.0 8.7 370 290 60 0 0 0 730 380 360 60 0 0 0 810 360 370 60 0 0 0 790 390 400 70 0 0 0 860 0.7 1.4 2.1 0.7 1.4 2.1 0.7 1.4 2.1 0.9 1.5 2.4 Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. DEAN RUNYAN ASSOCIATES PAGE 43 La Paz County Travel Impacts, 1998-2005p 1998 2000 2001 Total Direct Travel Spending ($Million) Visitor Spending at Destination 127.7 160.0 162.7 Other Travel* 0.0 0.0 0.0 Total Direct Spending 127.7 160.0 162.7 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 9.3 12.9 14.4 Campground 36.4 45.8 45.9 Private Home 15.1 18.6 18.9 Vacation Home 15.1 18.5 18.7 Day Travel 51.8 64.2 64.7 Spending at Destination 127.7 160.0 162.7 Visitor Spending by Commodity Purchased ($Million) Lodging 6.2 7.1 7.5 Food & Beverage Services 14.4 17.1 17.9 Food Stores 12.7 13.8 14.0 Ground Tran. & Motor Fuel 29.7 48.5 46.9 Arts, Entertainment & Recreation 39.8 47.2 49.8 Retail Sales 24.8 26.3 26.6 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 127.7 160.0 162.7 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 6.0 7.0 7.4 Arts, Entertainment & Recreation 9.3 11.1 11.7 Retail** 6.4 7.3 7.5 Auto Rental & other ground tran. 0.3 0.4 0.4 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 22.0 25.9 27.0 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 500 540 550 Arts, Entertainment & Recreation 530 530 510 Retail** 340 370 370 Auto Rental & other ground tran. 10 10 10 Air Transportation (visitor only) 0 0 0 Other Travel* 0 0 0 Total Direct Employment 1,390 1,460 1,440 Government Revenue Generated by Travel Spending ($Million) Local 1.5 1.7 1.7 State 4.9 5.9 6.0 Total Direct Gov't. Revenue 6.3 7.6 7.7 2002 2003 2004 2005p 161.8 0.0 161.8 173.5 0.0 173.5 184.2 0.0 184.2 205.9 0.0 205.9 14.1 45.9 19.0 18.6 64.2 161.8 15.5 49.6 19.9 19.7 68.7 173.5 14.8 53.5 21.1 20.9 74.0 184.2 22.3 58.1 22.6 22.3 80.6 205.9 7.5 18.4 14.3 44.4 50.8 26.3 0.0 161.8 7.8 19.0 14.5 53.7 52.6 25.9 0.0 173.5 7.7 19.3 14.5 63.6 53.9 25.3 0.0 184.2 9.4 21.2 14.6 78.0 56.7 26.0 0.0 205.9 7.6 11.9 7.7 0.4 0.0 0.0 27.6 7.8 12.4 7.8 0.4 0.0 0.0 28.4 7.9 12.7 7.8 0.5 0.0 0.0 28.9 8.9 13.2 8.2 0.5 0.0 0.0 30.8 520 520 370 10 0 0 1,430 530 530 360 10 0 0 1,440 500 510 370 10 0 0 1,390 530 500 390 10 0 0 1,430 1.7 6.1 7.9 1.8 6.8 8.6 1.8 7.5 9.3 2.1 8.5 10.6 Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. PAGE 44 DEAN RUNYAN ASSOCIATES Maricopa County Travel Impacts, 1998-2005p 1998 2000 2001 Total Direct Travel Spending ($Million) Visitor Spending at Destination 6,799 7,849 7,620 Other Travel* 832 921 866 Total Direct Spending 7,630 8,771 8,486 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 3,244 3,673 3,361 Campground 150 181 184 Private Home 2,240 2,601 2,681 Vacation Home 129 153 160 Day Travel 1,037 1,241 1,234 Spending at Destination 6,799 7,849 7,620 Visitor Spending by Commodity Purchased ($Million) Lodging 1,135 1,296 1,174 Food & Beverage Services 1,441 1,683 1,677 Food Stores 225 246 246 Ground Tran. & Motor Fuel 829 1,157 1,107 Arts, Entertainment & Recreation 886 1,050 1,067 Retail Sales 1,330 1,418 1,394 Air Transportation (visitor only) 953 998 955 Spending at Destination 6,799 7,849 7,620 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 833 965 925 Arts, Entertainment & Recreation 365 433 439 Retail** 222 247 245 Auto Rental & other ground tran. 43 48 44 Air Transportation (visitor only) 361 401 416 Other Travel* 350 410 410 Total Direct Earnings 2,173 2,508 2,479 Industry Employment Generated by Travel Spending (Thousand Jobs) Accommodation & Food Services 42.8 45.6 43.0 Arts, Entertainment & Recreation 16.9 16.6 15.4 Retail** 8.8 9.0 8.6 Auto Rental & other ground tran. 1.8 1.7 1.6 Air Transportation (visitor only) 8.3 8.2 8.1 Other Travel* 8.9 9.3 8.8 Total Direct Employment 87.6 90.4 85.5 Government Revenue Generated by Travel Spending ($Million) Local 241 267 253 State 236 273 274 Total Direct Gov't. Revenue 477 541 527 2002 2003 2004 2005p 7,613 851 8,465 8,186 940 9,125 8,854 9,824 1,033 1,137 9,886 10,961 3,269 182 2,752 165 1,246 7,613 3,535 194 2,951 174 1,331 8,186 3,871 206 3,164 185 1,428 8,854 4,431 219 3,408 198 1,569 9,824 1,129 1,738 252 1,086 1,093 1,387 929 7,613 1,192 1,843 262 1,248 1,163 1,408 1,070 8,186 1,314 1,975 273 1,417 1,249 1,441 1,184 8,854 1,536 2,168 287 1,683 1,319 1,521 1,310 9,824 932 449 248 48 390 390 2,455 986 479 254 51 435 410 2,619 1,069 515 263 53 469 440 2,811 1,168 544 278 58 478 450 2,981 42.0 15.5 8.6 1.6 6.9 7.8 82.3 43.1 16.9 8.6 1.6 6.9 7.5 84.6 44.4 18.1 8.6 1.6 7.1 7.5 87.4 46.8 19.5 8.7 1.7 7.1 7.5 91.2 255 285 540 266 299 565 281 318 599 312 346 657 Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. DEAN RUNYAN ASSOCIATES PAGE 45 Mohave County Travel Impacts, 1998-2005p 1998 2000 2001 Total Direct Travel Spending ($Million) Visitor Spending at Destination 253.7 319.4 327.9 Other Travel* 8.0 1.5 0.7 Total Direct Spending 261.7 320.9 328.6 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 84.8 106.1 109.4 Campground 23.9 29.3 28.7 Private Home 75.0 96.3 100.2 Vacation Home 26.8 32.8 33.7 Day Travel 43.2 54.9 55.9 Spending at Destination 253.7 319.4 327.9 Visitor Spending by Commodity Purchased ($Million) Lodging 32.8 38.6 39.5 Food & Beverage Services 56.3 67.8 71.5 Food Stores 21.4 23.7 24.4 Ground Tran. & Motor Fuel 39.2 64.0 61.9 Arts, Entertainment & Recreation 42.1 50.9 54.2 Retail Sales 61.9 67.5 69.1 Air Transportation (visitor only) 0.0 6.8 7.3 Spending at Destination 253.7 319.4 327.9 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 28.6 34.2 35.8 Arts, Entertainment & Recreation 17.9 21.8 23.1 Retail** 13.3 15.3 15.7 Auto Rental & other ground tran. 0.4 0.5 0.5 Air Transportation (visitor only) 0.0 2.7 3.2 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 63.5 75.4 78.8 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 2,150 2,390 2,360 Arts, Entertainment & Recreation 1,170 1,330 1,450 Retail** 610 700 710 Auto Rental & other ground tran. 20 20 20 Air Transportation (visitor only) 0 60 60 Other Travel* 90 30 20 Total Direct Employment 4,030 4,530 4,610 Government Revenue Generated by Travel Spending ($Million) Local 6.1 7.0 7.3 State 11.0 13.2 13.7 Total Direct Gov't. Revenue 17.1 20.2 21.0 2002 2003 2004 2005p 335.3 1.2 336.5 361.3 1.4 362.7 395.1 1.6 396.7 432.6 1.7 434.3 113.6 28.6 102.4 34.3 56.3 335.3 123.8 30.5 109.0 36.7 61.3 361.3 138.8 32.5 117.3 39.4 67.2 395.1 152.7 35.0 127.5 42.7 74.7 432.6 41.0 76.4 25.4 58.6 56.9 70.3 6.7 335.3 43.5 81.4 26.3 70.8 60.5 71.4 7.3 361.3 48.6 88.2 27.3 83.9 65.4 73.6 8.0 395.1 53.1 95.0 28.3 103.0 67.8 76.4 8.9 432.6 37.8 24.3 16.3 0.5 2.8 0.0 82.5 40.3 25.9 16.7 0.5 3.0 0.0 87.1 44.2 28.0 17.4 0.6 3.2 0.0 94.1 46.7 29.1 18.2 0.6 3.2 0.0 98.6 2,450 1,520 680 20 50 20 4,740 2,450 1,630 660 20 50 20 4,830 2,580 1,660 670 20 50 20 5,000 2,660 1,700 660 20 50 20 5,110 7.5 14.6 22.1 7.9 15.3 23.2 8.6 16.3 24.9 9.2 17.4 26.5 Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. PAGE 46 DEAN RUNYAN ASSOCIATES Navajo County Travel Impacts, 1998-2005p 1998 2000 2001 Total Direct Travel Spending ($Million) Visitor Spending at Destination 183.2 238.1 224.1 Other Travel* 0.4 0.3 0.3 Total Direct Spending 183.5 238.4 224.5 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 85.5 121.9 105.3 Campground 22.7 27.2 28.0 Private Home 27.2 31.8 33.0 Vacation Home 35.7 41.3 42.5 Day Travel 12.2 15.9 15.3 Spending at Destination 183.2 238.1 224.1 Visitor Spending by Commodity Purchased ($Million) Lodging 31.5 44.0 37.7 Food & Beverage Services 32.4 43.8 40.0 Food Stores 22.7 25.2 25.2 Ground Tran. & Motor Fuel 22.6 36.9 35.6 Arts, Entertainment & Recreation 35.6 44.0 44.1 Retail Sales 38.4 44.2 41.5 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 183.2 238.1 224.1 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 22.3 30.7 27.2 Arts, Entertainment & Recreation 13.0 16.5 16.2 Retail** 8.8 10.4 10.1 Auto Rental & other ground tran. 0.2 0.3 0.3 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 44.7 58.1 54.1 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 1,650 2,180 1,870 Arts, Entertainment & Recreation 1,040 990 1,030 Retail** 500 550 520 Auto Rental & other ground tran. 10 10 10 Air Transportation (visitor only) 0 0 0 Other Travel* 20 10 10 Total Direct Employment 3,210 3,750 3,440 Government Revenue Generated by Travel Spending ($Million) Local 4.4 5.8 5.2 State 6.6 8.6 8.2 Total Direct Gov't. Revenue 11.1 14.4 13.4 2002 2003 2004 2005p 227.6 0.3 228.0 228.9 0.2 229.2 236.3 0.2 236.5 258.8 0.2 259.1 108.5 27.4 33.5 42.9 15.3 227.6 102.4 30.0 35.1 45.1 16.2 228.9 101.1 32.7 37.3 47.8 17.3 236.3 113.7 35.3 39.7 50.8 19.3 258.8 38.3 42.1 25.8 33.8 46.1 41.5 0.0 227.6 36.1 41.3 26.2 40.8 44.6 40.0 0.0 228.9 35.9 41.2 26.6 48.3 45.1 39.1 0.0 236.3 39.6 45.0 27.3 59.3 47.0 40.6 0.0 258.8 28.2 16.9 10.3 0.3 0.0 0.0 56.0 27.1 16.7 10.3 0.3 0.0 0.0 54.5 27.0 17.0 10.3 0.3 0.0 0.0 54.8 28.7 17.6 10.8 0.4 0.0 0.0 57.7 1,830 960 500 10 0 10 3,310 1,730 970 490 10 0 10 3,210 1,620 950 480 10 0 10 3,070 1,570 960 490 10 0 10 3,040 5.3 8.5 13.8 5.1 8.8 13.9 5.1 9.0 14.1 5.5 9.8 15.3 Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. DEAN RUNYAN ASSOCIATES PAGE 47 Pima County Travel Impacts, 1998-2005p 1998 2000 2001 2002 2003 2004 2005p Total Direct Travel Spending ($Million) Visitor Spending at Destination 1,594 1,847 1,779 1,869 1,874 1,993 2,170 Other Travel* 26 27 26 23 24 26 28 Total Direct Spending 1,621 1,874 1,805 1,892 1,898 2,019 2,198 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 700 812 724 737 743 814 931 Campground 57 66 67 67 71 75 78 Private Home 372 431 448 460 479 501 527 Vacation Home 27 31 32 32 34 35 37 Day Travel 438 506 508 573 547 568 597 Spending at Destination 1,594 1,847 1,779 1,869 1,874 1,993 2,170 Visitor Spending by Commodity Purchased ($Million) Lodging 290 338 300 302 300 332 395 Food & Beverage Services 369 431 422 448 454 484 522 Food Stores 90 100 100 112 106 109 112 Ground Tran. & Motor Fuel 161 215 205 204 230 258 303 Arts, Entertainment & Recreation 226 268 268 277 286 305 317 Retail Sales 443 480 471 512 481 488 502 Air Transportation (visitor only) 14 16 15 14 16 18 20 Spending at Destination 1,594 1,847 1,779 1,869 1,874 1,993 2,170 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 217 254 239 249 250 270 294 Arts, Entertainment & Recreation 90 107 107 110 114 122 127 Retail** 72 80 79 86 82 83 86 Auto Rental & other ground tran. 11 13 12 13 13 14 15 7 Air Transportation (visitor only) 5 6 6 6 7 7 Other Travel* 10 20 20 10 10 10 10 Total Direct Earnings 412 475 457 476 478 510 544 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 11,880 13,370 12,590 12,890 12,660 13,250 13,840 Arts, Entertainment & Recreation 6,080 6,630 6,650 6,810 7,260 7,860 7,660 Retail** 3,210 3,350 3,190 3,410 3,130 3,160 3,200 Auto Rental & other ground tran. 480 460 420 430 440 430 440 Air Transportation (visitor only) 130 130 120 110 100 110 110 Other Travel* 520 470 440 360 320 310 310 Total Direct Employment 22,290 24,420 23,410 24,000 23,910 25,120 25,550 Government Revenue Generated by Travel Spending ($Million) Local 36.2 41.2 38.1 39.5 39.1 41.9 47.2 State 57.1 65.7 65.7 72.1 72.0 76.1 82.3 Total Direct Gov't. Revenue 93.3 106.9 103.8 111.5 111.1 118.0 129.5 Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. PAGE 48 DEAN RUNYAN ASSOCIATES Pinal County Travel Impacts, 1998-2005p 1998 2000 2001 Total Direct Travel Spending ($Million) Visitor Spending at Destination 219.3 262.6 271.4 Other Travel* 0.1 0.1 0.1 Total Direct Spending 219.4 262.7 271.5 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 43.6 46.4 48.2 Campground 13.8 16.6 16.5 Private Home 72.3 89.7 93.7 Vacation Home 30.0 36.7 38.0 Day Travel 59.7 73.3 75.0 Spending at Destination 219.3 262.6 271.4 Visitor Spending by Commodity Purchased ($Million) Lodging 17.5 18.4 19.0 Food & Beverage Services 49.1 58.0 61.5 Food Stores 20.5 23.1 24.0 Ground Tran. & Motor Fuel 26.9 43.9 42.4 Arts, Entertainment & Recreation 45.0 53.8 57.3 Retail Sales 60.2 65.4 67.3 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 219.3 262.6 271.4 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 21.6 24.8 26.1 Arts, Entertainment & Recreation 19.6 23.5 25.1 Retail** 11.5 13.1 13.5 Auto Rental & other ground tran. 0.3 0.3 0.3 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 53.0 61.8 65.1 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 1,490 1,580 1,610 Arts, Entertainment & Recreation 890 970 1,680 Retail** 590 620 600 Auto Rental & other ground tran. 10 10 10 Air Transportation (visitor only) 0 0 0 Other Travel* 10 0 0 Total Direct Employment 2,990 3,180 3,900 Government Revenue Generated by Travel Spending ($Million) Local 4.4 4.9 5.2 State 8.2 9.7 10.2 Total Direct Gov't. Revenue 12.6 14.6 15.4 2002 2003 2004 2005p 278.5 0.1 278.6 293.4 0.4 293.8 322.8 0.4 323.3 359.2 0.4 359.6 48.8 16.2 98.0 39.5 76.0 278.5 46.5 17.4 105.7 42.6 81.2 293.4 51.9 18.5 116.9 47.0 88.5 322.8 60.0 19.6 130.0 52.0 97.7 359.2 19.1 65.6 25.1 40.2 60.0 68.6 0.0 278.5 18.1 68.3 26.3 48.6 63.0 69.2 0.0 293.4 20.2 75.3 28.2 57.5 68.9 72.8 0.0 322.8 22.6 84.1 30.3 70.7 73.4 78.2 0.0 359.2 27.5 26.3 13.9 0.4 0.0 0.0 68.2 28.1 27.7 14.3 0.4 0.0 0.0 70.8 31.1 30.5 15.1 0.4 0.0 0.0 77.4 34.3 32.6 16.2 0.4 0.0 0.0 83.9 1,720 1,550 610 10 0 0 3,900 1,810 1,640 610 10 0 20 4,080 1,820 1,640 620 10 0 20 4,110 1,930 1,790 660 10 0 10 4,400 5.3 10.9 16.2 5.4 11.4 16.8 5.9 12.4 18.3 6.6 13.6 20.2 Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. DEAN RUNYAN ASSOCIATES PAGE 49 Santa Cruz County Travel Impacts, 1998-2005p 1998 2000 2001 Total Direct Travel Spending ($Million) Visitor Spending at Destination 207.6 236.8 237.9 Other Travel* 0.0 0.0 0.0 Total Direct Spending 207.6 236.8 237.9 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 27.5 29.0 25.6 Campground 3.8 4.4 4.4 Private Home 6.8 8.0 8.4 Vacation Home 0.8 0.9 1.0 Day Travel 168.7 194.4 198.5 Spending at Destination 207.6 236.8 237.9 Visitor Spending by Commodity Purchased ($Million) Lodging 11.0 11.6 10.3 Food & Beverage Services 25.9 29.1 28.8 Food Stores 79.3 90.4 92.3 Ground Tran. & Motor Fuel 5.3 8.7 8.4 Arts, Entertainment & Recreation 6.2 6.9 6.7 Retail Sales 79.8 90.1 91.4 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 207.6 236.8 237.9 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 11.9 13.1 12.6 Arts, Entertainment & Recreation 2.9 3.3 3.1 Retail** 22.6 25.8 26.2 Auto Rental & other ground tran. 0.1 0.1 0.1 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 37.5 42.2 42.0 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 830 830 820 Arts, Entertainment & Recreation 230 250 250 Retail** 1,010 1,060 1,050 Auto Rental & other ground tran. 0 0 0 Air Transportation (visitor only) 0 0 0 Other Travel* 0 0 0 Total Direct Employment 2,070 2,140 2,120 Government Revenue Generated by Travel Spending ($Million) Local 4.2 4.7 4.6 State 5.9 6.7 7.0 Total Direct Gov't. Revenue 10.0 11.3 11.6 2002 2003 2004 2005p 299.6 0.1 299.7 262.2 0.1 262.2 272.2 0.1 272.2 282.2 0.1 282.3 28.0 4.5 8.7 1.0 257.5 299.6 27.3 5.0 9.1 1.0 219.7 262.2 32.6 5.3 9.7 1.1 223.5 272.2 37.9 5.5 10.4 1.2 227.3 282.2 11.1 35.6 120.2 8.0 7.3 117.5 0.0 299.6 10.8 31.9 102.1 9.6 7.4 100.4 0.0 262.2 12.8 33.9 103.5 11.4 8.4 102.2 0.0 272.2 14.9 36.4 104.6 14.0 9.1 103.2 0.0 282.2 15.1 3.4 33.7 0.1 0.0 0.0 52.4 13.7 3.5 28.8 0.1 0.0 0.0 46.2 15.0 3.9 29.3 0.1 0.0 0.0 48.4 16.2 4.3 29.7 0.1 0.0 0.0 50.3 970 250 1,300 0 0 0 2,520 890 240 1,120 0 0 0 2,260 930 250 1,080 0 0 0 2,270 960 270 1,040 0 0 0 2,280 5.8 9.2 14.9 5.0 8.1 13.1 5.3 8.4 13.7 5.5 8.7 14.2 Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. PAGE 50 DEAN RUNYAN ASSOCIATES Yavapai County Travel Impacts, 1998-2005p 1998 2000 2001 Total Direct Travel Spending ($Million) Visitor Spending at Destination 434.7 552.7 551.6 Other Travel* 3.1 2.9 2.9 Total Direct Spending 437.8 555.6 554.5 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 138.7 208.1 197.1 Campground 35.7 39.8 40.5 Private Home 69.6 82.1 86.4 Vacation Home 14.6 16.8 17.6 Day Travel 176.1 205.8 210.0 Spending at Destination 434.7 552.7 551.6 Visitor Spending by Commodity Purchased ($Million) Lodging 59.0 86.0 81.3 Food & Beverage Services 100.3 132.4 133.2 Food Stores 27.0 30.8 31.1 Ground Tran. & Motor Fuel 16.7 27.3 26.4 Arts, Entertainment & Recreation 118.1 146.1 150.7 Retail Sales 113.5 130.2 128.9 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 434.7 552.7 551.6 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 52.0 71.3 70.1 Arts, Entertainment & Recreation 40.7 51.5 53.0 Retail** 18.4 21.2 21.2 Auto Rental & other ground tran. 0.2 0.2 0.2 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 113.6 146.4 146.6 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 3,500 4,410 4,210 Arts, Entertainment & Recreation 2,350 2,580 3,570 Retail** 930 970 950 Auto Rental & other ground tran. 10 10 10 Air Transportation (visitor only) 0 0 0 Other Travel* 120 100 90 Total Direct Employment 6,910 8,070 8,830 Government Revenue Generated by Travel Spending ($Million) Local 8.9 12.0 11.7 State 11.0 14.5 14.8 Total Direct Gov't. Revenue 19.9 26.5 26.5 2002 2003 2004 2005p 556.0 3.0 558.9 580.4 0.9 581.3 587.2 1.0 588.2 637.0 1.0 638.1 194.9 40.8 89.9 18.2 212.1 556.0 205.9 42.2 94.5 19.1 218.7 580.4 197.9 44.1 99.9 20.1 225.2 587.2 230.7 45.5 105.6 21.0 234.1 637.0 79.6 137.8 31.8 25.0 153.9 127.8 0.1 556.0 83.1 145.0 32.8 30.2 160.7 128.4 0.1 580.4 81.5 145.9 33.2 35.8 165.2 125.5 0.1 587.2 97.6 159.7 34.3 43.9 170.4 131.0 0.1 637.0 71.2 54.1 21.2 0.2 0.0 0.0 148.9 74.7 56.8 21.5 0.2 0.0 0.0 153.8 74.5 58.2 21.2 0.3 0.0 0.0 154.9 82.1 60.4 22.2 0.3 0.0 0.0 165.8 4,240 3,620 900 10 0 90 8,870 4,210 3,890 870 10 0 30 9,010 3,900 3,840 850 10 0 30 8,620 3,930 3,920 890 10 0 30 8,780 11.7 15.5 27.2 12.4 17.1 29.5 12.3 18.1 30.4 14.0 20.7 34.8 Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. DEAN RUNYAN ASSOCIATES PAGE 51 Yuma County Travel Impacts, 1998-2005p 1998 2000 2001 Total Direct Travel Spending ($Million) Visitor Spending at Destination 373.8 434.4 439.5 Other Travel* 5.2 5.5 3.0 Total Direct Spending 379.0 439.9 442.5 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 86.1 95.5 90.6 Campground 48.9 57.5 58.7 Private Home 63.6 77.0 81.4 Vacation Home 28.4 33.8 35.0 Day Travel 146.8 170.6 173.9 Spending at Destination 373.8 434.4 439.5 Visitor Spending by Commodity Purchased ($Million) Lodging 29.4 32.2 30.5 Food & Beverage Services 61.0 71.2 72.4 Food Stores 62.0 69.9 71.4 Ground Tran. & Motor Fuel 21.0 34.2 33.1 Arts, Entertainment & Recreation 77.9 90.8 92.1 Retail Sales 122.5 136.1 137.8 Air Transportation (visitor only) 0.0 0.0 2.2 Spending at Destination 373.8 434.4 439.5 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 28.2 32.4 32.2 Arts, Entertainment & Recreation 28.4 33.5 34.2 Retail** 26.4 29.9 30.3 Auto Rental & other ground tran. 0.2 0.3 0.3 Air Transportation (visitor only) 0.0 0.0 1.0 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 85.5 98.3 99.5 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 2,020 2,080 2,040 Arts, Entertainment & Recreation 1,340 1,480 2,210 Retail** 1,230 1,310 1,280 Auto Rental & other ground tran. 10 10 10 Air Transportation (visitor only) 0 0 20 Other Travel* 60 60 40 Total Direct Employment 4,660 4,940 5,590 Government Revenue Generated by Travel Spending ($Million) Local 9.2 10.4 10.4 State 11.4 13.2 13.9 Total Direct Gov't. Revenue 20.7 23.6 24.3 2002 2003 2004 2005p 496.2 2.5 498.7 496.1 2.0 498.1 524.7 2.8 527.5 563.2 3.1 566.3 103.1 58.2 83.3 35.4 216.2 496.2 118.2 61.5 87.7 37.1 191.6 496.1 132.2 64.8 92.1 38.9 196.6 524.7 154.8 67.0 97.2 40.8 203.5 563.2 33.4 82.2 85.0 31.3 99.4 162.2 2.7 496.2 36.7 83.9 77.8 37.9 108.0 148.2 3.7 496.1 40.8 89.1 79.3 44.9 116.9 150.5 3.4 524.7 47.9 97.0 80.6 55.1 124.9 153.9 3.7 563.2 36.3 36.7 35.6 0.3 1.1 0.0 111.2 37.9 39.6 32.8 0.3 1.5 0.0 113.0 40.8 42.7 33.4 0.3 1.3 0.0 119.8 44.7 45.4 34.2 0.3 1.4 0.0 127.3 2,190 2,210 1,410 10 20 30 5,870 2,250 2,200 1,260 10 20 30 5,770 2,310 2,240 1,220 10 20 30 5,830 2,430 2,230 1,270 10 20 30 5,990 11.9 16.3 28.2 11.7 16.8 28.5 12.3 18.4 30.7 13.4 20.5 33.9 Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. PAGE 52 DEAN RUNYAN ASSOCIATES APPENDICES Appendix A. Travel Industry Accounts: A comparison of the Regional Travel Impact Model and Travel & Tourism Satellite Accounts Appendix B. Travel Impact Estimation Procedures Appendix C. Definition of Terms Appendix D. Secondary Impacts Industry Groups Appendix E. Rounding and Format of Detailed Tables DEAN RUNYAN ASSOCIATES PAGE 53 APPENDIX A TRAVEL INDUSTRY ACCOUNTS: A COMPARISON OF THE REGIONAL TRAVEL IMPACT MODEL AND TRAVEL & TOURISM SATELLITE ACCOUNTS An economic account is a method for displaying inter-related information about a set of economic activities. A travel industry account is a method to report different types of related information about the purchase of goods and services by visitors. The Bureau of Economic Analysis (BEA), which now provides annual and quarterly estimates of travel and tourism at the national level describes a Travel and Tourism Satellite Account (TTSA) as “present(ing) a rearrangement of information from the National Income and Product Accounts, from the industry accounts, and from other sources so that travel and tourism activities can be analyzed more completely than is possible in the structure of the traditional national economic accounts.” 7 Similarly, the RTIM has been developed by Dean Runyan Associates to estimate travel spending, earnings, employment, and tax receipts at the state, county, and regional levels. These initial findings can, in turn, be used as input data for deriving estimates of other economic measures, such as value-added and indirect effects. This appendix provides an overview of the Regional Travel Impact Model (RTIM) and travel and tourism satellite accounts (TTSAs). Although there is no single or absolute form of a TTSA, the one developed by the Bureau of Economic Analysis (BEA) will be the basis of the analysis here. The definitions, framework, and estimating methods used for the U.S. BEA TTSA follow, as closely as is practicable, the guidelines for similar travel satellite accounts that were developed by the World Tourism Organization (WTO) and the Organization for Economic Co-operation and Development (OECD). The primary focus is on the direct impacts of visitor spending. Visitors are defined as persons that stay overnight away from home, or travel more than fifty miles one-way on a non-routine trip. Only the expenditures related to specific trips are counted as visitor spending. Other travel related expenditures such as the consumption of durable goods (e.g., recreational vehicles or sporting equipment) or the purchase of vacation homes are not considered. While such a definition of the travel industry (i.e., the trip related expenditures of visitors) is conservative, it is also in keeping with the notion of the travel industry as being an export-oriented industry for specific local communities. That is, visitors are important to regions because they inject money into the local economy. This focus on the export-oriented nature of the travel industry for local communities becomes blurred if the industry is defined so as to include non-trip related expenditures. 7 Peter D. Kuhbach, Mark A. Planting, and Erich H. Strassner, “U.S. Travel and Tourism Satellite Accounts for 1998-2003,” Survey of Current Business 84 (September 2004): 43-59. PAGE 54 DEAN RUNYAN ASSOCIATES PRIMARY CONCEPTS, CATEGORIES & DATA REQUIREMENTS There are three primary types of information that are measured and/or estimated in a travel industry account. The first is a measure of the travel industry in terms of both the characteristics of the business firms that sell travel goods and services and the characteristics of consumers that purchase travel industry goods and services. The second is measure of the demand segments that consume travel industry goods and services. For example, the distinction between business and leisure travel is a measure of demand segments. The third is a measure of the components of economic output associated with the travel industry. The employee earnings generated by visitor spending is one such component. Travel-generated tax receipts are another. These three categories of information represent different aspects of the accounting ledger – they represent different ways of viewing or analyzing the travel industry. The bulk of this paper will discuss these three types of information in terms of their conceptual foundations, the data requirements, and some of the more salient issues that users of this information should be aware of. There will also be some discussion of indirect and induced effects in that these effects can be reasonably estimated from the direct travel industry accounts. These secondary (versus direct) effects describe the relationship of the travel industry to other sectors of the larger economy. The intent of this discussion will be to provide a general overview of the process of constructing travel industry accounts and the underlying similarity between the RTIM and a TTSA. More technical issues are generally placed in footnotes. TRAVEL INDUSTRY Defining the travel industry is probably the most critical and data intensive effort involved in developing a travel industry account. It is an exercise in matching supply (sellers of goods and services) with demand (the travelers that purchase those particular goods and services). It is complicated by the fact that no single industrial classification scheme provides a valid measure of the travel industry. 8 There are only three significant industrial classifications, accommodations (NAICS 721) and Scheduled Passenger Air Transportation (NAICS 481111) and Travel Arrangement and Reservation Services (NAICS 5615) that primarily sell travel industry goods and services. 9 Firms in other industries (retail, recreation, transportation) provide goods and services to both travelers and other types of consumers. Because of this, most satellite accounts, as well as the RTIM, incorporate at least some information about the expenditures of visitors in order to define the supply of visitor industry firms. For example, if there is an estimate of visitor-days and an 8 The North American Industrial Classification System (NAICS) is the current standard in the United States. 9 Even these industries are not purely travel. For example, the accommodations industry provides services to local residents (food service and meeting rooms). Passenger airlines also ship cargo on the same planes that carry passengers. Fortunately, it is usually possible to make adjustments for these non-travel components through the use of additional data. DEAN RUNYAN ASSOCIATES PAGE 55 estimate of how much the average visitor spends on food services per day, then an estimate of visitor spending on food services can be calculated. In most cases, this will be only a fraction of all food service sales in that residents are a larger market for most restaurants. 10 The industry sectors that are usually matched to visitor spending in this way are: accommodations (NAICS 721), food service (722), arts, entertainment and recreation (71), and retail trade (44-45). A portion of transportation business is also part of the travel industry for obvious reasons. In the case of the transportation sector, the definition and measurement of the travel industry component is more complicated because most transportation spending by visitors involves travel to and from the destination, rather than travel at or within the destination market. This is not an issue if the geographic scope of the travel industry market includes the origin and destination of travel. National travel industry accounts thus include all domestic passenger air transportation in the travel industry. The issue is more complicated at the state or regional level, however. Suppose, for example, that the focus of a travel industry account is the state of Arizona. How should the purchase of a round trip airline ticket by a Chicago resident traveling to Phoenix be treated in that only some of the economic impact of this spending will occur in Arizona? A reasonable approach would be to allocate only a portion of this spending (and related payroll, taxes, etc.) to Arizona and ignore the remainder for the purpose of creating a travel industry account for Arizona. However, if this procedure were followed for every state, the sum of the state accounts would be less than the national travel account. The state accounts would be additive if outbound air travel from each state were included. However, this is methodologically inconsistent with the construction of a national account, which does not include outbound travel as a component of domestic tourism demand. The approach used in the RTIM is to make a distinction between the visitor industry, that includes only visitor demand, and the travel industry, which includes visitor demand and that portion of outbound travel that can be attributed to the resident economy. For example, the passenger air transportation employment in Arizona can be divided between three groups of travelers: inbound, outbound, and pass-through. Only that employment attributable to inbound travel is part of the Arizona visitor industry. Employment attributable to outbound and pass-through travelers is included with the larger travel industry. 11 10 The proportion can vary enormously among regions and localities, however. In many popular visitor destinations, the primary market for food service will be visitors. It should also be noted that even with reliable visitor survey data, there is still the issue of how to translate spending on food service commodities to the supply of food service by industry. As indicated in the footnote above, food service is also supplied by the accommodation industry. 11 The same issue arises with Travel agencies and reservation services (NAICS 5615). Most of these services are probably related to outbound travel and are treated as such in the RTIM. PAGE 56 DEAN RUNYAN ASSOCIATES The following two tables display the specific industries that are included in the travel industry for the BEA’s national TTSA and the RTIM. Although not identical, the industries are equivalent with only a few exceptions. 12 Bureau of Economic Analysis Tourism Industries Distribution of United States Domestic Travel-Generated Compensation, 2002 Accommodations & Food Service Traveler accommodations Food services and drinking places 35.4% 21.0% 14.3% Transportation Air transportation Rail transportation Water transportation Interurban bus transportation Interurban charter bus transportation Urban transit systems & other tran. Taxi service Automotive equipment rental & leasing Automotive repair services Parking lots and garages Toll highways 29.2% 20.7% 0.5% 0.9% 0.4% 0.3% 1.6% 0.9% 2.4% 1.2% 0.2% 0.1% Recreation Scenic and sightseeing transportation Motion pictures and performing arts Spectator sports Participant sports Gambling All other recreation and entertainment 11.1% 0.5% 1.2% 2.2% 2.5% 2.4% 2.3% Retail & nondurable goods production Petroleum refineries Industries producing nondurable PCE commodities, excluding petroleum refineries Wholesale trade & tran. services Gasoline service stations Retail trade services, excluding gasoline service stations 16.2% 0.2% 4.7% 4.2% 0.9% 6.2% Travel arrangement & reservation services 7.0% All other industries 1.1% Total Tourism Compensation 100.0% Source: Adapted from Peter D. Kuhbach, Mark A. Planting, and Erich H. Strassner, “U.S. Travel and Tourism Satellite Accounts for 1998-2003,” Survey of Current Business 84 (September 2004): 59, table 5. 12 The major exception is that the BEA includes the production of consumer non-durables that are sold through retail outlets. This is not a major component and would be even less so at the level of the state. DEAN RUNYAN ASSOCIATES PAGE 57 RTIM Travel Impact Industries Matched to NAICS Travel Impact Industry NAICS Industry (code) Accommodation & Food Services Accommodation (721) Food Services and Drinking Places (722) Arts, Entertainment & Recreation Performing Arts, Spectator Sports (711) Museums (712) Amusement, Gambling (713) Scenic and Sightseeing Transportation (487) Retail Food & Beverage Stores (445) Gasoline Stations (447) Clothing and Clothing Accessories Stores (448) Sporting Goods, Hobby, Book, and Music Stores (451) General Merchandise Stores (452) Miscellaneous Store Retailers (453) Ground Transportation Interurban and rural bus transportation (4852) Taxi and Limousine Service (4853) Charter Bus Industry (4855) Passenger Car Rental (532111) Parking Lots and Garages (812930) Air Transportation Scheduled Air Passenger Transportation (481111) Support Activities for Air Transportation (4881) Travel Arrangement Services Travel Agencies (56151) Tour Operators (56152) Source: Dean Runyan Associates PAGE 58 DEAN RUNYAN ASSOCIATES DEMAND SEGMENTS The distinction between inbound and outbound travel has already been discussed in the previous section and in terms of the concepts of the visitor industry and the travel industry. Three other types of demand segments that are related exclusively to the visitor industry will be discussed here. The first two demand categories are reported by the BEA in their national TTSA. They are: leisure versus business travel, and resident versus non-resident travel. The third demand category is typically reported in the RTIM: type of traveler accommodation. These three demand categories will be discussed in turn. The distinction between leisure versus business travel is useful for several reasons. Economists like to distinguish between personal consumption expenditures on the one hand and business expenditures on the other. Indeed, this distinction is central for the National Income and Product Accounts (NIPAs). Those in the travel industry are more likely to be interested in this distinction because leisure travelers represent a more “marketable” segment because their travel choices are less determined by economic and business factors. Furthermore, business and leisure travelers tend to have different spending profiles. The availability of this information in either a state or regional TTSA or RTIM is essentially dependent on the availability of survey data (as it is at the national level). It should be noted, however, that such estimates are considerably less reliable for smaller geographic areas because of the limitations of survey data. Even at the state level, year-to-year changes in the composition of this demand segment should be interpreted in conjunction with other data. The distinction between resident versus non-resident travel is fundamental to a national TTSA because it mirrors the distinction between the domestic economy and international transactions. Non-resident travel in the United States is considered an export in the official international transaction accounts. 13 The distinction is obviously also important because it is based on different political, legal, and currency regimes – factors that in themselves influence travel behavior. At the level of the state or region, the distinction between resident and nonresident travel is less important, although it is often reported. 14 There are at least two reasons why this distinction is less useful at state and regional levels. First, there is considerably less of an economic rationale for distinguishing resident and non-resident travel at the level of the state, or any other political jurisdiction within the United States, than there is at the national level. States do not maintain interstate trade balance sheets that chart the flow of goods and services across state boundaries. From an economic point of view, the administration of the tax system is the primary, if only, reason for this distinction. In the case of travel and tourism, the 13 Conversely, the spending of U.S. visitors in other countries is treated as an import in the international transaction accounts. 14 The issues discussed with regard to the reliability of survey data for leisure versus business travel also applies to this category DEAN RUNYAN ASSOCIATES PAGE 59 evaluation of the tax impacts of resident versus nonresident travel might also be important. 15 Second, travel is behaviorally defined by length of distance from home (usually at least 50 miles one-way), trip purpose (non-routine), and/or the use of an overnight accommodation away from home. Rarely is domestic travel defined by virtue of crossing a geographic boundary. 16 The operators of tourist attractions in local communities are generally less interested in the origin of visitors than in the revenue that they generate for their businesses. In terms of the economic impacts at the local level, the distinction between in-state residents, out-of-state residents and international visitors may not be relevant other than for the purpose of marketing. However, other geographic characteristics of the visitor (e.g., distance traveled, the specific area of origin) are generally more useful measures of the visitor market than whether the visitor is a resident or nonresident. Finally, the distinction among different types of traveler accommodations is generally reported in the RTIM. Typically, these categories are: • Visitors who stay in hotels, motels, B&Bs., and similar lodging facilities • Visitors who stay at campsites • Visitors who stay in the private homes of friends or relatives • Visitors who stay in vacation or second homes • Visitors who do not stay in overnight accommodations on their trip away from home (day visitors). These distinctions can be useful because estimates of economic impacts are often used for different purposes. The total of all accommodation types, of course, is an estimate of the total magnitude of the visitor industry. Visitors who stay in commercial lodging such as hotels and motels are most likely to have the greatest economic impact on a person-day basis. These visitors are also more likely to be influenced by marketing efforts. In urban areas, a large proportion will represent business travel. In other words, the type of accommodation category can be used in conjunction with other types of data to analyze the market characteristics of visitors. 15 Nonresident visitors who pay taxes in their destination state represent an unambiguous gain for the state. This effect is less clear for resident travelers within the state. 16 In essence, state level travel impact estimates really represent an aggregation of smaller geographic units, such as counties or regions. Populous states with large landmasses (e.g., California or Texas) will have a higher proportion of resident travel than small states (e.g., Rhode Island or Delaware). PAGE 60 DEAN RUNYAN ASSOCIATES COMPONENTS OF INDUSTRY OUTPUT Because both the RTIM and the TTSA are empirically linked to NAICS industry accounts, it is possible to provide estimates of different components of economic output. The major economic components most often estimated are: 17 • Travel spending (Gross Output) • Value-added (Gross Product) • Earnings (labor income) • Indirect business taxes (sales, excise, property taxes & fees). The relationship of these components is shown below. As indicated, the value-added of a particular industry (the bar on the right) is equal to gross output (travel spending) minus the intermediate inputs used by travel industry businesses to produce the good or service. Restaurants, for example, prepare and serve the food products that are purchased from suppliers. Airlines purchase or lease airplanes from other firms. These intermediate inputs are not counted as part of the value-added of the travel industry. They are counted as value-added in other industries (e.g., agriculture, aerospace manufacturing). Components of Industry Output Inputs/Goods Resold Operating Surplus Indirect Taxes Labor Income Output (Spending) Value-Added The distinction between gross output and value-added is probably even more important at the state or regional level. This is because the intermediate inputs that are purchased from other industries are even more likely to be purchased from businesses located in different regions or states. The economic impact of air 17 There are some small differences between the BEA TTSA and the RTIM in what these components include. The BEA allocates proprietor income to Operating Surplus; the RTIM allocates it to Labor Income. The RTIM does not have an estimate of property taxes in indirect taxes. Overall, property taxes on businesses are a relatively small proportion of indirect taxes. DEAN RUNYAN ASSOCIATES PAGE 61 passenger travel in the state of Hawaii should not include the purchase of airplanes manufactured in the United States mainland by Boeing or in Europe by Airbus. Travel industry value-added is a more meaningful measure of the true economic impact visitor spending in Hawaii because some of economic impact of that spending will occur elsewhere. 18 Value-added can also be viewed in terms of the distribution or payout of industry receipts, exclusive of those paid to other firms for intermediate inputs. Some of the receipts are distributed to labor as wages, benefits, and proprietor income. Some receipts are paid to government as indirect taxes. These taxes are called “indirect” because most of them are actually paid by consumers in the form of sales or excise taxes. 19 The remainder leaves gross operating surplus. Out of gross operating surplus various payments are made in the form of dividends, interest, and other payments, or retained by the firm. The sum of these three broad categories of payments is equal to travel industry value-added. To summarize: Value-added = Spending less intermediate goods & services, or Value-added = Labor Income plus indirect business taxes plus gross operating surplus. The RTIM is similar to the TTSA in that it also provides estimates of these components of economic output. Travel spending, earnings, and tax impacts are generally provided at the state or regional level. Value-added is generally reported at the statelevel only (sometimes referred to as Travel Industry Gross State Product). At the level of the state, travel industry value-added or GSP is an important measure – more economically meaningful than travel spending. 20 For smaller geographic areas, however, the rationale for reporting value-added is less clear. First, there are real data limitations and data costs in deriving these estimates. Second, the most important components of value added for the travel industry are earnings and tax receipts. Because the travel industry is relatively labor intensive and because a large proportion of travel industry goods and services are subject to excise and sales taxes, these two components of value-added (labor income and indirect taxes) are relatively high for the travel industry. The local effects of gross operating surplus are generally less important and certainly much more difficult to assess than are earnings and tax impacts. The relevance of earnings and tax receipts is also in keeping the exportoriented emphasis of the travel industry: earnings and tax receipts are more likely to stay in the local economy than is operating surplus. 18 It should also be noted the value of the intermediate inputs used by travel industry firms will not necessarily disappear if the travel industry stops buying them. Aerospace firms will shift their production to other users (e.g., military). Agriculture will seek new markets for their products. 19 Other taxes included here are property taxes, business franchise taxes, and other fees. Income taxes are not included, because they are paid out of operating surplus. 20 It is also possible to compare different industries with respect to their value-added. It is more difficult and less useful to compare industries on the basis of sales. PAGE 62 DEAN RUNYAN ASSOCIATES INDIRECT, INDUCED AND SECONDARY EFFECTS To this point, the discussion of travel industry accounts has referred only to the direct output components. That is, the ripple effects of the re-spending of travel industry receipts throughout the larger economy have not been analyzed. The structure of both the TTSA and the RTIM permit such analysis. • Indirect effects refer to the intermediate inputs used to produce the final product or service, providing that those inputs are themselves produced within the designated geographic area. • Induced effects refer to the purchase of goods and services by employees that are attributable to direct and indirect impacts. These induced impacts are derived from economic data that describe the purchasing patterns of households. For example, employees of all the designated export-oriented industries will spend their income on food, household durables, health care, and so on. • The sum of indirect and induced impacts is sometimes referred to as the secondary effect. These secondary impacts may be as great or greater than the direct impact alone. • The ratio of the total effects (direct plus either indirect, induced, or secondary) to the direct effects is the multiplier. The BEA reports the indirect components of economic output. This is equivalent to domestic travel spending less the goods and services imported from abroad to meet domestic demand. For travel, these imports would include souvenirs manufactured in China and petroleum extracted in Saudi Arabia. The indirect output multiplier for 2002 was 1.76. The ratio of domestic travel spending to travel industry value-added was 1.88. The difference reflects the intermediate inputs for travel imported from abroad. At the state level, these indirect output multipliers are typically lower because relatively more of the intermediate inputs are purchased from outside of the state. At the county or metropolitan level, the multipliers are generally even lower for the same reason. Furthermore, the estimates are usually less reliable because of the data limitations of the regional input-output model used to estimate the indirect effects. The BEA does not report induced effects – the effect of household spending of the direct and indirect labor income. Typically, these induced effects will be larger than the indirect effects at the state or regional level, in part because they are based on both the direct and indirect components. 21 As with indirect effects, the induced effects will also tend to be lower for smaller economic areas and the reliability of the estimates will be less. 21 The induced effects can be estimated with the Implan model maintained by the Minnesota Implan Group. DEAN RUNYAN ASSOCIATES PAGE 63 Secondary effects should be interpreted cautiously. These effects describe the relationship of economic transactions at a point in time. These relationships will not necessarily remain constant with a change in direct economic output. This is because all economic resources have alternative uses. Because of this, it is often difficult to determine the effect of an increase or decrease in visitor spending on the larger economic system over time. THE REGIONAL TRAVEL IMPACT MODEL AND TRAVEL & TOURISM SATELLITE ACCOUNTS COMPARED This appendix has provided an overview of Dean Runyan Associates RTIM and the Bureau of Economic Analysis’ domestic TTSA. These travel industry accounts are similar in terms of how they define the travel industry and the measures of the industry that are reported. The differences stem largely from their different levels of analysis – the BEA provides estimates at the national level only, while the RTIM’s are typically constructed on a state or regional level. Because of this geographic focus, the RTIM provides a distinction between the visitor industry and the travel industry. The RTIM also provides measures of all of the components of economic output and secondary effects at the state or large region level. At smaller units of analysis, however, the emphasis is on earnings and tax receipts generated by travel spending as these are the most reliable and meaningful measures of the economic impact of travel at the local level. PAGE 64 DEAN RUNYAN ASSOCIATES APPENDIX B TRAVEL IMPACT ESTIMATION PROCEDURES TRAVEL SPENDING Hotel, Motel, B&B. Spending on commercial accommodations by hotel and motel guests is estimated from room tax receipts for each county. Where room tax receipts are unavailable or incomplete, room sales are estimated from lodging inventories, occupancy rates, and room rates. Other lodging industry data, such as sales tax receipts, employment and earnings, are also used to estimate and/or validate room sales. Spending by hotel and motel guests in other business categories, such as food and transportation, is estimated using spending distributions reported in the visitor survey data. The spending distribution shows how travelers divide their spending between lodging and other purchases. Private Campground. Spending by campers using commercial campgrounds is estimated from the number of commercial campsites, the average occupancy of these campsites, and the average daily expenditures of visitor camp parties reported in survey data. Spending in other business categories is estimated in the same way as for hotel guests. Public Campground. Spending by campers using public campgrounds is estimated from visitor counts at federally, state and locally managed campsites and recreation areas, and daily spending estimates from the visitor survey. Private Home. Spending by private home guests is determined from census data and visitor survey data. The number of owner-occupied housing units per county is taken from the decennial census and updated annually. The average number of days per year that visitors are hosted by residents and the average daily spending of these visitors are estimated from visitor survey data. Vacation Home. The estimated spending by vacation home renters and owners is also based on census data and visitor survey data. The number of seasonal housing units per county is taken from the decennial census and updated annually. The average number of days per year that these units are occupied by owners or renters (where a room tax is not collected) and the average daily spending of these visitors are estimated from visitor survey data. Day Travel. The share of day visits as a percentage of total travel is estimated from visitor survey data and applied to average daily spending estimates to produce day visitor spending. Air Transportation. Visitor spending estimates for air transportation are derived from the Origin-Destination survey conducted for the Bureau of Transportation Statistics. Employment and earnings estimates are derived from industry receipts, DEAN RUNYAN ASSOCIATES PAGE 65 payroll and employment data for passenger traffic. The impacts of air cargo operations on scheduled passenger flights are not included in these estimates. Travel Arrangement Services. This category consists of travel agencies (NAICS 56151). Employment estimates are based on employment data provided by the Bureau of Labor Statistics. Spending estimates are derived from the 1997 Economic Census. RELATED TRAVEL IMPACTS Spending by travelers generates jobs, earnings and state and local tax revenue. Earnings generated directly from traveler expenditures are estimated from the payroll-to-receipts ratio obtained from data published in the 1997 Economic Census and the state and county estimates of earnings and employment produced annually by the Bureau of Economic Analysis’ Regional Economic Information System (REIS). Earnings includes payroll and other earned benefits of employees, and proprietor income. Employment in each business category is calculated from average earnings data derived from ES-202 statistics and the earnings and employment produced annually by the Bureau of Economic Analysis’ Regional Economic Information System (REIS). Local Taxes consist of all local (municipality, county, special districts) excise taxes, including room taxes, sales taxes and auto rental taxes. Property taxes are not included. State Taxes consist of all statewide excise taxes (including sales taxes and gasoline excise taxes) and personal and business income taxes. PAGE 66 DEAN RUNYAN ASSOCIATES APPENDIX C DEFINITION OF TERMS Accommodations: Spending for lodging by hotel and motel guests, campers and vacation home users. Air Transportation: Air passenger spending attributable to travelers in and to Arizona. The spending total includes air travel spending made outside Arizona for travel to Arizona and air travel within the state. Campers: Travelers staying at RV parks and commercial campgrounds or at public campgrounds such as those in state and national parks. Day Visitor: A traveler whose trip does not include an overnight stay but who travels out of his/her local area (50+ miles one-way). Visitor Spending: Spending by travelers at or near their destinations. This includes spending on airfares to the destination. All automobile operating expenses are included in the ground transportation component of destination spending. Direct Impacts: Employment, earnings and tax receipts directly generated by travel spending. Direct impacts are one component of total impacts (see below). Earnings: Total earnings include wage and salary disbursements, other earned income and proprietor income. Only the earnings attributable to travel expenditures are included. Eating, Drinking: Businesses serving food and beverages for immediate consumption. In addition to table service restaurants, this category includes fastfood outlets and refreshment stands. Employment: Industry employment (jobs) associated with the travel-generated payroll and proprietors. This includes both full- and part-time positions. Expenditures: Purchases by travelers during their trip, including lodging taxes and other applicable local and state taxes paid by the traveler at the point of sale. Food Stores: Grocery stores, supermarkets, fruit stands, retail bakeries, and other businesses selling food for consumption off the premises. Ground Transport: Spending on car rentals, gasoline and other vehicle operating expenses, and on local transportation such as taxi, bus, and train. Hotel and Motel Guests: Travelers staying in hotels, motels, resorts, bed & breakfast establishments, condominiums, and other lodging places where the Hotel/Motel Occupancy Tax is collected. Hotel/Motel Occupancy Tax: A state or local tax charged on lodging. Also referred to as room tax, transient lodging tax or bed tax. DEAN RUNYAN ASSOCIATES PAGE 67 Indirect Impacts: See secondary impacts. Induced Impacts: See secondary impacts. Local Tax Receipts: Tax revenue collected by counties and municipalities, as levied on applicable travel-related businesses. Consists of hotel occupancy taxes, local sales taxes and local auto rental taxes. Multiplier: Refers to the ratio of total impacts to direct impacts for employment or earnings. Private Home Guests: Travelers staying as guests with friends or relatives. Receipts: Travel expenditures less the sales and excise taxes imposed on those expenditures. Also referred to as business receipts. Recreation: Spending on entertainment and recreation, such as admissions to tourist attractions or artistic events. Retail Sales: Spending for gifts, souvenirs, and other items. Excludes spending listed separately, such as food stores or gasoline service. Secondary Impacts: The sum of indirect and induced impacts. Indirect impacts refer to the purchases of goods and services by the businesses that receive travel expenditures. Induced impacts refer to the spending by employees of the businesses that directly and indirectly receive travel expenditures. Spending Distributions: Information from visitor surveys showing how spending by each type of visitor is divided among various business categories. State Tax Receipts: State hotel occupancy taxes and sales taxes, motor fuel taxes and business franchise taxes attributable to travel expenditures Total Impacts: The sum of direct and secondary impacts. Travel: A day or overnight trip that is not of a local or commuting nature. Travel may be for business or pleasure purposes. Travel Arrangement: Travel agents and tour operators. Travel Spending. Spending by visitors on trip-related goods and services. Travel spending does not include purchases of durable goods (e.g., recreational equipment, luggage, etc.) used for or during travel. Total travel spending is the sum of Destination Spending (see above) and spending on airfares and travel arrangement services. Traveler: A person traveling in Arizona. A traveler may be an Arizona resident or a resident of another state. The terms traveler and visitor have the same meaning in this report. Vacation Home User: Travelers using their own vacation home or timeshare and those renting a vacation home or cabin where a transient lodging tax is not collected. PAGE 68 DEAN RUNYAN ASSOCIATES APPENDIX D Industry Groups for Secondary Impacts Accommodation & Food Services Food services and drinking places Hotels and motels, including casino hotels Other accommodations Arts, Entertainment & Recreation Bowling centers Fitness and recreational sports centers Independent artists, writers, and performers Museums, historical sites, zoos, and parks Other amusement, gambling, and recreation industries Performing arts companies Promoters of performing arts and sports and agents for public figures Scenic and sightseeing trans and support activities for transportation Spectator sports Wholesale & Retail Trade Building material and garden supply stores Clothing and clothing accessories stores Electronics and appliance stores Food and beverage stores Furniture and home furnishings stores Gasoline stations General merchandise stores Health and personal care stores Miscellaneous store retailers Motor vehicle and parts dealers Nonstore retailers Sporting goods, hobby, book and music stores Wholesale trade Transportation Air transportation Automotive equipment rental and leasing Automotive repair and maintenance, except car washes Couriers and messengers Rail transportation Transit and ground passenger transportation Travel arrangement and reservation services Truck transportation Warehousing and storage Water transportation DEAN RUNYAN ASSOCIATES PAGE 69 Professional Services Accounting and bookkeeping services Advertising and related services All other miscellaneous professional and technical services Architectural and engineering services Book publishers Cable networks and program distribution Child day care services Civic, social, professional and similar organizations Colleges, universities, and junior colleges Computer systems design services Custom computer programming services Data processing services Database, directory, and other publishers Elementary and secondary schools Environmental and other technical consulting services Grantmaking and giving and social advocacy organizations Home health care services Hospitals Information services Legal services Management consulting services Management of companies and enterprises Motion picture and video industries Newpaper publishers Nursing and residential care facilities Offices of physicians, dentists, and other health practitioners Other ambulatory health care services Other computer related services, including facilities management Other educational services Periodical publishers Photographic services Radio and television broadcasting Religious organizations Scientific research and development services Social assistance, except child day care services Software publishers Sound recording industries Specialized design services Telecommunications Veterinary services PAGE 70 DEAN RUNYAN ASSOCIATES Other Services Business support services Car washes Commercial machinery repair and maintenance Death care services Drycleaning and laundry services Electronic equipment repair and maintenance Employment services Facilities support services General and consumer goods rental except video tapes and discs Household goods repair and maintenance Investigation and security services Lessors of nonfinancial intangible assets Machinery and equipment rental and leasing Office administrative services Other personal services Other support services Personal care services Private households Services to buildings and dwellings Video tape and disc rental Waste management and remediation services Government Federal electric utilities Federal Military Federal Non-Military Other Federal Government enterprises Other State and local government enterprises Postal service State & Local Education State & Local Non-Education State and local government electric utilities State and local government passenger transit Construction Commercial and institutional buildings Highway, street, bridge, and tunnel construction Maintenance and repair of farm and nonfarm residential structures Maintenance and repair of highways, streets, bridges, and tunnels Maintenance and repair of nonresidential buildings Manufacturing and industrial buildings New farm housing units and additions and alterations New multifamily housing structures, nonfarm New residential 1-unit structures, nonfarm New residential additions and alterations, nonfarm Other maintenance and repair construction Other new construction Water, sewer, and pipeline construction DEAN RUNYAN ASSOCIATES PAGE 71 Finance, Ins., & Real Estate Funds, trusts, and other financial vehicles Insurance agencies, brokerages, and related Insurance carriers Monetary authorities and depository credit intermediation Nondepository credit intermediation and related activities Real estate Securities, commodity contracts, investments Mining & Manufacturing all mining & manufacturing industries except for food processing Agriculture & Food Processing farming & manufacturing industries in food processing PAGE 72 DEAN RUNYAN ASSOCIATES APPENDIX E Rounding and Format of Detailed Tables ROUNDING OF ESTIMATES Dollar amounts in the detailed metropolitan and regional reports are rounded to the nearest $100,000. For example, an estimate of $3,674,352 before rounding would be rounded to $3,700,000. In the detailed tables, this is presented as $3.7 million. Most employment estimates are rounded to the nearest ten jobs. For example, an employment estimate of 137 jobs before rounding would be rounded to 140 jobs. Employment estimates for large metropolitan and regional areas are rounded to the nearest 100 jobs and reported in thousands (e.g., 3,943 reported as 3.9 thousand). All totals in the tables are the sum of the estimates before rounding. For example, the sum of 40 (rounded from 37) and 60 (rounded from 57) would be 90 (rounded from 37 + 57 = 94). This means that the reported totals are occasionally different from the sum of the rounded details. TABLE FORMAT • Total Direct Travel Spending includes visitor spending at destination (including air transportation) plus other travel. Other travel includes resident spending on outbound air transportation and spending on travel arrangement services. Total direct travel spending does not include secondary (indirect and induced) effects. • Visitor Spending by Type of Traveler Accommodation refers to the total direct spending of each category of visitor at that destination (county or state). For example, the spending of visitors that stayed at hotels, motels or B&B’s includes their spending on accommodations, food & beverage service, recreation, transportation and all other visitor related commodities. • Visitor Spending by Commodity Purchased refers to the total spending on each commodity for all types of visitors. For example, the total spending on Food & Beverage Services includes spending by visitors staying in hotels, private campgrounds, private homes and the other types of accommodation. The total visitor spending on commodities is identical to the total spending by type of accommodation. The next two sections, Direct Travel-Generated Earnings by Industry and Direct Travel-Generated Employment by Industry, provide estimates of travel-generated earnings and employment that are based on an industry, rather than a commodity, classification. A business that is classified in a particular industry may include more than one commodity. For example, a resort that is classified in the accommodation industry may provide accommodations, food and beverages and recreation. DEAN RUNYAN ASSOCIATES PAGE 73 • Direct Travel-Generated Earnings by Industry includes the payroll, other earned benefits, and proprietor income of all employees in that industry classification. • Direct Travel-Generated Employment by Industry includes all full- and parttime employees. This includes payroll employees covered by unemployment insurance and those that are not, as well as proprietors. • Tax Revenues Generated by Travel Spending, provides a breakout of local state taxes. A breakout of federal tax impacts is provided at the state level only. Local taxes include all room taxes, local sales taxes and local auto rental taxes, plus the local share of the state transaction privilege tax. The state share of the transaction privilege tax, personal and business income taxes, motor fuel tax and contributions from tribal gaming revenue is included in state tax receipts. Federal taxes include payroll and income taxes, the motor fuel excise tax and airline ticket taxes. PAGE 74 DEAN RUNYAN ASSOCIATES