Arizona Travel Impacts 1998-2008p photo courtesy of Arizona Office of Tourism June 2009 Prepared for the Arizona Office of Tourism Phoenix, Arizona ARIZONA TRAVEL IMPACTS 1998-2008P Arizona Office of Tourism Primary Research Conducted By: Dean Runyan Associates Portland, Oregon June 2009 EXECUTIVE SUMMARY This report describes the economic impacts of travel to and through Arizona and the state’s fifteen counties. 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 estimates for Arizona are comparable to the U.S. Travel and Tourism Satellite Accounts produced by the Bureau of Economic Analysis. The estimates of spending, earnings, employment and tax receipts are also used as input data to derive estimates of other economic measures, including gross domestic product (GDP) and secondary effects of the travel industry. THE ARIZONA TRAVEL INDUSTRY IS A LEADING EXPORT-ORIENTED INDUSTRY Travel and tourism is one of the most important “export-oriented” industries in Arizona. Spending by visitors generates sales in lodging, food services, recreation, transportation and retail businesses – the “travel industry.” These sales support jobs for Arizona residents and contribute tax revenue to local and state governments. In recent years, the travel industry has been one of the top two export-oriented industries in the state in terms of Gross Domestic Product (GDP). GDP of Arizona Export-Oriented Industries Agric./Food Proc. 2005 2006 2007 Mining Micro-Electronics Aerospace Travel $0 $1 $2 $3 $4 $5 $6 $7 $8 Gross Domestic Product (Billions) Note: Data not available for comparison industries for 2008. THE TRAVEL INDUSTRY SUPPORTS EMPLOYMENT IN OTHER INDUSTRIES Secondary impacts include the purchases of goods and services by travel industry businesses (indirect effects) and by travel industry employees (induced effects). In 2008 (preliminary), direct travel industry employment was 166,900 with earnings of $5.0 billion. The total (direct and secondary) impact of the Arizona travel industry in 2008 was 310,000 jobs and $10.2 billion earnings. Most of the secondary impacts were in professional services, government, finance, real estate and construction. DEAN RUNYAN ASSOCIATES PAGE I THE TRAVEL INDUSTRY PRODUCES SIGNIFICANT TAX BENEFITS • In 2008, direct travel spending was associated with $1.4 billion in state and local tax revenues and $1.2 billion in federal tax revenues. This is equivalent to $1,080 per Arizona household. • In recent years, the state and local tax revenues supported by the travel industry represented over 7 percent of all state and local tax revenues in Arizona. The visitors who purchase goods and services in the state directly pay most of these taxes. • Compared to other industries, the travel industry produces a proportionately large amount of tax revenue in relation industry gross domestic product (GDP). Only retail trade has a higher proportion of indirect business taxes (sales, property taxes & other business payments to government) in relation to industry GDP. However, in contrast to the travel industry, the sales taxes paid by retail establishments are primarily taxes on residents rather than visitors. State and Local Government Tax Revenue Arizona, 2007-08 Fiscal Year (Billion) Travel Industry $1.5 6.9% Other Industries & Households $19.5 93.1% Indirect Business Taxes as a Percent of Industry Gross Domestic Product, Arizona, 2007 Calendar Year Construction Manufacturing Retail trade Health Care Travel All Industries 0% 5% 10% 15% 20% 25% Indirect Business Taxes as Percent of GDP PAGE II DEAN RUNYAN ASSOCIATES THE TRAVEL INDUSTRY BENEFITS ALL REGIONS OF ARIZONA About three-fourths of all travel spending occurs in the two most populous counties of the state – Maricopa and Pima. But in relation to the size of the regional economies within Arizona, travel is actually more important in the non-metropolitan areas of the state. Travel-Generated Earnings as a Percent of Total Earnings Arizona Counties, 2008p Maricopa & Pima All other 0% 1% 2% 3% 4% 5% 6% Percent of State Direct Travel-Generated Earnings RECENT TRENDS IN THE ARIZONA TRAVEL INDUSTRY Total direct travel spending in Arizona in 2008 was $18.5 billion. This represents a 3.2 percent decrease over the preceding year in current dollars. Employment, earnings and tax receipts also declined. Nationally, there has also been a sharp decline in travel due to the recession and the capacity reductions of air carriers. Direct Travel Spending in Current and Constant Dollars Arizona, 1998-2008p $22 $20 Billions $18 $16 Constant $14 Current $12 $10 98 99 00 01 02 03 04 05 06 07 08p Year DEAN RUNYAN ASSOCIATES PAGE III SUMMARY OF FINDINGS • Total direct travel spending in Arizona in 2008 was $18.5 billion. This represents a 3.2 percent decrease over the preceding year in current dollars. Employment, earnings and tax receipts also declined. Travel activity to Arizona began to weaken earlier (4th quarter of 2007) than in the larger U.S. (see page 3). The collapse of the housing market and the economic recession in Arizona and Southern California were contributing factors. In addition, capacity reductions by air carriers have also adversely affected the Arizona travel, which is more dependent on air travel than most visitor destinations in the U.S. • Visitors that stayed overnight in lodging establishments accounted for 41.2 percent of all visitor spending in 2008p. Visitors that stayed in the private homes of friends or relatives accounted for 29.4 percent. Day travelers accounted for about 21.2 percent. • More than one-half (51.7 percent) of all spending by visitors in 2008 was for leisure and hospitality services (arts, entertainment, recreation, accommodations, food service). • Direct travel spending in Arizona generated 166,900 jobs with earnings of $5.0 billion in 2008. Three-fourths of these jobs were in the accommodations, food services, and arts, entertainment and recreation industries. • In 2008, direct travel spending was associated with $1.4 billion in state and local tax revenues and $1.2 billion in federal tax revenues. This is equivalent to $1,080 per Arizona household. The travel industry share of all state and local tax revenues is more than 7 percent. • The tax revenues supported by the travel industry are high relative to other industries (almost 14 percent of Gross Domestic Product for the travel industry versus 9 percent of GDP for all Arizona industries). In addition, most of the taxes generated by travel industry taxes are imposed on visitors rather than residents. • Travel spending in Arizona generated a total (direct and secondary) impact of 310,000 jobs with earnings of $10.2 billion in 2008. Most of the secondary impacts were in professional and business services. • 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. PAGE IV DEAN RUNYAN ASSOCIATES TABLE OF CONTENTS page I. National Travel Trends II. Arizona Travel Impacts 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 Arizona Travel Industry Gross Domestic Product Gross Domestic Product of Arizona Export-Oriented Industries Travel Related Construction Activity Secondary Impacts III. State and Local Government Revenue IV. County Travel Impacts Appendices A. Regional Travel Impact Model B. Travel Industry Accounts: A comparison of the Regional Travel Impact Model and Travel & Tourism Satellite Accounts C. Arizona Earnings and Employment by Industry Sector D. Secondary Impacts Industry Groups DEAN RUNYAN ASSOCIATES 1 5 6 7 10 11 11 12 15 16 17 18 23 29 51 52 59 71 73 PAGE V LIST OF TABLES AND FIGURES page I. National Travel Trends 1 Direct Travel Spending in U.S., 1998-2008p U.S. Travel Spending in Current & Constant Dollars, 1998-2008p Overseas Arrivals to the United States, 1998-2008p Visitor Air Arrivals in U.S., 1998-2008 Annual U.S. Travel Spending, 2006Q1-2008Q4 Visitor Air Arrivals in U.S., 2006Q1-2008Q4 Overseas Arrivals to the U.S., 2006Q1-2008Q4 1 1 2 2 II. Arizona Travel Impacts 3 5 Arizona Travel Trends, 1998-2007p Direct Travel Spending in Arizona Adjusted for Inflation, 1998-2008p Visitor Air Arrivals to Arizona, 1998-2008 Visitor Air Arrivals to Arizona, 2006Q1-2008Q4 Arizona Lodging Sales, 2006Q1-2008Q4 Visitor Spending by Type of Traveler Accommodation, 2008p Visitor Spending by Commodity Purchased, 2008p Direct Travel-Generated Employment by Industry, 2008p Arizona Travel Impacts by Origin of Visitor, 2008p Visitor Spending in Arizona by Origin of Visitor, 2008p Arizona Direct Travel Impacts, 1998-2003 Arizona Direct Travel Impacts, 2004-2008p Arizona Travel Industry Gross Domestic Product, 2008p Arizona GDP, Selected Export-Oriented Industries, 2004-2007 Value of New Construction in Travel-Related Buildings, 2004-2008 Total Employment and Earnings, 2008p Secondary Employment & Earnings, 2008p III. State and Local Government Revenue 7 8 8 9 9 10 11 11 12 12 13 14 15 16 17 18 20-21 23 Arizona State & Local Tax Revenue, 2006-07 FY Arizona Travel Industry State & Local Tax Revenues, 2006-07 FY Arizona State & Local Tax Revenues, 2006-07 FY (table) GDP and Tax Payments of Selected Arizona Industries, 2006 Tax Payments as Percent of GDP for Selected Arizona Industries, 2006 State Transaction Privilege Taxes Generated by Travel Spending, 2008 FY IV. County Travel Impacts 23 24 25 26 26 27-28 29 Travel-Generated Earnings Shares, 2008p Travel-Generated Employment and Earnings Shares by County, 2008p County Impact Summary Tables County Impact Detail Tables, 1998-2008p PAGE VI 3 30-31 32 33-36 37-50 DEAN RUNYAN ASSOCIATES PREFACE The purpose of this study is to document the economic significance of the travel industry in Arizona from 1998 to 2008. 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 DEAN RUNYAN ASSOCIATES PAGE VII I. NATIONAL TRAVEL TRENDS Direct travel spending by domestic and international visitors in the United States was $780 billion in 2008 (preliminary). This represents a 4.4 percent increase over 2007 in current dollars (no adjustment for price increases). However, when adjusted for inflation travel spending actually declined by 0.4 percent on an annual basis. This is shown in the graph below. Gasoline, accommodations, and airfares were the primary components of travel price inflation. Direct Travel Spending In U.S., 1998-2008p ($Billions) Domestic International 1998 $409 $71 1999 $431 $75 2000 $465 $82 2001 $452 $72 2002 $459 $67 2003 $493 $64 2004 $534 $75 2005 $572 $82 2006 $615 $86 2007 $650 $97 2008p $669 $110 Annual Percentage Change 98-08p 5.1% 4.5% 07-08p 3.0% 14.2% Total $480 $506 $547 $524 $525 $557 $608 $654 $700 $746 $780 Pct. Int'l. 14.9% 14.8% 15.1% 13.7% 12.7% 11.6% 12.3% 12.5% 12.2% 13.0% 14.2% 5.0% 4.4% Sources: Bureau of Economic Analysis (Travel and Tourism Satellite Accounts; U.S. International Trade in Goods and Services). U.S. Direct Travel Spending in Current and Constant Dollars, 1998-2008p ($Billions) 800 750 $Billions 700 650 Constant 600 Current 550 500 450 98 99 00 01 02 03 04 05 06 07 08p Source: Bureau of Economic Analysis. Constant (2008) travel spending estimates derived from BEA constant (2000) dollar estimates by Dean Runyan Associates, Inc. DEAN RUNYAN ASSOCIATES PAGE 1 The number of domestic trips on U.S. air carriers in 2008 decreased by 5.0 percent on an annual basis. The economic recession, higher airfares, and reduced airline capacity all contributed to the decrease in air travel. Visitor Air Arrivals in U.S., 1998-2008 Domestic Air Carriers 260 250 Millions 240 230 220 210 200 190 00 01 02 03 04 05 06 07 08 Source: Bureau of Transportation Statistics, U.S. Department of Transportation (Origin & Destination Survey and T-100 domestic market data). Visitor air arrivals exclude return trips and passengers making connections to other flights. The number of overseas arrivals to the U.S. in 2008 grew by 6.0 percent over the preceding year. This compares to a 10.3 percent increase in 2007. The estimated 26 million arrivals in 2008 will nearly equal the previous peak attained in 2000. The increase in the number of international visitors contributed to a 14.2 percent increase in travel spending in current dollars (see preceding table). Visitation has increased over the past year in part due to the decline in the value of the U.S. dollar in relation to foreign currencies. Overseas Arrivals to the United States, 1998-2008 (Millions) 30 25 7.2 Millions of Arrivals 6.7 6.6 6.4 20 15 7.0 6.7 6.7 6.9 5.2 7.6 10 10.3 10.8 5.8 6.2 6.2 9.3 9.9 9.7 04 05 06 4.7 6.3 5.7 5.6 5.2 5.8 5.0 11.2 9.1 6.2 6.4 8.2 8.3 02 03 10.9 12.2 Other Asia W. Europe 5 0 98 99 00 01 07 08 Source: 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). PAGE 2 DEAN RUNYAN ASSOCIATES Quarterly breakouts of the travel indicators shown previously are presented below. The declining rates of annual growth accelerated during the course of the year. Annual U.S. Travel Spending, 2006Q1-2008Q4 Seasonally adjusted chained (2000) Dollars Annual Spending in $Billions 635 630 625 620 615 610 605 600 06-1 06-2 06-3 06-4 07-1 07-2 07-3 07-4 08-1 08-2 08-3 08-4 Year & Quarter Source: Bureau of Economic Analysis Visitor Air Arrivals in U.S., 2006Q1-2008Q4 Domestic Air Carriers 70 Millions of Arrivals 65 60 2006 2007 2008 55 50 45 40 Q1 Q2 Q3 Q4 Source: Bureau of Transportation Statistics, U.S. Department of Transportation (Origin & Destination Survey and T-100 domestic market data). Overseas Arrivals to the U.S., 2006Q1-2008Q4 8 7 Millions 6 5 2006 2007 2008 4 3 2 1 0 Q1 Q2 Q3 Q4 Source: U.S. Department of Commerce, International Trade Administration, Office of Travel and Tourism Industries DEAN RUNYAN ASSOCIATES PAGE 3 II: ARIZONA TRAVEL IMPACTS 1998-2008P DEAN RUNYAN ASSOCIATES PAGE 5 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 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 by businesses within Arizona for other goods and services (indirect impacts). Visitor generated earnings are also spent by employees for goods and services produced in Arizona (induced impacts). DIRECT IMPACTS OF TRAVEL IN ARIZONA: A SUMMARY • Total direct travel spending in Arizona in 2008 was $18.5 billion. This represents a 3.2 percent decrease over the preceding year in current dollars. Employment, earnings and tax receipts also declined. Travel activity to Arizona began to weaken earlier (4th quarter of 2007) than in the larger U.S. (see page 3). The collapse of the housing market and the economic recession in Arizona and Southern California were contributing factors. In addition, capacity reductions by air carriers have also adversely affected the Arizona travel, which is more dependent on air travel than most visitor destinations in the U.S. • Visitors that stayed overnight in lodging establishments accounted for 41.2 percent of all visitor spending in 2008p. Visitors that stayed in the private homes of friends or relatives accounted for 29.4 percent. Day travelers accounted for about 21.2 percent. • More than one-half (51.7 percent) of all spending by visitors in 2008 was for leisure and hospitality services (arts, entertainment, recreation, accommodations, food service). Retail spending (including food and beverages purchased for off-premise consumption) amounted to 21.5 percent. Transportation (including motor fuel) comprised the remaining 26.9 percent. • In 2008, direct travel spending was associated with $1.4 billion in state and local tax revenues and $1.2 billion in federal tax revenues. • Direct travel spending in Arizona generated 166,900 jobs with earnings of $5.0 billion in 2008. Three-fourths of these jobs were in the accommodations, food services, and arts, entertainment and recreation industries. PAGE 6 DEAN RUNYAN ASSOCIATES TRAVEL TRENDS Total direct travel spending in Arizona in 2008 was $18.5 billion. This represents a 3.2 percent decrease over the preceding year in current dollars. Employment, earnings and tax receipts also declined. These recent declines in travel spending and related impacts follow the preceding annual period (2006-07) where travel impacts were generally flat. Arizona Travel Trends, 1998-2008p Spending ($Billion) Earnings Employment ($Billion) (Thousand) 1998 11.8 3.2 1999 13.1 3.5 2000 14.2 3.8 2001 13.4 3.7 2002 13.3 3.6 2003 14.7 4.0 2004 15.9 4.3 2005 17.6 4.5 2006 18.7 4.9 2007 19.1 5.0 2008p 18.5 5.0 Annual Percentage Change 07-08p -3.2 -1.6 98-08p 4.6 4.5 148.8 158.1 163.3 153.3 148.2 158.2 163.0 168.8 172.0 170.0 166.9 -1.8 1.2 Tax Revenue ($Million) Local/State Federal Total 941 630 1,571 1,043 702 1,746 1,138 744 1,882 1,082 777 1,859 1,101 825 1,926 1,211 912 2,122 1,287 988 2,275 1,399 1,081 2,479 1,464 1,176 2,640 1,501 1,213 2,713 1,437 1,159 2,596 -4.3 4.3 -4.4 6.3 -4.3 5.1 Note: p = preliminary. The percent change for 1998-2008p 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. Employment includes full- and part-time payroll positions and selfemployment. This figure is greater than the number of employed individuals. The graphs on the following two pages show • Annual travel spending in current and constant dollars, • Annual visitor air travel to Arizona on domestic flights of U.S. air carriers, • Quarterly visitor air travel to Arizona, and • Quarterly lodging sales in Arizona. In general, the sharper decline in travel to Arizona relative to the U.S. can be traced to the fact that travel activity to Arizona began to weaken earlier (4th quarter of 2007) than in the larger U.S. (see page 3). The collapse of the housing market and the economic recession in Arizona and Southern California were contributing factors. Arizona is also more dependent on air travel than most visitor destinations in the U.S. In this regard, the capacity reductions by air carriers further weakened the Arizona travel industry. DEAN RUNYAN ASSOCIATES PAGE 7 When adjusted for inflation, travel spending in Arizona declined by 8.1 percent. From 2006 to 2007, travel spending declined by 0.8 percent in constant dollars. Direct Travel Spending in Arizona Adjusted for Inflation 1998-2008p $22 $20 Billions $18 $16 Constant $14 Current $12 $10 98 99 00 01 02 03 04 05 06 07 08p 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 for 1998-2008p is 1.7 percent (constant dollars) and 4.6 percent (current dollars). Visitor air travel to Arizona leveled off in 2007 and declined sharply in 2008. In 2008, 7.3 million domestic visitors traveled to Arizona by air, a decrease of 7.8 percent over 2007. 1 Visitor Air Arrivals to Arizona, 1998-2008 Domestic Air Carriers 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 05 06 07 08 Year Source: Dean Runyan Associates and Airline Origin and Destination Survey, U.S. Bureau of Transportation Statistics. Note: These estimates are for visitor air arrivals only. They do not include return travel of Arizona residents or passengers making connecting flights. 1 This represents between one-quarter and one-third of all overnight visitors to Arizona. Visitors that travel to Arizona by air also stay longer and spend more. At least 40 percent of all visitor nights by domestic travelers can be attributed to visitors that traveled by air. (Sources: 2001 National Household Transportation Survey, and TNS TravelsAmerica Survey.) PAGE 8 DEAN RUNYAN ASSOCIATES The following two graphs show quarterly data for visitor air travel and lodging sales. The decline in travel to Arizona began in the 4th quarter of 2007. Visitor Air Arrivals to Arizona, 2006Q1-2008Q4 Domestic Air Carriers 3.0 Millions of Visitors 2.5 0.3% 2006 2007 2008 -2.9% 2.0 3.8% -2.3% -9.6% 1.5 -11.0% 7.6% -9.4% 1.0 0.5 0.0 Q1 Q2 Q3 Q4 Source: Dean Runyan Associates and Airline Origin and Destination Survey, U.S. Bureau of Transportation Statistics. Arizona Lodging Sales, 2006Q1-2008Q4 $900 Lodging Sales in Millions $800 3.2% 2006 2007 2008 -3.8% $700 $600 $500 4.1% 0.5% 7.1% -5.6% -6.2% -12.2% $400 $300 $200 $100 $0 Q1 Q2 Q3 Q4 Source: Dean Runyan Associates and Arizona Department of Revenue. DEAN RUNYAN ASSOCIATES PAGE 9 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 (29.4 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, a significant share of the spending by day travelers in Arizona is generated by Mexican travel across the border (17 percent of the day travel spending total). 2 The primary purpose of most of this travel is for retail goods and groceries. Visitor Spending by Type of Traveler Accommodation, 2008p (Billions) Day Travel $3.6 21.2% Vacation Home $0.7 41.2% 4.1% Hotel, Motel $7.0 29.4% 4.1% Private Home $5.0 Campground $0.7 2 Border Crossing Data reported by the Bureau of Transportation Statistics indicates a decline in such Mexican day travel over the past several years. PAGE 10 DEAN RUNYAN ASSOCIATES 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 (51.7 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 21.5 percent. Transportation (including motor fuel) comprised the remaining 26.9 percent. Visitor Spending by Type of Commodity Purchased, 2008p (Billions) Air Transportation $1.4 Ground Tran/Gas $3.2 Lodging $2.6 8.1% 15.1% 18.6% 22.1% Food/Bev. Serv. $3.8 21.5% 14.5% Retail/Food Stores $3.7 Arts/Entertain./Rec. $2.5 TRAVEL-GENERATED EMPLOYMENT While about one-half of all visitor spending is in leisure and hospitality services, about three-fourths of all travel-generated employment is in the accommodations, food service, arts, entertainment and recreation industries. This is because leisure and hospitality is more labor-intensive than retail trade (including gasoline service). Direct Travel-Generated Employment by Industry, 2008p (Thousands) Other Travel 8.4 Other Visitor Tran. 9 Retail/Gas Serv. 19.4 5.4% 5.0% 11.6% 52.2% 25.7% Accomm./Food Serv. 87.1 Arts/Entertain./Rec. 42.9 Note: Other Visitor Transportation includes passenger air travel and all local ground transportation excluding motor fuel. Other Travel includes travel agencies and resident air travel. Gasoline Service is included in the Retail Industry category. DEAN RUNYAN ASSOCIATES PAGE 11 VISITOR ORIGIN More than three-fourths of the visitor impacts in Arizona are generated by out-ofstate travelers. Visitors from other states are the largest segment (over 60 percent of spending), while international travel comprises almost 15 percent of visitor impacts. Mexican day travel (3.3 percent of all visitor spending) is especially significant for the counties on the national border. Arizona Travel Impacts by Origin of Visitor, 2008p Origin Spending Arizona Other U.S. International All Visitors Other Travel Total Travel Earnings Employment Tax Receipts ($ Million) ($ Billion) ($ Billion) (Thousand) Local/State Federal 3.8 10.8 2.6 17.1 1.4 18.5 0.8 3.0 0.6 4.4 0.5 5.0 32.0 103.9 22.5 158.5 8.4 166.9 306 902 219 1,426 10 1,437 147 564 85 796 363 1,159 Sources: Dean Runyan Associates, International Trade Administration and Bureau of Economic Analysis (U.S. Dept. of Commerce), TNS TravelsAmerica visitor survey, Statistics Canada, Vera Pavlakovich-Kochi and Alberta H. Charney, “Mexican Visitors to Arizona: Visitor Characteristics and Economic Impacts, 2007-08” (Karl Eller College of Business and Public Administration, University of Arizona) and Bureau of Transportation Statistics Border Crossing/Entry Data. Other travel includes travel agencies and resident air travel. Visitor Spending in Arizona by Origin of Visitor, 2008p (Billions) International $2.6 Arizona $3.8 15.1% 22.1% 62.8% Other U.S. $10.8 Sources: See table note, above. Detailed direct travel impacts for the state of Arizona, 1998-2008p, are reported on pages 12-13. PAGE 12 DEAN RUNYAN ASSOCIATES Arizona Direct Travel Impacts, 1998-2003 1998 1999 2000 2001 Total Direct Travel Spending ($Billion) Visitor Spending at Destination 10.9 12.1 13.2 12.4 Other Travel* 0.9 1.0 1.0 0.9 Total Direct Spending 11.8 13.1 14.2 13.4 Visitor Spending by Type of Traveler Accommodation ($Billion) Hotel, Motel 5.0 5.4 5.8 5.3 Campground 0.5 0.5 0.6 0.6 Private Home 2.7 3.2 3.6 3.3 Vacation Home 0.4 0.4 0.4 0.4 Day Travel 2.4 2.6 2.9 2.8 Spending at Destination 10.9 12.1 13.2 12.4 Visitor Spending by Commodity Purchased ($Billion) Lodging 1.9 2.0 2.1 1.9 Food & Beverage Services 2.3 2.6 2.8 2.7 Food Stores 0.7 0.7 0.7 0.7 Ground Tran. & Motor Fuel 1.2 1.5 1.8 1.6 Arts, Entertainment & Recreation 1.6 1.8 2.0 2.0 Retail Sales 2.4 2.6 2.7 2.6 Air Transportation (visitor only) 0.9 1.0 1.0 0.9 Spending at Destination 10.9 12.1 13.2 12.4 Industry Earnings Generated by Travel Spending ($Billion) Accommodation & Food Services 1.3 1.5 1.6 1.5 Arts, Entertainment & Recreation 0.6 0.7 0.8 0.8 Retail** 0.4 0.5 0.5 0.5 Auto Rental & other ground tran. 0.1 0.1 0.1 0.1 Air Transportation (visitor only) 0.3 0.4 0.4 0.4 Other Travel* 0.4 0.4 0.5 0.4 Total Direct Earnings 3.2 3.5 3.8 3.7 Industry Employment Generated by Travel Spending (Thousand jobs) Accommodation & Food Services 75.2 80.8 85.0 77.6 Arts, Entertainment & Recreation 33.9 35.8 36.8 36.7 Retail** 19.1 20.3 20.9 19.2 Auto Rental & other ground tran. 2.2 2.3 2.3 2.0 Air Transportation (visitor only) 7.9 8.5 8.1 8.0 Other Travel* 10.4 10.4 10.4 9.7 Total Direct Employment 148.8 158.1 163.3 153.3 Government Revenue Generated by Travel Spending ($Million)*** Local and State 941 1,043 1,138 1,082 Federal 630 702 744 777 Total Direct Gov't. Revenue 1,571 1,746 1,882 1,859 2002 2003 12.4 0.9 13.3 13.7 1.0 14.7 5.2 0.6 3.2 0.4 2.9 12.4 5.6 0.6 4.0 0.5 3.1 13.7 1.9 2.7 0.8 1.5 2.0 2.6 0.9 12.4 2.0 3.1 0.8 1.9 2.2 2.7 1.1 13.7 1.5 0.8 0.5 0.1 0.4 0.4 3.6 1.6 0.9 0.5 0.1 0.4 0.4 4.0 75.7 35.7 19.3 2.0 6.8 8.6 148.2 80.4 40.9 19.6 2.2 6.8 8.2 158.2 1,101 825 1,926 1,211 912 2,122 Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Local and State tax revenues include property taxes and taxes attributable to travel industry employees. These tax receipts are not included in the county breakouts. DEAN RUNYAN ASSOCIATES PAGE 13 Arizona Direct Travel Impacts, 2004-2008p 2004 2005 2006 Total Direct Travel Spending ($Billion) Visitor Spending at Destination 14.8 16.3 17.3 Other Travel* 1.1 1.3 1.5 Total Direct Spending 15.9 17.6 18.7 Visitor Spending by Type of Traveler Accommodation ($Billion) Hotel, Motel 6.0 6.9 7.3 Campground 0.7 0.7 0.7 Private Home 4.3 4.7 5.0 Vacation Home 0.5 0.5 0.6 Day Travel 3.3 3.5 3.6 Spending at Destination 14.8 16.3 17.3 Visitor Spending by Commodity Purchased ($Billion) Lodging 2.2 2.5 2.7 Food & Beverage Services 3.3 3.6 3.8 Food Stores 0.8 0.8 0.8 Ground Tran. & Motor Fuel 2.2 2.6 2.9 Arts, Entertainment & Recreation 2.4 2.5 2.6 Retail Sales 2.8 2.9 2.9 Air Transportation (visitor only) 1.2 1.3 1.5 Spending at Destination 14.8 16.3 17.3 Industry Earnings Generated by Travel Spending ($Billion) Accommodation & Food Services 1.8 1.9 2.1 Arts, Entertainment & Recreation 0.9 1.0 1.1 Retail** 0.5 0.6 0.6 Auto Rental & other ground tran. 0.1 0.1 0.1 Air Transportation (visitor only) 0.5 0.5 0.5 Other Travel* 0.5 0.5 0.5 Total Direct Earnings 4.3 4.5 4.9 Industry Employment Generated by Travel Spending (Thousand jobs) Accommodation & Food Services 82.7 86.5 88.2 Arts, Entertainment & Recreation 43.2 44.9 45.5 Retail** 19.7 19.8 20.1 Auto Rental & other ground tran. 2.2 2.2 2.3 Air Transportation (visitor only) 7.0 6.9 7.3 Other Travel* 8.3 8.4 8.7 Total Direct Employment 163.0 168.8 172.0 Government Revenue Generated by Travel Spending ($Million)*** Local and State 1,287 1,399 1,464 Federal 988 1,081 1,176 Total Direct Gov't. Revenue 2,275 2,479 2,640 2007 2008p 17.6 1.5 19.1 17.1 1.4 18.5 7.4 0.7 5.2 0.6 3.7 17.6 7.0 0.7 5.0 0.7 3.6 17.1 2.8 3.9 0.9 3.1 2.6 2.9 1.5 17.6 2.6 3.8 0.9 3.2 2.5 2.8 1.4 17.1 2.2 1.1 0.6 0.1 0.5 0.6 5.0 2.2 1.1 0.6 0.1 0.5 0.5 5.0 87.6 44.5 19.9 2.4 6.9 8.7 170.0 87.1 42.9 19.4 2.4 6.7 8.4 166.9 1,501 1,213 2,713 1,437 1,159 2,596 Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Local and State tax revenues include property taxes and taxes attributable to travel industry employees. These tax receipts are not included in the county breakouts. PAGE 14 DEAN RUNYAN ASSOCIATES ARIZONA TRAVEL INDUSTRY GROSS DOMESTIC PRODUCT In concept, the Gross Domestic Product (GDP) of a particular industry is equal to gross output (sales or receipts) minus intermediate inputs (the goods and services purchased from other industries). 3 GDP is always smaller than output or sales because GDP 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, GDP 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 GDP are shown in the chart below. Arizona travel industry GDP amounted to $7.0 billion in 2008. Arizona travel industry GDP represents over 3 percent of total state GDP. By way of comparison, the U.S. travel industry comprises about 2.5 percent of national GDP. 4 About 62 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 GDP 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. 5 Arizona Travel Industry Gross Domestic Product, 2008p $20 11.5 $11.5 Inputs $5.0 Earnings $2.1 Surplus & Taxes $15 $10 5.0 5.0 2.1 2.1 Spending ($18.5) GDP ($7.0) $5 $0 3 Gross Domestic Product was referred as Gross State Product in previous editions of this report. The terminology was formally changed by the Bureau of Economic Analysis. See also pages 50-51 of Appendix A. 4 Sarah R. Mattingly and Eric S. Griffith, “U.S. Travel and Tourism Satellite Accounts for 2004-2007,” Survey of Current Business 88 (June 2008): 14-28. 5 About 38 percent of the $11.5 billion of inputs and goods resold are purchased from other Arizona businesses. DEAN RUNYAN ASSOCIATES PAGE 15 GROSS DOMESTIC PRODUCT OF ARIZONA EXPORT-ORIENTED INDUSTRIES Export-oriented industries are those industries that primarily market their products and services to other regions, states or nations. 6 Agriculture, mining, and manufacturing are the best examples of export-oriented industries. Clearly, there are cases in each of these three sectors where the products are sold within the local or regional market. Nonetheless, in general most businesses within these industries depend on export markets. The travel industry is also an export-oriented industry because goods and services are sold to visitors, rather than residents. The travel industry injects money into the local economy, as do the exports of other industries. Exports are not necessarily more important than locally traded goods and services. However, diverse export-oriented industries in any economy are a source of strength – in part because they generate income that contributes to the development of other local services and amenities. Such industries characterize the “comparative advantage” of the local economy within larger regional, national and global markets. A comparison of the GDP’s of the leading export-oriented industries in Arizona is shown below. Data for 2008 is not yet available for the comparison industries. Arizona Gross Domestic Product, 2004-2007 Selected Export-Oriented Industries Agric./Food Proc. 2004 2005 2006 2007 Mining Micro-Electronics Aerospace Travel $0 $1 $2 $3 $4 $5 $6 $7 $8 Gross Domestic Product (Billions) Source: Dean Runyan Associations and Bureau of Economic Analysis. The travel industry and the microelectronics industry (NAICS 334) have been the top two export-oriented industries in the state in recent years. 7 6 See also pages 52 of Appendix A and page 69 of Appendix C. The decline in the GDP of the microelectronics industry of $1.8 billion from 2004 to 2005 was due to a decline in Gross Operating Surplus. Earnings increased by $0.3 billion during this period. 7 PAGE 16 DEAN RUNYAN ASSOCIATES TRAVEL RELATED CONSTRUCTION ACTIVITY Investment in the infrastructure of the travel industry represents another aspect of the travel economy. In the short term, such investments provide employment in the construction trades and architectural professions. In the longer term, investments in accommodations, attractions and other facilities serve to maintain and enhance Arizona’s share of the visitor market. The graph below is based upon the travel-related share of the value of new construction in hotels and motels; amusement, social and recreational buildings; and stores and restaurants. It is an underestimate of the total value of capital investment in the travel industry. 8 The $740 million figure represents 15 percent of all non-residential construction in Arizona in 2008. This investment supported 13,800 construction jobs with earnings of $765 million. Overall, non-residential construction in Arizona declined by 30 percent from 2007 to 2008. Although travel-related construction increased by 12 percent over the same period, it is expected to show a sharp decline in 2009, much like the broader construction industry. Value of New Construction in Travel-Related Buildings 2005-2008 $1,200 $963 $1,000 $740 Millions $800 $662 $600 $400 $250 $200 $0 2005 2006 2007 2008 Year Source: Dean Runyan Associates and McGraw-Hill Dodge Construction. Note: The reported value is the sum of 100% of hotels and motels; 50% of amusement, social and recreational buildings; and 10% of stores and restaurants. The value of new construction represents the value of contract awards in place rather than the value work completed. 8 Neither transportation-related construction nor second home construction is included. The figures refer only to new construction, not reconstruction or additions and alterations. Fees for architects and engineers are also excluded. DEAN RUNYAN ASSOCIATES PAGE 17 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, 2008p Earnings (Billions) Employment (Thousands) Induced 105.3 33.9% Induced $3.8 37.3% Direct $5.0 49.0% Direct 166.9 53.8% Indirect 38.2 12.3% Indirect $1.4 13.7% Source: Dean Runyan Associates and Minnesota Implan Group. PAGE 18 DEAN RUNYAN ASSOCIATES 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 $1.6 billion 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 $355 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 $1.2 million earnings). Employees of travelrelated businesses pay fees to attend public educational institutions and to operate motor vehicles. • Finance, Real Estate (11,000 jobs and $461 million earnings). Employees and businesses use the services of financial institutions, insurers, and real estate businesses. • Construction (11,000 jobs and $561 million earnings). Structures that house travel-related businesses, such as hotels and restaurants, require ongoing maintenance. (This category does not include new construction.) DEAN RUNYAN ASSOCIATES PAGE 19 Direct and Secondary Employment Generated by Travel in Arizona, 2008p 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, 2008p Accomm. & Food Serv. Prof. Services Arts, Entertain., Rec. Transportation Government Retail Trade Construction Finance, Ins., & Real Estate Other Services Mining & Manufacturing Agric.& Food Processing $0 $500 Direct Secondary $1,000 $1,500 $2,000 $2,500 Direct & Secondary Earnings (Millions) Source: Dean Runyan Associates and Minnesota Implan Group. Industry Groups are defined in appendix. Detailed estimates are reported in the following table. It should be emphasized that the estimates of indirect and induced impacts reported here apply to the entire state of Arizona and do not necessarily reflect economic patterns for individual counties, regions or sub-regions within the state. While total economic impacts can be calculated on a county or regional level, such a detailed analysis is not included in this study. In general, geographic areas with lower levels of aggregate economic activity will have smaller secondary impacts within those same geographic boundaries. PAGE 20 DEAN RUNYAN ASSOCIATES Direct & Secondary Visitor-Generated Employment in Arizona, 2008p (thousand jobs) Industry Group Accommodation & Food Services Arts, Entertainment & Recreation Retail Trade Professional Services Transportation Government Other Services Finance, Ins., & Real Estate Construction Mining & Manufacturing Agriculture & Food Processing All Industries Direct 87 43 19 0 17 0 0 0 0 0 0 167 Secondary Indirect Induced 4 9 5 2 3 18 8 23 5 4 1 22 5 8 4 7 1 10 1 2 1 1 38 105 Grand Total 100 51 40 31 26 23 13 11 11 4 2 310 Total 12 8 21 31 9 23 13 11 11 4 2 143 Direct & Secondary Visitor-Generated Earnings in Arizona, 2008p ($ 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 2,214 0 1,112 1,061 0 567 0 0 0 0 0 4,953 Secondary Indirect Induced 67 151 477 1,143 113 33 180 51 78 1,084 11 129 44 516 161 300 171 184 100 164 29 32 1,432 3,787 Total 218 1,620 147 231 1,161 140 561 461 355 264 62 5,220 Grand Total 2,432 1,620 1,258 1,292 1,161 707 561 461 355 264 62 10,173 Source: Dean Runyan Associates & Minnesota Implan Group. Industry Groups are defined in Appendix E. DEAN RUNYAN ASSOCIATES PAGE 21 III. STATE AND LOCAL GOVERNMENT REVENUE This section of the report provides an analysis of the state and local government revenue supported by the travel industry. Most major sources of government revenue, including sales, property and income taxes are included. The pie chart below, adapted from the Bureau of the Census’ State and Local Government Finance and other data sources, shows the main categories of tax revenue in Arizona. About one-half of all state and local tax revenue in Arizona is derived from sales or gross receipts taxes. 9 Three-fourths of all sales taxes are collected by the state. The next largest category is property taxes -- paid primarily by homeowners and businesses to local governments. 10 All income taxes (80 percent paid by individuals) are collected by the state. Arizona State and Local Government Tax Revenues 2008-08 Fiscal Year (Billion) License & Other $0.9 4.3% Property $6.3 Sales & Gross Receipts $9.8 30.3% 47.1% Income $3.8 18.3% Sources: The 2007-08 fiscal year estimates of state and local tax revenues in Arizona were prepared by Dean Runyan Associates from various sources, including the Bureau of the Census (State and Local Government Finance), the Arizona Department of Revenue, the Bureau of Economic Analysis and a selection of annual financial reports for cities and counties. The state transaction privilege tax is designated as a general sales tax. Over 90 percent of all property taxes are local. About 80 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 comprise 60 percent of all state and local tax receipts. The primary sources of travel industry tax revenue are: • Sales tax receipts generated by visitor spending. This includes local and state sales taxes, lodging taxes, and motor fuel taxes. Other selective sales 9 The state transaction privilege tax is considered a sales tax in this report. Businesses pay 62 percent of all property taxes in Arizona based on calculations by Dean Runyan Associates from data reported by the Bureau of the Census, State and Local Government Finance and Property Taxes on Business Capital, Ernst and Young (March 2006). 10 DEAN RUNYAN ASSOCIATES PAGE 23 taxes (e.g., cigarettes, liquor) were not estimated separately from the general sales tax. • Taxes paid by travel industry employees attributable to travel generated earnings (sales, property and income taxes). The estimates for these taxes were based primarily on the share of travel industry earnings in relation to total personal income in the state. • Taxes paid by travel industry businesses attributable to travel generated business receipts (property and income taxes). The estimates for these taxes were based primarily on the share of travel industry earnings in relation to total earnings in the state. Other business taxes, such as licenses and payroll taxes, were not included. The distribution of taxes generated by the travel industry for the 2007-08 fiscal year is shown in the following pie chart. The categories are the same as the preceding figure, with the exception that sales tax receipts are also distinguished between those that are generated by visitor spending and those that are generated by the spending of travel industry employees. Arizona Travel Industry State and Local Government Tax Revenues 2007-08 Fiscal Year (Million) Property $144 9.8% Other $20 1.4% Income $90 6.1% Employee Sales $211 14.4% Visitor Sales $1,004 68.3% Source: Dean Runyan Associates. “Other” travel-generated tax revenue includes gaming taxes. Whereas slightly less than one-half of all state and local tax revenue in Arizona was attributable to sales tax collections in the 2007-08 fiscal year, more than 83 percent of all travel industry tax revenue was attributable to sales tax receipts from visitors (68.3 percent) and the purchases of employees in the travel industry (14.5 percent). More than two-thirds of all tax revenues supported by the travel industry was directly related to visitor spending. Travel industry state and local tax revenues are compared to total Arizona state and local tax revenues in the following table. Because of the travel industry generates a relatively high proportion of sales tax revenues, it is associated with proportionately PAGE 24 DEAN RUNYAN ASSOCIATES more tax revenues than would be expected given the size of the industry, as measured by earnings or gross domestic product. Whereas the earnings and GDP of the travel industry are in the range of 3 percent of the state totals, travel industry tax revenues represent almost 7 percent of all state and local tax revenues in Arizona. Arizona State and Local Tax Revenues 2007-08 Fiscal Year ($Million) Travel Total Generated Sales & Gross Receipts 9,850 1,210 Income 3,810 90 Property 6,310 140 License & Other 950 20 Total Tax Receipts 20,920 1,470 Percent Travel 12.3% 2.4% 2.0% 2.1% 6.9% Source: Dean Runyan Associates and Bureau of the Census, State and Local Government Finance. The tax revenue benefits of the travel industry are also borne out in comparison with other industries. This is illustrated in the table and figure below. The concept of Gross Domestic Product was discussed earlier (page14; see also appendix pages 62-63). The tax payment categories are defined as follows: • Indirect Business Taxes (IBT) include all property taxes, licenses, fees and sales taxes paid by the firm to all levels of government. Business income taxes are not included. Overall, sales taxes are the largest component. Even though consumers normally paid these taxes at the point of sale, they are defined as indirect business taxes in terms of GDP. Indirect Business Taxes are an official category of Gross Domestic Product, as defined by the Bureau of Economic Analysis. • Employee Property and Income Taxes (EPIT) include the state and local property and income taxes paid by employees. These personal tax payments are estimated by Dean Runyan Associates on the basis of industry earnings and tax revenue data. EPIT is not an official category. The sum of IBT and EPIT for 2007 is roughly equivalent to the estimates of Arizona state and local tax revenue for the 2007-08 fiscal year. More to the point, the tax payments generated by the travel industry in relation to Gross Domestic Product are greater than all industries except retail trade. Retail trade tax payments are especially high, of course, because of sales tax payments. However, in contrast to the travel industry, the sales taxes paid by retail establishments are primarily taxes on residents rather than visitors. DEAN RUNYAN ASSOCIATES PAGE 25 GDP and Tax Payments of Selected Arizona Industries 2007 Calendar Year ($Million) GDP 15,574 19,493 20,384 16,433 7,148 245,952 Construction Manufacturing Retail trade Health Care Travel All Industries Indirect Bus. Taxes 410 475 4,682 131 901 16,456 Employee Inc. Sum of Bus. & & Prop. Taxes Employee Taxes 390 800 411 886 358 5,040 410 541 144 1,044 5,947 22,403 Tax Payments as Percent of GDP for Selected Arizona Industries 2007 Calendar Year Construction Indirect Bus. Taxes Employee Prop. & IncomeTaxes Manufacturing Retail trade Health Care Travel All Industries 0% 5% 10% 15% 20% 25% Taxes as Percent of Gross Domestic Product Table and graph sources: Bureau and Economic Analysis and Dean Runyan Associates. Travel industry and employee income and property tax payments estimated by Dean Runyan Associates. Other GDP and Indirect Business Taxes estimated by Bureau of Economic Analysis. *Travel Industry Business & Employee tax payments of $1,044 million are lower than the estimate on page 23 because business income taxes are not included and because employee sales tax payments are included in the indirect business taxes of other industries (especially retail trade). This is consistent with GDP accounting. PAGE 26 DEAN RUNYAN ASSOCIATES 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, 2008 FY Maricopa & Pima All Other Counties 0% 2% 4% 6% 8% 10% 12% 14% 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. DEAN RUNYAN ASSOCIATES PAGE 27 State Transaction Privilege Taxes Generated by Direct Travel Spending, 2008 FY Apache Cochise Coconino Gila Graham/Greenlee La Paz Maricopa Mohave Navajo Pima Pinal Santa Cruz Yavapai Yuma 0% 5% 10% 15% 20% 25% 30% 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 travel-generated state and local government revenue: • The travel industry accounted for almost seven percent of all state and local tax revenues in Arizona in the 2007-08 fiscal year – more than twice the industry proportion of statewide earnings and gross domestic product. • Most of the travel industry tax receipts are a result of visitor spending rather than taxes on Arizona residents. • The tax receipts generated by the Arizona travel industry are more than onehalf greater in relation to gross domestic product than the industry average. • The tax revenues generated by the travel industry are relatively more important for the non-urban areas of the state as compared to the urbanized areas of greater Phoenix and Tucson. PAGE 28 DEAN RUNYAN ASSOCIATES IV: COUNTY TRAVEL IMPACTS 1998-2008P DEAN RUNYAN ASSOCIATES PAGE 29 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. Distribution of Travel-Generated Earnings, 2008p Maricopa & Pima All other 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 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. Maricopa and Pima counties have 68 percent of all travel-generated employment. The other Arizona counties have 32 percent of all travel-generated employment. PAGE 30 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. Travel-Generated Earnings as Percent of Total Earnings 2008p Maricopa & Pima All other 0% 1% 2% 3% 4% 5% 6% 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. Travel-generate employment in Maricopa and Pima counties constitutes 4.0 percent of all employment in those counties. The comparable figure for other Arizona counties is 8.7 percent. In general, the employment and 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 wage and salary employment and self-employment. Because total employment includes all jobs, regardless of the hours worked, the average annual earnings of the job or the number of individuals employed, this indicator is in some respects less useful than earnings estimates. Nonetheless, the distribution of counties is similar for earnings and employment. DEAN RUNYAN ASSOCIATES PAGE 31 Travel-Generated Employment and Earnings as Percent of Total, 2008p Employment Apache Cochise Coconino Gila Graham/Greenlee La Paz Maricopa Mohave Navajo Pima Pinal Santa Cruz Yavapai Yuma Arizona Total 27,360 60,860 85,540 23,650 12,790 7,610 2,307,890 68,700 40,350 525,000 78,730 19,310 91,700 84,550 3,440,910 Travel 1,720 4,520 11,330 2,660 1,150 1,270 91,130 4,790 3,520 22,770 4,840 2,020 9,210 5,970 166,900 Earnings (Million) Percent Travel 6.3% 7.4% 13.2% 11.2% 9.0% 16.7% 3.9% 7.0% 8.7% 4.3% 6.1% 10.5% 10.0% 7.1% 4.9% Total $995 $2,717 $3,129 $774 $497 $255 $111,256 $2,273 $1,397 $21,298 $3,323 $775 $2,889 $3,382 $155,423 Travel $32 $83 $274 $60 $11 $31 $3,232 $105 $73 $544 $116 $49 $197 $145 $4,953 Percent Travel 3.2% 3.1% 8.8% 7.7% 2.1% 12.0% 2.9% 4.6% 5.2% 2.6% 3.5% 6.3% 6.8% 4.3% 3.2% Source: Dean Runyan Associates, U.S. Bureau of Labor Statistics, and U.S. Bureau of Economic Analysis. Total and travel-generated employment estimates by Dean Runyan Associates. Detailed direct travel impact estimates for 1998 through 2008p can be found on the following pages. As noted in the appendix to this report (page 56), county level estimates are necessarily less reliable than the statewide estimates. Furthermore, estimates for the smallest counties are less reliable than those for larger counties due to survey sample sizes and other data limitations. For this reason, small changes in year-to-year estimates are less important than longer-term trends. PAGE 32 DEAN RUNYAN ASSOCIATES 2008p Arizona County Travel Impacts Travel Spending Total Visitor Earnings Related Travel-Generated Impacts Employment Local Taxes State Taxes Total Taxes ($Million) ($Million) ($Million) (jobs) ($Million) ($Million) ($Million) 149 351 955 237 48 217 11,671 456 307 2,105 462 257 703 599 18,516 149 350 953 237 48 217 10,288 450 306 2,067 461 257 702 596 17,081 32 83 274 60 13 31 3,232 105 73 544 116 49 197 145 4,953 1,720 4,520 11,330 2,660 1,150.0 1,270 91,130 4,790 3,520 22,770 4,840 2,020 9,210 5,970 166,900 3.3 11.7 28.1 2.8 1.2 2.1 318.2 8.9 6.7 43.7 8.5 5.2 15.9 14.2 470.4 5.4 12.5 36.5 6.6 1.9 8.3 366.7 17.6 11.1 79.6 16.8 8.2 23.7 22.2 617.2 8.7 24.3 64.5 9.4 3.1 10.3 684.9 26.5 17.8 123.3 25.3 13.4 39.6 36.4 1,087.6 Apache Cochise Coconino Gila Graham/Greenlee La Paz Maricopa Mohave Navajo Pima Pinal Santa Cruz Yavapai Yuma Arizona Property taxes and sales taxes paid by travel industry employees not included. DEAN RUNYAN ASSOCIATES PAGE 33 Arizona County Total Travel Spending, 1998-2008p ($ Millions) Annual Percent Chg. Apache Cochise Coconino Gila Graham/Greenlee La Paz Maricopa Mohave Navajo Pima Pinal Santa Cruz Yavapai Yuma Arizona PAGE 34 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008p 80 94 109 101 100 107 113 129 138 143 149 207 234 258 253 271 279 302 320 328 352 351 675 715 741 694 691 741 788 843 870 920 955 179 189 206 204 204 213 221 233 242 247 237 23 26 31 28 28 30 32 36 45 48 48 126 146 162 160 158 175 186 208 210 216 217 7,327 7,989 8,779 8,176 7,979 9,069 9,888 11,069 11,910 12,198 11,671 249 291 322 315 315 361 397 435 483 469 456 179 213 240 220 221 229 238 260 283 290 307 1,552 1,725 1,876 1,738 1,788 1,885 2,019 2,197 2,263 2,237 2,105 206 236 263 257 257 291 323 365 408 450 462 206 226 237 237 298 262 272 274 254 255 257 426 579 558 543 540 581 590 642 685 717 703 371 407 444 434 485 501 533 567 587 590 599 11,806 13,071 14,225 13,361 13,333 14,725 15,903 17,578 18,704 19,132 18,516 07-08p 4.0 -0.2 3.9 -4.3 -0.2 0.5 -4.3 -2.7 5.6 -5.9 2.7 0.7 -2.0 1.5 -3.2 98-08p 6.4 5.5 3.5 2.8 7.4 5.6 4.8 6.3 5.5 3.1 8.4 2.2 5.1 4.9 4.6 DEAN RUNYAN ASSOCIATES Arizona County Travel-Generated Earnings, 1998-2008p ($ 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 2005 2006 2007 2007p 19 22 25 23 24 24 25 27 28 30 32 46 52 57 57 60 62 68 70 73 81 83 186 196 203 190 191 204 216 224 234 253 274 43 45 50 49 49 51 53 56 59 62 60 6 7 8 7 7 8 8 9 11 12 13 22 25 26 27 27 29 29 31 30 31 31 2,099 2,269 2,509 2,402 2,334 2,605 2,811 2,987 3,214 3,331 3,232 60 69 75 75 77 87 94 99 112 108 105 44 52 58 53 54 55 55 58 64 66 73 394 438 475 440 450 475 510 543 567 568 544 50 56 62 61 62 70 77 85 97 110 116 37 41 42 42 52 46 48 49 46 48 49 110 155 147 144 144 154 155 167 182 195 197 83 91 99 97 107 114 121 128 138 140 145 3,199 3,518 3,838 3,668 3,639 3,982 4,271 4,533 4,858 5,034 4,953 DEAN RUNYAN ASSOCIATES 07-08p 7.4 2.4 8.2 -3.1 2.5 -0.5 -3.0 -1.9 10.2 -4.3 5.6 1.9 1.1 3.8 -1.6 98-08p 5.3 6.1 3.9 3.4 7.3 3.5 4.4 5.8 5.2 3.3 8.9 2.7 6.0 5.7 4.5 PAGE 35 Arizona County Travel-Generated Employment, 1998-2008p Annual Percent Chg. 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008p Apache 1,430 1,530 1,650 1,700 1,490 1,580 1,680 1,740 1,660 1,670 1,720 Cochise 3,490 3,840 4,000 3,830 3,890 3,950 4,070 4,160 4,230 4,480 4,520 Coconino 11,180 11,280 11,200 10,370 10,110 10,550 10,720 10,950 10,680 10,780 11,330 Gila 2,690 2,700 2,850 2,950 2,910 2,970 2,830 2,850 2,860 2,780 2,660 Graham/Greenlee 480 500 560 640 670 800 790 870 1,130 1,180 1,150 La Paz 1,370 1,460 1,480 1,430 1,400 1,450 1,410 1,470 1,330 1,330 1,270 Maricopa 83,870 86,740 90,450 82,250 77,260 84,010 87,390 91,310 92,900 92,990 91,130 Mohave 3,820 4,290 4,540 4,420 4,430 4,800 5,000 5,170 5,830 5,130 4,790 Navajo 3,140 3,490 3,770 3,380 3,220 3,210 3,080 3,120 3,290 3,230 3,520 Pima 21,240 23,260 24,430 22,450 22,520 23,730 25,110 25,670 25,870 24,530 22,770 Pinal 2,790 3,050 3,180 3,680 3,560 4,030 4,110 4,450 4,810 4,650 4,840 Santa Cruz 2,050 2,120 2,140 2,100 2,490 2,260 2,270 2,240 2,120 2,030 2,020 Yavapai 6,700 9,060 8,100 8,630 8,540 9,000 8,650 8,720 8,950 9,060 9,210 Yuma 4,530 4,750 5,000 5,460 5,650 5,810 5,900 6,080 6,370 6,140 5,970 Arizona 148,780 158,080 163,350 153,270 148,160 158,160 163,020 168,800 172,030 169,970 166,900 PAGE 36 06-07p 3.6 6.9 6.1 -7.0 1.8 -4.5 -1.9 -17.8 7.0 -12.0 0.6 -4.7 2.9 -6.3 -3.0 98-07p 1.9 2.6 0.1 -0.1 9.1 -0.8 0.8 2.3 1.1 0.7 5.7 -0.1 3.2 2.8 1.2 DEAN RUNYAN ASSOCIATES Apache County Travel Impacts, 1998-2008p 1998 2000 2002 Total Direct Travel Spending ($Million) Visitor Spending at Destination 79.9 109.4 100.2 Other Travel* 0.0 0.0 0.0 Total Direct Spending 79.9 109.4 100.2 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 39.9 57.5 52.9 Campground 8.5 4.5 4.5 Private Home 17.3 23.8 19.8 Vacation Home 11.7 13.6 13.6 Day Travel 2.5 3.6 3.2 Spending at Destination 79.9 109.4 100.2 Visitor Spending by Commodity Purchased ($Million) Lodging 14.7 20.0 18.5 Food & Beverage Services 15.4 21.2 19.9 Food Stores 7.4 8.1 8.1 Ground Tran. & Motor Fuel 15.6 26.7 22.8 Arts, Entertainment & Recreation 11.2 14.8 14.3 Retail Sales 15.6 18.6 16.5 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 79.9 109.4 100.2 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 10.3 14.0 13.1 Arts, Entertainment & Recreation 4.7 6.2 5.9 Retail** 3.9 4.8 4.6 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 19.0 25.2 23.9 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 860 1,010 910 Arts, Entertainment & Recreation 290 320 290 Retail** 270 310 290 Auto Rental & other ground tran. 10 10 10 Air Transportation (visitor only) 0 0 0 Other Travel* 0 0 0 Total Direct Employment 1,430 1,650 1,490 Government Revenue Generated by Travel Spending ($Million)*** Local 2.1 2.9 2.6 State 3.4 4.6 4.3 Total Direct Gov't. Revenue 5.5 7.5 6.9 2004 2006 2007 2008p 113.3 0.0 113.3 138.1 0.0 138.1 142.8 0.0 142.8 148.5 0.0 148.5 52.3 5.7 27.4 15.6 4.1 113.3 67.7 6.7 31.1 17.7 5.1 138.1 70.0 6.9 32.0 18.5 5.3 142.8 76.7 6.8 30.3 19.4 5.5 148.5 17.3 20.9 8.4 34.9 15.4 16.4 0.0 113.3 21.0 24.8 8.8 48.7 16.9 17.9 0.0 138.1 21.9 25.5 9.1 51.7 16.9 17.7 0.0 142.8 24.1 26.5 9.6 53.8 16.9 17.6 0.0 148.5 13.0 6.4 4.9 0.2 0.0 0.0 24.5 15.3 7.3 5.5 0.3 0.0 0.0 28.4 16.4 7.3 5.6 0.3 0.0 0.0 29.6 18.3 7.7 5.5 0.3 0.0 0.0 31.7 820 550 300 10 0 0 1,680 910 460 290 10 0 0 1,660 900 480 280 10 0 0 1,670 920 530 270 10 0 0 1,720 2.6 4.9 7.5 3.0 5.4 8.4 3.1 5.5 8.6 3.3 5.4 8.7 Details may not add to totals due to rounding. Estimates for some years not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payments of travel industry employees not included. DEAN RUNYAN ASSOCIATES PAGE 37 Cochise County Travel Impacts, 1998-2008p 1998 2000 2002 Total Direct Travel Spending ($Million) Visitor Spending at Destination 205.7 257.3 270.1 Other Travel* 0.9 0.8 0.8 Total Direct Spending 206.6 258.2 270.9 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 40.2 54.4 54.1 Campground 35.4 41.1 40.4 Private Home 39.3 53.0 45.5 Vacation Home 5.0 5.6 5.8 Day Travel 85.7 102.5 123.0 Spending at Destination 205.7 257.3 270.1 Visitor Spending by Commodity Purchased ($Million) Lodging 22.2 27.8 27.8 Food & Beverage Services 43.2 55.6 58.6 Food Stores 49.6 56.1 69.4 Ground Tran. & Motor Fuel 16.2 27.7 23.7 Arts, Entertainment & Recreation 24.1 31.5 31.2 Retail Sales 50.4 58.7 59.3 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 205.7 257.3 270.1 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 20.2 26.0 26.9 Arts, Entertainment & Recreation 10.7 13.9 13.8 Retail** 14.2 16.6 18.6 Auto Rental & other ground tran. 0.2 0.2 0.2 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.7 0.6 0.6 Total Direct Earnings 45.9 57.3 60.1 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 1,620 1,960 1,900 Arts, Entertainment & Recreation 1,100 1,160 1,100 Retail** 720 850 860 Auto Rental & other ground tran. 10 10 10 Air Transportation (visitor only) 0 0 0 Other Travel* 40 30 20 Total Direct Employment 3,490 4,000 3,890 Government Revenue Generated by Travel Spending ($Million)*** Local 7.1 8.7 9.0 State 7.3 9.1 9.9 Total Direct Gov't. Revenue 14.4 17.8 18.9 2004 2006 2007 2008p 301.6 0.8 302.4 326.8 0.8 327.7 350.9 0.9 351.8 350.3 1.0 351.3 69.4 46.0 60.3 6.3 118.2 301.6 86.2 50.7 65.9 6.8 115.7 326.8 106.1 50.9 67.2 7.0 118.0 350.9 110.0 50.4 63.3 7.4 117.6 350.3 33.6 67.6 63.3 36.2 38.7 62.1 0.0 301.6 40.4 74.0 57.8 50.5 41.3 62.8 0.0 326.8 49.0 81.1 58.9 53.7 43.8 64.3 0.0 350.9 50.8 80.0 59.2 55.8 42.0 62.5 0.0 350.3 31.6 17.1 18.3 0.2 0.0 0.6 67.9 35.4 19.1 18.2 0.3 0.0 0.6 73.5 41.6 20.2 18.6 0.3 0.0 0.7 81.4 43.8 20.3 18.3 0.3 0.0 0.7 83.4 2,040 1,200 810 10 0 20 4,070 2,140 1,260 800 10 0 20 4,230 2,270 1,380 800 10 0 20 4,480 2,290 1,440 750 10 0 20 4,520 10.0 11.1 21.1 10.7 12.0 22.7 11.8 12.8 24.6 11.7 12.5 24.3 Details may not add to totals due to rounding. Estimates for some years not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payments of travel industry employees not included. PAGE 38 DEAN RUNYAN ASSOCIATES Coconino County Travel Impacts, 1998-2008p 1998 2000 2002 2004 2006 2007 2008p Total Direct Travel Spending ($Million) Visitor Spending at Destination 675.2 737.1 689.0 785.0 867.8 917.4 953.2 Other Travel* 0.2 3.7 2.0 2.6 2.4 2.1 2.0 Total Direct Spending 675.4 740.8 691.1 787.5 870.1 919.6 955.3 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 485.6 514.7 477.4 537.4 598.1 640.1 678.0 Campground 37.6 36.6 37.2 41.0 44.4 44.6 43.4 Private Home 42.7 54.6 48.4 63.7 69.3 70.9 66.4 Vacation Home 23.4 26.1 27.3 29.4 31.6 32.7 34.1 Day Travel 85.9 96.8 90.1 104.3 115.4 120.2 122.6 Spending at Destination 675.2 737.1 689.0 785.0 867.8 917.4 953.2 Visitor Spending by Commodity Purchased ($Million) Lodging 186.0 198.6 180.9 203.0 234.6 255.2 270.4 Food & Beverage Services 172.4 189.0 181.7 208.1 226.1 240.8 251.5 Food Stores 37.8 40.1 39.9 42.5 43.5 45.7 48.0 Ground Tran. & Motor Fuel 28.2 47.5 40.7 61.7 85.6 90.9 94.5 Arts, Entertainment & Recreation 100.2 112.7 109.4 126.2 130.3 134.2 135.3 Retail Sales 147.3 149.1 134.7 141.6 145.6 148.1 151.2 Air Transportation (visitor only) 3.3 0.0 1.7 1.9 2.1 2.5 2.3 Spending at Destination 675.2 737.1 689.0 785.0 867.8 917.4 953.2 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 118.1 127.8 119.5 135.5 147.4 164.4 181.5 Arts, Entertainment & Recreation 41.0 46.1 44.7 51.5 55.6 57.3 60.7 Retail** 25.3 26.6 24.7 26.4 27.9 28.7 29.2 Auto Rental & other ground tran. 0.5 0.6 0.5 0.6 0.7 0.8 0.7 Air Transportation (visitor only) 1.2 0.0 0.7 0.8 1.0 1.1 1.0 Other Travel* 0.1 1.5 1.0 1.1 1.1 1.0 1.0 Total Direct Earnings 186.2 202.6 191.2 215.9 233.7 253.3 274.2 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 7,290 7,280 6,600 6,860 6,610 6,850 7,250 Arts, Entertainment & Recreation 2,530 2,620 2,360 2,720 2,920 2,760 2,910 Retail** 1,310 1,250 1,090 1,090 1,090 1,120 1,110 Auto Rental & other ground tran. 20 20 20 20 20 20 20 Air Transportation (visitor only) 30 0 10 10 10 10 10 Other Travel* 0 30 30 20 20 20 20 Total Direct Employment 11,180 11,200 10,110 10,720 10,680 10,780 11,330 Government Revenue Generated by Travel Spending ($Million)*** Local 20.1 21.4 19.8 22.7 25.2 26.8 28.1 State 25.1 27.6 27.4 30.8 33.6 35.4 36.5 Total Direct Gov't. Revenue 45.2 49.0 47.2 53.5 58.8 62.2 64.5 Details may not add to totals due to rounding. Estimates for some years not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payments of travel industry employees not included. DEAN RUNYAN ASSOCIATES PAGE 39 Gila County Travel Impacts, 1998-2008p 1998 2000 2002 Total Direct Travel Spending ($Million) Visitor Spending at Destination 178.6 206.0 203.9 Other Travel* 0.2 0.2 0.2 Total Direct Spending 178.8 206.2 204.1 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 31.9 36.9 32.3 Campground 10.9 5.4 5.5 Private Home 12.7 16.9 14.6 Vacation Home 10.3 11.4 11.8 Day Travel 112.8 128.5 132.7 Spending at Destination 178.6 206.0 203.9 Visitor Spending by Commodity Purchased ($Million) Lodging 13.4 15.5 13.5 Food & Beverage Services 31.6 37.3 36.8 Food Stores 10.9 11.8 12.0 Ground Tran. & Motor Fuel 5.7 9.7 8.3 Arts, Entertainment & Recreation 74.5 86.6 90.5 Retail Sales 42.5 45.1 42.7 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 178.6 206.0 203.9 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 16.1 18.9 18.1 Arts, Entertainment & Recreation 19.0 22.2 23.0 Retail** 7.6 8.2 7.9 Auto Rental & other ground tran. 0.1 0.1 0.1 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.2 0.1 0.2 Total Direct Earnings 42.9 49.5 49.3 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 1,190 1,330 1,280 Arts, Entertainment & Recreation 1,090 1,090 1,240 Retail** 400 420 380 Auto Rental & other ground tran. 0 0 0 Air Transportation (visitor only) 0 0 0 Other Travel* 10 10 10 Total Direct Employment 2,690 2,850 2,910 Government Revenue Generated by Travel Spending ($Million)*** Local 2.0 2.4 2.1 State 2.6 3.1 3.0 Total Direct Gov't. Revenue 4.6 5.5 5.1 2004 2006 2007 2008p 220.7 0.1 220.8 241.4 0.1 241.6 247.1 0.2 247.3 236.6 0.2 236.7 35.0 6.0 18.8 12.4 140.9 220.7 46.3 6.3 20.1 13.1 147.6 241.4 48.9 6.3 20.5 13.6 149.8 247.1 37.6 6.2 19.2 14.1 151.6 236.6 14.6 40.6 12.5 12.7 97.6 42.8 0.0 220.7 19.1 45.7 13.0 17.7 101.5 44.5 0.0 241.4 20.6 47.6 13.5 18.8 102.2 44.4 0.0 247.1 15.8 45.0 13.8 19.5 100.3 42.1 0.0 236.6 19.8 25.0 8.1 0.1 0.0 0.1 53.1 23.0 27.6 8.6 0.1 0.0 0.1 59.4 25.1 27.8 8.7 0.1 0.0 0.1 61.8 23.7 27.6 8.4 0.1 0.0 0.1 59.9 1,250 1,200 360 0 0 10 2,830 1,300 1,190 360 0 0 10 2,860 1,350 1,080 350 0 0 10 2,780 1,200 1,120 340 0 0 10 2,660 2.4 5.3 7.7 3.2 7.0 10.2 3.3 7.2 10.5 2.8 6.6 9.4 Details may not add to totals due to rounding. Estimates for some years not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payments of travel industry employees not included. PAGE 40 DEAN RUNYAN ASSOCIATES Graham & Greenlee Counties Travel Impacts, 1998-2008p Total Direct Travel Spending ($Million) Visitor Spending at Destination Other Travel* Total Direct Spending Visitor Spending by Type of Traveler Ac Hotel, Motel Campground Private Home Vacation Home Day Travel Spending at Destination Visitor Spending by Commodity Purcha Lodging Food & Beverage Services Food Stores Ground Tran. & Motor Fuel Arts, Entertainment & Recreation Retail Sales Air Transportation (visitor only) Spending at Destination Industry Earnings Generated by Travel Accommodation & Food Services Arts, Entertainment & Recreation Retail** Auto Rental & other ground tran. Air Transportation (visitor only) Other Travel* Total Direct Earnings Industry Employment Generated by Tra Accommodation & Food Services Arts, Entertainment & Recreation Retail** Auto Rental & other ground tran. Air Transportation (visitor only) Other Travel* Total Direct Employment Government Revenue Generated by Tr Local State Total Direct Gov't. Revenue 1998 2000 2002 2004 2006 2007 2008p 23.4 0.1 23.4 31.1 0.1 31.2 27.5 0.1 27.6 31.7 0.1 31.8 45.0 0.1 45.0 48.0 0.1 48.0 47.9 0.1 47.9 12.1 0.8 7.8 0.7 1.7 23.4 16.0 1.0 10.7 0.8 2.4 31.1 14.3 0.9 9.2 0.8 2.1 27.5 14.4 1.2 12.3 0.9 2.7 31.7 25.6 1.2 13.4 1.0 3.5 45.0 27.6 1.2 14.2 1.1 3.7 48.0 27.7 1.2 13.8 1.2 3.7 47.9 4.3 6.0 1.0 3.3 3.5 5.2 0.0 23.4 5.5 7.9 1.2 5.6 4.6 6.2 0.0 31.1 4.8 7.2 1.1 4.8 4.2 5.3 0.0 27.5 4.7 8.1 1.2 7.3 4.8 5.6 0.0 31.7 9.0 11.3 1.4 10.2 6.2 6.9 0.0 45.0 10.0 12.0 1.5 10.9 6.4 7.1 0.0 48.0 9.8 12.0 1.6 11.3 6.2 7.0 0.0 47.9 3.3 1.7 1.0 0.0 0.0 0.0 6.2 4.4 2.3 1.3 0.0 0.0 0.1 8.0 3.9 2.1 1.1 0.0 0.0 0.1 7.3 4.2 2.4 1.2 0.1 0.0 0.0 7.9 6.4 3.2 1.5 0.1 0.0 0.0 11.2 7.2 3.4 1.6 0.1 0.0 0.0 12.2 7.5 3.4 1.5 0.1 0.0 0.0 12.5 290 130 60 0 0 0 480 0.6 1.1 1.7 340 140 70 0 0 0 560 0.8 1.4 2.2 350 260 60 0 0 0 670 0.7 1.3 2.0 360 510 530 370 550 580 60 70 70 0 0 0 0 0 0 0 0 0 790 1,130 1,180 0.7 1.1 1.2 1.5 1.9 2.0 2.2 3.0 3.2 520 560 60 0 0 0 1,150 1.2 1.9 3.1 Details may not add to totals due to rounding. Estimates for some years not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payments of travel industry employees not included. DEAN RUNYAN ASSOCIATES PAGE 41 La Paz County Travel Impacts, 1998-2008p 1998 2000 2002 Total Direct Travel Spending ($Million) Visitor Spending at Destination 125.5 161.9 157.6 Other Travel* 0.0 0.0 0.0 Total Direct Spending 125.5 161.9 157.6 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 9.3 12.9 14.0 Campground 35.8 40.4 39.8 Private Home 12.7 18.5 15.4 Vacation Home 15.0 18.5 18.4 Day Travel 52.7 66.7 65.0 Spending at Destination 125.5 161.9 157.6 Visitor Spending by Commodity Purchased ($Million) Lodging 6.2 7.1 7.5 Food & Beverage Services 14.0 17.6 17.8 Food Stores 12.6 13.9 14.3 Ground Tran. & Motor Fuel 28.4 48.7 41.7 Arts, Entertainment & Recreation 39.6 47.5 50.4 Retail Sales 24.6 27.1 26.0 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 125.5 161.9 157.6 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 5.9 7.2 7.4 Arts, Entertainment & Recreation 9.3 11.2 11.8 Retail** 6.3 7.4 7.5 Auto Rental & other ground tran. 0.3 0.4 0.4 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 21.7 26.3 27.0 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 490 550 510 Arts, Entertainment & Recreation 530 540 510 Retail** 340 380 360 Auto Rental & other ground tran. 10 10 10 Air Transportation (visitor only) 0 0 0 Other Travel* 0 0 0 Total Direct Employment 1,370 1,480 1,400 Government Revenue Generated by Travel Spending ($Million)*** Local 1.4 1.7 1.7 State 4.8 6.1 5.9 Total Direct Gov't. Revenue 6.2 7.8 7.6 2004 2006 2007 2008p 186.2 0.0 186.2 209.7 0.0 209.7 215.6 0.0 215.6 216.8 0.0 216.8 14.7 48.0 21.0 20.8 76.8 186.2 10.8 55.8 23.9 23.8 89.5 209.7 10.4 56.7 24.7 24.9 92.8 215.6 9.5 56.2 23.3 26.1 95.5 216.8 7.7 19.9 14.5 63.7 54.3 26.1 0.0 186.2 7.0 20.4 14.7 88.9 52.8 25.9 0.0 209.7 7.0 21.0 15.2 94.4 52.4 25.6 0.0 215.6 6.5 20.7 15.7 98.2 51.0 24.6 0.0 216.8 8.1 12.8 8.0 0.5 0.0 0.0 29.3 8.0 13.2 8.5 0.5 0.0 0.0 30.2 8.4 13.1 8.7 0.5 0.0 0.0 30.7 8.6 13.1 8.4 0.5 0.0 0.0 30.6 510 510 380 10 0 0 1,410 470 460 390 10 0 0 1,330 460 450 400 10 0 0 1,330 460 430 370 10 0 0 1,270 1.9 7.7 9.6 2.2 8.8 11.0 2.2 8.8 11.0 2.1 8.3 10.3 Details may not add to totals due to rounding. Estimates for some years not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payments of travel industry employees not included. PAGE 42 DEAN RUNYAN ASSOCIATES Maricopa County Travel Impacts, 1998-2008p 1998 2000 2002 2004 Total Direct Travel Spending ($Million) Visitor Spending at Destination 6,424 7,824 7,096 8,808 Other Travel* 903 955 883 1,080 Total Direct Spending 7,327 8,779 7,979 9,888 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 3,215 3,659 3,261 3,851 Campground 150 181 183 206 Private Home 1,946 2,583 2,337 3,140 Vacation Home 129 153 165 186 Day Travel 983 1,247 1,149 1,426 Spending at Destination 6,424 7,824 7,096 8,808 Visitor Spending by Commodity Purchased ($Million) Lodging 1,135 1,296 1,129 1,314 Food & Beverage Services 1,343 1,684 1,574 1,974 Food Stores 216 246 238 273 Ground Tran. & Motor Fuel 789 1,163 1,014 1,421 Arts, Entertainment & Recreation 830 1,051 998 1,249 Retail Sales 1,230 1,419 1,246 1,440 Air Transportation (visitor only) 882 964 897 1,137 Spending at Destination 6,424 7,824 7,096 8,808 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 800 965 876 1,068 Arts, Entertainment & Recreation 341 433 409 515 Retail** 208 248 227 263 Auto Rental & other ground tran. 40 48 44 53 Air Transportation (visitor only) 334 387 377 450 Other Travel* 376 428 402 463 Total Direct Earnings 2,099 2,509 2,334 2,811 Industry Employment Generated by Travel Spending (Thousand Jobs) Accommodation & Food Services 40.9 45.6 39.2 44.4 Arts, Entertainment & Recreation 15.8 16.6 14.1 18.1 Retail** 8.2 9.0 7.8 8.6 Auto Rental & other ground tran. 1.7 1.7 1.5 1.6 Air Transportation (visitor only) 7.7 7.9 6.7 6.9 Other Travel* 9.5 9.6 8.0 7.8 Total Direct Employment 83.9 90.5 77.3 87.4 Government Revenue Generated by Travel Spending ($Million)*** Local 230 268 239 282 State 238 290 280 336 Total Direct Gov't. Revenue 468 558 519 618 2006 2007 2008p 10,503 10,725 10,288 1,407 1,473 1,383 11,910 12,198 11,671 4,704 4,725 4,457 228 231 233 3,685 3,822 3,658 212 224 241 1,672 1,721 1,697 10,503 10,725 10,288 1,665 1,692 1,585 2,267 2,332 2,231 295 308 312 1,888 1,993 2,045 1,377 1,373 1,286 1,565 1,553 1,455 1,446 1,474 1,373 10,503 10,725 10,288 1,248 591 294 62 496 523 3,214 1,324 591 296 64 506 549 3,331 1,319 579 280 62 472 520 3,232 47.6 19.2 8.9 1.7 7.1 8.2 92.9 47.4 20.0 8.8 1.8 6.8 8.2 93.0 47.4 18.8 8.7 1.8 6.5 7.9 91.1 330 383 712 336 389 724 318 367 685 Details may not add to totals due to rounding. Estimates for some years not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payments of travel industry employees not included. DEAN RUNYAN ASSOCIATES PAGE 43 Mohave County Travel Impacts, 1998-2008p 1998 2000 2002 Total Direct Travel Spending ($Million) Visitor Spending at Destination 240.6 319.9 314.0 Other Travel* 8.0 1.7 1.2 Total Direct Spending 248.6 321.6 315.2 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 84.8 106.1 113.6 Campground 24.0 24.1 23.4 Private Home 63.8 96.2 84.6 Vacation Home 26.9 32.8 34.3 Day Travel 41.2 55.5 52.8 Spending at Destination 240.6 319.9 314.0 Visitor Spending by Commodity Purchased ($Million) Lodging 32.8 38.6 41.0 Food & Beverage Services 52.1 67.9 69.4 Food Stores 21.0 23.7 24.8 Ground Tran. & Motor Fuel 37.5 64.3 55.0 Arts, Entertainment & Recreation 39.6 51.0 52.8 Retail Sales 57.6 67.7 64.3 Air Transportation (visitor only) 0.0 6.7 6.7 Spending at Destination 240.6 319.9 314.0 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 27.2 34.3 35.5 Arts, Entertainment & Recreation 16.8 21.8 22.5 Retail** 12.6 15.4 15.2 Auto Rental & other ground tran. 0.4 0.5 0.5 Air Transportation (visitor only) 0.0 2.7 2.8 Other Travel* 3.2 0.9 0.7 Total Direct Earnings 60.3 75.5 77.2 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 2,040 2,400 2,300 Arts, Entertainment & Recreation 1,100 1,330 1,410 Retail** 580 710 630 Auto Rental & other ground tran. 20 20 20 Air Transportation (visitor only) 0 50 50 Other Travel* 90 30 20 Total Direct Employment 3,820 4,540 4,430 Government Revenue Generated by Travel Spending ($Million)*** Local 5.8 7.0 7.1 State 10.8 13.7 14.1 Total Direct Gov't. Revenue 16.6 20.7 21.2 2004 2006 2007 2008p 395.6 1.9 397.5 477.4 5.9 483.3 462.5 6.5 469.0 450.3 6.1 456.4 138.7 27.0 117.1 39.4 68.0 395.6 179.0 30.1 133.7 45.7 83.2 477.4 152.7 31.5 139.7 48.7 84.1 462.5 145.3 31.8 132.2 51.3 83.8 450.3 48.6 88.4 27.4 84.1 65.5 73.8 7.7 395.6 63.9 106.5 29.8 117.3 73.6 82.6 3.7 477.4 54.5 101.5 30.6 124.6 69.9 77.9 3.5 462.5 49.2 97.3 31.6 129.7 66.0 73.3 3.2 450.3 44.2 28.1 17.4 0.6 3.1 0.9 94.2 54.1 33.1 19.9 0.6 1.7 2.8 112.1 51.4 31.4 19.6 0.7 1.5 3.0 107.6 50.8 31.0 18.7 0.6 1.4 2.8 105.5 2,590 1,660 670 20 50 20 5,000 3,030 1,980 720 20 20 50 5,830 2,710 1,640 690 20 20 50 5,130 2,550 1,530 630 20 20 50 4,790 8.6 16.9 25.5 10.4 19.6 30.0 9.5 18.8 28.3 8.9 17.6 26.5 Details may not add to totals due to rounding. Estimates for some years not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payments of travel industry employees not included. PAGE 44 DEAN RUNYAN ASSOCIATES Navajo County Travel Impacts, 1998-2008p 1998 2000 2002 Total Direct Travel Spending ($Million) Visitor Spending at Destination 179.0 239.2 220.8 Other Travel* 0.4 0.3 0.3 Total Direct Spending 179.4 239.5 221.1 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 85.3 121.8 108.1 Campground 22.5 21.5 21.6 Private Home 23.0 31.8 27.3 Vacation Home 35.6 41.3 42.6 Day Travel 12.7 17.2 15.8 Spending at Destination 179.0 239.2 220.8 Visitor Spending by Commodity Purchased ($Million) Lodging 31.5 44.0 38.3 Food & Beverage Services 31.1 44.1 40.2 Food Stores 22.6 25.2 25.6 Ground Tran. & Motor Fuel 21.6 37.0 31.7 Arts, Entertainment & Recreation 34.9 44.2 44.9 Retail Sales 37.3 44.6 40.0 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 179.0 239.2 220.8 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 21.8 30.9 27.5 Arts, Entertainment & Recreation 12.7 16.6 16.4 Retail** 8.6 10.4 10.0 Auto Rental & other ground tran. 0.2 0.3 0.3 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.3 0.2 0.3 Total Direct Earnings 43.7 58.4 54.4 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 1,610 2,190 1,780 Arts, Entertainment & Recreation 1,020 990 930 Retail** 480 560 480 Auto Rental & other ground tran. 10 10 10 Air Transportation (visitor only) 0 0 0 Other Travel* 20 10 10 Total Direct Employment 3,140 3,770 3,220 Government Revenue Generated by Travel Spending ($Million)*** Local 4.3 5.8 5.1 State 6.7 8.9 8.5 Total Direct Gov't. Revenue 11.0 14.8 13.6 2004 2006 2007 2008p 237.3 0.2 237.5 282.8 0.2 283.1 290.1 0.3 290.4 306.4 0.3 306.7 101.0 25.8 37.2 47.8 18.6 237.3 128.4 28.9 41.8 53.4 22.7 282.8 129.7 29.4 43.4 56.3 23.5 290.1 146.0 28.6 40.9 59.0 24.3 306.4 35.9 41.5 26.6 48.5 45.3 39.4 0.0 237.3 43.7 50.1 28.2 67.6 50.1 43.2 0.0 282.8 44.5 51.3 29.6 71.8 50.0 42.9 0.0 290.1 50.3 55.2 31.6 74.7 50.6 44.0 0.0 306.4 27.1 17.0 10.4 0.3 0.0 0.2 55.0 32.1 19.7 11.6 0.4 0.0 0.2 63.9 34.0 19.7 11.8 0.4 0.0 0.2 66.1 39.2 21.0 12.0 0.4 0.0 0.2 72.8 1,630 950 480 10 0 10 3,080 1,690 1,080 500 10 0 10 3,290 1,680 1,020 510 10 0 10 3,230 1,870 1,140 490 10 0 10 3,520 5.1 9.4 14.5 6.0 10.8 16.8 6.1 10.9 17.0 6.7 11.1 17.8 Details may not add to totals due to rounding. Estimates for some years not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payments of travel industry employees not included. DEAN RUNYAN ASSOCIATES PAGE 45 Pima County Travel Impacts, 1998-2008p 1998 2000 2002 2004 2006 2007 2008p Total Direct Travel Spending ($Million) Visitor Spending at Destination 1,526 1,848 1,765 1,993 2,230 2,199 2,067 Other Travel* 26 27 23 26 32 38 38 Total Direct Spending 1,552 1,876 1,788 2,019 2,263 2,237 2,105 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 700 813 738 814 960 900 797 Campground 57 64 65 73 79 81 81 Private Home 318 431 379 501 564 589 563 Vacation Home 27 31 32 35 39 41 44 Day Travel 424 507 549 568 586 586 580 Spending at Destination 1,526 1,848 1,765 1,993 2,230 2,199 2,067 Visitor Spending by Commodity Purchased ($Million) Lodging 290 338 302 332 413 393 340 Food & Beverage Services 347 431 413 483 538 532 496 Food Stores 88 100 109 109 107 109 108 Ground Tran. & Motor Fuel 153 216 190 258 338 355 363 Arts, Entertainment & Recreation 213 268 256 305 323 314 289 Retail Sales 420 480 481 488 488 469 443 Air Transportation (visitor only) 14 15 14 18 23 28 28 Spending at Destination 1,526 1,848 1,765 1,993 2,230 2,199 2,067 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 210 254 236 270 307 310 295 Arts, Entertainment & Recreation 85 107 102 122 136 131 126 Retail** 69 80 81 83 86 84 80 Auto Rental & other ground tran. 11 13 12 14 17 17 16 Air Transportation (visitor only) 5 6 6 7 8 9 9 Other Travel* 15 16 13 14 15 17 17 Total Direct Earnings 394 475 450 510 567 568 544 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 11,380 13,370 12,180 13,240 14,070 13,320 12,320 Arts, Entertainment & Recreation 5,710 6,640 6,260 7,860 7,810 7,220 6,620 Retail** 3,060 3,360 3,220 3,160 3,110 3,040 2,890 Auto Rental & other ground tran. 450 460 400 430 460 490 480 Air Transportation (visitor only) 130 130 110 110 110 130 120 Other Travel* 520 470 360 310 310 340 330 Total Direct Employment 21,240 24,430 22,520 25,110 25,870 24,530 22,770 Government Revenue Generated by Travel Spending ($Million)*** Local 35.2 41.2 38.0 41.9 50.2 48.6 43.7 State 57.0 68.8 70.7 79.4 87.5 85.8 79.6 Total Direct Gov't. Revenue 92.3 110.0 108.7 121.2 137.7 134.4 123.3 Details may not add to totals due to rounding. Estimates for some years not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payments of travel industry employees not included. PAGE 46 DEAN RUNYAN ASSOCIATES Pinal County Travel Impacts, 1998-2008p 1998 2000 2002 Total Direct Travel Spending ($Million) Visitor Spending at Destination 206.0 262.7 256.5 Other Travel* 0.1 0.1 0.1 Total Direct Spending 206.1 262.8 256.6 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 43.6 46.4 48.9 Campground 13.8 15.5 15.2 Private Home 61.6 89.7 80.5 Vacation Home 30.0 36.7 39.5 Day Travel 56.9 73.2 71.3 Spending at Destination 206.0 262.7 256.5 Visitor Spending by Commodity Purchased ($Million) Lodging 17.5 18.4 19.1 Food & Beverage Services 44.7 58.0 57.9 Food Stores 20.1 23.1 24.5 Ground Tran. & Motor Fuel 25.7 44.1 37.7 Arts, Entertainment & Recreation 42.4 53.7 55.5 Retail Sales 55.6 65.3 61.8 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 206.0 262.7 256.5 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 20.1 24.8 25.0 Arts, Entertainment & Recreation 18.3 23.5 24.1 Retail** 10.8 13.1 12.9 Auto Rental & other ground tran. 0.3 0.4 0.3 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.1 0.1 0.1 Total Direct Earnings 49.5 61.8 62.4 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 1,380 1,580 1,550 Arts, Entertainment & Recreation 830 960 1,420 Retail** 560 620 570 Auto Rental & other ground tran. 10 10 10 Air Transportation (visitor only) 0 0 0 Other Travel* 10 0 0 Total Direct Employment 2,790 3,180 3,560 Government Revenue Generated by Travel Spending ($Million)*** Local 4.1 4.9 4.8 State 8.0 10.1 10.3 Total Direct Gov't. Revenue 12.1 15.0 15.1 2004 2006 2007 2008p 322.7 0.4 323.1 407.6 0.4 408.0 449.2 0.4 449.6 461.1 0.4 461.6 51.9 17.1 117.0 47.0 88.2 322.7 63.5 18.2 154.3 61.4 108.7 407.6 70.1 17.9 172.9 69.7 117.1 449.2 68.9 17.4 174.7 78.2 120.6 461.1 20.2 75.2 28.2 57.7 68.8 72.6 0.0 322.7 24.6 96.9 34.6 80.5 82.2 88.7 0.0 407.6 27.3 110.3 39.7 85.5 89.6 96.8 0.0 449.2 26.6 113.1 44.4 88.9 90.7 97.4 0.0 461.1 31.0 30.5 15.1 0.4 0.0 0.3 77.3 39.5 38.6 18.6 0.4 0.0 0.3 97.5 46.3 42.4 20.4 0.4 0.0 0.3 109.9 49.5 44.9 20.9 0.4 0.0 0.3 116.1 1,820 1,640 620 10 0 20 4,110 2,100 1,950 740 10 0 10 4,810 2,260 1,560 800 10 0 20 4,650 2,350 1,660 800 10 0 20 4,840 5.9 12.8 18.8 7.5 15.6 23.2 8.4 16.9 25.3 8.5 16.8 25.3 Details may not add to totals due to rounding. Estimates for some years not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payments of travel industry employees not included. DEAN RUNYAN ASSOCIATES PAGE 47 Santa Cruz County Travel Impacts, 1998-2008p 1998 2000 2002 Total Direct Travel Spending ($Million) Visitor Spending at Destination 206.4 236.9 297.6 Other Travel* 0.0 0.0 0.1 Total Direct Spending 206.4 236.9 297.7 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 27.4 29.0 27.9 Campground 3.8 3.0 2.9 Private Home 5.8 8.0 7.1 Vacation Home 0.8 0.9 1.0 Day Travel 168.5 194.5 257.1 Spending at Destination 206.4 236.9 297.6 Visitor Spending by Commodity Purchased ($Million) Lodging 11.0 11.6 11.1 Food & Beverage Services 25.6 29.1 35.0 Food Stores 79.3 90.4 120.1 Ground Tran. & Motor Fuel 5.1 8.7 7.5 Arts, Entertainment & Recreation 6.0 6.9 6.9 Retail Sales 79.5 90.1 117.0 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 206.4 236.9 297.6 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 11.7 13.1 14.9 Arts, Entertainment & Recreation 2.8 3.3 3.3 Retail** 22.6 25.8 33.6 Auto Rental & other ground tran. 0.1 0.1 0.1 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.0 0.0 0.1 Total Direct Earnings 37.2 42.2 51.9 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 820 830 960 Arts, Entertainment & Recreation 220 250 230 Retail** 1,000 1,060 1,290 Auto Rental & other ground tran. 0 0 0 Air Transportation (visitor only) 0 0 0 Other Travel* 0 0 0 Total Direct Employment 2,050 2,140 2,490 Government Revenue Generated by Travel Spending ($Million)*** Local 4.2 4.7 5.7 State 6.0 6.9 9.4 Total Direct Gov't. Revenue 10.2 11.6 15.1 2004 2006 2007 2008p 272.2 0.1 272.3 254.0 0.1 254.1 255.2 0.1 255.2 257.0 0.1 257.0 32.6 3.4 9.7 1.1 223.5 272.2 38.8 3.7 11.0 1.3 197.1 254.0 42.1 3.8 11.3 1.3 194.5 255.2 42.4 3.8 10.7 1.4 196.6 257.0 12.8 33.9 103.5 11.4 8.4 102.2 0.0 272.2 15.3 34.1 90.0 15.9 9.2 89.5 0.0 254.0 16.9 35.1 90.6 16.9 9.5 86.2 0.0 255.2 16.6 34.7 90.6 17.6 9.2 88.4 0.0 257.0 15.0 3.9 29.3 0.1 0.0 0.0 48.4 15.6 4.5 26.1 0.1 0.0 0.0 46.4 17.0 4.7 25.8 0.1 0.0 0.1 47.6 17.6 4.7 26.0 0.1 0.0 0.1 48.5 930 250 1,080 0 0 0 2,270 900 320 890 0 0 0 2,120 850 310 870 0 0 0 2,030 830 330 850 0 0 0 2,020 5.3 8.7 14.0 5.1 8.2 13.3 5.1 8.2 13.3 5.2 8.2 13.4 Details may not add to totals due to rounding. Estimates for some years not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payments of travel industry employees not included. PAGE 48 DEAN RUNYAN ASSOCIATES Yavapai County Travel Impacts, 1998-2008p 1998 2000 2002 Total Direct Travel Spending ($Million) Visitor Spending at Destination 422.8 554.8 537.0 Other Travel* 3.1 2.9 3.0 Total Direct Spending 425.9 557.8 540.0 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 138.6 208.1 194.8 Campground 35.6 38.1 38.9 Private Home 59.1 82.1 73.6 Vacation Home 14.6 16.8 18.2 Day Travel 174.9 208.0 209.8 Spending at Destination 422.8 554.8 537.0 Visitor Spending by Commodity Purchased ($Million) Lodging 59.0 86.0 79.6 Food & Beverage Services 96.1 133.1 130.8 Food Stores 26.6 30.8 31.2 Ground Tran. & Motor Fuel 16.0 27.4 23.5 Arts, Entertainment & Recreation 115.7 146.5 149.9 Retail Sales 109.4 131.1 121.9 Air Transportation (visitor only) 0.0 0.0 0.1 Spending at Destination 422.8 554.8 537.0 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 50.6 71.5 68.8 Arts, Entertainment & Recreation 39.6 51.7 52.2 Retail** 17.8 21.4 20.3 Auto Rental & other ground tran. 0.2 0.2 0.2 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 2.3 2.1 2.2 Total Direct Earnings 110.4 146.9 143.8 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 3,390 4,430 4,090 Arts, Entertainment & Recreation 2,280 2,590 3,490 Retail** 900 980 870 Auto Rental & other ground tran. 10 10 10 Air Transportation (visitor only) 0 0 0 Other Travel* 120 100 90 Total Direct Employment 6,700 8,100 8,540 Government Revenue Generated by Travel Spending ($Million)*** Local 8.6 12.0 11.2 State 11.1 15.3 15.4 Total Direct Gov't. Revenue 19.7 27.3 26.7 2004 2006 2007 2008p 588.9 1.0 589.9 683.8 0.9 684.8 716.2 1.0 717.2 702.0 1.0 703.0 197.8 42.1 99.9 20.1 227.0 588.9 255.5 44.1 114.1 22.6 245.4 683.8 276.8 44.3 118.3 23.8 250.8 716.2 268.3 43.3 111.7 25.0 251.5 702.0 81.5 146.5 33.2 35.9 165.6 126.1 0.1 588.9 109.8 172.8 35.7 50.0 177.4 137.9 0.1 683.8 121.7 183.4 37.6 53.2 180.7 139.5 0.1 716.2 115.7 180.9 38.6 55.3 176.8 134.6 0.1 702.0 74.7 58.3 21.3 0.3 0.0 0.7 155.3 90.8 66.6 23.7 0.3 0.1 0.7 182.2 101.4 68.1 24.2 0.3 0.1 0.7 194.8 103.6 68.6 23.6 0.3 0.1 0.7 196.9 3,910 3,850 860 10 0 30 8,650 4,170 3,800 930 10 0 30 8,950 4,390 3,680 960 10 0 30 9,060 4,440 3,820 910 10 0 30 9,210 12.4 18.9 31.3 15.5 23.4 38.8 16.5 24.5 41.0 15.9 23.7 39.6 Details may not add to totals due to rounding. Estimates for some years not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payments of travel industry employees not included. DEAN RUNYAN ASSOCIATES PAGE 49 Yuma County Travel Impacts, 1998-2008p 1998 2000 2002 Total Direct Travel Spending ($Million) Visitor Spending at Destination 365.7 438.6 482.0 Other Travel* 5.2 5.5 2.6 Total Direct Spending 370.9 444.0 484.6 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 86.0 95.5 102.9 Campground 48.8 57.3 57.9 Private Home 54.0 76.9 68.4 Vacation Home 28.4 33.8 35.3 Day Travel 148.6 175.1 217.5 Spending at Destination 365.7 438.6 482.0 Visitor Spending by Commodity Purchased ($Million) Lodging 29.4 32.2 33.4 Food & Beverage Services 58.1 72.5 77.2 Food Stores 61.8 70.1 84.6 Ground Tran. & Motor Fuel 20.1 34.4 29.4 Arts, Entertainment & Recreation 76.2 91.6 96.4 Retail Sales 120.1 137.9 158.4 Air Transportation (visitor only) 0.0 0.0 2.6 Spending at Destination 365.7 438.6 482.0 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 27.3 32.8 34.7 Arts, Entertainment & Recreation 27.6 33.9 35.2 Retail** 26.0 30.1 34.9 Auto Rental & other ground tran. 0.2 0.3 0.3 Air Transportation (visitor only) 0.0 0.0 1.1 Other Travel* 2.2 2.4 1.3 Total Direct Earnings 83.3 99.4 107.4 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 1,950 2,110 2,090 Arts, Entertainment & Recreation 1,300 1,500 2,120 Retail** 1,210 1,320 1,390 Auto Rental & other ground tran. 10 10 10 Air Transportation (visitor only) 0 0 20 Other Travel* 60 60 30 Total Direct Employment 4,530 5,000 5,650 Government Revenue Generated by Travel Spending ($Million)*** Local 9.0 10.5 11.6 State 11.6 14.0 16.3 Total Direct Gov't. Revenue 20.6 24.5 27.8 2004 2006 2007 2008p 529.6 2.9 532.6 583.5 3.3 586.9 586.7 3.4 590.1 596.0 3.2 599.2 132.0 64.6 91.8 38.8 202.3 529.6 176.2 68.4 103.0 43.3 192.5 583.5 174.2 68.6 106.9 45.7 191.4 586.7 185.0 66.8 102.0 48.5 193.7 596.0 40.8 90.8 79.4 45.0 117.9 152.5 3.3 529.6 56.1 104.1 75.4 62.8 134.7 147.7 2.8 583.5 56.9 106.3 77.2 66.7 132.7 143.9 3.0 586.7 58.7 107.6 79.2 69.4 133.4 144.8 2.8 596.0 41.4 43.2 33.7 0.3 1.3 1.3 121.2 49.7 51.5 33.4 0.3 1.3 1.6 137.8 52.4 51.1 33.2 0.3 1.3 1.6 140.1 56.1 52.7 33.5 0.3 1.3 1.5 145.4 2,350 2,270 1,230 10 20 30 5,900 2,630 2,450 1,230 10 20 30 6,370 2,620 2,290 1,180 10 20 30 6,140 2,680 2,070 1,160 10 20 30 5,970 12.5 19.3 31.7 14.0 22.2 36.2 14.0 22.1 36.2 14.2 22.2 36.4 Details may not add to totals due to rounding. Estimates for some years not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payments of travel industry employees not included. PAGE 50 DEAN RUNYAN ASSOCIATES APPENDICES Appendix A. Regional Travel Impact Model Appendix B. Travel Industry Accounts: A comparison of the Regional Travel Impact Model and Travel & Tourism Satellite Accounts Appendix C. Arizona Earnings and Employment by Industry Sector Appendix D. Secondary Impacts Industry Groups DEAN RUNYAN ASSOCIATES PAGE 51 APPENDIX A REGIONAL TRAVEL IMPACT MODEL This appendix 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 2008. 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. GROSS DOMESTIC PRODUCT An estimate of the Gross Domestic Product (GDP) of the Arizona travel industry based on the RTIM direct travel impacts is also provided in this report. The GDP of an industry is equal to gross output (sales or receipts) minus intermediate inputs (the goods and services purchased from other industries). GDP is always less than output or sales because GDP 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. GDP is a useful concept because it permits comparisons of the economic contributions of different industries. PAGE 52 DEAN RUNYAN ASSOCIATES The relationship between spending and gross domestic product is illustrated in the figure below. Examples of inputs are the food or accounting services that restaurants purchase from suppliers. “Goods resold” are the commodities that retail establishments purchase from manufacturers or wholesale trade businesses and resell with a markup. These inputs or goods are not counted as the GDP of the restaurant or retail industry because their value was created in other industries (agriculture, accounting, manufacturing). Relationship Between Spending and Gross Domestic Product Inputs/Goods Resold Operating Surplus Indirect Taxes Labor Income Spending GDP It is for this reason that “travel spending” – as measured from surveys of visitors – is not the best measure of the travel industry’s real economic contribution. This is because some visitor spending is actually counted as the GDP of other industries (e.g., agriculture, accounting, manufacturing). Furthermore, these other industries may or may not be located within the geographic area of interest. If the farm were located within the region of interest, then the GDP of the local farm would be included as an indirect or secondary effect. If not (e.g., a manufacturing firm in another state or country), then that part of GDP is not counted. The preceding graph also shows the three main components of GDP. For most industries, labor income (essentially equivalent to earnings in this report) is the primary component of GDP. This is true of the travel industry. A second component is the tax payments that businesses make to government, such as sales, excise and property taxes. In the case of sales taxes, businesses are essentially a collection agency for the government. The final component, operating surplus, represents the income and payments (e.g., dividends, interest) to other stakeholders of the firm. The concept of GDP also illustrates that with small geographic units of analysis (e.g., counties), earnings, employment, and tax revenues are the best measures of the economic value of the travel industry to the local economy. Small area measures of GDP are less reliable and much of the operating surplus may leak out of the local economy anyway. Indirect effects are also generally less in smaller economies. DEAN RUNYAN ASSOCIATES PAGE 53 COMPARISON WITH OTHER EXPORT-ORIENTED INDUSTRIES Export-oriented industries are those industries that primarily market their products and services to other regions, states or nations. Agriculture, mining, and manufacturing are the best examples of export-oriented industries. Clearly, there are cases in each of these three sectors where the products are sold within the local or regional market. Nonetheless, in general most businesses within these industries depend on export markets. The travel industry is also an export-oriented industry because goods and services are sold to visitors, rather than residents. The travel industry injects money into the local economy, as do the exports of other industries. Exports are not necessarily more important than locally traded goods and services. However, diverse export-oriented industries in any economy are a source of strength – in part because they generate income that contributes to the development of other local services and amenities. Such industries characterize the “comparative advantage” of the local economy within larger regional, national and global markets. For the purposes of this report, we have defined five major export-oriented industries in Arizona. • Aerospace. This industry comprises establishments engaged in aerospace product and parts manufacturing. • Microelectronics. This industry includes establishments that manufacture computers, communications equipment and similar products and components that utilize integrated circuits. This is the largest manufacturing subsector (NAICS 334). • Food. The food group encompasses parts of two major industry categories: agriculture, and food manufacturing or processing. • Mining. This industry is comprised primarily of copper mining companies. • Travel. A portion of the transportation, retail, leisure, and hospitality industries as estimated in this report. These industries are compared in terms of earnings and GDP in order to illustrate the significance of the travel industry in the larger economy. This type of comparison is more meaningful for the travel industry than comparisons with non-export oriented industries (e.g., health care, retail trade, government) where industry growth is largely a function of population and demographic factors. See Appendix C for a list of Arizona industries. TRAVEL RELATED CONSTRUCTION ACTIVITY Investment in the infrastructure of the travel industry represents another aspect of the travel economy. In the short term, such investments provide employment in the construction trades and architectural professions. In the longer term, investments in accommodations, attractions and other facilities serve to maintain and enhance PAGE 54 DEAN RUNYAN ASSOCIATES Arizona’s share of the visitor market. The statewide estimate of travel related construction activity is based on McGraw-Hill Dodge Construction statistics. PRELIMINARY ESTIMATES Preliminary estimates for 2008 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 2007 becomes available. STATEWIDE TAX IMPACTS As with last year’s report, the sum of travel-generated state and local tax revenues at the county level is less than the statewide estimate of state and local tax revenues. This is because property taxes and the sales tax revenues attributable to the spending of travel industry employees are included at the statewide level. Data limitations do not permit the estimate of the aforementioned taxes at the county level. 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. DEAN RUNYAN ASSOCIATES PAGE 55 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 included for the statewide total. They are not included for county level estimates. 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. Also included at the state level only is an estimate of the sales tax payments associated with travel industry earnings. 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. PAGE 56 DEAN RUNYAN ASSOCIATES 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 parttime 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. DEAN RUNYAN ASSOCIATES PAGE 57 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 generally expressed in current dollars. There is no adjustment for inflation unless noted. • The employment estimates in this report are estimates of the total number of full- and part-time jobs (positions) directly generated by travel spending, rather than the number of individuals employed. Both payroll jobs and selfemployment 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. PAGE 58 DEAN RUNYAN ASSOCIATES APPENDIX B 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.” 11 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. 11 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. DEAN RUNYAN ASSOCIATES PAGE 59 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. 12 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. 13 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 12 The North American Industrial Classification System (NAICS) is the current standard in the United States. 13 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. PAGE 60 DEAN RUNYAN ASSOCIATES 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. 14 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. 15 14 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. 15 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. DEAN RUNYAN ASSOCIATES PAGE 61 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. 16 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. 16 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. PAGE 62 DEAN RUNYAN ASSOCIATES 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 DEAN RUNYAN ASSOCIATES PAGE 63 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. 17 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. 18 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 17 Conversely, the spending of U.S. visitors in other countries is treated as an import in the international transaction accounts. 18 The issues discussed with regard to the reliability of survey data for leisure versus business travel also applies to this category PAGE 64 DEAN RUNYAN ASSOCIATES evaluation of the tax impacts of resident versus nonresident travel might also be important. 19 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. 20 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. 19 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. 20 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). DEAN RUNYAN ASSOCIATES PAGE 65 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: 21 • 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 21 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. PAGE 66 DEAN RUNYAN ASSOCIATES 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. 22 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. 23 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 Domestic Product). At the level of the state, travel industry value-added or GDP is an important measure – more economically meaningful than travel spending. 24 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 revenue. 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. 22 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. 23 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. 24 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. DEAN RUNYAN ASSOCIATES PAGE 67 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. 25 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. 25 The induced effects can be estimated with the Implan model maintained by the Minnesota Implan Group. PAGE 68 DEAN RUNYAN ASSOCIATES 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. DEAN RUNYAN ASSOCIATES PAGE 69 APPENDIX C Arizona Earnings and Employment by Industry Sector, 2007 Earnings Industry Sector ($Million) Percent Employment of Total (Thousand) Percent of Total Primarily Export-Oriented Agriculture, Forestry, Fishing and related Mining Manufacturing **Travel 16,768 1,176 1,151 14,441 5,031 10.8% 0.8% 0.7% 9.3% 3.3% 254 43 16 195 170 7.2% 1.2% 0.4% 5.5% 4.8% Primarily Local/Regional Construction Utilities Wholesale trade Retail trade Real estate and rental and leasing Management of companies and enterprises Administrative and waste services Other services, except public administration Government and government enterprises 82,559 13,669 1,387 8,503 12,557 5,060 2,391 9,073 4,028 25,890 53.4% 8.8% 0.9% 5.5% 8.1% 3.3% 1.5% 5.9% 2.6% 16.7% 2,025 284 13 123 411 248 30 299 168 449 57.5% 8.1% 0.4% 3.5% 11.7% 7.0% 0.9% 8.5% 4.8% 12.7% 55,285 4,654 3,197 10,383 12,763 1,722 15,514 7,052 154,613 35.8% 3.0% 2.1% 6.7% 8.3% 1.1% 10.0% 4.6% 100.0% 1,242 95 53 182 217 57 314 324 3,520 35.3% 2.7% 1.5% 5.2% 6.2% 1.6% 8.9% 9.2% 100.0% Mixed Transportation and warehousing Information Finance and insurance Professional and technical services Educational services Health care and social assistance Leisure and Hospitality Arizona Total** **Travel is not included in the sub and grand totals because it is also represented in other sectors (primarily leisure and hospitality, transporation, and retail trade). DEAN RUNYAN ASSOCIATES PAGE 71 PAGE 72 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 73 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 74 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 75 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 76 DEAN RUNYAN ASSOCIATES