Arizona Travel Impacts 1998-2006p June 2007 Prepared for the Arizona Office of Tourism Phoenix, Arizona ARIZONA TRAVEL IMPACTS 1998-2006P Arizona Office of Tourism Primary Research Conducted By: Dean Runyan Associates Portland, Oregon June 2007 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. 2004 2005 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 2006. 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 2006 (preliminary), direct travel industry employment was 173,000 with earnings of $4.9 billion. The total (direct and secondary) impact of the Arizona travel industry in 2006 was 321,000 jobs and $10.0 billion earnings. Most of the secondary impacts were in professional services, government, finance, real estate and construction. In addition, the value of new private sector construction in the travel industry approached $1 billion in 2006. This investment supported 13,400 construction jobs with earnings of $660 million – more than 16 percent of all non-residential construction in the state. DEAN RUNYAN ASSOCIATES PAGE I THE TRAVEL INDUSTRY PRODUCES SIGNIFICANT TAX BENEFITS • In 2006 (preliminary), the state and local tax revenues associated with the travel industry were $1.5 billion. The federal tax revenues associated with the Arizona travel industry were $1.2 billion. The combined sum of local, state and federal tax revenues were equivalent to $1,150 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, 2004-05 Fiscal Year (Billion) Travel Industry $1.3 7.3% Other Industries & Households $17.0 92.7% Indirect Business Taxes as a Percent of Industry Gross Domestic Product, Arizona, 2005 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, 2006p Maricopa & Pima All Other 0% 1% 2% 3% 4% 5% 6% Percent of Total Earnings that is Travel-Generated THE ARIZONA TRAVEL INDUSTRY CONTINUES TO GROW The Arizona travel industry has rebounded strongly from the decline associated with the events of 9/11and the decrease in business travel. Total direct travel spending in Arizona in 2006 (preliminary) was $18.6 billion – compared to $13.3 billion in 2001 and 2002. Since 2002, the travel industry has added 25,000 jobs and earnings have increased by $1.3 billion. State and local tax revenues have increased by $381 million over the same period. Direct Travel Spending in Current and Constant Dollars Arizona, 1998-2006p $19 $18 $17 Billions $16 $15 $14 Constant $13 Current $12 $11 $10 98 99 00 01 02 03 04 05 06p Year DEAN RUNYAN ASSOCIATES PAGE III SUMMARY OF FINDINGS • Total direct travel spending in Arizona in 2006 was $18.6 billion (preliminary). This represents a 5.9 percent increase over 2005. This compares to a 10.5 percent increase from 2004 to 2005. In constant (inflation-adjusted) dollars, travel spending increased by 2.0 percent from 2005 to 2006. Increased room rates, gasoline prices, and airfares contributed to most of the travel spending inflation. • Approximately 7.5 million domestic visitors traveled to Arizona in 2006 by air. This is 1.8 percent increase over 2005 (compared to a 5.0 percent increase from 2004 to 2005). • Visitors that stayed overnight in lodging establishments accounted for 42.4 percent of all visitor spending in 2006. Visitors that stayed in the private homes of friends or relatives accounted for 29.1 percent. Day travelers accounted for about 20.9 percent. More than one-half (52.9 percent) of spending by all categories of visitors in 2006 was for leisure and hospitality services (arts, entertainment, recreation, accommodations, food service). Spending on retail was 22.1 percent and transportation was 25.0 percent. • In 2006, direct travel spending was associated with $1.5 billion in state and local tax revenues and $1.2 billion in federal tax revenues. This is equivalent to $1,150 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 (more than 13 percent of Gross Domestic Product for the travel industry versus 8 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. • Direct travel spending in Arizona generated 172,700 jobs with earnings of $4.9 billion in 2006. Three-fourths of these jobs were in the accommodations, food services, and arts, entertainment and recreation industries. • Travel spending in Arizona generated a total (direct and secondary) impact of 321,000 jobs with earnings of $10.0 billion in 2006. Most of the secondary impacts were in professional and business services. Investment in new travel industry construction supported another 13,400 construction jobs with earnings of $660 million. • 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 Generated by Travel Spending 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 9 10 10 11 14 15 16 17 21 27 49 50 57 69 71 PAGE V LIST OF TABLES AND FIGURES page I. National Travel Trends 1 Direct Travel Spending in U.S., 1998-2006p U.S. Travel Spending in Current & Constant Dollars, 1998-2006 Overseas Arrivals to the United States, 1998-2006 U.S. Domestic Passenger Air Arrivals, 1998-2006 U.S. Travel-Generated Employment, 1998-2006p U.S. Travel-Related Employment, Selected Industries, 1998-2006 1 1 2 2 II. Arizona Travel Impacts 5 Arizona Travel Trends, 1998-2006p Direct Travel Spending in Arizona Adjusted for Inflation, 1998-2006p Domestic Air Passenger Visitor Arrivals to Arizona, 1998-2006 Visitor Spending by Type of Traveler Accommodation, 2006p Visitor Spending by Commodity Purchased, 2006p Direct Travel-Generated Employment by Industry, 2006p Arizona Travel Impacts by Origin of Visitor, 2006p Visitor Spending in Arizona by Origin of Visitor, 2006p Arizona Direct Travel Impacts, 1998-2002 Arizona Direct Travel Impacts, 2003-2006p Arizona Travel Industry Gross Domestic Product, 2006p Arizona GDP, Selected Export-Oriented Industries, 2004 & 2005 Value of New Construction in Travel-Related Buildings, 2003-2006 Total Employment and Earnings, 2006p Secondary Employment & Earnings, 2006p III. State and Local Government Revenue 7 8 8 9 10 10 11 11 12 13 14 15 16 17 19-20 21 Arizona State & Local Tax Revenue, 2004-05 FY Arizona Travel Industry State & Local Tax Revenues, 2004-05 FY Arizona State & Local Tax Revenues, 2004-05 FY (table) Arizona Gross Domestic Product & Tax Payments State Transaction Privilege Taxes Generated by Travel Spending, 2006p IV. County Travel Impacts 21 21 23 24 25-26 27 Travel-Generated Earnings Shares, 2006p Travel-Generated Employment and Earnings Shares by County, 2006p County Impact Summary Tables County Impact Detail Tables, 1998-2006p PAGE VI 3 3 28-29 30 31-34 35-48 DEAN RUNYAN ASSOCIATES PREFACE The purpose of this study is to document the economic significance of the travel industry in Arizona from 1998 to 2006. 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 $661 billion in 2006. This represents a 6.9 percent increase over 2005. Direct Travel Spending In U.S., 1998-2006p ($Billions) 1998 1999 2000 2001 2002 2003 2004 2005 2006p Domestic International $388 $71 $406 $75 $434 $82 $421 $72 $429 $67 $459 $64 $498 $75 $537 $82 $576 $86 Annual Percentage Change 98-06p 5.1% 05-06p 7.2% Total $459 $481 $517 $493 $495 $523 $572 $619 $661 2.3% 4.9% Pct. Int'l. 15.5% 15.6% 16.0% 14.6% 13.4% 12.3% 13.0% 13.2% 13.0% 4.7% 6.9% Sources: Dean Runyan Associates and Bureau of Economic Analysis (Travel and Tourism Satellite Accounts; U.S. International Trade in Goods and Services). International estimate for 2006 is preliminary. Travel spending in inflation-adjusted constant (2006) dollars is shown in the graph below. The 2005-2006 annual increase in travel spending in constant dollars was 3.0 percent, following a 4.9 percent increase from 2005 to 2006. Higher prices for gasoline, air travel and accommodations contributed to the more modest growth in constant dollar travel spending. U.S. Travel spending in Current and Constant Dollars, 1998-2006 ($Billions) 700 650 $Billions 600 550 Constant 500 Current 450 400 98 99 00 01 02 03 04 05 06 Source: Dean Runyan Associates and Bureau of Economic Analysis. Constant (2006) travel spending estimates derived from BEA constant (2000) dollar estimates. DEAN RUNYAN ASSOCIATES PAGE 1 The slower rate of increase in travel spending in 2006 (compared to the two preceding years) is probably a result of a number of factors, including: • Concerns about air travel security. • Higher costs of travel relating to airline tickets, gasoline and lodging. • General economic uncertainties, such as the downturn in the housing market. It is noteworthy that the level of both overseas arrivals and domestic air passenger arrivals were essentially unchanged in 2006 over 2005. These trends are shown in the following two graphs. The number of overseas arrivals in 2006 was 83 percent of the level in 2000. Domestic air travel flattened after three successive years of strong growth (in the 4.4 to 7.5 percent range). Overseas Arrivals to the United States, 1998-2006 (Millions) 30 25 7.2 6.7 Millions of Arrivals 6.7 6.4 20 15 10 6.9 6.7 5.2 7.6 10.3 5.8 6.2 6.2 9.3 9.9 9.7 04 05 06 5.8 5.7 5.0 8.2 8.3 02 03 11.2 9.1 Other Asia W. Europe 4.7 6.3 10.8 5.6 5.2 5 0 98 99 00 01 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). U.S. Domestic Passenger Air Arrivals, 1998-2006 680 660 Millions 640 620 600 580 560 540 98 99 00 01 02 03 04 05 06 Source: Bureau of Transportation Statistics, U.S. Department of Transportation (T-100 domestic market data). PAGE 2 DEAN RUNYAN ASSOCIATES The estimate of direct travel-generated employment in 2006 is based only on the first three quarters of data, but the slower rate of employment growth in 2006 following two years of stronger increases is consistent with the trends on spending and arrivals. Direct travel-generated employment is now at about the same level that it was in the year 2000. U.S. Travel-Generated Employment, 1998-2006p (Millions of Jobs) 6.00 Millions of Jobs 5.80 5.60 5.40 5.20 5.00 98 99 00 01 02 03 04 05 06p Source: Dean Runyan Associates and Bureau of Economic Analysis (BEA). Preliminary estimate for 2006 based on 3 quarters of data. The two industries that have the highest share of travel-generated employment (other than travel agencies) are air transportation and traveler accommodations. Together, travel-generated employment in these two industries comprises about one-third of all direct travel-generated employment. Employment in both of these industries remains below the peak years. This was the fifth successive year of retrenchment in the airline industry. Accommodations employment is still below the peak attained in 2000, despite growth from 2003 to 2006. U.S. Travel-Related Employment, Selected Industries, 1998-2006 Scheduled Air Transportation Traveler Accommodations 600 1,860 550 Thousands of Jobs Thousands of Jobs 1,840 500 450 1,820 1,800 1,780 1,760 1,740 1,720 400 1,700 98 99 00 01 02 03 04 05 06 98 99 00 01 02 03 04 05 Source: Bureau of Labor Statistics (Current Employment Survey). These employment figures include some non- travel-generated employment. They should not be directly compared to the BEA employment estimates of travel-generated employment. DEAN RUNYAN ASSOCIATES PAGE 3 06 II: ARIZONA TRAVEL IMPACTS 1998-2006P Employment (Thousands) Induced 109 33.9% Direct 173 53.7% Indirect 40 12.4% 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 2006 (preliminary) was $18.6 billion. This represents a 5.9 percent increase over 2005. This compares to a 10.5 percent increase from 2004 to 2005. In constant (inflation-adjusted) dollars, travel spending increased by 2.0 percent from 2005 to 2006. Increased room rates, gasoline prices, and airfares contributed to most of the travel spending inflation. • Approximately 7.5 million domestic visitors traveled to Arizona in 2006 by air. This is 1.8 percent increase over 2005 (compared to a 5.0 percent increase from 2004 to 2005). • Visitors that stayed overnight in lodging establishments accounted for 42.4 percent of all visitor spending in 2006p. Visitors that stayed in the private homes of friends or relatives accounted for 29.1 percent. Day travelers accounted for about 20.9 percent. • More than one-half (52.9 percent) of all spending by visitors in 2006p 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 22.1 percent. Transportation (including motor fuel) comprised the remaining 25.0 percent. • In 2006, direct travel spending was associated with $1.5 billion in state and local tax revenues and $1.2 billion in federal tax revenues. • Direct travel spending in Arizona generated 172,700 jobs with earnings of $4.9 billion in 2006p. 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 2006 was $18.6 billion. This represents a 5.9 percent increase over the preceding year. Travel industry employment also increased by 2.5 percent from 2005 to 2006. This is the fourth consecutive year of positive growth in employment after several years of contraction. Arizona Travel Trends, 1998-2006p Spending ($Billion) Earnings Employment ($Billion) 1998 11.8 1999 13.0 2000 14.2 2001 13.3 2002 13.3 2003 14.7 2004 15.9 2005 17.6 2006p 18.6 Annual Percentage Change 05-06p 5.9 98-06p 5.9 (Thousand) 3.2 3.5 3.8 3.7 3.6 4.0 4.3 4.5 4.9 148 158 163 153 148 158 163 169 173 7.1 5.4 2.5 1.9 Tax Revenue ($Million) Local/State Federal Total 938 629 1,566 1,040 701 1,741 1,136 743 1,879 1,079 776 1,855 1,098 824 1,922 1,209 911 2,120 1,285 987 2,272 1,396 1,080 2,476 1,479 1,162 2,641 5.9 5.9 7.7 8.0 6.7 6.7 Note: p = preliminary. The percent change for 1998-2006p 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 self-employment. This figure is greater than the number of employed individuals. In constant (inflation-adjusted) dollars, travel spending increased by 2.0 percent from 2005 to 2006. Increased room rates, gasoline prices, and airfares contributed to most of the travel spending inflation. A comparison of travel spending trends in current and constant dollars is shown on the following page. Since 1998, travel spending has increased at an average annual rate of 3.3 percent in constant dollars. DEAN RUNYAN ASSOCIATES PAGE 7 Direct Travel Spending in Arizona Adjusted for Inflation 1998-2006p $19 $18 $17 Billions $16 $15 $14 Constant $13 Current $12 $11 $10 98 99 00 01 02 03 04 05 06p Year Note: Constant dollar travel spending was deflated by a composite of the West Urban CPI and room rates reported by Smith Travel. The average annual increase in travel spending in constant dollars for 1998-2006p is 3.3 percent. In 2006, 7.5 million domestic visitors traveled to Arizona by air, an increase of 1.8 percent over 2005. Since the trough of 2002, domestic air travel to Arizona has increased on average 6.2 percent per year. 1 Domestic Air Passenger Visitor Arrivals to Arizona 1998-2006 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 Year Source: Dean Runyan Associates and Airline Origin and Destination Survey, U.S. Bureau of Transportation Statistics. Note: These estimates are for air arrivals only. They do not include return travel of Arizona residents or connecting flights normally reported in air passenger statistics. 1 This represents more than one-fourth of all overnight visitors to Arizona. Visitors that travel to Arizona by air also stay longer and spend more. About 45 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 2006 TravelsAmerica Survey.) PAGE 8 DEAN RUNYAN ASSOCIATES VISITOR SPENDING BY TYPE OF TRAVELER ACCOMMODATION The pie chart below provides a breakout of total visitor spending in Arizona (all spending on leisure and hospitality services, transportation, and retail) by the type of accommodation in which the visitor stayed. As is indicated, the three primary categories for Arizona (as well as most other states) are (1) the hotel, motel category (this also includes B&B’s, Dude Ranches, and other commercial lodging facilities with the exception of campgrounds), (2) the private homes of friends or relatives, and (3) visitors that do not stay overnight away from home. Arizona is somewhat atypical in two respects. First, a relatively high portion of visitor spending (29.1 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, 2006p (Billions) Day Travel $3.6 Vacation Home $0.6 20.9% 42.4% 3.5% Hotel, Motel $7.3 29.1% 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. DEAN RUNYAN ASSOCIATES PAGE 9 VISITOR SPENDING BY TYPE OF COMMODITY PURCHASED The following pie chart provides a breakout of visitor spending for all types of travelers by the type of commodity (good or service) purchased. Approximately one-half (52.9 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 22.1 percent. Transportation (including motor fuel) comprised the remaining 25.0 percent. Visitor Spending by Type of Commodity Purchased, 2006p (Billions) Air Transportation $1.4 Ground Tran/Gas $2.9 Lodging $2.7 8.1% 15.7% 16.9% 22.1% Food/Bev. Serv. $3.8 22.1% 15.1% Retail/Food Stores $3.8 Arts/Entertain./Rec. $2.6 TRAVEL-GENERATED EMPLOYMENT While about one-half of all visitor spending is in leisure and hospitality services, about three-fourths of all travel-generated employment is in the accommodations, food service, arts, entertainment and recreation industries. This is because leisure and hospitality is more labor-intensive than retail trade (including gasoline service). Direct Travel-Generated Employment by Industry, 2006p (Thousands) Other Visitor Tran. 6.7 Other Travel 11.3 3.9% Retail/Gas Serv. 20 6.5% 11.6% 51.3% 26.7% Accomm./Food Serv. 88.7 Arts/Entertain./Rec. 46.1 Note: Other Visitor Transportation includes passenger air travel and all local ground transportation excluding motor fuel. Other Travel includes travel agencies and resident air travel. Gasoline Service is included in the Retail Industry category. PAGE 10 DEAN RUNYAN ASSOCIATES VISITOR ORIGIN More than three-fourths of the visitor impacts in Arizona are generated by out-ofstate travelers. Visitors from other states are the largest segment (over 65 percent of spending), while international travel comprises almost 13 percent of visitor impacts. Mexican day travel (3.5% of spending) is especially significant for the counties on the national border. Arizona Travel Impacts by Origin of Visitor, 2006p Origin Spending Arizona Other U.S. International All Visitors Other Travel Total Travel Earnings Employment Tax Receipts ($ Million) ($ Billion) ($ Billion) (Thousand) Local/State Federal 3.8 11.2 2.2 17.2 1.4 18.6 0.8 3.0 0.5 4.3 0.5 4.9 33 109 19 161 11 173 318 962 188 1,469 10 1,479 150 573 71 793 369 1,162 Sources: Dean Runyan Associates, International Trade Administration and Bureau of Economic Analysis (U.S. Dept. of Commerce), TNS TravelsAmerica visitor survey, Statistics Canada, A.H. Charney and V.K. Pavlakovich, “The Economic Impacts of Mexican Visitors to Arizona, 2001” (Karl Eller College of Business and Public Administration, University of Arizona) 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, 2006p (Billions) Mexican Day $0.6 Overseas & Canada $1.6 Arizona $3.8 3.5% 9.3% 22.1% 65.1% Other U.S. $11.2 Sources: See table note, above. Detailed direct travel impacts for the state of Arizona, 1998-2006p, are reported on pages 18-19. DEAN RUNYAN ASSOCIATES PAGE 11 Arizona Direct Travel Impacts, 1998-2002 1998 1999 2000 Total Direct Travel Spending ($Billion) Visitor Spending at Destination 10.8 12.1 13.2 Other Travel* 0.9 1.0 1.0 Total Direct Spending 11.8 13.0 14.2 Visitor Spending by Type of Traveler Accommodation ($Billion) Hotel, Motel 5.0 5.4 5.8 Campground 0.5 0.5 0.6 Private Home 2.7 3.2 3.6 Vacation Home 0.4 0.4 0.4 Day Travel 2.3 2.6 2.9 Spending at Destination 10.8 12.1 13.2 Visitor Spending by Commodity Purchased ($Billion) Lodging 1.9 2.0 2.1 Food & Beverage Services 2.3 2.5 2.8 Food Stores 0.7 0.7 0.7 Ground Tran. & Motor Fuel 1.2 1.5 1.8 Arts, Entertainment & Recreation 1.6 1.8 2.0 Retail Sales 2.4 2.6 2.7 Air Transportation (visitor only) 0.9 1.0 1.0 Spending at Destination 10.8 12.1 13.2 Industry Earnings Generated by Travel Spending ($Billion) Accommodation & Food Services 1.3 1.5 1.6 Arts, Entertainment & Recreation 0.6 0.7 0.8 Retail** 0.4 0.5 0.5 Auto Rental & other ground tran. 0.1 0.1 0.1 Air Transportation (visitor only) 0.3 0.4 0.4 Other Travel* 0.4 0.4 0.5 Total Direct Earnings 3.2 3.5 3.8 Industry Employment Generated by Travel Spending (Thousand jobs) Accommodation & Food Services 75.0 80.6 84.8 Arts, Entertainment & Recreation 33.8 35.7 36.7 Retail** 19.0 20.2 20.8 Auto Rental & other ground tran. 2.2 2.2 2.3 Air Transportation (visitor only) 5.2 5.6 5.3 Other Travel* 13.1 13.3 13.1 Total Direct Employment 148.4 157.7 163.0 Government Revenue Generated by Travel Spending ($Million) Local and State 938 1,040 1,136 Federal 629 701 743 Total Direct Gov't. Revenue 1,566 1,741 1,879 2001 2002 12.4 0.9 13.3 12.4 0.9 13.3 5.3 0.6 3.3 0.4 2.8 12.4 5.2 0.6 3.2 0.4 2.9 12.4 1.9 2.7 0.7 1.6 1.9 2.6 0.9 12.4 1.9 2.7 0.8 1.5 2.0 2.6 0.9 12.4 1.5 0.8 0.5 0.1 0.4 0.4 3.7 1.5 0.8 0.5 0.1 0.4 0.4 3.6 77.5 36.6 19.2 2.0 5.0 12.8 152.9 75.6 35.6 19.2 2.0 4.2 11.2 147.8 1,079 776 1,855 1,098 824 1,922 Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. PAGE 12 DEAN RUNYAN ASSOCIATES Arizona Direct Travel Impacts, 2003-2006p 2003 2004 2005 Total Direct Travel Spending ($Billion) Visitor Spending at Destination 13.7 14.8 16.3 Other Travel* 1.0 1.1 1.3 Total Direct Spending 14.7 15.9 17.6 Visitor Spending by Type of Traveler Accommodation ($Billion) Hotel, Motel 5.6 6.0 6.9 Campground 0.6 0.7 0.7 Private Home 4.0 4.3 4.7 Vacation Home 0.5 0.5 0.5 Day Travel 3.1 3.2 3.5 Spending at Destination 13.7 14.8 16.3 Visitor Spending by Commodity Purchased ($Billion) Lodging 2.0 2.2 2.5 Food & Beverage Services 3.1 3.3 3.6 Food Stores 0.8 0.8 0.8 Ground Tran. & Motor Fuel 1.9 2.2 2.6 Arts, Entertainment & Recreation 2.2 2.4 2.5 Retail Sales 2.7 2.8 2.9 Air Transportation (visitor only) 1.1 1.2 1.3 Spending at Destination 13.7 14.8 16.3 Industry Earnings Generated by Travel Spending ($Billion) Accommodation & Food Services 1.6 1.8 1.9 Arts, Entertainment & Recreation 0.9 0.9 1.0 Retail** 0.5 0.5 0.6 Auto Rental & other ground tran. 0.1 0.1 0.1 Air Transportation (visitor only) 0.4 0.5 0.5 Other Travel* 0.4 0.5 0.5 Total Direct Earnings 4.0 4.3 4.5 Industry Employment Generated by Travel Spending (Thousand jobs) Accommodation & Food Services 80.3 82.6 86.4 Arts, Entertainment & Recreation 40.8 43.1 44.8 Retail** 19.5 19.7 19.8 Auto Rental & other ground tran. 2.2 2.2 2.2 Air Transportation (visitor only) 4.2 4.3 4.3 Other Travel* 10.9 11.0 11.0 Total Direct Employment 157.9 162.8 168.5 Government Revenue Generated by Travel Spending ($Million) Local and State 1,209 1,285 1,396 Federal 911 987 1,080 Total Direct Gov't. Revenue 2,120 2,272 2,476 2006p 17.2 1.4 18.6 7.3 0.7 5.0 0.6 3.6 17.2 2.7 3.8 0.8 2.9 2.6 2.9 1.4 17.2 2.1 1.1 0.6 0.1 0.5 0.5 4.9 88.7 46.1 20.0 2.2 4.5 11.3 172.7 1,479 1,162 2,641 Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. DEAN RUNYAN ASSOCIATES PAGE 13 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 $6.9 billion in 2006. 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 63 percent of all travel spending in Arizona is attributed to intermediate inputs and goods resold at retail. Intermediate inputs cover a range of goods and services that are purchased by travel industry businesses for the purpose of creating a product or service for the traveler. For example, lodging establishments purchase cable television services. Restaurants purchase food and beverages from vendors. In both cases, these inputs are classified as the 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, 2006p $20 11.7 $11.7 Inputs $4.9 Earnings $2.0 Surplus & Taxes $15 $10 4.9 4.9 2.0 2.0 Spending ($18.6) GDP ($6.9) $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 Peter Kuhbach and Bradlee A. Herauf, “U.S. Travel and Tourism Satellite Accounts for 2001-2004,” Survey of Current Business 85 (June 2005): 17-29. 5 About 38 percent of the $11.7 billion of inputs and goods resold are purchased from other Arizona businesses. The total direct and indirect travel industry Gross Domestic Product is $11.3 billion. PAGE 14 DEAN RUNYAN ASSOCIATES 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. The comparison years are for 2004 and 2005 – data for 2006 is not yet available for the comparison industries. Arizona Gross Domestic Product, 2004 & 2005 Selected Export-Oriented Industries 2.7 Agric./Food Proc. 2.6 2004 2005 1.6 Mining 2.4 7.0 Micro-Electronics 5.2 2.8 Aerospace 3.4 6.1 Travel 6.4 $0 $1 $2 $3 $4 $5 $6 $7 $8 Gross Domestic Product (Billions) Source: Dean Runyan Associations and Bureau of Economic Analysis. For the years 2004 and 2005, the travel industry and the micro-electronics industry (NAICS 334) were the top two export-oriented industries in the state. 7 6 See also pages 52 of Appendix A and page 69 of Appendix C. The decline in the GDP of the micro-electronics 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 DEAN RUNYAN ASSOCIATES PAGE 15 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 Nonetheless, the $960 million figure represents 16.2 percent of all non-residential construction in Arizona in 2006. This investment supported 13,400 construction jobs with earnings of $660 million. New construction value in the travel industry in 2006 was more than three times as great as new construction value in 2005. New hotel and motel buildings accounted for over one-half of the new construction value in the travel industry. Both occupancy rates and room rates have rebounded from their post-2001 troughs, making the industry an attractive investment. Value of New Construction in Travel-Related Buildings 2003-2006 $1,000 $900 Millions $800 $700 $600 $500 $400 $300 $200 2003 2004 2005 2006 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. PAGE 16 DEAN RUNYAN ASSOCIATES SECONDARY IMPACTS Travel spending within Arizona brings money into many Arizona communities in the form of business receipts. Portions of these receipts are spent within the state for labor and supplies. Employees, in turn, spend a portion of their earnings on goods and services in the state. This re-spending of travel-related revenues creates indirect and induced impacts. To summarize: • Direct impacts represent the employment and earnings attributable to travel expenditures made directly by travelers at businesses throughout the state. • Indirect impacts represent the employment and earnings associated with industries that supply goods and services to the direct businesses (i.e., those that receive money directly from travelers throughout the state). • Induced impacts represent the employment and earnings that results from purchases for food, housing, transportation, recreation, and other goods and services made by travel industry employees, and the employees of the indirectly affected industries. Total Employment and Earnings Generated by Travel Spending in Arizona, 2006p Earnings (Billions) Employment (Thousands) Induced 109 33.9% Induced $3.7 37.0% Direct $4.9 49.0% Direct 173 53.7% Indirect 40 12.4% Indirect $1.4 14.0% Source: Dean Runyan Associates and Minnesota Implan Group. DEAN RUNYAN ASSOCIATES PAGE 17 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 (32,000 jobs and $1,586 million earnings). Legal, medical, educational and other professional services are utilized by travel businesses (indirect effect) and by employees of these firms (induced effect). • Other Services (13,000 jobs and $348 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 (24,000 jobs and $1,137 million earnings). Employees of travel-related businesses pay fees to attend public educational institutions and to operate motor vehicles. • Finance, Real Estate (11,000 jobs and $451 million earnings). Employees and businesses use the services of financial institutions, insurers, and real estate businesses. • Construction (11,000 jobs and $549 million earnings). Structures that house travel-related businesses, such as hotels and restaurants, require ongoing maintenance. (This category does not include new construction. See page 21.) PAGE 18 DEAN RUNYAN ASSOCIATES Direct and Secondary Employment Generated by Travel in Arizona, 2006p 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, 2006p Accomm. & Food Serv. Prof. Services Arts, Entertain., Rec. Transportation Government Retail Trade Construction Finance, Ins., & Real Estate Other Services Mining & Manufacturing Direct Agric.& Food Processing $0 $500 $1,000 Secondary $1,500 $2,000 $2,500 Direct & Secondary Earnings (Millions) Source: Dean Runyan Associates and Minnesota Implan Group. Industry Groups are defined in appendix. Detailed estimates are reported in the following table. It should be emphasized that the estimates of indirect and induced impacts reported here apply to the entire state of Arizona and do not necessarily reflect economic patterns for individual counties, regions or sub-regions within the state. While total economic impacts can be calculated on a county or regional level, such a detailed analysis is not included in this study. In general, geographic areas with lower levels of aggregate economic activity will have smaller secondary impacts within those same geographic boundaries. DEAN RUNYAN ASSOCIATES PAGE 19 Direct & Secondary Visitor-Generated Employment in Arizona, 2006p (thousand jobs) Industry Group Accommodation & Food Services Arts, Entertainment & Recreation Retail Trade Professional Services Transportation Government Other Services Finance, Ins., & Real Estate Construction Mining & Manufacturing Agriculture & Food Processing All Industries Direct 89 46 20 0 18 0 0 0 0 0 0 173 Secondary Indirect Induced 4 9 6 2 3 18 8 24 5 4 1 23 5 8 4 7 1 10 1 2 1 1 40 109 Total 13 8 21 32 9 24 13 11 11 4 2 148 Grand Total 102 54 41 32 27 24 13 11 11 4 2 321 Direct & Secondary Visitor-Generated Earnings in Arizona, 2006p ($ 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 2,092 0 1,112 1,065 0 582 0 0 0 0 0 4,850 Secondary Indirect Induced 66 148 467 1,119 111 33 176 50 76 1,061 11 126 44 505 158 293 167 180 98 161 29 32 1,403 3,708 Total 214 1,586 144 226 1,137 137 549 451 348 258 61 5,111 Grand Total 2,305 1,586 1,256 1,291 1,137 719 549 451 348 258 61 9,961 Source: Dean Runyan Associates & Minnesota Implan Group. Industry Groups are defined in Appendix E. PAGE 20 DEAN RUNYAN ASSOCIATES 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, 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, 2004-05 Fiscal Year (Million) License & Other $905 4.9% Property $5,126 Sales & Gross Receipts $8,750 28.0% 47.7% Income $3,550 19.4% Source: Dean Runyan Associates and Bureau of the Census, State and Local Government Finance. The state transaction privilege tax is designated as a general sales tax. Over 90 percent of all property taxes were local during the 2004-05 fiscal year. About 80 percent of all income tax receipts were personal (vs. corporate). Selective sales taxes include taxes on lodging, motor fuel, alcohol, tobacco and public utilities. Other taxes include license taxes. State tax receipts comprised 60 percent of all state and local tax receipts in the 2004-05 fiscal year. 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 taxes (e.g., cigarettes, liquor) were not estimated separately from the general sales tax. 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 21 • 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 2004-05 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 2004-05 Fiscal Year (Million) Property $128 9.6% Other $14 1.0% Income $79 5.9% Employee Sales $190 14.2% Visitor Sales $929 69.3% Source: Dean Runyan Associates. “Other” travel-generated tax revenue includes gaming taxes. Whereas slightly less than one-half of all state and local tax revenue in Arizona was attributable to sales tax collections in the 2004-05 fiscal year, almost 85 percent of all travel industry tax revenue was attributable to sales tax receipts. More than twothirds of all tax revenues supported by the travel industry was directly related to visitor spending. Travel industry state and local tax revenues are compared to total Arizona state and local tax revenues in the following table. Because of the travel industry generates a relatively high proportion of sales tax revenues, it is associated with proportionately more tax revenues than would be expected given the size of the industry, as measured by earnings or gross domestic product. Whereas the earnings and GDP of the travel industry are in the range of 3 percent of the state totals, travel industry tax PAGE 22 DEAN RUNYAN ASSOCIATES revenues represent more than 7 percent of all state and local tax revenues in Arizona. Arizona State and Local Tax Revenues 2004-05 Fiscal Year ($Million) Sales & Gross Receipts Income Property License & Other Total Tax Receipts Total 8,750 3,550 5,126 905 18,331 Travel Related 1,119 79 128 14 1,341 Percent Travel 12.8% 2.2% 2.5% 1.6% 7.3% 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 2005 is roughly equivalent to the census estimates of Arizona state and local tax revenue for the 2004-05 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 23 Arizona Gross Domestic Product and Tax Payments 2005 Calendar Year ($Million) Indirect Bus. Taxes 317 398 4,318 94 869 14,714 GDP 15,905 17,208 18,243 13,622 6,355 212,312 Construction Manufacturing Retail trade Health Care Travel All Industries Employee Inc. Sum of Bus. & & Prop. Taxes Employee Taxes 364 681 379 777 314 4,632 329 423 126 *995 4,973 19,687 Source: 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 $995 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. Tax Payments as Percent Gross Domestic Product Selected Arizona Industries 2005 Calendar Year Construction Indirect Bus. Taxes Employee Prop. & IncomeTaxes Manufacturing Retail trade Health Care Travel All Industries 0% 5% 10% 15% 20% 25% 30% Taxes as Percent of Gross Domestic Product Source: See table, above. PAGE 24 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, 2006p Maricopa & Pima All Other 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 25 State Transaction Privilege Taxes Generated by Direct Travel Spending, 2006p 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 7.3 percent of all state and local tax revenues in Arizona in the 2004-05 fiscal year. • Most of the taxes generated by travel industry taxes 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, than for the more urbanized areas of greater Phoenix and Tucson. PAGE 26 DEAN RUNYAN ASSOCIATES IV: COUNTY TRAVEL IMPACTS 1998-2006P DEAN RUNYAN ASSOCIATES PAGE 27 The analysis of travel impacts at the county level provides a valuable overview of how the economic benefits of travel and tourism are distributed throughout the state. Urban areas, such as Maricopa County, tend to have highly developed travel industry infrastructure consisting of large inventories of amusement and recreation opportunities, commercial accommodations, and well-developed transportation links. Hotel/motel guests are important to these areas and, hence, a large proportion of travel expenditures are spent on overnight lodging. In many of the less urbanized areas of Arizona, however, the economic significance of travel and tourism is actually relatively more important. The infrastructure that serves visitors to Maricopa County also serves local residents. Most of the spending on recreation and food services in Maricopa county is by local residents. This is not the case in most other less urbanized areas of the state – leisure and hospitality businesses are generally much more dependent on visitor spending rather than local residents. In the graph below, the two most populous counties in Arizona, Maricopa and Pima, are compared with the thirteen other counties in the state with respect to their share of total earnings – more than three-fourths of all travel-generated earnings occur within the two most populous counties in the state. Share of Total Earnings and Travel-Generated Earnings, 2006p Maricopa & Pima Compared with Other Arizona Counties Maricopa & Pima All Other 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Percent of State Direct Travel-Generated Earnings Source: Dean Runyan Associates, U.S. Bureau of Labor Statistics, and U.S. Bureau of Economic Analysis. Total and travel-generated earnings estimates by Dean Runyan Associates. Maricopa and Pima counties have 69 percent of all travelgenerated jobs. The other Arizona counties have 31 percent of all travel-generated jobs. PAGE 28 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 2006p Maricopa & Pima All Other 0% 1% 2% 3% 4% 5% 6% Percent of Total Earnings that is Travel-Generated Source: Dean Runyan Associates, U.S. Bureau of Labor Statistics, and U.S. Bureau of Economic Analysis. Total and travel-generated earnings estimates by Dean Runyan Associates. Travel-generate employment in Maricopa and Pima counties constitutes 4.2 percent of all employment in those counties. The comparable figure for other Arizona counties is 9.0 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 salaried employees and proprietors. Because total employment includes all jobs, regardless of the hours worked or the average annual earnings of the job, this indicator may less useful than earnings estimates. Nonetheless, the distribution of counties is similar for earnings and employment. DEAN RUNYAN ASSOCIATES PAGE 29 Travel-Generated Employment and Earnings as Percent of Total, 2006p Employment Apache Cochise Coconino Gila Graham/Greenlee La Paz Maricopa Mohave Navajo Pima Pinal Santa Cruz Yavapai Yuma Arizona Total 26,830 60,060 82,360 22,730 16,640 7,980 2,318,120 74,510 39,570 506,290 63,470 18,280 91,930 86,360 3,415,130 Travel 1,740 4,230 10,760 2,840 1,130 1,340 93,400 5,900 3,310 25,870 4,690 2,130 8,970 6,420 172,710 Percent Travel 6.5 7.0 13.1 12.5 6.8 16.8 4.0 7.9 8.4 5.1 7.4 11.6 9.8 7.4 5.1 Earnings (Million) Percent Total Travel Travel $881 $28 3.2 $2,468 $74 3.0 $2,782 $233 8.4 $669 $60 8.9 $599 $11 1.9 $254 $30 11.8 $110,669 $3,205 2.9 $2,426 $113 4.6 $1,333 $64 4.8 $20,086 $570 2.8 $2,567 $96 3.8 $670 $47 7.0 $2,858 $183 6.4 $3,112 $137 4.4 $151,374 $4,850 3.2 Source: Dean Runyan Associates, U.S. Bureau of Labor Statistics, and U.S. Bureau of Economic Analysis. Total and travel-generated employment estimates by Dean Runyan Associates. Detailed direct travel impact estimates for 1998 through 2006p can be found on the following pages. As noted in the introductory section to this report, county level estimates are necessarily less reliable than the statewide estimates. Furthermore, estimates for the smallest counties are less reliable than those for larger counties due to survey sample sizes and other data limitations. For this reason, small changes in year-to-year estimates are less important than longer-term trends. PAGE 30 DEAN RUNYAN ASSOCIATES 2006p Arizona County Travel Impacts Travel Spending Total Visitor Apache Cochise Coconino Gila Graham/Greenlee La Paz Maricopa Mohave Navajo Pima Pinal Santa Cruz Yavapai Yuma Arizona Earnings Related Travel-Generated Impacts Employment Local Taxes State Taxes Total Taxes ($Million) ($Million) ($Million) (jobs) ($Million) ($Million) ($Million) 137.5 327.4 868.9 241.1 44.8 207.7 11,826.5 482.0 281.8 2,258.0 402.0 254.2 682.1 581.7 18,595.8 137.5 326.6 863.8 241.0 44.7 207.7 10,459.1 477.0 281.6 2,227.2 401.6 254.2 681.3 578.3 17,181.6 28.4 73.9 233.2 59.6 11.2 29.9 3,205.0 112.7 64.0 569.6 96.4 46.6 182.5 136.9 4,850.1 1,740 4,230 10,760 2,840 1,130.0 1,340 93,400 5,900 3,310 25,870 4,690 2,130 8,970 6,420 172,710 3.0 10.7 25.0 3.2 1.1 2.1 329.5 10.4 6.0 50.2 7.4 5.1 15.4 13.9 483.1 5.4 12.0 33.3 7.0 1.9 8.8 382.1 19.6 10.7 87.4 15.4 8.2 23.3 22.0 637.2 8.4 22.7 58.3 10.2 3.0 10.9 711.6 30.0 16.8 137.6 22.8 13.3 38.7 35.9 1,120.2 Property taxes and sales taxes paid by travel industry employees not included. DEAN RUNYAN ASSOCIATES PAGE 31 Arizona County Total Travel Spending, 1998-2006p ($ Millions) Annual Percent Chg. Apache Cochise Coconino Gila Graham/Greenlee La Paz Maricopa Mohave Navajo Pima Pinal Santa Cruz Yavapai Yuma Arizona PAGE 32 1998 1999 2000 2001 2002 2003 2004 2005 2006p 05-06p 79.7 93.8 109.2 101.2 100.0 107.2 113.2 128.8 137.5 6.7 206.0 233.0 257.7 252.7 270.1 278.7 301.8 319.6 327.4 2.4 668.5 708.1 733.9 687.4 684.3 734.1 780.5 835.7 868.9 4.0 178.5 188.7 205.9 203.2 203.8 213.1 220.5 232.5 241.1 3.7 23.4 26.2 31.2 28.1 27.6 30.4 31.8 36.4 44.8 22.9 123.9 144.6 160.0 158.4 155.5 172.7 184.2 206.2 207.7 0.7 7,311.9 7,978.0 8,770.5 8,166.8 7,968.5 9,067.1 9,886.4 11,063.8 11,826.5 6.9 247.7 289.8 320.9 314.0 314.2 360.0 396.7 434.5 482.0 10.9 178.4 212.4 238.4 219.1 220.0 228.2 236.5 259.3 281.8 8.7 1,548.9 1,723.0 1,874.0 1,736.0 1,785.5 1,885.4 2,019.4 2,196.4 2,258.0 2.8 205.6 235.8 262.7 257.2 256.1 291.1 323.3 364.9 402.0 10.2 206.3 226.4 236.8 236.5 297.7 262.0 272.2 273.5 254.2 -7.1 424.2 575.8 555.6 540.8 537.7 578.8 588.2 639.6 682.1 6.7 366.9 403.0 439.9 430.2 479.9 495.9 527.5 561.1 581.7 3.7 11,770.0 13,038.7 14,196.7 13,331.8 13,300.7 14,704.9 15,882.3 17,552.3 18,595.8 5.9 98-06p 7.0 6.0 3.3 3.8 8.4 6.7 6.2 8.7 5.9 4.8 8.7 2.6 6.1 5.9 5.9 DEAN RUNYAN ASSOCIATES Arizona County Travel-Generated Earnings, 1998-2006p ($ Millions) Annual Percent Chg. Apache Cochise Coconino Gila Graham/Greenlee La Paz Maricopa Mohave Navajo Pima Pinal Santa Cruz Yavapai Yuma Arizona 1998 19.0 45.8 184.6 42.8 6.2 21.3 2,096.1 60.1 43.5 393.7 49.5 37.2 110.0 82.2 3,192.0 DEAN RUNYAN ASSOCIATES 1999 21.8 51.7 194.7 45.0 6.8 24.2 2,267.7 69.3 52.0 437.3 56.1 40.7 154.0 89.9 3,511.2 2000 25.2 57.2 200.8 49.4 8.0 25.9 2,508.0 75.4 58.1 475.2 61.8 42.2 146.4 98.3 3,832.1 2001 23.5 56.4 188.7 48.7 7.3 26.3 2,400.8 75.3 52.9 439.9 61.4 41.7 143.0 96.2 3,662.0 2002 23.9 59.9 189.5 49.2 7.3 26.6 2,332.3 77.0 54.2 449.2 62.3 51.9 143.3 106.1 3,632.6 2003 24.2 62.3 201.8 51.4 7.8 28.3 2,604.7 86.5 54.3 475.3 70.1 46.1 153.1 112.4 3,978.2 2004 24.5 67.7 214.1 53.0 7.9 28.9 2,811.5 94.1 54.8 510.0 77.4 48.4 154.9 119.8 4,267.0 2005 2006p 26.6 28.4 70.3 73.9 222.1 233.2 55.9 59.6 8.7 11.2 31.0 29.9 2,986.5 3,205.0 98.8 112.7 57.7 64.0 543.0 569.6 85.3 96.4 48.6 46.6 166.5 182.5 126.9 136.9 4,528.0 4,850.1 05-06p 6.8 5.1 5.0 6.6 28.8 -3.4 7.3 14.1 10.9 4.9 13.0 -4.0 9.6 7.9 7.1 98-06p 5.2 6.2 3.0 4.2 7.7 4.3 5.5 8.2 4.9 4.7 8.7 2.9 6.5 6.6 5.4 PAGE 33 Arizona County Travel-Generated Employment, 1998-2006p 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 2006p 05-06p 1,430 1,530 1,650 1,700 1,490 1,580 1,680 1,740 1,740 0.0 3,480 3,830 4,000 3,810 3,880 3,940 4,060 4,150 4,230 1.9 11,070 11,180 11,110 10,270 10,020 10,460 10,630 10,860 10,760 -0.9 2,680 2,690 2,850 2,950 2,910 2,970 2,820 2,840 2,840 0.0 480 510 560 640 670 800 790 870 1,130 29.9 1,340 1,440 1,460 1,400 1,370 1,430 1,390 1,440 1,340 -6.9 83,730 86,670 90,400 82,190 77,200 84,020 87,410 91,300 93,400 2.3 3,810 4,280 4,530 4,410 4,420 4,790 5,000 5,170 5,900 14.1 3,120 3,470 3,750 3,370 3,200 3,200 3,070 3,110 3,310 6.4 21,210 23,230 24,420 22,430 22,500 23,740 25,120 25,670 25,870 0.8 2,780 3,050 3,180 3,680 3,550 4,040 4,110 4,450 4,690 5.4 2,050 2,120 2,140 2,100 2,490 2,260 2,270 2,240 2,130 -4.9 6,670 9,010 8,070 8,600 8,510 8,970 8,620 8,690 8,970 3.2 4,480 4,700 4,940 5,390 5,580 5,740 5,830 6,010 6,420 6.8 148,350 157,710 163,040 152,940 147,790 157,930 162,790 168,550 172,710 2.5 98-06p 2.5 2.5 -0.4 0.7 11.3 0.0 1.4 5.6 0.7 2.5 6.8 0.5 3.8 4.6 1.9 DEAN RUNYAN ASSOCIATES Apache County Travel Impacts, 1998-2006p 1998 2000 2002 Total Direct Travel Spending ($Million) Visitor Spending at Destination 79.7 109.2 100.0 Other Travel* 0.0 0.0 0.0 Total Direct Spending 79.7 109.2 100.0 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 39.8 57.5 52.9 Campground 8.4 10.8 10.6 Private Home 17.3 23.8 19.8 Vacation Home 11.7 13.6 13.6 Day Travel 2.4 3.5 3.1 Spending at Destination 79.7 109.2 100.0 Visitor Spending by Commodity Purchased ($Million) Lodging 14.7 20.0 18.5 Food & Beverage Services 15.4 21.2 19.9 Food Stores 7.4 8.1 8.1 Ground Tran. & Motor Fuel 15.5 26.5 22.7 Arts, Entertainment & Recreation 11.2 14.8 14.3 Retail Sales 15.6 18.5 16.5 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 79.7 109.2 100.0 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 10.3 14.0 13.1 Arts, Entertainment & Recreation 4.6 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 ($Million)*** Local 2.1 2.9 2.6 State 3.4 4.6 4.3 Total Direct Gov't. Revenue 5.5 7.5 6.9 2003 2004 2005 2006p 107.2 0.0 107.2 113.2 0.0 113.2 128.8 0.0 128.8 137.5 0.0 137.5 51.7 12.2 25.2 14.5 3.6 107.2 52.3 14.0 27.4 15.5 4.0 113.2 63.2 15.4 29.1 16.6 4.5 128.8 67.8 16.5 30.8 17.5 4.9 137.5 17.3 20.7 8.3 29.2 15.0 16.8 0.0 107.2 17.3 20.9 8.4 34.8 15.4 16.4 0.0 113.2 20.1 23.6 8.6 42.8 16.4 17.4 0.0 128.8 21.0 24.7 8.7 48.5 16.8 17.7 0.0 137.5 13.0 6.2 4.8 0.2 0.0 0.0 24.2 13.0 6.4 4.9 0.2 0.0 0.0 24.5 14.4 6.8 5.1 0.3 0.0 0.0 26.6 15.4 7.3 5.4 0.3 0.0 0.0 28.4 850 430 290 10 0 0 1,580 820 550 300 10 0 0 1,680 890 560 280 10 0 0 1,740 910 550 270 10 0 0 1,740 2.6 4.7 7.3 2.6 4.9 7.5 3.0 5.3 8.2 3.0 5.4 8.4 Details may not add to totals due to rounding. Estimates for 1999 and 2001 not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payments of travel industry employees not included. DEAN RUNYAN ASSOCIATES PAGE 35 Cochise County Travel Impacts, 1998-2006p 1998 2000 2002 Total Direct Travel Spending ($Million) Visitor Spending at Destination 205.1 256.8 269.3 Other Travel* 0.9 0.8 0.8 Total Direct Spending 206.0 257.7 270.1 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 40.2 54.4 54.1 Campground 35.4 41.8 41.6 Private Home 39.3 53.0 45.5 Vacation Home 5.0 5.6 5.8 Day Travel 85.2 102.0 122.3 Spending at Destination 205.1 256.8 269.3 Visitor Spending by Commodity Purchased ($Million) Lodging 22.2 27.8 27.8 Food & Beverage Services 43.1 55.5 58.3 Food Stores 49.6 56.0 69.4 Ground Tran. & Motor Fuel 16.1 27.6 23.6 Arts, Entertainment & Recreation 24.1 31.4 31.1 Retail Sales 50.2 58.5 59.1 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 205.1 256.8 269.3 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 20.2 25.9 26.8 Arts, Entertainment & Recreation 10.6 13.9 13.7 Retail** 14.2 16.6 18.6 Auto Rental & other ground tran. 0.2 0.2 0.2 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 45.8 57.2 59.9 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 1,620 1,960 1,900 Arts, Entertainment & Recreation 1,090 1,160 1,100 Retail** 720 840 860 Auto Rental & other ground tran. 10 10 10 Air Transportation (visitor only) 0 0 0 Other Travel* 40 30 20 Total Direct Employment 3,480 4,000 3,880 Government Revenue Generated by Travel Spending ($Million)*** Local 7.1 8.6 8.9 State 7.3 9.1 9.9 Total Direct Gov't. Revenue 14.3 17.7 18.8 2003 2004 2005 2006p 277.9 0.8 278.7 301.0 0.8 301.8 318.8 0.8 319.6 326.6 0.8 327.4 57.3 44.8 56.6 6.0 113.1 277.9 69.4 47.5 60.3 6.3 117.6 301.0 78.9 50.2 63.3 6.5 119.8 318.8 86.2 52.2 66.4 6.8 115.0 326.6 28.8 61.8 62.1 30.3 35.0 59.8 0.0 277.9 33.6 67.4 63.3 36.1 38.5 61.9 0.0 301.0 37.6 71.7 62.2 44.4 39.9 62.9 0.0 318.8 40.4 74.0 57.8 50.4 41.3 62.7 0.0 326.6 28.3 15.4 17.8 0.2 0.0 0.0 62.3 31.6 17.0 18.3 0.2 0.0 0.0 67.7 33.5 17.6 18.3 0.3 0.0 0.0 70.3 35.8 19.1 18.2 0.3 0.0 0.0 73.9 1,940 1,170 800 10 0 20 3,940 2,040 1,190 810 10 0 20 4,060 2,110 1,210 800 10 0 20 4,150 2,160 1,250 790 10 0 20 4,230 9.2 10.4 19.5 9.9 11.1 21.1 10.5 11.7 22.2 10.7 12.0 22.7 Details may not add to totals due to rounding. Estimates for 1999 and 2001 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 36 DEAN RUNYAN ASSOCIATES Coconino County Travel Impacts, 1998-2006p 1998 2000 2002 2003 2004 2005 2006p Total Direct Travel Spending ($Million) Visitor Spending at Destination 668.3 730.2 682.2 733.3 778.0 833.5 863.8 Other Travel* 0.2 3.7 2.0 0.8 2.6 2.2 5.1 Total Direct Spending 668.5 733.9 684.3 734.1 780.5 835.7 868.9 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 485.9 515.1 477.8 505.8 537.9 580.3 600.1 Campground 37.7 45.0 45.9 48.0 50.4 52.2 53.6 Private Home 42.7 54.7 48.5 60.5 63.8 66.9 71.3 Vacation Home 23.4 26.1 27.3 28.2 29.4 30.6 31.8 Day Travel 78.6 89.2 82.8 90.7 96.4 103.5 106.9 Spending at Destination 668.3 730.2 682.2 733.3 778.0 833.5 863.8 Visitor Spending by Commodity Purchased ($Million) Lodging 186.0 198.6 180.9 188.6 203.0 220.6 234.6 Food & Beverage Services 170.3 186.8 179.4 194.2 205.7 220.1 223.7 Food Stores 37.6 39.9 39.7 41.2 42.3 43.2 43.3 Ground Tran. & Motor Fuel 28.0 47.3 40.5 51.8 61.5 75.4 85.3 Arts, Entertainment & Recreation 99.0 111.4 108.1 117.3 124.8 128.7 128.9 Retail Sales 144.1 146.1 131.9 137.0 138.8 143.2 142.9 Air Transportation (visitor only) 3.3 0.0 1.7 3.3 1.9 2.3 5.0 Spending at Destination 668.3 730.2 682.2 733.3 778.0 833.5 863.8 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 117.4 127.1 118.8 126.1 134.7 140.3 147.9 Arts, Entertainment & Recreation 40.5 45.5 44.1 47.9 50.9 52.5 55.1 Retail** 24.9 26.1 24.3 25.4 26.0 26.7 27.5 Auto Rental & other ground tran. 0.5 0.6 0.5 0.6 0.6 0.7 0.7 Air Transportation (visitor only) 1.2 0.0 0.7 1.3 0.8 0.9 0.9 Other Travel* 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Direct Earnings 184.6 200.8 189.5 201.8 214.1 222.1 233.2 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 7,230 7,230 6,550 6,770 6,820 6,780 6,660 Arts, Entertainment & Recreation 2,490 2,590 2,330 2,540 2,690 2,940 2,970 Retail** 1,290 1,230 1,080 1,080 1,070 1,080 1,070 Auto Rental & other ground tran. 20 20 20 20 20 20 20 Air Transportation (visitor only) 20 0 10 20 10 10 10 Other Travel* 10 30 30 20 30 20 20 Total Direct Employment 11,070 11,110 10,020 10,460 10,630 10,860 10,760 Government Revenue Generated by Travel Spending ($Million)*** Local 19.9 21.3 19.6 21.3 22.5 24.1 25.0 State 24.8 27.3 27.1 29.0 30.6 32.4 33.3 Total Direct Gov't. Revenue 44.8 48.6 46.8 50.3 53.1 56.5 58.3 Details may not add to totals due to rounding. Estimates for 1999 and 2001 not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payments of travel industry employees not included. DEAN RUNYAN ASSOCIATES PAGE 37 Gila County Travel Impacts, 1998-2006p 1998 2000 2002 Total Direct Travel Spending ($Million) Visitor Spending at Destination 178.3 205.7 203.6 Other Travel* 0.2 0.2 0.2 Total Direct Spending 178.5 205.9 203.8 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 31.9 36.9 32.3 Campground 10.9 12.3 12.5 Private Home 12.7 16.9 14.6 Vacation Home 10.3 11.4 11.8 Day Travel 112.5 128.2 132.3 Spending at Destination 178.3 205.7 203.6 Visitor Spending by Commodity Purchased ($Million) Lodging 13.4 15.5 13.5 Food & Beverage Services 31.5 37.2 36.7 Food Stores 10.9 11.8 12.0 Ground Tran. & Motor Fuel 5.6 9.6 8.2 Arts, Entertainment & Recreation 74.5 86.5 90.5 Retail Sales 42.4 45.0 42.6 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 178.3 205.7 203.6 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 16.0 18.8 18.1 Arts, Entertainment & Recreation 19.0 22.2 23.0 Retail** 7.6 8.2 7.9 Auto Rental & other ground tran. 0.1 0.1 0.1 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 42.8 49.4 49.2 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 1,180 1,330 1,280 Arts, Entertainment & Recreation 1,090 1,090 1,240 Retail** 400 420 370 Auto Rental & other ground tran. 0 0 0 Air Transportation (visitor only) 0 0 0 Other Travel* 10 10 10 Total Direct Employment 2,680 2,850 2,910 Government Revenue Generated by Travel Spending ($Million)*** Local 2.0 2.3 2.1 State 2.6 3.1 3.0 Total Direct Gov't. Revenue 4.6 5.4 5.0 2003 2004 2005 2006p 213.0 0.1 213.1 220.4 0.1 220.5 232.4 0.1 232.5 241.0 0.1 241.1 34.0 13.0 17.9 12.1 136.0 213.0 35.0 13.6 18.8 12.4 140.6 220.4 42.4 14.0 19.5 12.7 143.8 232.4 46.3 14.3 20.1 13.1 147.2 241.0 14.0 39.1 12.3 10.6 94.0 43.0 0.0 213.0 14.6 40.5 12.5 12.6 97.6 42.6 0.0 220.4 17.3 43.8 12.8 15.5 99.3 43.7 0.0 232.4 19.1 45.6 12.9 17.6 101.4 44.4 0.0 241.0 19.1 24.0 8.1 0.1 0.0 0.0 51.4 19.8 25.0 8.1 0.1 0.0 0.0 53.0 21.6 26.0 8.2 0.1 0.0 0.0 55.9 23.3 27.5 8.6 0.1 0.0 0.0 59.6 1,270 1,330 360 0 0 10 2,970 1,250 1,200 360 0 0 10 2,820 1,300 1,180 360 0 0 10 2,840 1,310 1,170 360 0 0 10 2,840 2.3 4.2 6.4 2.4 5.3 7.7 2.9 6.6 9.5 3.2 7.0 10.2 Details may not add to totals due to rounding. Estimates for 1999 and 2001 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 Graham & Greenlee Counties Travel Impacts, 1998-2006p 1998 2000 2002 2003 Total Direct Travel Spending ($Million) Visitor Spending at Destination 23.3 31.1 27.5 30.4 Other Travel* 0.1 0.1 0.1 0.1 Total Direct Spending 23.4 31.2 27.6 30.4 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 12.1 16.0 14.3 14.4 Campground 1.0 1.2 1.1 1.2 Private Home 7.8 10.7 9.1 11.4 Vacation Home 0.7 0.8 0.8 0.9 Day Travel 1.7 2.4 2.1 2.5 Spending at Destination 23.3 31.1 27.5 30.4 Visitor Spending by Commodity Purchased ($Million) Lodging 4.3 5.5 4.8 4.7 Food & Beverage Services 6.0 8.0 7.2 8.0 Food Stores 1.0 1.2 1.1 1.2 Ground Tran. & Motor Fuel 3.3 5.6 4.8 6.1 Arts, Entertainment & Recreation 3.5 4.6 4.2 4.7 Retail Sales 5.2 6.2 5.3 5.7 Air Transportation (visitor only) 0.0 0.0 0.0 0.0 Spending at Destination 23.3 31.1 27.5 30.4 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 3.3 4.4 3.9 4.1 Arts, Entertainment & Recreation 1.7 2.3 2.1 2.3 Retail** 1.0 1.3 1.1 1.2 Auto Rental & other ground tran. 0.0 0.0 0.0 0.0 Air Transportation (visitor only) 0.0 0.0 0.0 0.0 Other Travel* 0.0 0.0 0.0 0.0 Total Direct Earnings 6.2 8.0 7.3 7.8 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 290 340 350 380 Arts, Entertainment & Recreation 130 140 260 360 Retail** 60 70 60 60 Auto Rental & other ground tran. 0 0 0 0 Air Transportation (visitor only) 0 0 0 0 Other Travel* 0 0 0 0 Total Direct Employment 480 560 670 800 Government Revenue Generated by Travel Spending ($Million)*** Local 0.6 0.8 0.7 0.7 State 1.1 1.4 1.3 1.4 Total Direct Gov't. Revenue 1.7 2.2 2.0 2.2 2004 2005 2006p 31.7 0.1 31.8 36.4 0.1 36.4 44.7 0.1 44.8 14.4 1.4 12.3 0.9 2.7 31.7 17.9 1.5 13.0 1.0 3.1 36.4 25.7 1.5 13.2 1.0 3.5 44.7 4.7 8.1 1.2 7.3 4.8 5.6 0.0 31.7 5.9 9.1 1.2 9.0 5.2 5.9 0.0 36.4 9.0 11.2 1.4 10.2 6.1 6.9 0.0 44.7 4.2 2.4 1.2 0.1 0.0 0.0 7.9 4.7 2.6 1.3 0.1 0.0 0.0 8.7 6.4 3.2 1.5 0.1 0.0 0.0 11.2 360 370 60 0 0 0 790 390 510 410 540 60 70 0 0 0 0 0 0 870 1,130 0.7 1.5 2.2 0.9 1.6 2.5 1.1 1.9 3.0 Details may not add to totals due to rounding. Estimates for 1999 and 2001 not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payments of travel industry employees not included. DEAN RUNYAN ASSOCIATES PAGE 39 La Paz County Travel Impacts, 1998-2006p 1998 2000 2002 Total Direct Travel Spending ($Million) Visitor Spending at Destination 123.9 160.0 155.5 Other Travel* 0.0 0.0 0.0 Total Direct Spending 123.9 160.0 155.5 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 9.3 12.9 14.0 Campground 36.0 45.8 45.2 Private Home 12.8 18.6 15.4 Vacation Home 15.1 18.5 18.5 Day Travel 50.8 64.2 62.4 Spending at Destination 123.9 160.0 155.5 Visitor Spending by Commodity Purchased ($Million) Lodging 6.2 7.1 7.5 Food & Beverage Services 13.6 17.1 17.1 Food Stores 12.6 13.8 14.2 Ground Tran. & Motor Fuel 28.2 48.5 41.5 Arts, Entertainment & Recreation 39.3 47.2 50.0 Retail Sales 23.9 26.3 25.2 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 123.9 160.0 155.5 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 5.7 7.0 7.2 Arts, Entertainment & Recreation 9.2 11.1 11.7 Retail** 6.2 7.3 7.4 Auto Rental & other ground tran. 0.3 0.4 0.4 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 21.3 25.9 26.6 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 480 540 500 Arts, Entertainment & Recreation 520 530 510 Retail** 330 370 360 Auto Rental & other ground tran. 10 10 10 Air Transportation (visitor only) 0 0 0 Other Travel* 0 0 0 Total Direct Employment 1,340 1,460 1,370 Government Revenue Generated by Travel Spending ($Million)*** Local 1.4 1.7 1.6 State 4.7 6.0 5.8 Total Direct Gov't. Revenue 6.1 7.7 7.5 2003 2004 2005 2006p 172.7 0.0 172.7 184.2 0.0 184.2 206.2 0.0 206.2 207.7 0.0 207.7 15.5 49.5 19.5 19.7 68.5 172.7 14.8 53.5 21.1 20.9 74.0 184.2 22.3 58.2 22.6 22.4 80.6 206.2 10.8 62.4 24.2 24.0 86.4 207.7 7.8 18.8 14.5 53.3 52.5 25.8 0.0 172.7 7.7 19.3 14.5 63.6 53.9 25.3 0.0 184.2 9.4 21.2 14.7 78.1 56.7 26.0 0.0 206.2 7.0 19.8 14.6 88.6 52.5 25.3 0.0 207.7 7.8 12.3 7.7 0.4 0.0 0.0 28.3 7.9 12.7 7.8 0.5 0.0 0.0 28.9 8.9 13.5 8.1 0.5 0.0 0.0 31.0 7.9 13.1 8.4 0.5 0.0 0.0 29.9 530 530 360 10 0 0 1,430 500 510 370 10 0 0 1,390 550 490 390 10 0 0 1,440 480 460 390 10 0 0 1,340 1.8 6.9 8.7 1.8 7.6 9.4 2.1 8.7 10.8 2.1 8.8 10.9 Details may not add to totals due to rounding. Estimates for 1999 and 2001 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 Maricopa County Travel Impacts, 1998-2006p 1998 2000 2002 2003 Total Direct Travel Spending ($Million) Visitor Spending at Destination 6,409 7,815 7,085 8,090 Other Travel* 903 955 883 977 Total Direct Spending 7,312 8,771 7,968 9,067 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 3,215 3,658 3,260 3,519 Campground 150 181 183 194 Private Home 1,946 2,582 2,336 2,884 Vacation Home 129 153 165 174 Day Travel 969 1,241 1,141 1,318 Spending at Destination 6,409 7,815 7,085 8,090 Visitor Spending by Commodity Purchased ($Million) Lodging 1,135 1,296 1,129 1,192 Food & Beverage Services 1,340 1,683 1,573 1,823 Food Stores 216 246 238 261 Ground Tran. & Motor Fuel 783 1,157 1,008 1,238 Arts, Entertainment & Recreation 828 1,050 997 1,151 Retail Sales 1,226 1,418 1,244 1,392 Air Transportation (visitor only) 882 964 897 1,032 Spending at Destination 6,409 7,815 7,085 8,090 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 799 965 876 980 Arts, Entertainment & Recreation 340 433 408 474 Retail** 207 247 226 252 Auto Rental & other ground tran. 40 48 44 50 Air Transportation (visitor only) 334 387 377 419 Other Travel* 380 430 400 430 Total Direct Earnings 2,096 2,508 2,332 2,605 Industry Employment Generated by Travel Spending (Thousand Jobs) Accommodation & Food Services 40.9 45.6 39.2 42.8 Arts, Entertainment & Recreation 15.8 16.6 14.1 16.8 Retail** 8.2 9.0 7.8 8.5 Auto Rental & other ground tran. 1.7 1.7 1.5 1.6 Air Transportation (visitor only) 5.0 5.1 4.0 4.0 Other Travel* 12.2 12.4 10.7 10.4 Total Direct Employment 83.7 90.4 77.2 84.0 Government Revenue Generated by Travel Spending ($Million)*** Local 229 267 238 264 State 238 290 279 313 Total Direct Gov't. Revenue 467 557 518 577 2004 2005 2006p 8,807 9,822 10,459 1,080 1,241 1,367 9,886 11,064 11,826 3,849 206 3,138 185 1,428 8,807 4,426 4,684 219 228 3,407 3,662 198 212 1,572 1,673 9,822 10,459 1,314 1,975 273 1,417 1,249 1,441 1,137 8,807 1,538 1,665 2,173 2,268 288 295 1,686 1,882 1,322 1,378 1,525 1,566 1,291 1,405 9,822 10,459 1,069 515 263 53 450 460 2,811 1,170 546 277 58 457 480 2,987 1,261 591 294 62 485 510 3,205 44.4 18.1 8.6 1.6 4.1 10.5 87.4 46.8 19.5 8.7 1.7 4.1 10.5 91.3 47.7 20.0 8.9 1.7 4.3 10.8 93.4 281 336 617 314 366 679 330 382 712 Details may not add to totals due to rounding. Estimates for 1999 and 2001 not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payments of travel industry employees not included. DEAN RUNYAN ASSOCIATES PAGE 41 Mohave County Travel Impacts, 1998-2006p 1998 2000 2002 Total Direct Travel Spending ($Million) Visitor Spending at Destination 239.8 319.2 313.0 Other Travel* 8.0 1.7 1.2 Total Direct Spending 247.7 320.9 314.2 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 84.8 106.1 113.6 Campground 24.0 29.3 28.6 Private Home 63.8 96.2 84.6 Vacation Home 26.8 32.8 34.3 Day Travel 40.3 54.9 51.8 Spending at Destination 239.8 319.2 313.0 Visitor Spending by Commodity Purchased ($Million) Lodging 32.8 38.6 41.0 Food & Beverage Services 51.9 67.8 69.2 Food Stores 21.0 23.7 24.8 Ground Tran. & Motor Fuel 37.3 64.0 54.7 Arts, Entertainment & Recreation 39.5 50.9 52.6 Retail Sales 57.3 67.5 64.0 Air Transportation (visitor only) 0.0 6.7 6.7 Spending at Destination 239.8 319.2 313.0 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 27.1 34.2 35.4 Arts, Entertainment & Recreation 16.8 21.8 22.4 Retail** 12.6 15.3 15.1 Auto Rental & other ground tran. 0.4 0.5 0.5 Air Transportation (visitor only) 0.0 2.7 2.8 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 60.1 75.4 77.0 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 2,030 2,390 2,300 Arts, Entertainment & Recreation 1,090 1,330 1,400 Retail** 570 700 630 Auto Rental & other ground tran. 20 20 20 Air Transportation (visitor only) 0 50 50 Other Travel* 90 30 20 Total Direct Employment 3,810 4,530 4,420 Government Revenue Generated by Travel Spending ($Million)*** Local 5.7 7.0 7.1 State 10.8 13.6 14.0 Total Direct Gov't. Revenue 16.5 20.7 21.1 2003 2004 2005 2006p 357.4 2.6 360.0 394.8 1.9 396.7 429.7 4.9 434.5 477.0 5.0 482.0 123.2 30.5 106.2 36.7 60.7 357.4 138.7 32.5 117.1 39.4 67.2 394.8 150.8 34.9 126.1 43.0 75.0 429.7 178.7 35.7 134.3 46.0 82.4 477.0 43.5 80.5 26.2 70.3 60.0 70.7 6.1 357.4 48.6 88.2 27.3 83.9 65.4 73.6 7.7 394.8 53.1 95.3 28.4 103.1 68.1 76.8 4.8 429.7 63.9 106.6 30.0 116.9 73.7 82.7 3.1 477.0 40.0 25.7 16.6 0.5 2.5 0.0 86.5 44.2 28.0 17.4 0.6 3.1 0.0 94.1 46.8 29.2 18.1 0.6 1.9 0.0 98.8 54.8 33.1 19.9 0.6 1.6 0.0 112.7 2,440 1,620 650 20 40 30 4,790 2,580 1,660 670 20 50 30 5,000 2,660 1,750 670 20 30 40 5,170 3,090 1,980 740 20 20 50 5,900 7.9 15.7 23.6 8.6 16.9 25.4 9.2 18.0 27.2 10.4 19.6 30.0 Details may not add to totals due to rounding. Estimates for 1999 and 2001 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 Navajo County Travel Impacts, 1998-2006p 1998 2000 2002 Total Direct Travel Spending ($Million) Visitor Spending at Destination 178.0 238.1 219.6 Other Travel* 0.4 0.3 0.3 Total Direct Spending 178.4 238.4 220.0 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 85.3 121.9 108.1 Campground 22.5 27.2 27.1 Private Home 23.0 31.8 27.4 Vacation Home 35.6 41.3 42.6 Day Travel 11.6 15.9 14.4 Spending at Destination 178.0 238.1 219.6 Visitor Spending by Commodity Purchased ($Million) Lodging 31.5 44.0 38.3 Food & Beverage Services 30.9 43.8 39.8 Food Stores 22.6 25.2 25.6 Ground Tran. & Motor Fuel 21.5 36.9 31.5 Arts, Entertainment & Recreation 34.7 44.0 44.7 Retail Sales 36.9 44.2 39.6 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 178.0 238.1 219.6 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 21.7 30.7 27.3 Arts, Entertainment & Recreation 12.7 16.5 16.3 Retail** 8.6 10.4 9.9 Auto Rental & other ground tran. 0.2 0.3 0.3 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 43.5 58.1 54.2 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 1,600 2,180 1,770 Arts, Entertainment & Recreation 1,010 990 930 Retail** 480 550 480 Auto Rental & other ground tran. 10 10 10 Air Transportation (visitor only) 0 0 0 Other Travel* 20 10 10 Total Direct Employment 3,120 3,750 3,200 Government Revenue Generated by Travel Spending ($Million)*** Local 4.3 5.8 5.1 State 6.6 8.9 8.4 Total Direct Gov't. Revenue 10.9 14.7 13.5 2003 2004 2005 2006p 228.0 0.2 228.2 236.3 0.2 236.5 259.0 0.2 259.3 281.6 0.2 281.8 102.4 30.0 34.4 45.1 16.1 228.0 101.1 32.7 37.3 47.8 17.3 236.3 113.7 35.4 39.8 50.9 19.3 259.0 128.5 36.7 41.8 53.5 21.0 281.6 36.1 41.0 26.2 40.5 44.4 39.8 0.0 228.0 35.9 41.2 26.6 48.3 45.1 39.1 0.0 236.3 39.6 45.0 27.3 59.4 47.0 40.6 0.0 259.0 43.7 49.7 28.1 67.4 49.9 42.8 0.0 281.6 27.0 16.6 10.2 0.3 0.0 0.0 54.3 27.0 17.0 10.3 0.3 0.0 0.0 54.8 28.7 17.7 10.7 0.4 0.0 0.0 57.7 32.3 19.6 11.5 0.4 0.0 0.0 64.0 1,720 970 490 10 0 10 3,200 1,620 950 480 10 0 10 3,070 1,610 990 490 10 0 10 3,110 1,720 1,070 510 10 0 10 3,310 5.1 9.0 14.1 5.1 9.3 14.4 5.5 10.1 15.6 6.0 10.7 16.8 Details may not add to totals due to rounding. Estimates for 1999 and 2001 not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payments of travel industry employees not included. DEAN RUNYAN ASSOCIATES PAGE 43 Pima County Travel Impacts, 1998-2006p 1998 2000 2002 2003 2004 2005 2006p Total Direct Travel Spending ($Million) Visitor Spending at Destination 1,523 1,847 1,762 1,861 1,993 2,167 2,227 Other Travel* 26 27 23 24 26 29 31 Total Direct Spending 1,549 1,874 1,785 1,885 2,019 2,196 2,258 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 700 812 737 743 814 931 959 Campground 57 66 67 71 75 78 81 Private Home 317 431 379 470 501 531 561 Vacation Home 27 31 32 34 35 37 39 Day Travel 421 506 547 544 568 589 587 Spending at Destination 1,523 1,847 1,762 1,861 1,993 2,167 2,227 Visitor Spending by Commodity Purchased ($Million) Lodging 290 338 302 300 332 395 413 Food & Beverage Services 346 431 412 450 484 523 537 Food Stores 88 100 109 106 109 110 107 Ground Tran. & Motor Fuel 152 215 189 228 258 303 336 Arts, Entertainment & Recreation 213 268 256 283 305 318 323 Retail Sales 419 480 480 477 488 498 488 Air Transportation (visitor only) 14 15 14 16 18 21 22 Spending at Destination 1,523 1,847 1,762 1,861 1,993 2,167 2,227 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 209 254 236 249 270 294 310 Arts, Entertainment & Recreation 85 107 102 113 122 127 136 Retail** 69 80 81 81 83 85 86 Auto Rental & other ground tran. 11 13 12 13 14 15 17 Air Transportation (visitor only) 5 6 6 7 7 7 8 Other Travel* 10 20 10 10 10 10 10 Total Direct Earnings 394 475 449 475 510 543 570 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 11,360 13,370 12,170 12,580 13,250 14,000 14,240 Arts, Entertainment & Recreation 5,700 6,630 6,260 7,190 7,860 7,650 7,650 Retail** 3,050 3,350 3,210 3,110 3,160 3,150 3,100 Auto Rental & other ground tran. 440 460 390 430 430 440 460 Air Transportation (visitor only) 120 120 100 100 100 100 110 Other Travel* 530 480 360 320 310 320 310 Total Direct Employment 21,210 24,420 22,500 23,740 25,120 25,670 25,870 Government Revenue Generated by Travel Spending ($Million)*** Local 35.2 41.2 38.0 38.9 41.9 47.2 50.2 State 56.9 68.8 70.5 74.5 79.3 85.6 87.4 Total Direct Gov't. Revenue 92.1 109.9 108.5 113.4 121.2 132.8 137.6 Details may not add to totals due to rounding. Estimates for 1999 and 2001 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 Pinal County Travel Impacts, 1998-2006p 1998 2000 2002 Total Direct Travel Spending ($Million) Visitor Spending at Destination 205.5 262.6 256.1 Other Travel* 0.1 0.1 0.1 Total Direct Spending 205.6 262.7 256.1 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 43.6 46.4 48.9 Campground 13.8 16.6 16.3 Private Home 61.6 89.7 80.5 Vacation Home 30.0 36.7 39.5 Day Travel 56.5 73.3 70.9 Spending at Destination 205.5 262.6 256.1 Visitor Spending by Commodity Purchased ($Million) Lodging 17.5 18.4 19.1 Food & Beverage Services 44.6 58.0 57.8 Food Stores 20.1 23.1 24.5 Ground Tran. & Motor Fuel 25.6 43.9 37.5 Arts, Entertainment & Recreation 42.4 53.8 55.4 Retail Sales 55.5 65.4 61.7 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 205.5 262.6 256.1 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 20.0 24.8 24.9 Arts, Entertainment & Recreation 18.3 23.5 24.1 Retail** 10.8 13.1 12.9 Auto Rental & other ground tran. 0.3 0.3 0.3 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 49.5 61.8 62.3 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 1,380 1,580 1,550 Arts, Entertainment & Recreation 830 970 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 2,780 3,180 3,550 Government Revenue Generated by Travel Spending ($Million)*** Local 4.1 4.9 4.8 State 8.0 10.0 10.3 Total Direct Gov't. Revenue 12.0 15.0 15.1 2003 2004 2005 2006p 290.7 0.4 291.1 322.8 0.4 323.3 364.4 0.4 364.9 401.6 0.4 402.0 46.5 17.4 103.6 42.6 80.5 290.7 51.9 18.5 116.9 47.0 88.5 322.8 59.9 19.4 133.1 53.2 98.8 364.4 63.6 19.8 150.4 59.9 108.0 401.6 18.1 67.4 26.2 48.2 62.5 68.4 0.0 290.7 20.2 75.3 28.2 57.5 68.9 72.8 0.0 322.8 22.6 85.7 30.9 70.7 74.6 79.8 0.0 364.4 24.6 95.2 33.8 80.2 80.9 87.0 0.0 401.6 27.8 27.4 14.2 0.4 0.0 0.0 70.1 31.1 30.5 15.1 0.4 0.0 0.0 77.4 34.8 33.3 16.4 0.4 0.0 0.0 85.3 39.5 37.9 18.3 0.4 0.0 0.0 96.4 1,790 1,620 600 10 0 20 4,040 1,820 1,640 620 10 0 20 4,110 1,950 1,810 660 10 0 20 4,450 2,070 1,880 710 10 0 10 4,690 5.4 11.7 17.0 5.9 12.8 18.8 6.7 14.3 21.0 7.4 15.4 22.8 Details may not add to totals due to rounding. Estimates for 1999 and 2001 not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payments of travel industry employees not included. DEAN RUNYAN ASSOCIATES PAGE 45 Santa Cruz County Travel Impacts, 1998-2006p 1998 2000 2002 Total Direct Travel Spending ($Million) Visitor Spending at Destination 206.3 236.8 297.6 Other Travel* 0.0 0.0 0.1 Total Direct Spending 206.3 236.8 297.7 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 27.4 29.0 27.9 Campground 3.8 4.4 4.5 Private Home 5.8 8.0 7.1 Vacation Home 0.8 0.9 1.0 Day Travel 168.4 194.4 257.1 Spending at Destination 206.3 236.8 297.6 Visitor Spending by Commodity Purchased ($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 7.4 Arts, Entertainment & Recreation 6.0 6.9 6.9 Retail Sales 79.4 90.1 117.0 Air Transportation (visitor only) 0.0 0.0 0.0 Spending at Destination 206.3 236.8 297.6 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 11.7 13.1 14.9 Arts, Entertainment & Recreation 2.8 3.3 3.3 Retail** 22.6 25.8 33.6 Auto Rental & other ground tran. 0.1 0.1 0.1 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 37.2 42.2 51.9 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 820 830 960 Arts, Entertainment & Recreation 220 250 230 Retail** 1,000 1,060 1,290 Auto Rental & other ground tran. 0 0 0 Air Transportation (visitor only) 0 0 0 Other Travel* 0 0 0 Total Direct Employment 2,050 2,140 2,490 Government Revenue Generated by Travel Spending ($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 2003 2004 2005 2006p 261.9 0.1 262.0 272.2 0.1 272.2 273.5 0.1 273.5 254.2 0.1 254.2 27.3 5.0 9.0 1.0 219.6 261.9 32.6 5.3 9.7 1.1 223.5 272.2 38.0 5.5 10.4 1.2 218.3 273.5 38.8 5.9 11.2 1.3 197.0 254.2 10.8 31.8 102.1 9.5 7.3 100.3 0.0 261.9 12.8 33.9 103.5 11.4 8.4 102.2 0.0 272.2 14.9 35.6 100.4 14.0 9.1 99.4 0.0 273.5 15.3 34.1 90.0 15.9 9.2 89.6 0.0 254.2 13.7 3.5 28.8 0.1 0.0 0.0 46.1 15.0 3.9 29.3 0.1 0.0 0.0 48.4 15.9 4.3 28.3 0.1 0.0 0.0 48.6 15.8 4.5 26.1 0.1 0.0 0.0 46.6 890 240 1,120 0 0 0 2,260 930 250 1,080 0 0 0 2,270 960 270 1,010 0 0 0 2,240 920 300 910 0 0 0 2,130 5.0 8.4 13.4 5.3 8.7 14.0 5.4 8.8 14.1 5.1 8.2 13.3 Details may not add to totals due to rounding. Estimates for 1999 and 2001 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 Yavapai County Travel Impacts, 1998-2006p 1998 2000 2002 Total Direct Travel Spending ($Million) Visitor Spending at Destination 421.1 552.7 534.7 Other Travel* 3.1 2.9 3.0 Total Direct Spending 424.2 555.6 537.7 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 138.7 208.1 194.8 Campground 35.6 39.8 40.7 Private Home 59.1 82.1 73.6 Vacation Home 14.6 16.8 18.2 Day Travel 173.1 205.8 207.4 Spending at Destination 421.1 552.7 534.7 Visitor Spending by Commodity Purchased ($Million) Lodging 59.0 86.0 79.6 Food & Beverage Services 95.6 132.4 130.1 Food Stores 26.6 30.8 31.2 Ground Tran. & Motor Fuel 15.9 27.3 23.3 Arts, Entertainment & Recreation 115.4 146.1 149.4 Retail Sales 108.6 130.2 121.0 Air Transportation (visitor only) 0.0 0.0 0.1 Spending at Destination 421.1 552.7 534.7 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 50.4 71.3 68.6 Arts, Entertainment & Recreation 39.5 51.5 52.1 Retail** 17.7 21.2 20.2 Auto Rental & other ground tran. 0.2 0.2 0.2 Air Transportation (visitor only) 0.0 0.0 0.0 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 110.0 146.4 143.3 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 3,380 4,410 4,070 Arts, Entertainment & Recreation 2,270 2,580 3,470 Retail** 890 970 860 Auto Rental & other ground tran. 10 10 10 Air Transportation (visitor only) 0 0 0 Other Travel* 120 100 90 Total Direct Employment 6,670 8,070 8,510 Government Revenue Generated by Travel Spending ($Million)*** Local 8.6 12.0 11.2 State 11.0 15.2 15.3 Total Direct Gov't. Revenue 19.6 27.2 26.5 2003 2004 2005 2006p 577.9 0.9 578.8 587.2 1.0 588.2 638.6 1.0 639.6 681.3 0.9 682.1 205.9 42.2 92.6 19.1 218.1 577.9 197.9 44.1 99.9 20.1 225.2 587.2 230.7 45.5 106.7 21.3 234.5 638.6 255.5 46.3 113.8 22.6 243.1 681.3 83.1 144.1 32.7 30.0 160.2 127.7 0.1 577.9 81.5 145.9 33.2 35.8 165.2 125.5 0.1 587.2 97.6 160.3 34.5 44.0 170.8 131.5 0.1 638.6 109.8 172.0 35.6 49.9 176.9 137.0 0.1 681.3 74.4 56.5 21.3 0.2 0.0 0.0 153.1 74.5 58.2 21.2 0.3 0.0 0.0 154.9 82.3 61.1 22.1 0.3 0.0 0.0 166.5 91.6 66.4 23.6 0.3 0.1 0.0 182.5 4,190 3,880 860 10 0 30 8,970 3,900 3,840 850 10 0 30 8,620 3,980 3,780 890 10 0 30 8,690 4,190 3,830 920 10 0 30 8,970 12.3 17.7 30.1 12.3 18.9 31.2 14.1 21.6 35.7 15.4 23.3 38.7 Details may not add to totals due to rounding. Estimates for 1999 and 2001 not printed due to space limitations. *Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline. ***Property taxes and sales tax payments of travel industry employees not included. DEAN RUNYAN ASSOCIATES PAGE 47 Yuma County Travel Impacts, 1998-2006p 1998 2000 2002 Total Direct Travel Spending ($Million) Visitor Spending at Destination 361.7 434.4 477.3 Other Travel* 5.2 5.5 2.6 Total Direct Spending 366.9 439.9 479.9 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 86.0 95.5 103.0 Campground 48.8 57.5 58.1 Private Home 54.0 77.0 68.5 Vacation Home 28.4 33.8 35.3 Day Travel 144.5 170.6 212.5 Spending at Destination 361.7 434.4 477.3 Visitor Spending by Commodity Purchased ($Million) Lodging 29.4 32.2 33.4 Food & Beverage Services 56.9 71.2 75.6 Food Stores 61.7 69.9 84.5 Ground Tran. & Motor Fuel 19.9 34.2 29.3 Arts, Entertainment & Recreation 75.5 90.8 95.5 Retail Sales 118.3 136.1 156.4 Air Transportation (visitor only) 0.0 0.0 2.6 Spending at Destination 361.7 434.4 477.3 Industry Earnings Generated by Travel Spending ($Million) Accommodation & Food Services 26.9 32.4 34.2 Arts, Entertainment & Recreation 27.3 33.5 34.7 Retail** 25.7 29.9 34.6 Auto Rental & other ground tran. 0.2 0.3 0.3 Air Transportation (visitor only) 0.0 0.0 1.1 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 82.2 98.3 106.1 Industry Employment Generated by Travel Spending (Jobs) Accommodation & Food Services 1,920 2,080 2,050 Arts, Entertainment & Recreation 1,290 1,480 2,090 Retail** 1,200 1,310 1,370 Auto Rental & other ground tran. 10 10 10 Air Transportation (visitor only) 0 0 20 Other Travel* 60 60 30 Total Direct Employment 4,480 4,940 5,580 Government Revenue Generated by Travel Spending ($Million)*** Local 8.9 10.4 11.4 State 11.5 13.8 16.1 Total Direct Gov't. Revenue 20.3 24.2 27.5 2003 2004 2005 2006p 493.7 2.2 495.9 524.6 2.9 527.5 558.1 3.0 561.1 578.3 3.4 581.7 118.1 61.5 85.9 37.1 191.2 493.7 132.1 64.8 92.0 38.9 196.6 524.6 154.6 67.1 97.8 41.2 197.4 558.1 176.5 68.7 103.7 43.6 185.9 578.3 36.7 83.1 77.7 37.6 107.6 147.6 3.4 493.7 40.8 89.1 79.3 44.9 116.9 150.5 3.3 524.6 47.9 96.7 78.9 55.2 125.3 150.9 3.2 558.1 56.1 102.2 75.3 62.5 133.7 145.6 2.9 578.3 37.6 39.4 32.7 0.3 1.4 0.0 112.4 40.8 42.7 33.4 0.3 1.3 0.0 119.8 44.6 46.0 33.3 0.3 1.3 0.0 126.9 49.7 51.0 33.1 0.3 1.2 0.0 136.9 2,240 2,190 1,250 10 20 30 5,740 2,310 2,240 1,220 10 20 30 5,830 2,460 2,250 1,240 10 20 30 6,010 2,680 2,470 1,220 10 20 30 6,420 11.6 17.3 29.0 12.3 19.1 31.4 13.3 21.1 34.3 13.9 22.0 35.9 Details may not add to totals due to rounding. Estimates for 1999 and 2001 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 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 49 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 2006. 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 50 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 51 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. • Micro-electronics. 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 52 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 2006 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 2006 becomes available. REVISIONS TO TRAVEL IMPACT ESTIMATES In this year’s report, data from the airline origin and destination survey were more fully integrated into the RTIM modeling procedure. The revised estimates primarily resulted in decreased private home visitation impacts for several years (1997, 1998, 2001, and 2002). Estimates for the current and most recent years were not substantially affected by this revision. This year’s report also provides a more comprehensive estimate of the tax revenues associated with the travel industry at the state level, due to the inclusion of property taxes and the sales tax revenues attributable to the spending of travel industry employees. This revision does not apply to the county level tax estimates. For this reason, the sum of state and local taxes at the county level are less than the statewide estimate of travel-related state and local tax revenues. 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 DEAN RUNYAN ASSOCIATES PAGE 53 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. 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. PAGE 54 DEAN RUNYAN ASSOCIATES 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. 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 DEAN RUNYAN ASSOCIATES PAGE 55 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. INTERPRETATION OF IMPACT ESTIMATES Users of this report should be aware of several issues regarding the interpretation of the impact estimates contained herein. • The monetary estimates in this report are expressed in current dollars. There is no adjustment for inflation, with the exception of the graphs on pages 1 and 8. • 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 56 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 57 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 58 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 59 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 60 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 61 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 62 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 63 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 64 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 65 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 66 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 67 APPENDIX C Arizona Earnings and Employment by Industry Sector, 2005 Industry Sector Earnings Percent ($Million) of Total Average Employment Percent of Total Export-Oriented Agriculture, Foresting, Fishing & related Mining Manufacturing 15,826 12% 250 8% 1,356 818 13,652 1.0% 0.6% 10.0% 44 12 194 1.4% 0.4% 6.0% Non Export-Oriented 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 74,111 54% 1,847 57% 13,097 1,169 7,163 11,316 5,634 1,713 7,911 3,423 22,687 9.6% 0.9% 5.2% 8.3% 4.1% 1.2% 5.8% 2.5% 16.5% 270 13 113 377 181 26 275 160 433 8.3% 0.4% 3.5% 11.6% 5.6% 0.8% 8.5% 4.9% 13.4% Mixed Transportation and warehousing Information Finance and insurance Professional and technical services Educational services Health care and social assistance Arts, entertainment, and recreation Accommodation and food services 47,195 34% 1,140 35% 4,050 3,113 9,431 10,446 1,449 12,771 1,359 4,575 3.0% 2.3% 6.9% 7.6% 1.1% 9.3% 1.0% 3.3% 87 56 170 196 48 284 61 238 2.7% 1.7% 5.2% 6.1% 1.5% 8.8% 1.9% 7.3% 137,132 100% 3,236 100% Arizona Total Source: Dean Runyan Associates and Bureau of Economic Analysis. Industry classifications by Dean Runyan Associates. DEAN RUNYAN ASSOCIATES PAGE 69 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 71 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 72 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 73 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 74 DEAN RUNYAN ASSOCIATES