Arizona Travel Impacts 1998-2011p photo courtesy of Arizona Office of Tourism June 2012 Prepared for the Arizona Office of Tourism Phoenix, Arizona ARIZONA TRAVEL IMPACTS 1998-2011P Arizona Office of Tourism Primary Research Conducted By: Dean Runyan Associates Portland, Arizona June 2012 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. CONTINUING IMPROVEMENT IN THE ARIZONA TRAVEL INDUSTRY Following two years of steep declines in travel activity, the Arizona travel industry began to recover during 2010. Although spending and employment increased from 2010 to 2011, the rates of increase for most indicators of travel activity were less than the preceding year. Part of this slower rate of growth may be attributable to the fact that last year’s recovery followed the very steep decline in 2009. In this respect, the more recent rate of growth in the travel industry may represent a more normal pace of growth given the sluggish performance of the broader economy. A positive sign is the increase in travel-generated employment for the year – the first increase in five years. 1  Spending. Total direct travel spending in Arizona was $18.3 billion in 2011. Travel spending increased by 5.4 percent in current dollars compared to 2010. Inflation-adjusted (real) travel spending was unchanged following a 3.2 percent increase the preceding year. Transportation costs were the primary source of price increases. Room rates also increased by 2.8 percent.1  Travel Activity. According to Smith Travel Research, room demand in Arizona increased by 3.6 percent from 2010 to 2011, following an 8.1 percent increase the preceding year. Visitor air arrivals on domestic flights increased by 0.5 percent, the same rate of increase as from 2009 to 2010.  Employment. Travel-generated employment increased by 1.7 percent – an addition of 2,700 jobs. This is the first increase in employment since 2006.  Secondary Impacts. The re-spending of travel-related revenues by businesses and employees supported 136,000 additional jobs outside of the travel industry with earnings of $5.4 billion.  GDP. The Gross Domestic Product of the travel industry was $7.3 billion in 2011. The travel industry and the microelectronics industry have been the top two export-oriented industries in the state in recent years. Smith Travel Research reports prepared for Arizona Office of Tourism. 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. Travel is especially important in the non-metropolitan areas of the state, where manufacturing and traded services are less prevalent. Selected Arizona Export-Oriented Industries, 2011p Travel $5.1 Microelectronics $4.9 Aerospace $3.0 Agriculture $1.5 Mining $1.2 $0 $1 $2 $3 $4 $5 $6 Earnings in Billions Note: Preliminary 2011 estimates by Dean Runyan Associates. Agriculture includes food and beverage processing industries. THE TRAVEL INDUSTRY GENERATES TAX BENEFITS FOR ARIZONA RESIDENTS In 2011, the travel industry generated $1,030 in local, state and federal tax receipts for each Arizona household.  In 2011, 6.9 percent of all local and state tax revenues were generated by the travel industry.  The tax revenue impacts of the Arizona travel industry are relatively more important in non-urban counties (see graph). State Transaction Privilege Taxes Generated By Direct Travel Spending, 2011 FY Maricopa & Pima All Other Counties 0% 5% 10% 15% 20% Percent Travel-Generated DEAN RUNYAN ASSOCIATES ARIZONA TRAVEL IMPACTS, 1998-2011P page I. U.S. Travel II. Arizona Travel Summary of Arizona Travel Travel Trends Visitor Origin Travel Related Construction Activity Arizona Travel Industry Gross Domestic Product Gross Domestic Product of Arizona Export-Oriented Industries Direct, Secondary & Total Impacts III. State and Local Government Revenue IV. County Travel Impacts Appendices A. Regional Travel Impact Model B. Travel Industry Accounts: A comparison of the Regional Travel Impact Model and Travel & Tourism Satellite Accounts C. Arizona Earnings and Employment by Industry Sector D. Secondary Impacts Industry Groups DEAN RUNYAN ASSOCIATES 1 5 6 7 9 10 11 12 13 19 25 47 49 56 67 68 PAGE I List of Tables and Figures page I. US Travel Annual Direct Travel Spending in U.S., 200-2011p Annual U.S. Travel Spending, 2008Q1-2011Q4 International Direct Travel Spending in U.S. Overseas Arrivals to the U.S. U.S. Travel Industry Employment, 2008Q1-2011Q4 U.S. Leisure & Hosp. Sector Average Weekly Hours, 2008-Q1 to 2011-Q4 2 2 3 3 4 4 II. Arizona Travel Arizona Travel Trends, 1998-2011p Arizona Travel Spending in Real and Current Dollars, 2000-2011p Air Passenger Visitor Arrivals to Arizona, US Air Carriers, 2000-2011 Arizona Room Demand, 2008-Q1 to 2011-Q4 Arizona Travel Impacts by Origin of Visitor, 2011p International Visitor Spending in Arizona, 2000-2011p Value of New Construction in Travel-Related Buildings, 2004-2009 Arizona Travel Industry Gross Domestic Product, 2011p Arizona Gross Domestic Product, 2006-09 (Selected Export-Oriented Industries) Total Employment and Earnings Generated by Travel Spending in Arizona, 2011p Direct & Secondary Employment Generated by Travel Spending, 2011p (graph) Direct & Secondary Earnings Generated by Travel Spending, 2011p (graph) Direct & Secondary Employment Generated by Travel Spending, 2011p (table) Direct & Secondary Earnings Generated by Travel Spending, 2011p (table) Arizona Travel Impacts, 2002-2011p (detail) III. State and Local Government Revenue 23 Arizona State & Local Tax Revenue, 2007-08 FY Arizona Travel Industry State & Local Tax Revenues, 2007-08 FY Arizona State & Local Tax Revenues, 2007-08 FY (table) GDP and Tax Payments of Selected Arizona Industries, 2007 Tax Payments as Percent of GDP for Selected Arizona Industries, 2007 State Transaction Privilege Taxes Generated by Travel Spending, 2009 FY IV. County Travel Impacts 23 24 25 26 26 27-28 29 Travel-Generated Earnings Shares, 2011p Travel-Generated Employment and Earnings Shares by County, 2011p County Impact Summary Tables County Impact Detail Tables, 2000-2011p PAGE II 7 8 8 8 9 9 10 11 12 13 15 15 16 16 17 30-31 32 33-36 37-50 DEAN RUNYAN ASSOCIATES PREFACE The purpose of this study is to document the economic significance of the travel industry in Arizona from 1998 to 2011. 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 Melissa Elkins, Research Manager 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 III This page intentionally blank I. U.S. TRAVEL DEAN RUNYAN ASSOCIATES PAGE 1 The following two graphs are derived from the Bureau of Economic Analysis Travel and Tourism Satellite Accounts.1 Both graphs show direct tourism output for the United States – spending by domestic and international visitors. Annual Direct Travel Spending in U.S., 2000-11p Tourism Output (Billions) $900 $850 $800 Real $750 Current $700 $650 $600 $550 $500 00 01 02 03 04 05 06 07 08 09 10 11p Real Tourism Output (Billions) Direct Travel Spending in U.S. 2008-Q1 to 2011-Q4 Annualized Seasonally Adjusted in 2005 Dollars $740 $720 $700 $680 $660 $640 $620 $600 $580 08-2 08-4 09-2 09-4 10-2 10-4 11-2 Spending by domestic and international visitors was $807.5 billion in 2011(preliminary) in current dollars. This represents a 8.2 percent increase over 2010. When adjusted for changes in prices (constant dollars), spending increased by 3.5 percent – compared to a 2.9 percent increase from 2009 to 2010. In real terms, tourism output has still not recovered from the steep decline from 2007 to 2009. Real travel spending has increased in every quarter since the third quarter of 2009. The average quarterly rate of increase during this period has been 0.8 percent. The average quarterly rate of decrease from 2008-Q1 to 2009Q2 was 2.7 percent. 11-4 Year-Quarter 1 See www.bea.gov/industry/index.htm. Released March 21, 2012. Constant (2011) travel spending estimates derived from BEA constant (2005) dollar estimates by Dean Runyan Associates, Inc. Estimates for 2011 and the 4th quarter of 2011 are preliminary. DEAN RUNYAN ASSOCIATES PAGE 2 The following three graphs are concerned with international travel to the U.S. The first graph is derived from the Bureau of Economic Analysis Travel and Tourism Satellite Accounts and International Transactions.2 The following two graphs are derived from the monthly international arrival data released by the Office of Travel and Tourism Industries.3 International Direct Travel Spending in U.S. Amounts in Real Dollars (Billions) International Share of U.S. Internal Travel* $120 International Share Share Spend $115 $110 $105 $100 $95 $90 $85 $80 $75 15% 10% 5% 0% 01 03 05 07 09 International Spending (Billion) 20% In real dollars, spending by international visitors in the U.S. increased by 7.4 percent from 2010 to 2011 (preliminary). This follows a 6.0 percent increase from 2009 to 2010 and a 12 percent decrease in the prior year. The international share of U.S. travel spending in 2011 (14.4 percent) is equivalent to the level in 2000. 11p *Airfares for international flights on U.S. air carriers are not included. Overseas Arrivals (Millions) 30 Much of the increase in international visitor spending, particularly in 2011, is due to favorable exchange rates with respect to the U.S. dollar. Overseas arrivals to the U.S. increased by 5.8% in 2011 compared to a 11 percent increase the prior year. Overseas arrivals declined by 6.3 percent from 2008 to 2009. It should also be noted that the increased share of international spending in recent years is in part a function of sluggish growth domestic travel spending. Europe Asia Other 25 20 15 10 5 0 00 01 02 03 04 05 06 07 08 09 10 11 50 2009 2010 2011 40 30 20 10 0 Q1 Q2 Q3 Q4 2 See www.bea.gov/international/index.htm for quarterly international estimates of travel and tourism exports (travel to the U.S. by international visitors). The estimates for the 4 th quarter of 2011 are preliminary. 3 See http://tinet.ita.doc.gov/research/monthly/index.html DEAN RUNYAN ASSOCIATES PAGE 3 Travel industry employment has exhibited modest growth since the second quarter of 2010. The average quarterly growth (seasonally adjusted) has been 0.4 percent. This compares with an average quarterly decline of 1.6 percent from the first quarter of 2008 to the first quarter of 2010. The fact that travel industry employment has not recovered is a reflection of the trend in real travel spending (see previous graph). It is also a reflection of the fact that changes in employment typically lag changes in spending and business receipts – employers tend to lengthen the hours of existing employees and improve their balance sheets prior to hiring new workers following steep recessions. U.S. Travel Industry Employment, 2008-Q1 to 2011-Q4 Seasonally Adjusted at Annual Rates 6.2 Millions of Jobs 6.0 5.8 5.6 5.4 5.2 5.0 08-2 08-4 09-2 09-4 10-2 10-4 11-2 11-4 Source: Bureau of Economic Analysis Travel & Tourism Satellite Accounts. In this regard, the change in average weekly hours of employees in the leisure and hospitality sector is a positive sign. Average weekly hours have increased in every quarter beginning with the second quarter of 2010 with the exception of 2011-Q3. U.S. Leisure & Hospitality Sector Average Weekly Hours, 2008-Q1 to 2011-Q4 Average Weekly Hours 26.4 2008 26.2 2009 2010 2011 26.0 25.8 25.6 25.4 25.2 25.0 24.8 Q1 Q2 Q3 Q4 Source: Bureau of Labor Statistics Current Employment Survey. The Leisure and Hospitality sectors include all businesses in arts, entertainment and recreation (NAICS 71) and accommodation and food services (NAICS 72). DEAN RUNYAN ASSOCIATES PAGE 4 II. ARIZONA TRAVEL 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). SUMMARY OF ARIZONA TRAVEL  Total direct travel spending in Arizona was $18.3 billion in 2011. Travel spending increased by 5.4 percent in current dollars compared to 2010. Inflation-adjusted (real) travel spending was unchanged following a 3.2 percent increase the preceding year. Transportation costs were the primary source of price increases. Room rates also increased by 2.8 percent.1  Room demand in Arizona increased by 3.6 percent (Smith Travel Research) from 2010 to 2011, following an 8.1 percent increase the preceding year. Visitor air arrivals on domestic flights increased by 0.5 percent, the same rate of increase as from 2009 to 2010.  Local and state taxes increased by 7.7 percent from 2010 to 2011. Part of this increase was due to the one percent increase in tax rates for lodging, restaurants/bar, retail and amusement sales that took effect in June 2010.  Travel-generated employment increased by 1.7 percent – an addition of 2,700 jobs. This is the first increase in employment since 2006.  The Gross Domestic Product of the travel industry was $7.3 billion in 2011. The travel industry and the microelectronics industry have been the top two exportoriented industries in the state in recent years.  The re-spending of travel-related revenues by businesses and employees creates secondary impacts. In 2011, the secondary impacts were 136,000 jobs with $5.4 billion in earnings. 1 Smith Travel Research reports prepared for Arizona Office of Tourism. Room rates declined by 3.2 percent from 2009 to 2010. PAGE 6 DEAN RUNYAN ASSOCIATES TRAVEL TRENDS Total direct travel spending in Arizona was $18.3 billion in 2011. This represents a 5.4 percent increase over the preceding year in current dollars. This travel spending resulted in 2,700 additional jobs in the travel industry, an increase of 1.7 percent. This is the first increase in travel-generated employment since 2006. Local and state taxes increased by 7.7 percent from 2010 to 2011. Part of this increase reflects the one percent increase in tax rates for lodging, restaurants/bar, retail and amusement sales that took effect in June 2010.2 Although spending and employment increased from 2010 to 2011, the rates of increase for most indicators of travel activity were less than the preceding year (see next page). Part of this slower rate of growth may be attributable to the fact that last year’s recovery followed the very steep decline in 2009. In this respect, the more recent rate of growth in the travel industry may represent a more normal pace of growth given the sluggish performance of the broader economy. Arizona Travel Trends, 1998-2011p Spending 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011p Earnings Employment ($Billion) ($Billion) (Thousand) 11.7 13.0 14.2 13.3 13.3 14.5 15.7 17.3 18.4 18.8 18.3 16.3 17.3 18.3 3.2 3.5 3.8 3.7 3.6 4.0 4.3 4.6 5.0 5.1 5.1 4.8 4.8 5.1 149.1 158.4 163.7 153.4 148.4 158.6 164.3 170.7 174.4 172.7 170.6 157.6 155.0 157.7 Tax Revenue ($Million) Local/State Federal Total 964 811 1,775 1,070 900 1,970 1,162 954 2,116 1,094 858 1,952 1,116 874 1,990 1,230 935 2,164 1,310 1,031 2,342 1,421 1,112 2,532 1,491 1,198 2,689 1,533 1,235 2,768 1,499 1,208 2,707 1,383 1,130 2,513 1,434 1,169 2,603 1,545 1,144 2,689 Annual Percentage Change 10-11p 98-11p 5.4 3.5 5.4 3.7 1.7 0.4 7.7 3.7 -2.1 2.7 3.3 3.2 Note: Estimates for 2011p are preliminary. The percentage change for 1998-2011p refers to the average annual percentage change. These direct travel impacts do not include secondary (indirect and induced) impacts. One-way visitor airfares are included. Total earnings include wage and salary disbursements, other earned income and proprietor income. Employment includes full- and part-time payroll employees and self-employed. 2 The decrease in federal tax revenues attributable to travel spending is due to the temporary reduction in payroll taxes (for Social Security) that took effect in January 2011. DEAN RUNYAN ASSOCIATES PAGE 7 Arizona Direct Travel Spending In real dollars (adjusted for inflation) Arizona travel spending was unchanged from 2010. Transportation prices were up substantially. Room rates increased by 2.8 percent (Smith Travel Research). Real travel spending is still about 10 percent below its 2005-2007 level. Real and Current Dollars Travel Spending (Billions) $22 $20 Real $18 Current $16 $14 $12 $10 00 01 02 03 04 05 06 07 08 09 10 11 Air Passenger Visitor Arrivals to Arizona U.S. Air Carriers, 2000-2011 Sources: Smith Travel Research, Energy Information Administration, U.S. Department of Transportation Origin and Destination Survey, and Bureau of Labor Statistics CPI-West Urban. Visitor Air Arrivals (Millions) 8.5 8.0 Visitor air arrivals to Arizona increased by 0.5 percent from 2010 to 2011, the same rate of increase as the preceding year. 7.5 7.0 6.5 6.0 Sources: U.S. Department of Transportation Origin and Destination Survey and Dean Runyan Associates. 5.5 5.0 00 01 02 03 04 05 06 07 08 09 10 11 Arizona Room Demand 2008-Q1 to 2011-Q4 Room Demand (Millions) 7.0 2008 2009 2010 2011 6.5 Room demand increased by 4.0 percent from 2010 to 2011, compared to an 8.1 percent increase the preceding year. 6.0 5.5 5.0 Source: Smith Travel Research reports prepared for Arizona Tourism Commission. 4.5 4.0 Q1 PAGE 8 Q2 Q3 Q4 DEAN RUNYAN ASSOCIATES VISITOR ORIGIN Out-of-state travelers generate more than three-fourths of the visitor impacts in Arizona. Visitors from other states are the largest segment (almost 63 percent of spending), while international travel, including day travel from Mexico, comprises approximately 14 percent of visitor impacts. Arizona Travel Impacts by Origin of Visitor, 2011p Origin Spending Earnings Employment Tax Receipts ($ Million) ($ Billion) ($ Billion) (Thousand) Local/State Federal 3.8 10.7 2.5 17.0 1.3 18.3 0.8 3.1 0.6 4.5 0.6 5.1 30.3 98.7 21.0 149.9 7.8 157.7 322 983 228 1,533 12 1,545 166 659 98 923 221 1,144 Arizona Other U.S. International All Visitors Other Travel Total Travel Sources: Dean Runyan Associates, International Trade Administration and Bureau of Economic Analysis (U.S. Dept. of Commerce), TNS TravelsAmerica visitor survey, Statistics Canada, Vera Pavlakovich-Kochi and Alberta H. Charney, “Mexican Visitors to Arizona: Visitor Characteristics and Economic Impacts, 2007-08” (Karl Eller College of Business and Public Administration, University of Arizona) and Bureau of Transportation Statistics Border Crossing/Entry Data. Other travel includes travel agencies and resident air travel. International Visitor Spending in Arizona, 2000-2011p International Share Spending in Real (2011) Dollars 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Share 01 03 05 $2.9 $2.8 $2.7 $2.6 $2.5 $2.4 $2.3 $2.2 $2.1 $2.0 Spend 07 09 11p Sources: See above table for source of international estimates. See first graph on preceding page for constant dollar estimates. Constant dollar visitor spending does not include “Other Travel.” DEAN RUNYAN ASSOCIATES PAGE 9 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.3 The $161 million figure represents 3.9 percent of all non-residential construction in Arizona in 2011. This investment supported 2,400 construction jobs with earnings of $132 million. By contrast, in 2006 the value of new construction in the travel industry was 16.5 percent of all non-residential construction and generated 14,000 jobs. Value of New Construction in Travel-Related Buildings 2005-2011 $1,200 $964 $1,000 $734 Millions $800 $642 $600 $400 $282 $250 $161 $138 $200 $0 2005 2006 2007 2008 2009 2010 2011 Sources: McGraw-Hill Construction Dodge MarketLook. Travel-related estimates prepared by Dean Runyan Associates. 3 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 10 DEAN RUNYAN ASSOCIATES ARIZONA TRAVEL INDUSTRY GROSS DOMESTIC PRODUCT In concept, the Gross Domestic Product (GDP) of a particular industry is equal to gross output (sales or receipts) minus intermediate inputs (the goods and services purchased from other industries). GDP is always smaller than output or sales because GDP measures only the “value added” of an industry and does not include the cost of the inputs that are also necessary to produce a good or service. Alternatively, GDP can be thought of as the sum of earnings, indirect business taxes (primarily excise and property taxes) and other operating surplus (including profits). Estimates of travel spending and travel industry GDP are shown in the chart below. Arizona travel industry GDP amounted to $7.3 billion in 2011. Arizona travel industry GDP represented 2.8 percent of the total Arizona GDP in 2011. About 60 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.4 Arizona Travel Industry Gross Domestic Product, 2011p $20 $11.0 Inputs Billions $15 11.0 $10 $5 $0 $5.1 Earnings $2.1 Surplus & Taxes 5.1 5.1 2.1 2.1 Spending ($18.3) GDP ($7.3) Sources: Dean Runyan Associates, Bureau of Economic Analysis, and Minnesota Implan Group. Details may not add to totals due to rounding. 4 About 38 percent of the $11 billion of inputs and goods resold are purchased from other Arizona businesses. DEAN RUNYAN ASSOCIATES PAGE 11 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. 5 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. Sufficient data for 2011 is not yet available for the comparison industries. As noted, the figures for 2010 are estimated by Dean Runyan Associates. Arizona Gross Domestic Product, 2007-2010 Selected Export-Oriented Industries 2007 2008 2009 2010 Agric./Food Proc. Mining Micro-Electronics Aerospace Travel $0 $2 $4 $6 $8 $10 Gross Domestic Product (Billions) Sources: Dean Runyan Associates and Bureau of Economic Analysis. The travel industry and the microelectronics industry (NAICS 334) have been the leading two export-oriented industries in the state in recent years. 5 See also pages 52 of Appendix A and page 66 of Appendix C. PAGE 12 DEAN RUNYAN ASSOCIATES DIRECT, SECONDARY AND TOTAL 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 result 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, 2011p Employment (Thousands) Induced 99.5 Direct 157.7 Indirect 36.1 Earnings (Billions) Induced $3.9 Direct $5.1 Indirect $1.5 Note: Indirect and induced impacts estimated by Dean Runyan Associates with Minnesota IMPLAN model. Percentages may not add to 100% due to rounding. Total employment was 293,000. The employment multiplier for 2011 is 1.85 (293.0/157.7). Total earnings were $10.5 billion. The earnings multiplier is 2.05 (($10.5/$5.1). DEAN RUNYAN ASSOCIATES PAGE 13 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. To summarize the primary secondary impacts:  Professional Services (29,000 jobs and $1.6 billion earnings). Legal, medical, educational and other professional services are utilized by travel businesses (indirect effect) and by employees of these firms (induced effect).  Other Services (12,000 jobs and $367 million earnings). Employees of travelrelated 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 (22,000 jobs and $1.2 billion earnings). Employees of travel-related businesses pay fees to attend public educational institutions and to operate motor vehicles.  Finance, Insurance and Real Estate (10,000 jobs and $476 million earnings). Employees and businesses use the services of financial institutions, insurers and real estate businesses. PAGE 14 DEAN RUNYAN ASSOCIATES Direct and Secondary Employment Generated by Travel Spending in Arizona, 2011p Accomm. & Food Serv. Arts, Entertain., Rec. Retail Trade Prof. Services Transportation Government Other Services Finance, Ins., & Real… Construction Mining & Manufacturing Agric.& Food Processing Direct 0 Secondary 50 100 150 Direct and Secondary Employment (Thousands) Direct and Secondary Earnings Generated by Travel Spending in Arizona, 2011p Accomm. & Food Serv. Prof. Services Transportation Arts, Entertain., Rec. Government Retail Trade Construction Finance, Ins., & Real Estate Other Services Mining & Manufacturing Agric.& Food Processing Direct $0 Secondary $500 $1,000 $1,500 $2,000 $2,500 $3,000 Direct and Secondary Earnings (Millions) See notes at end of table on page 20. Detailed estimates are reported in the following table. It should be emphasized that the estimates of indirect and induced impacts reported here apply to the entire state of Arizona and do not necessarily reflect economic patterns for individual counties, regions or subregions within the state. While total economic impacts can be calculated on a county or regional level, such a detailed analysis is not included in this study. In general, geographic areas with lower levels of aggregate economic activity will have smaller secondary impacts within those same geographic boundaries. DEAN RUNYAN ASSOCIATES PAGE 15 Direct & Secondary Visitor-Generated Employment in Arizona, 2011p (thousand jobs) Industry Group Accomm. & Food Serv. Arts, Entertain., Rec. Retail Trade Prof. Services Transportation Government Other Services Finance, Ins., & Real Estate Construction Mining & Manufacturing Agric.& Food Processing All Industries Direct 84 39 18 0 17 0 0 0 0 0 0 158 Secondary Indirect Induced 4 8 5 2 3 17 7 22 5 4 1 21 5 7 4 6 1 9 1 2 1 1 36 99 Total 12 7 20 29 8 22 12 10 10 4 2 136 Grand Total 96 46 37 29 26 22 12 10 10 4 2 293 Direct & Secondary Visitor-Generated Earnings in Arizona, 2011p ($ Million) Industry Group Accomm. & Food Serv. Prof. Services Transportation Arts, Entertain., Rec. Government Retail Trade Construction Finance, Ins., & Real Estate Other Services Mining & Manufacturing Agric.& Food Processing All Industries Direct 2,217 0 1,370 991 0 536 0 0 0 0 0 5,114 Secondary Indirect Induced 69 156 493 1,180 117 35 186 53 80 1,119 12 133 46 533 166 309 176 190 103 169 30 34 1,479 3,910 Total 225 1,673 151 239 1,199 145 579 476 367 272 64 5,389 Grand Total 2,442 1,673 1,521 1,230 1,199 681 579 476 367 272 64 10,503 Source: Dean Runyan Associates and Minnesota Implan Group. Note: These industry groups are not equivalent to the categories used in the direct impact tables used in this report. See Appendix D. Details may not add to totals due to rounding. Detailed direct travel impacts for 2002 through 2011p are shown on the following page. PAGE 16 DEAN RUNYAN ASSOCIATES Arizona Direct Travel Impacts, 2002-2011p 2002 2004 2006 2008 2009 2010 2011p Total Direct Travel Spending ($Billion) Destination Spending 12.4 14.7 17.2 17.0 15.2 Other Travel* 0.9 1.0 1.3 1.3 1.1 Total Direct Spending 13.3 15.7 18.4 18.3 16.3 Visitor Spending by Type of Traveler Accommodation ($Billion) Hotel, Motel 5.2 6.0 7.3 7.0 6.2 Campground 0.6 0.7 0.7 0.7 0.6 Private Home 3.2 4.3 5.0 5.0 4.4 Vacation Home 0.4 0.5 0.6 0.6 0.6 Day Travel 2.9 3.3 3.6 3.6 3.3 Destination Spending 12.4 14.7 17.2 17.0 15.2 Visitor Spending by Commodity Purchased ($Billion) Accommodations 1.9 2.2 2.7 2.6 2.2 Food Service 2.7 3.3 3.8 3.7 3.6 Food Stores 0.8 0.8 0.8 0.9 0.9 Local Tran. & Gas 1.5 2.2 2.9 3.2 2.2 Arts, Ent. & Rec. 2.0 2.4 2.6 2.5 2.3 Retail Sales 2.6 2.8 2.9 2.8 2.7 Visitor Air Tran. 0.9 1.1 1.4 1.4 1.2 Destination Spending 12.4 14.7 17.2 17.0 15.2 Industry Earnings Generated by Travel Spending ($Billion) Accom. & Food Serv. 1.5 1.8 2.1 2.2 2.1 Arts, Ent. & Rec. 0.8 0.9 1.1 1.1 1.0 Retail** 0.5 0.6 0.6 0.6 0.5 Ground Tran. 0.1 0.1 0.1 0.1 0.1 Visitor Air Tran. 0.4 0.5 0.6 0.6 0.6 Other Travel* 0.4 0.5 0.6 0.5 0.5 Total Direct Earnings 3.6 4.3 5.0 5.1 4.8 Industry Employment Generated by Travel Spending (Thousand Jobs) Accom. & Food Serv. 75.7 82.7 88.2 87.3 83.0 Arts, Ent. & Rec. 35.7 43.2 45.5 43.1 39.4 Retail** 19.3 20.2 21.7 21.6 18.2 Ground Tran. 2.0 2.1 2.1 2.2 1.9 Visitor Air Tran. 7.2 7.7 8.2 7.8 7.4 Other Travel* 8.4 8.4 8.8 8.6 7.8 Total Direct Employment 148.4 164.3 174.4 170.6 157.6 Government Revenue Generated by Travel Spending ($Million)*** Local and State 1,116 1,310 1,491 1,499 1,383 Federal Tax Receipts 874 1,031 1,198 1,208 1,130 Total Direct Gov't Revenue 1,990 2,342 2,689 2,707 2,513 16.1 1.2 17.3 17.0 1.3 18.3 6.8 0.6 4.6 0.6 3.4 16.1 7.2 0.7 4.9 0.7 3.5 17.0 2.3 3.9 0.8 2.6 2.3 2.7 1.4 16.1 2.4 4.0 0.9 3.1 2.4 2.8 1.4 17.0 2.1 1.0 0.5 0.1 0.6 0.6 4.8 2.2 1.0 0.5 0.1 0.7 0.6 5.1 81.6 84.2 39.2 38.9 17.7 17.6 1.9 2.0 7.0 7.3 7.6 7.8 155.0 157.7 1,434 1,545 1,169 1,144 2,603 2,689 Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel agencies. **Retail includes gasoline. ***Local and State tax revenues include property taxes and taxes attributable to travel industry employees. These tax receipts are not included in the county breakouts. DEAN RUNYAN ASSOCIATES PAGE 17 This page intentionally blank III. STATE AND LOCAL GOVERNMENT REVENUE This section of the report provides an analysis of the state and local government revenue supported by the travel industry. Most major sources of government revenue, including sales, property and income taxes are included. The pie chart below, adapted from the Bureau of the Census’ State and Local Government Finance and other data sources, shows the main categories of tax revenue in Arizona. About one-half of all state and local tax revenue in Arizona is derived from sales or gross receipts taxes.1 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.2 All income taxes (80 percent paid by individuals) are collected by the state. Arizona State and Local Government Tax Revenues Property $7.4 35.0% 2010-11 Fiscal Year (Billion) License & Other $0.8 3.6% Sales & Gross Receipts $10.1 47.9% Income $2.8 13.4% Sources: The 2010-11 fiscal year estimates of state and local tax revenues in Arizona were prepared by Dean Runyan Associates from various sources, including the Bureau of the Census (State and Local Government Finance), the Arizona Department of Revenue, the Bureau of Economic Analysis and a selection of annual financial reports for cities and counties. The state transaction privilege tax is designated as a general sales tax. Over 90 percent of all property taxes are local. About 80 percent of all income tax receipts are personal (vs. corporate). Selective sales taxes include taxes on lodging, motor fuel, alcohol, tobacco and public utilities. Other taxes include license taxes. State tax receipts comprise 60 percent of all state and local tax receipts. The primary sources of travel industry tax revenue are:  Sales tax receipts generated by visitor spending. This includes local and state sales taxes, lodging taxes, and motor fuel taxes. Other selective sales 1 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). 2 DEAN RUNYAN ASSOCIATES PAGE 19 taxes (e.g., cigarettes, liquor) were not estimated separately from the general sales tax.  Taxes paid by travel industry employees attributable to travel generated earnings (sales, property and income taxes). The estimates for these taxes were based primarily on the share of travel industry earnings in relation to total personal income in the state.  Taxes paid by travel industry businesses attributable to travel generated business receipts (property and income taxes). The estimates for these taxes were based primarily on the share of travel industry earnings in relation to total earnings in the state. Other business taxes, such as licenses and payroll taxes, were not included. The distribution of taxes generated by the travel industry for the 2008-09 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 2010-11 Fiscal Year (Million) Income $90 6.1% Employee Sales $184 12.6% Property $163 11.1% Other $17 1.2% Trav-Gen. Sales $1,006 68.9% Source: Dean Runyan Associates. “Other” travel-generated tax revenue includes gaming taxes. Whereas slightly less than one-half of all state and local tax revenue in Arizona was attributable to sales tax collections in the 2010-11 fiscal year, 82 percent of all travel industry tax revenue was attributable to sales tax receipts from visitors (69 percent) and the purchases of employees in the travel industry (13 percent). More than twothirds of all tax revenues supported by the travel industry was directly related to visitor spending. Travel industry state and local tax revenues are compared to total Arizona state and local tax revenues in the following table. Because of the travel industry generates a relatively high proportion of sales tax revenues, it is associated with proportionately PAGE 20 DEAN RUNYAN ASSOCIATES more tax revenues than would be expected given the size of the industry, as measured by earnings or gross domestic product. Whereas the earnings and GDP of the travel industry are in the range of 3 percent of the state totals, travel industry tax revenues represent almost 7 percent of all state and local tax revenues in Arizona. Arizona State and Local Tax Revenues 2010-11 Fiscal Year ($Million) Sales & Gross Receipts Income Property License & Other Total Tax Receipts Total 10,110 2,830 7,390 770 21,100 Travel Generated 1,190 90 160 20 1,460 Percent Travel 11.8% 3.2% 2.2% 2.2% 6.9% Source: Dean Runyan Associates and Bureau of the Census, State and Local Government Finance. The tax revenue benefits of the travel industry are also borne out in comparison with other industries. This is illustrated in the table and figure below. The concept of Gross Domestic Product was discussed earlier (page 11; see also appendix pages 49-50). 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 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 21 GDP and Tax Payments of Selected Arizona Industries Construction Health Care Manufacturing Retail Travel All Industries 2010 Calendar Year ($Million) Indirect Employee Inc. Sum of Bus. & GDP Bus. Taxes & Prop. Taxes Employee Taxes 11,739 283 230 513 19,670 512 340 852 20,131 657 319 976 18,692 3,307 465 3,772 6,887 1,196 128 1,324 249,824 15,686 5,853 21,539 Tax Payments as Percent of GDP for Selected Arizona Industries 2010 Calendar Year Construction IBT Health Care EPIT Manufacturing Retail Travel All Industries 0% 5% 10% 15% 20% 25% Percent of Gross Domestic Product Table and graph sources: Bureau and Economic Analysis and Dean Runyan Associates. Travel industry and employee income and property tax payments estimated by Dean Runyan Associates. Other GDP and Indirect Business Taxes estimated by Bureau of Economic Analysis. *Travel Industry Business & Employee tax payments of $1,196 million are lower than the estimate on page 21 because business income taxes are not included and because employee sales tax payments are included in the indirect business taxes of other industries (especially retail trade). This is consistent with GDP accounting. PAGE 22 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, 2011 FY Maricopa & Pima All Other Counties 0% 5% 10% 15% 20% 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 23 State Transaction Privilege Taxes Generated by Direct Travel Spending, 2011 FY Apache Cochise Coconino Gila Graham/Greenlee La Paz Maricopa Mohave Navajo Pima Pinal Santa Cruz Yavapai Yuma 0% 10% 20% 30% 40% Percent Travel-Generated Source: Dean Runyan Associates and Arizona Department of Revenue. These estimates represent the total state transaction privilege tax receipts generated by travel spending. Counties and municipalities generally are allocated a portion of these receipts based on resident population. Other county and municipal excise taxes are also imposed on visitors. To summarize this analysis of travel-generated state and local government revenue:  The travel industry accounted for almost seven percent of all state and local tax revenues in Arizona in the 2010-11 fiscal year – more than twice the industry proportion of statewide earnings and gross domestic product.  Most of the travel industry tax receipts are a result of visitor spending rather than taxes on Arizona residents.  The proportion of tax receipts generated by the Arizona travel industry in relation to industry GDP is twice as great as the statewide industry average.  The tax revenues generated by the travel industry are relatively more important for the non-urban areas of the state as compared to the urbanized areas of greater Phoenix and Tucson. PAGE 24 DEAN RUNYAN ASSOCIATES IV: COUNTY TRAVEL IMPACTS 1998-2011P DEAN RUNYAN ASSOCIATES PAGE 25 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 employment – seven out of ten travel-generated jobs are in the two most populous counties in the state. Distribution of Travel-Generated Employment, 2011p Percent of State Direct Travel-Generated Employment Maricopa & Pima All other 0% 20% 40% 60% 80% Source: Dean Runyan Associates, U.S. Bureau of Labor Statistics, and U.S. Bureau of Economic Analysis. Total and travel-generated employments estimates by Dean Runyan Associates. Maricopa and Pima counties have 68 percent of all travel-generated employment. The other Arizona counties have 32 percent of all travel-generated employment. PAGE 26 DEAN RUNYAN ASSOCIATES However, as a group the less urbanized counties in the state actually have a higher proportion of travel-generated employment in relation to the total employment of the county. This is shown graphically below. Four percent of all employment in Maricopa and Pima counties are travel-generated. By contrast, the proportion is more than double in all other Arizona counties. Percent of Total Area Employment that is Travel-Generated, 2011p Maricopa & Pima All other 0% 2% 4% 6% 8% 10% 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. Travelgenerate employment in Maricopa and Pima counties constitutes 4.0 percent of all employment in those counties. The comparable figure for other Arizona counties is 8.9 percent. In general, the employment and earnings estimates provided in the preceding figures are probably the best measure at the county level of the relative importance of travel and tourism for local economies. The following table provides estimates for individual counties. Total employment includes all full-time and part-time wage and salary employment and self-employment. Because total employment includes all jobs, regardless of the hours worked, the average annual earnings of the job or the number of individuals employed, this indicator is in some respects less useful than earnings estimates. Nonetheless, the distribution of counties is similar for earnings and employment. DEAN RUNYAN ASSOCIATES PAGE 27 Travel-Generated Employment and Earnings as Percent of Total, 2011p Employment Total Travel Apache 31,860 1,700 Cochise 57,040 3,990 Coconino 82,290 11,060 Gila 21,720 2,600 Graham/Greenlee 15,860 850 La Paz 7,350 1,240 Maricopa 2,199,000 85,430 Mohave 62,750 4,620 Navajo 38,860 3,140 Pima 483,460 21,820 Pinal 73,900 5,070 Santa Cruz 17,940 1,600 Yavapai 79,330 8,240 Yuma 80,530 6,330 Arizona 3,251,880 157,700 Earnings (Million) Percent Travel 5.3% 7.0% 13.4% 12.0% 5.4% 16.9% 3.9% 7.4% 8.1% 4.5% 6.9% 8.9% 10.4% 7.9% 4.8% Total $1,279 $2,846 $3,333 $881 $759 $288 $113,772 $2,426 $1,505 $21,655 $3,208 $785 $2,731 $3,702 $159,173 Travel $31 $77 $284 $54 $11 $30 $3,429 $99 $71 $537 $120 $39 $184 $151 $5,114 Percent Travel 2.4% 2.7% 8.5% 6.1% 1.4% 10.3% 3.0% 4.1% 4.7% 2.5% 3.7% 5.0% 6.7% 4.1% 3.2% Source: Dean Runyan Associates, U.S. Bureau of Labor Statistics, and U.S. Bureau of Economic Analysis. Total and travel-generated employment estimates by Dean Runyan Associates. Note: Details may not add to totals due to rounding. Percentages calculated on unrounded numbers. Detailed direct travel impact estimates for 1998 through 2011p can be found on the following pages. As noted in the appendix to this report (page 52), county level estimates are necessarily less reliable than the statewide estimates. Furthermore, estimates for the smallest counties are less reliable than those for larger counties due to survey sample sizes and other data limitations. For this reason, small changes in year-to-year estimates are less important than longer-term trends. PAGE 28 DEAN RUNYAN ASSOCIATES 2011p Arizona County Travel Impacts Travel Spending Total Visitor Earnings Related Travel-Generated Impacts Employment Local Taxes State Taxes Total Taxes ($Million) ($Million) ($Million) (jobs) ($Million) ($Million) ($Million) 138 330 1,011 227 47 211 11,161 462 287 2,398 507 211 677 616 18,285 138 329 1,004 227 47 211 10,081 461 287 2,195 507 211 677 603 16,978 31 77 284 54 11 30 3,429 99 71 537 120 39 184 151 5,114 1,700 3,990 11,060 2,600 850 1,240 85,430 4,620 3,140 21,820 5,070 1,600 8,240 6,330 157,700 2.9 11.4 31.4 2.8 1.2 2.0 343.0 9.8 6.2 48.5 10.2 4.4 15.9 15.2 505.0 5.4 13.2 42.8 6.4 2.1 8.1 404.8 19.5 11.2 87.2 20.0 7.7 24.9 24.4 677.5 8.3 24.6 74.2 9.2 3.3 10.2 747.8 29.3 17.4 135.7 30.2 12.0 40.8 39.6 1,182.5 Apache Cochise Coconino Gila Graham/Greenlee La Paz Maricopa Mohave Navajo Pima Pinal Santa Cruz Yavapai Yuma Arizona Property taxes and sales taxes paid by travel industry employees not included. Details may not add to totals due to rounding. DEAN RUNYAN ASSOCIATES PAGE 29 Arizona County Total Travel Spending, 1998-2011p ($ Millions) Annual Percent Chg. 1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011p Apache 80 109 101 100 107 113 129 138 143 148 125 130 138 Cochise 207 258 253 271 279 302 320 328 352 351 331 336 330 Coconino 679 745 696 695 743 792 849 878 927 965 905 956 1,011 Gila 179 206 204 204 213 221 233 242 247 237 217 221 227 Graham/Greenlee 23 31 28 28 30 32 36 45 48 48 36 42 47 La Paz 126 162 160 158 175 186 208 210 216 216 179 189 211 Maricopa 7,032 8,467 7,922 7,685 8,656 9,440 10,520 11,280 11,500 11,126 9,719 10,537 11,161 Mohave 247 320 310 314 361 388 426 474 460 447 396 431 462 Navajo 179 240 220 221 229 238 260 283 290 306 256 267 287 Pima 1,778 2,115 1,970 2,014 2,114 2,276 2,488 2,605 2,566 2,434 2,234 2,310 2,398 Pinal 206 263 257 257 291 323 365 408 450 461 426 471 507 Santa Cruz 206 237 237 298 262 272 274 254 255 257 270 235 211 Yavapai 426 558 543 540 581 591 642 685 718 703 624 642 677 Yuma 375 449 437 489 505 540 577 601 605 619 598 580 616 Arizona 11,745 14,160 13,340 13,272 14,548 15,715 17,328 18,430 18,775 18,320 16,314 17,348 18,285 10-11p 6.2 -1.6 5.8 2.6 11.0 11.5 5.9 7.1 7.4 3.8 7.7 -10.0 5.5 6.2 5.4 98-11p 4.3 3.7 3.1 1.9 5.5 4.1 3.6 4.9 3.7 2.3 7.2 0.2 3.6 3.9 3.5 Note: Details may not add to totals due to rounding. Percentages calculated on unrounded numbers. PAGE 30 DEAN RUNYAN ASSOCIATES Arizona County Travel-Generated Earnings, 1998-2011p ($ Millions) Annual Percent Chg. Apache Cochise Coconino Gila Graham/Greenlee La Paz Maricopa Mohave Navajo Pima Pinal Santa Cruz Yavapai Yuma Arizona 1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 19 25 23 24 24 25 27 29 30 33 32 46 57 57 60 62 68 71 74 82 85 82 189 205 194 194 209 224 232 244 265 287 270 43 50 49 49 51 53 56 60 62 60 56 6 8 7 7 8 8 9 11 12 13 10 22 26 27 27 29 30 32 32 32 33 30 2,108 2,519 2,400 2,344 2,595 2,831 3,036 3,315 3,422 3,332 3,166 60 75 74 77 88 91 97 110 106 104 100 44 58 53 54 55 55 59 65 67 74 67 393 474 476 448 472 507 549 574 576 551 520 50 62 61 62 70 78 86 99 111 118 113 37 42 42 52 46 49 49 47 48 49 48 110 147 143 144 154 156 168 183 196 199 176 82 98 95 106 115 124 127 137 139 145 143 3,208 3,847 3,701 3,649 3,977 4,298 4,598 4,979 5,150 5,083 4,812 2010 2011p 31 31 81 77 269 284 53 54 10 11 29 30 3,219 3,429 97 99 68 71 518 537 114 120 45 39 175 184 141 151 4,850 5,114 10-11p -1.6 -4.3 5.4 1.6 8.0 2.9 6.5 2.2 3.2 3.6 4.7 -12.2 4.8 7.1 5.4 98-11p 3.7 4.1 3.2 1.8 4.3 2.4 3.8 3.9 3.8 2.4 7.0 0.4 4.0 4.8 3.7 Note: Details may not add to totals due to rounding. Percentages calculated on unrounded numbers. DEAN RUNYAN ASSOCIATES PAGE 31 Arizona County Travel-Generated Employment, 1998-2011p Annual Percent Chg. 1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011p Apache 1,430 1,650 1,700 1,490 1,580 1,700 1,780 1,710 1,710 1,800 1,740 1,720 1,700 Cochise 3,490 4,000 3,830 3,890 3,950 4,080 4,200 4,280 4,530 4,530 4,290 4,230 3,990 Coconino 11,260 11,280 10,450 10,180 10,660 10,910 11,170 10,920 11,100 11,710 11,010 10,790 11,060 Gila 2,690 2,850 2,950 2,910 2,970 2,830 2,860 2,880 2,800 2,700 2,560 2,490 2,600 Graham/Greenlee 480 560 640 670 800 800 880 1,140 1,190 1,180 940 870 850 La Paz 1,370 1,480 1,430 1,400 1,450 1,430 1,520 1,400 1,400 1,380 1,250 1,200 1,240 Maricopa 84,040 90,620 81,120 77,410 84,180 88,190 92,350 94,280 94,490 93,490 85,250 84,090 85,430 Mohave 3,830 4,550 4,410 4,450 4,850 4,980 5,190 5,870 5,180 4,930 4,700 4,660 4,620 Navajo 3,140 3,770 3,380 3,220 3,210 3,100 3,170 3,350 3,290 3,540 3,080 3,120 3,140 Pima 21,320 24,510 23,710 22,590 23,770 25,200 25,980 26,240 24,940 23,080 22,180 21,740 21,820 Pinal 2,790 3,180 3,680 3,560 4,030 4,130 4,490 4,870 4,720 4,940 4,480 4,560 5,070 Santa Cruz 2,050 2,140 2,100 2,490 2,260 2,280 2,250 2,130 2,050 2,020 1,970 1,800 1,600 Yavapai 6,700 8,100 8,630 8,540 9,000 8,660 8,750 8,990 9,120 9,240 8,190 7,830 8,240 Yuma 4,510 4,980 5,420 5,630 5,840 5,990 6,100 6,390 6,170 6,090 6,000 5,920 6,330 Arizona 149,100 163,660 153,440 148,430 158,560 164,270 170,690 174,450 172,690 170,630 157,630 155,020 157,700 Note: Details may not add to totals due to rounding. Percentages calculated on unrounded numbers. PAGE 32 10-11p -0.8 -1.4 -2.0 -2.5 -7.1 -4.2 -1.4 -0.9 1.1 -2.0 1.9 -8.6 -4.4 -1.4 -1.7 98-11p 1.4 1.5 -0.3 -0.6 5.6 -1.0 0.0 1.5 -0.1 0.1 3.9 -1.0 1.2 2.1 0.3 DEAN RUNYAN ASSOCIATES Apache County Travel Impacts, 2002-2011p 2002 2004 2006 Total Direct Travel Spending ($Million) Destination Spending 100.2 113.3 138.1 Other Travel* 0.0 0.0 0.0 Total Direct Spending 100.2 113.3 138.1 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 52.9 52.3 67.7 Campground 10.6 14.0 16.4 Private Home 19.8 27.4 31.1 Vacation Home 13.6 15.6 17.7 Day Travel 3.2 4.1 5.1 Destination Spending 100.2 113.3 138.1 Visitor Spending by Commodity Purchased ($Million) Accommodations 18.5 17.3 21.0 Food Service 19.9 20.9 24.8 Food Stores 8.1 8.4 8.8 Local Tran. & Gas 22.8 34.9 48.7 Arts, Ent. & Rec. 14.3 15.4 16.9 Retail Sales 16.5 16.4 17.9 Visitor Air Tran. 0.0 0.0 0.0 Destination Spending 100.2 113.3 138.1 Industry Earnings Generated by Travel Spending ($Million) Accom. & Food Serv. 13.1 13.0 15.3 Arts, Ent. & Rec. 5.9 6.4 7.3 Retail** 4.6 5.1 6.3 Ground Tran. 0.2 0.2 0.3 Visitor Air Tran. 0.0 0.0 0.0 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 23.9 24.8 29.2 Industry Employment Generated by Travel Spending (Jobs) Accom. & Food Serv. 910 820 910 Arts, Ent. & Rec. 290 550 460 Retail** 290 320 330 Ground Tran. 10 10 10 Visitor Air Tran. 0 0 0 Other Travel* 0 0 0 Total Direct Employment 1,490 1,700 1,710 Government Revenue Generated by Travel Spending ($Million) Local Tax Receipts 2.6 2.6 3.0 State Tax Receipts 4.3 4.9 5.4 Total Direct Gov't Revenue 6.9 7.5 8.4 2008 2009 2010 2011p 148.4 0.0 148.4 124.8 0.0 124.8 130.3 0.0 130.3 138.5 0.0 138.5 76.7 16.7 30.1 19.3 5.4 148.4 64.2 13.3 26.1 17.0 4.3 124.8 64.1 14.0 28.6 18.8 4.8 130.3 64.6 15.5 31.7 21.3 5.4 138.5 24.1 26.4 9.6 53.8 16.9 17.6 0.0 148.4 21.5 25.4 9.5 35.4 16.1 16.9 0.0 124.8 20.1 24.8 9.2 44.1 15.4 16.6 0.0 130.3 19.1 24.4 9.6 53.9 15.1 16.4 0.0 138.5 18.3 7.7 6.7 0.3 0.0 0.0 32.9 18.9 7.3 5.1 0.3 0.0 0.0 31.6 18.9 6.9 4.9 0.3 0.0 0.0 31.0 18.7 6.6 4.9 0.3 0.0 0.0 30.5 930 530 330 10 0 0 1,800 980 520 230 10 0 0 1,740 980 510 230 10 0 0 1,720 970 490 230 10 0 0 1,700 3.3 5.4 8.7 3.0 5.1 8.1 2.9 5.2 8.1 2.9 5.4 8.3 Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel agencies. **Retail includes gasoline. DEAN RUNYAN ASSOCIATES PAGE 33 Cochise County Travel Impacts, 2002-2011p 2002 2004 2006 Total Direct Travel Spending ($Million) Destination Spending 270.1 301.6 326.8 Other Travel* 0.8 0.8 0.8 Total Direct Spending 270.9 302.4 327.7 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 54.1 69.4 86.2 Campground 41.6 47.5 52.3 Private Home 45.5 60.3 65.9 Vacation Home 5.8 6.3 6.8 Day Travel 123.0 118.2 115.7 Destination Spending 270.1 301.6 326.8 Visitor Spending by Commodity Purchased ($Million) Accommodations 27.8 33.6 40.4 Food Service 58.6 67.6 74.0 Food Stores 69.4 63.3 57.8 Local Tran. & Gas 23.7 36.2 50.5 Arts, Ent. & Rec. 31.2 38.7 41.3 Retail Sales 59.3 62.1 62.8 Visitor Air Tran. 0.0 0.0 0.0 Destination Spending 270.1 301.6 326.8 Industry Earnings Generated by Travel Spending ($Million) Accom. & Food Serv. 26.9 31.6 35.4 Arts, Ent. & Rec. 13.8 17.1 19.1 Retail** 18.6 18.6 19.0 Ground Tran. 0.2 0.2 0.3 Visitor Air Tran. 0.0 0.0 0.0 Other Travel* 0.6 0.6 0.6 Total Direct Earnings 60.1 68.1 74.3 Industry Employment Generated by Travel Spending (Jobs) Accom. & Food Serv. 1,900 2,040 2,140 Arts, Ent. & Rec. 1,100 1,200 1,260 Retail** 860 820 860 Ground Tran. 10 10 10 Visitor Air Tran. 0 0 0 Other Travel* 20 20 20 Total Direct Employment 3,890 4,080 4,280 Government Revenue Generated by Travel Spending ($Million) Local Tax Receipts 9.0 10.0 10.7 State Tax Receipts 9.9 11.2 12.0 Total Direct Gov't Revenue 18.9 21.1 22.7 2008 2009 2010 2011p 350.0 1.0 351.0 329.9 1.2 331.1 334.4 1.3 335.7 329.0 1.4 330.4 110.0 52.0 63.1 7.3 117.6 350.0 97.6 46.3 58.8 7.0 120.2 329.9 113.3 44.9 61.2 7.3 107.7 334.4 107.4 44.8 64.8 7.8 104.1 329.0 50.8 80.0 59.2 55.8 41.9 62.4 0.0 350.0 46.0 80.1 64.7 36.8 39.9 62.6 0.0 329.9 50.8 81.9 53.9 45.8 40.6 61.3 0.0 334.4 46.5 79.2 50.1 56.0 39.0 58.2 0.0 329.0 43.7 20.3 19.5 0.3 0.0 0.7 84.6 43.2 19.3 18.1 0.3 0.0 0.9 81.7 43.3 19.3 16.7 0.3 0.0 1.0 80.6 41.9 18.1 15.7 0.3 0.0 1.1 77.1 2,280 1,410 810 10 0 20 4,530 2,210 1,330 730 10 0 20 4,290 2,190 1,340 670 10 0 20 4,230 2,050 1,290 630 10 0 20 3,990 11.7 12.5 24.3 11.5 12.1 23.6 11.9 12.8 24.7 11.4 13.2 24.6 Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel agencies. **Retail includes gasoline. PAGE 34 DEAN RUNYAN ASSOCIATES Coconino County Travel Impacts, 2002-2011p 2002 2004 2006 Total Direct Travel Spending ($Million) Destination Spending 693.7 786.8 874.6 Other Travel* 1.0 5.4 3.6 Total Direct Spending 694.7 792.2 878.2 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 479.6 538.2 601.2 Campground 45.7 50.2 53.4 Private Home 51.0 64.7 73.1 Vacation Home 27.3 29.4 31.6 Day Travel 90.1 104.3 115.4 Destination Spending 693.7 786.8 874.6 Visitor Spending by Commodity Purchased ($Million) Accommodations 180.9 203.0 234.6 Food Service 181.7 208.1 226.1 Food Stores 39.9 42.5 43.5 Local Tran. & Gas 40.7 61.7 85.6 Arts, Ent. & Rec. 109.4 126.2 130.3 Retail Sales 134.7 141.6 145.6 Visitor Air Tran. 6.4 3.8 9.0 Destination Spending 693.7 786.8 874.6 Industry Earnings Generated by Travel Spending ($Million) Accom. & Food Serv. 119.5 135.5 147.4 Arts, Ent. & Rec. 44.7 51.5 55.6 Retail** 24.7 26.8 29.3 Ground Tran. 0.5 0.6 0.7 Visitor Air Tran. 3.7 4.1 7.6 Other Travel* 0.6 5.7 3.0 Total Direct Earnings 193.8 224.3 243.5 Industry Employment Generated by Travel Spending (Jobs) Accom. & Food Serv. 6,600 6,860 6,610 Arts, Ent. & Rec. 2,360 2,720 2,920 Retail** 1,090 1,110 1,160 Ground Tran. 20 20 20 Visitor Air Tran. 80 80 150 Other Travel* 20 120 60 Total Direct Employment 10,180 10,910 10,920 Government Revenue Generated by Travel Spending ($Million) Local Tax Receipts 19.9 22.8 25.4 State Tax Receipts 27.5 31.0 33.7 Total Direct Gov't Revenue 47.4 53.8 59.1 2008 2009 2010 2011p 957.0 8.0 965.0 897.2 8.0 905.2 948.9 6.8 955.7 1,004.3 7.0 1,011.4 679.8 52.2 68.5 34.0 122.5 957.0 641.5 47.8 63.7 33.0 111.1 897.2 685.7 45.0 65.9 33.8 118.6 948.9 723.5 50.0 68.5 35.7 126.6 1,004.3 270.4 251.5 48.0 94.4 135.3 151.1 6.3 957.0 252.4 248.4 47.3 62.6 129.9 146.4 10.2 897.2 267.7 261.5 46.5 77.7 132.3 152.0 11.3 948.9 285.3 271.6 49.7 94.5 135.3 156.3 11.5 1,004.3 181.5 60.7 31.2 0.7 5.8 7.3 287.2 170.7 58.2 27.0 0.7 7.5 5.9 270.0 169.2 58.1 27.6 0.7 8.6 5.2 269.4 181.0 58.1 28.8 0.8 9.5 5.8 284.0 7,270 6,920 6,840 2,920 2,740 2,630 1,210 1,060 1,050 20 20 20 120 150 160 160 120 100 11,710 11,010 10,790 7,330 2,350 1,090 20 160 100 11,060 28.2 36.7 64.9 27.0 35.0 62.0 28.9 38.1 67.0 31.4 42.8 74.2 Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel agencies. **Retail includes gasoline. DEAN RUNYAN ASSOCIATES PAGE 35 Gila County Travel Impacts, 2002-2011p 2002 2004 2006 Total Direct Travel Spending ($Million) Destination Spending 203.9 220.7 241.4 Other Travel* 0.2 0.1 0.1 Total Direct Spending 204.1 220.8 241.6 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 32.3 35.0 46.3 Campground 12.5 13.6 14.3 Private Home 14.6 18.8 20.1 Vacation Home 11.8 12.4 13.1 Day Travel 132.7 140.9 147.6 Destination Spending 203.9 220.7 241.4 Visitor Spending by Commodity Purchased ($Million) Accommodations 13.5 14.6 19.1 Food Service 36.8 40.6 45.7 Food Stores 12.0 12.5 13.0 Local Tran. & Gas 8.3 12.7 17.7 Arts, Ent. & Rec. 90.5 97.6 101.5 Retail Sales 42.7 42.8 44.5 Visitor Air Tran. 0.0 0.0 0.0 Destination Spending 203.9 220.7 241.4 Industry Earnings Generated by Travel Spending ($Million) Accom. & Food Serv. 18.1 19.8 23.0 Arts, Ent. & Rec. 23.0 25.0 27.6 Retail** 7.9 8.2 8.9 Ground Tran. 0.1 0.1 0.1 Visitor Air Tran. 0.0 0.0 0.0 Other Travel* 0.2 0.1 0.1 Total Direct Earnings 49.3 53.2 59.7 Industry Employment Generated by Travel Spending (Jobs) Accom. & Food Serv. 1,280 1,250 1,300 Arts, Ent. & Rec. 1,240 1,200 1,190 Retail** 380 370 370 Ground Tran. 0 0 0 Visitor Air Tran. 0 0 0 Other Travel* 10 10 10 Total Direct Employment 2,910 2,830 2,880 Government Revenue Generated by Travel Spending ($Million) Local Tax Receipts 2.1 2.4 3.2 State Tax Receipts 3.0 5.3 7.0 Total Direct Gov't Revenue 5.1 7.7 10.2 2008 2009 2010 2011p 236.4 0.2 236.6 217.0 0.2 217.2 221.0 0.2 221.3 226.7 0.2 226.9 37.6 14.1 19.1 14.0 151.6 236.4 34.5 13.2 18.0 13.6 137.7 217.0 37.1 12.2 18.3 13.8 139.7 221.0 37.2 12.4 19.0 14.5 143.7 226.7 15.8 44.9 13.8 19.5 100.3 42.1 0.0 236.4 14.4 45.4 13.7 12.9 88.7 41.9 0.0 217.0 15.0 46.6 13.3 16.0 87.9 42.3 0.0 221.0 14.6 47.7 13.8 19.6 88.3 42.8 0.0 226.7 23.7 27.6 8.8 0.1 0.0 0.1 60.3 23.2 25.1 7.9 0.1 0.0 0.1 56.5 21.5 23.5 8.0 0.1 0.0 0.2 53.2 22.2 23.3 8.2 0.1 0.0 0.2 54.0 1,200 1,120 360 0 0 10 2,700 1,140 1,080 330 0 0 10 2,560 1,070 1,100 320 0 0 10 2,490 1,090 1,170 330 0 0 10 2,600 2.8 6.6 9.4 2.6 6.0 8.6 2.7 6.1 8.9 2.8 6.4 9.2 Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel agencies. **Retail includes gasoline. PAGE 36 DEAN RUNYAN ASSOCIATES Graham & Greenlee Counties Travel Impacts, 2002-2011p 2002 2004 2006 Total Direct Travel Spending ($Million) Destination Spending 27.5 31.7 45.0 Other Travel* 0.1 0.1 0.1 Total Direct Spending 27.6 31.8 45.0 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 14.3 14.4 25.6 Campground 1.1 1.4 1.5 Private Home 9.2 12.3 13.4 Vacation Home 0.8 0.9 1.0 Day Travel 2.1 2.7 3.5 Destination Spending 27.5 31.7 45.0 Visitor Spending by Commodity Purchased ($Million) Accommodations 4.8 4.7 9.0 Food Service 7.2 8.1 11.3 Food Stores 1.1 1.2 1.4 Local Tran. & Gas 4.8 7.3 10.2 Arts, Ent. & Rec. 4.2 4.8 6.2 Retail Sales 5.3 5.6 6.9 Visitor Air Tran. 0.0 0.0 0.0 Destination Spending 27.5 31.7 45.0 Industry Earnings Generated by Travel Spending ($Million) Accom. & Food Serv. 3.9 4.2 6.4 Arts, Ent. & Rec. 2.1 2.4 3.2 Retail** 1.1 1.3 1.7 Ground Tran. 0.0 0.1 0.1 Visitor Air Tran. 0.0 0.0 0.0 Other Travel* 0.1 0.0 0.0 Total Direct Earnings 7.3 7.9 11.4 Industry Employment Generated by Travel Spending (Jobs) Accom. & Food Serv. 350 360 510 Arts, Ent. & Rec. 260 370 550 Retail** 60 60 80 Ground Tran. 0 0 0 Visitor Air Tran. 0 0 0 Other Travel* 0 0 0 Total Direct Employment 670 800 1,140 Government Revenue Generated by Travel Spending ($Million) Local Tax Receipts 0.7 0.7 1.1 State Tax Receipts 1.3 1.5 1.9 Total Direct Gov't Revenue 2.0 2.2 3.0 2008 2009 2010 2011p 47.9 0.1 47.9 35.7 0.1 35.8 42.4 0.1 42.5 47.0 0.1 47.1 27.7 1.4 13.9 1.2 3.7 47.9 17.7 1.3 12.8 1.1 2.8 35.7 23.8 1.2 13.0 1.1 3.3 42.4 26.9 1.4 13.8 1.2 3.7 47.0 9.8 12.0 1.6 11.3 6.2 7.0 0.0 47.9 6.1 9.9 1.4 7.4 5.1 5.8 0.0 35.7 7.8 11.6 1.5 9.3 5.7 6.6 0.0 42.4 8.6 12.5 1.6 11.3 6.0 7.0 0.0 47.0 7.5 3.4 1.8 0.1 0.0 0.0 12.8 5.5 2.8 1.3 0.1 0.0 0.1 9.7 5.7 2.7 1.4 0.1 0.0 0.1 9.9 6.3 2.8 1.4 0.1 0.0 0.1 10.7 530 570 80 0 0 0 1,180 400 480 60 0 0 0 940 380 430 60 0 0 0 870 390 400 60 0 0 0 850 1.2 1.9 3.2 0.9 1.6 2.5 1.1 1.8 2.9 1.2 2.1 3.3 Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel agencies. **Retail includes gasoline. DEAN RUNYAN ASSOCIATES PAGE 37 La Paz County Travel Impacts, 2002-2011p 2002 2004 2006 Total Direct Travel Spending ($Million) Destination Spending 157.6 186.2 209.7 Other Travel* 0.0 0.0 0.0 Total Direct Spending 157.6 186.2 209.7 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 14.0 14.7 10.8 Campground 44.9 52.9 61.7 Private Home 15.4 21.0 23.9 Vacation Home 18.4 20.8 23.8 Day Travel 65.0 76.8 89.5 Destination Spending 157.6 186.2 209.7 Visitor Spending by Commodity Purchased ($Million) Accommodations 7.5 7.7 7.0 Food Service 17.8 19.9 20.4 Food Stores 14.3 14.5 14.7 Local Tran. & Gas 41.7 63.7 88.9 Arts, Ent. & Rec. 50.4 54.3 52.8 Retail Sales 26.0 26.1 25.9 Visitor Air Tran. 0.0 0.0 0.0 Destination Spending 157.6 186.2 209.7 Industry Earnings Generated by Travel Spending ($Million) Accom. & Food Serv. 7.4 8.1 8.0 Arts, Ent. & Rec. 11.8 12.8 13.2 Retail** 7.5 8.4 9.9 Ground Tran. 0.4 0.5 0.5 Visitor Air Tran. 0.0 0.0 0.0 Other Travel* 0.0 0.0 0.0 Total Direct Earnings 27.0 29.7 31.6 Industry Employment Generated by Travel Spending (Jobs) Accom. & Food Serv. 510 510 470 Arts, Ent. & Rec. 510 510 460 Retail** 360 400 460 Ground Tran. 10 10 10 Visitor Air Tran. 0 0 0 Other Travel* 0 0 0 Total Direct Employment 1,400 1,430 1,400 Government Revenue Generated by Travel Spending ($Million) Local Tax Receipts 1.7 1.9 2.2 State Tax Receipts 5.9 7.7 8.9 Total Direct Gov't Revenue 7.6 9.6 11.0 2008 2009 2010 2011p 216.5 0.0 216.5 179.5 0.0 179.5 189.2 0.0 189.2 210.8 0.0 210.8 9.5 62.4 23.2 26.0 95.5 216.5 10.2 49.8 19.6 22.3 77.6 179.5 7.4 50.9 21.0 24.2 85.7 189.2 8.3 58.9 22.8 26.6 94.3 210.8 6.5 20.7 15.6 98.2 51.0 24.6 0.0 216.5 6.5 21.3 15.6 64.7 46.7 24.7 0.0 179.5 5.4 20.7 14.8 80.6 43.6 24.1 0.0 189.2 5.7 21.4 15.9 98.5 44.6 24.7 0.0 210.8 8.6 13.1 10.5 0.5 0.0 0.0 32.7 8.8 12.3 7.9 0.5 0.0 0.0 29.6 8.8 11.9 7.6 0.5 0.0 0.0 28.8 9.3 12.0 7.8 0.5 0.0 0.0 29.7 460 440 470 10 0 0 1,380 480 400 360 10 0 0 1,250 470 390 330 10 0 0 1,200 490 400 340 10 0 0 1,240 2.1 8.3 10.4 2.0 7.7 9.8 1.9 7.8 9.7 2.0 8.1 10.2 Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel agencies. **Retail includes gasoline. PAGE 38 DEAN RUNYAN ASSOCIATES Maricopa County Travel Impacts, 2002-2011p 2002 2004 2006 Total Direct Travel Spending ($Million) Destination Spending 6,964 8,601 10,225 Other Travel* 721 839 1,055 Total Direct Spending 7,685 9,440 11,280 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 3,202 3,758 4,579 Campground 184 206 229 Private Home 2,265 3,025 3,532 Vacation Home 165 186 212 Day Travel 1,149 1,426 1,672 Destination Spending 6,964 8,601 10,225 Visitor Spending by Commodity Purchased ($Million) Accommodations 1,129 1,314 1,665 Food Service 1,574 1,974 2,267 Food Stores 238 273 295 Local Tran. & Gas 1,014 1,421 1,888 Arts, Ent. & Rec. 998 1,249 1,377 Retail Sales 1,246 1,440 1,565 Visitor Air Tran. 765 930 1,167 Destination Spending 6,964 8,601 10,225 Industry Earnings Generated by Travel Spending ($Million) Accom. & Food Serv. 876 1,068 1,248 Arts, Ent. & Rec. 409 515 591 Retail** 227 270 318 Ground Tran. 44 51 58 Visitor Air Tran. 395 475 565 Other Travel* 394 452 537 Total Direct Earnings 2,344 2,831 3,315 Industry Employment Generated by Travel Spending (Thousand Jobs) Accom. & Food Serv. 39.2 44,380 47,650 Arts, Ent. & Rec. 14.1 18,120 19,240 Retail** 7.8 8,900 9,760 Ground Tran. 1.5 1,570 1,600 Visitor Air Tran. 7.0 7,420 7,820 Other Travel* 7.8 7,800 8,230 Total Direct Employment 77.4 88,190 94,280 Government Revenue Generated by Travel Spending ($Million) Local Tax Receipts 257 309 360 State Tax Receipts 280 337 384 Total Direct Gov't Revenue 538 646 744 2008 2009 2010 2011p 10,076 1,050 11,126 8,785 9,506 934 1,030 9,719 10,537 10,081 1,079 11,161 4,364 234 3,541 240 1,696 10,076 3,803 203 3,111 227 1,440 8,785 4,232 197 3,272 236 1,569 9,506 4,462 222 3,446 254 1,697 10,081 1,585 2,230 312 2,044 1,285 1,454 1,166 10,076 1,285 2,148 301 1,437 1,193 1,371 1,050 8,785 1,353 2,298 304 1,710 1,234 1,444 1,163 9,506 1,419 2,376 323 2,015 1,256 1,477 1,214 10,081 1,319 578 317 57 542 519 3,332 1,242 539 254 53 559 519 3,166 1,247 547 261 55 574 536 3,219 1,320 545 270 61 638 595 3,429 47.5 19.2 9.8 1.6 7.4 7.9 93.5 44.9 17.0 7.8 1.4 7.0 7.2 85.2 44.2 16.8 8.0 1.4 6.7 7.0 84.1 45.4 16.6 8.0 1.5 6.9 7.2 85.4 346 369 715 308 339 647 326 371 697 343 405 748 Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel agencies. **Retail includes gasoline. DEAN RUNYAN ASSOCIATES PAGE 39 Mohave County Travel Impacts, 2002-2011p 2002 2004 2006 Total Direct Travel Spending ($Million) Destination Spending 312.5 387.8 473.7 Other Travel* 1.1 0.4 0.4 Total Direct Spending 313.6 388.2 474.1 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 113.0 135.2 177.4 Campground 28.6 32.5 35.7 Private Home 83.8 112.9 131.7 Vacation Home 34.3 39.4 45.7 Day Travel 52.8 68.0 83.2 Destination Spending 312.5 387.8 473.7 Visitor Spending by Commodity Purchased ($Million) Accommodations 41.0 48.6 63.9 Food Service 69.4 88.4 106.5 Food Stores 24.8 27.4 29.8 Local Tran. & Gas 55.0 84.1 117.3 Arts, Ent. & Rec. 52.8 65.5 73.6 Retail Sales 64.3 73.8 82.6 Visitor Air Tran. 5.3 0.0 0.0 Destination Spending 312.5 387.8 473.7 Industry Earnings Generated by Travel Spending ($Million) Accom. & Food Serv. 35.5 44.2 54.1 Arts, Ent. & Rec. 22.5 28.1 33.1 Retail** 15.2 18.0 21.8 Ground Tran. 0.5 0.6 0.6 Visitor Air Tran. 2.5 0.0 0.0 Other Travel* 0.7 0.3 0.3 Total Direct Earnings 76.8 91.2 109.9 Industry Employment Generated by Travel Spending (Jobs) Accom. & Food Serv. 2,300 2,590 3,030 Arts, Ent. & Rec. 1,410 1,660 1,980 Retail** 630 700 820 Ground Tran. 20 20 20 Visitor Air Tran. 60 0 0 Other Travel* 20 20 10 Total Direct Employment 4,450 4,980 5,870 Government Revenue Generated by Travel Spending ($Million) Local Tax Receipts 7.1 8.6 10.4 State Tax Receipts 14.1 16.9 19.6 Total Direct Gov't Revenue 21.2 25.4 30.0 2008 2009 2010 2011p 446.4 0.4 446.9 395.1 0.5 395.6 430.8 0.6 431.4 461.3 0.7 462.0 143.9 37.7 130.1 51.1 83.6 446.4 133.6 31.1 114.5 45.9 69.9 395.1 155.0 30.8 119.4 48.0 77.6 430.8 161.9 34.0 127.6 52.2 85.6 461.3 49.2 97.1 31.5 129.6 65.9 73.2 0.0 446.4 44.8 97.9 31.2 85.4 63.9 72.0 0.0 395.1 48.4 104.8 30.8 106.4 65.3 75.1 0.0 430.8 48.9 107.6 32.4 130.0 66.0 76.3 0.0 461.3 50.7 31.0 21.7 0.6 0.0 0.3 104.3 50.9 30.1 17.5 0.7 0.0 0.4 99.7 49.4 28.5 17.7 0.7 0.0 0.4 96.7 51.4 28.2 18.2 0.7 0.0 0.5 98.9 2,590 1,530 770 20 0 10 4,930 2,640 1,400 630 20 0 10 4,700 2,540 1,460 630 20 0 20 4,660 2,550 1,400 630 20 0 20 4,620 8.9 17.6 26.5 8.6 16.8 25.4 9.3 18.1 27.4 9.8 19.5 29.3 Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel agencies. **Retail includes gasoline. PAGE 40 DEAN RUNYAN ASSOCIATES Navajo County Travel Impacts, 2002-2011p 2002 2004 2006 Total Direct Travel Spending ($Million) Destination Spending 220.8 237.3 282.8 Other Travel* 0.3 0.2 0.2 Total Direct Spending 221.1 237.5 283.1 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 108.1 101.0 128.4 Campground 27.0 32.6 36.6 Private Home 27.3 37.2 41.8 Vacation Home 42.6 47.8 53.4 Day Travel 15.8 18.6 22.7 Destination Spending 220.8 237.3 282.8 Visitor Spending by Commodity Purchased ($Million) Accommodations 38.3 35.9 43.7 Food Service 40.2 41.5 50.1 Food Stores 25.6 26.6 28.2 Local Tran. & Gas 31.7 48.5 67.6 Arts, Ent. & Rec. 44.9 45.3 50.1 Retail Sales 40.0 39.4 43.2 Visitor Air Tran. 0.0 0.0 0.0 Destination Spending 220.8 237.3 282.8 Industry Earnings Generated by Travel Spending ($Million) Accom. & Food Serv. 27.5 27.1 32.1 Arts, Ent. & Rec. 16.4 17.0 19.7 Retail** 10.0 10.7 12.6 Ground Tran. 0.3 0.3 0.4 Visitor Air Tran. 0.0 0.0 0.0 Other Travel* 0.3 0.2 0.2 Total Direct Earnings 54.4 55.3 65.0 Industry Employment Generated by Travel Spending (Jobs) Accom. & Food Serv. 1,780 1,630 1,690 Arts, Ent. & Rec. 930 950 1,080 Retail** 480 500 560 Ground Tran. 10 10 10 Visitor Air Tran. 0 0 0 Other Travel* 10 10 10 Total Direct Employment 3,220 3,100 3,350 Government Revenue Generated by Travel Spending ($Million) Local Tax Receipts 5.1 5.1 6.0 State Tax Receipts 8.5 9.4 10.8 Total Direct Gov't Revenue 13.6 14.5 16.8 2008 2009 2010 2011p 306.1 0.3 306.4 255.6 0.3 255.9 266.8 0.3 267.1 286.5 0.4 286.9 146.0 36.2 40.8 58.8 24.3 306.1 113.5 31.0 36.9 54.4 19.9 255.6 117.7 31.0 38.9 57.5 21.7 266.8 124.2 34.5 41.5 62.3 24.0 286.5 50.3 55.2 31.5 74.7 50.6 43.9 0.0 306.1 40.9 48.8 30.9 49.2 45.3 40.5 0.0 255.6 40.6 49.4 30.2 61.3 44.6 40.6 0.0 266.8 41.7 51.2 32.0 74.9 45.3 41.5 0.0 286.5 39.2 21.0 13.6 0.4 0.0 0.2 74.4 36.2 19.0 10.9 0.4 0.0 0.2 66.7 37.5 19.4 10.9 0.4 0.0 0.3 68.5 39.4 19.4 11.2 0.4 0.0 0.3 70.6 1,870 1,080 570 10 0 10 3,540 1,690 910 460 10 0 10 3,080 1,760 880 460 10 0 10 3,120 1,840 830 450 10 0 10 3,140 6.6 11.1 17.8 5.7 9.9 15.7 5.8 10.4 16.2 6.2 11.2 17.4 Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel agencies. **Retail includes gasoline. DEAN RUNYAN ASSOCIATES PAGE 41 Pima County Travel Impacts, 2002-2011p 2002 2004 2006 Total Direct Travel Spending ($Million) Destination Spending 1,881 2,125 2,404 Other Travel* 133 151 201 Total Direct Spending 2,014 2,276 2,605 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 790 874 1,038 Campground 67 75 81 Private Home 443 574 659 Vacation Home 32 35 39 Day Travel 549 568 586 Destination Spending 1,881 2,125 2,404 Visitor Spending by Commodity Purchased ($Million) Accommodations 302 332 413 Food Service 413 483 538 Food Stores 109 109 107 Local Tran. & Gas 190 258 338 Arts, Ent. & Rec. 256 305 323 Retail Sales 481 488 488 Visitor Air Tran. 131 150 197 Destination Spending 1,881 2,125 2,404 Industry Earnings Generated by Travel Spending ($Million) Accom. & Food Serv. 236 270 307 Arts, Ent. & Rec. 102 122 136 Retail** 81 85 90 Ground Tran. 12 14 15 Visitor Air Tran. 5 5 10 Other Travel* 12 12 17 Total Direct Earnings 448 507 574 Industry Employment Generated by Travel Spending (Jobs) Accom. & Food Serv. 12,180 13,240 14,070 Arts, Ent. & Rec. 6,260 7,860 7,810 Retail** 3,220 3,220 3,290 Ground Tran. 400 420 420 Visitor Air Tran. 140 130 220 Other Travel* 390 330 420 Total Direct Employment 22,590 25,200 26,240 Government Revenue Generated by Travel Spending ($Million) Local Tax Receipts 40.2 44.5 53.4 State Tax Receipts 70.6 79.3 87.6 Total Direct Gov't Revenue 110.9 123.8 141.0 2008 2009 2010 2011p 2,234 199 2,434 2,056 178 2,234 2,117 193 2,310 2,195 204 2,398 873 83 655 44 579 2,234 807 74 576 42 557 2,056 868 71 600 43 534 2,117 907 78 626 46 538 2,195 340 495 108 363 288 443 197 2,234 303 489 112 261 271 449 171 2,056 312 507 102 305 274 429 188 2,117 320 524 103 355 280 422 191 2,195 294 126 86 15 12 18 551 281 119 77 14 12 17 520 282 118 73 14 12 19 518 295 118 73 16 13 20 537 12,370 11,970 11,780 6,440 6,440 6,390 3,170 2,810 2,640 440 380 370 250 220 210 410 360 340 23,080 22,180 21,740 12,000 6,280 2,580 390 210 360 21,820 48.1 79.7 127.8 44.3 76.1 120.4 46.2 80.4 126.5 48.5 87.2 135.7 Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel agencies. **Retail includes gasoline. PAGE 42 DEAN RUNYAN ASSOCIATES Pinal County Travel Impacts, 2002-2011p 2002 2004 2006 Total Direct Travel Spending ($Million) Destination Spending 256.5 322.7 407.6 Other Travel* 0.1 0.4 0.4 Total Direct Spending 256.6 323.1 408.0 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 48.9 51.9 63.5 Campground 16.3 18.5 19.7 Private Home 80.5 117.0 154.3 Vacation Home 39.5 47.0 61.4 Day Travel 71.3 88.2 108.7 Destination Spending 256.5 322.7 407.6 Visitor Spending by Commodity Purchased ($Million) Accommodations 19.1 20.2 24.6 Food Service 57.9 75.2 96.9 Food Stores 24.5 28.2 34.6 Local Tran. & Gas 37.7 57.7 80.5 Arts, Ent. & Rec. 55.5 68.8 82.2 Retail Sales 61.8 72.6 88.7 Visitor Air Tran. 0.0 0.0 0.0 Destination Spending 256.5 322.7 407.6 Industry Earnings Generated by Travel Spending ($Million) Accom. & Food Serv. 25.0 31.0 39.5 Arts, Ent. & Rec. 24.1 30.5 38.6 Retail** 12.9 15.5 19.9 Ground Tran. 0.3 0.4 0.4 Visitor Air Tran. 0.0 0.0 0.0 Other Travel* 0.1 0.3 0.3 Total Direct Earnings 62.4 77.7 98.7 Industry Employment Generated by Travel Spending (Jobs) Accom. & Food Serv. 1,550 1,820 2,100 Arts, Ent. & Rec. 1,420 1,640 1,950 Retail** 570 640 800 Ground Tran. 10 10 10 Visitor Air Tran. 0 0 0 Other Travel* 0 20 10 Total Direct Employment 3,560 4,130 4,870 Government Revenue Generated by Travel Spending ($Million) Local Tax Receipts 4.8 5.9 7.5 State Tax Receipts 10.3 12.8 15.7 Total Direct Gov't Revenue 15.1 18.8 23.2 2008 2009 2010 2011p 461.0 0.4 461.4 425.0 0.5 425.6 470.8 0.6 471.3 506.8 0.7 507.4 68.9 18.8 174.6 78.2 120.5 461.0 59.5 16.4 165.6 75.9 107.6 425.0 67.3 15.5 184.5 84.3 119.1 470.8 77.2 18.5 193.2 89.6 128.2 506.8 26.6 113.1 44.4 88.9 90.7 97.4 0.0 461.0 22.5 113.9 45.1 58.6 87.8 97.2 0.0 425.0 23.9 125.9 48.1 73.0 93.4 106.4 0.0 470.8 27.1 132.5 51.6 89.2 96.3 110.1 0.0 506.8 49.5 44.9 22.8 0.4 0.0 0.3 117.9 48.7 43.9 19.9 0.5 0.0 0.4 113.4 48.6 43.4 21.4 0.5 0.0 0.4 114.4 52.5 43.9 22.4 0.5 0.0 0.5 119.8 2,350 1,670 890 10 0 10 4,940 2,200 1,490 760 10 0 10 4,480 2,040 1,710 790 10 0 20 4,560 2,310 1,920 810 10 0 20 5,070 8.5 16.8 25.4 8.3 16.2 24.5 9.4 18.2 27.5 10.2 20.0 30.2 Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel agencies. **Retail includes gasoline. DEAN RUNYAN ASSOCIATES PAGE 43 Santa Cruz County Travel Impacts, 2002-2011p 2002 2004 2006 Total Direct Travel Spending ($Million) Destination Spending 297.6 272.2 254.0 Other Travel* 0.1 0.1 0.1 Total Direct Spending 297.7 272.3 254.1 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 27.9 32.6 38.8 Campground 4.5 5.3 5.9 Private Home 7.1 9.7 11.0 Vacation Home 1.0 1.1 1.3 Day Travel 257.1 223.5 197.1 Destination Spending 297.6 272.2 254.0 Visitor Spending by Commodity Purchased ($Million) Accommodations 11.1 12.8 15.3 Food Service 35.0 33.9 34.1 Food Stores 120.1 103.5 90.0 Local Tran. & Gas 7.5 11.4 15.9 Arts, Ent. & Rec. 6.9 8.4 9.2 Retail Sales 117.0 102.2 89.5 Visitor Air Tran. 0.0 0.0 0.0 Destination Spending 297.6 272.2 254.0 Industry Earnings Generated by Travel Spending ($Million) Accom. & Food Serv. 14.9 15.0 15.6 Arts, Ent. & Rec. 3.3 3.9 4.5 Retail** 33.6 29.4 26.4 Ground Tran. 0.1 0.1 0.1 Visitor Air Tran. 0.0 0.0 0.0 Other Travel* 0.1 0.0 0.0 Total Direct Earnings 51.9 48.5 46.7 Industry Employment Generated by Travel Spending (Jobs) Accom. & Food Serv. 960 930 900 Arts, Ent. & Rec. 230 250 320 Retail** 1,290 1,090 910 Ground Tran. 0 0 0 Visitor Air Tran. 0 0 0 Other Travel* 0 0 0 Total Direct Employment 2,490 2,280 2,130 Government Revenue Generated by Travel Spending ($Million) Local Tax Receipts 5.7 5.3 5.1 State Tax Receipts 9.4 8.7 8.2 Total Direct Gov't Revenue 15.1 14.0 13.3 2008 2009 2010 2011p 257.0 0.1 257.0 269.6 0.1 269.6 234.6 0.1 234.7 211.0 0.1 211.1 42.4 5.9 10.7 1.4 196.6 257.0 30.8 5.3 10.0 1.3 222.2 269.6 40.0 5.2 10.4 1.4 177.7 234.6 33.1 4.6 11.0 1.5 160.8 211.0 16.6 34.7 90.6 17.6 9.2 88.4 0.0 257.0 12.1 35.3 103.1 11.6 7.7 99.8 0.0 269.6 15.1 33.6 81.0 14.4 8.6 81.7 0.0 234.6 12.1 29.5 73.2 17.6 7.5 71.2 0.0 211.0 17.6 4.7 26.4 0.1 0.0 0.1 48.9 16.4 4.0 27.9 0.1 0.0 0.1 48.4 16.9 4.4 23.1 0.1 0.0 0.1 44.6 14.8 3.7 20.5 0.1 0.0 0.1 39.1 830 320 860 0 0 0 2,020 780 270 910 0 0 0 1,970 790 300 700 0 0 0 1,800 700 280 620 0 0 0 1,600 5.2 8.2 13.4 5.3 8.6 13.8 4.9 8.1 13.0 4.4 7.7 12.0 Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel agencies. **Retail includes gasoline. PAGE 44 DEAN RUNYAN ASSOCIATES Yavapai County Travel Impacts, 2002-2011p 2002 2004 2006 Total Direct Travel Spending ($Million) Destination Spending 537.1 589.4 684.0 Other Travel* 3.2 1.9 1.0 Total Direct Spending 540.3 591.3 684.9 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 194.8 198.1 255.6 Campground 40.7 44.1 46.2 Private Home 73.7 100.2 114.2 Vacation Home 18.2 20.1 22.6 Day Travel 209.8 227.0 245.4 Destination Spending 537.1 589.4 684.0 Visitor Spending by Commodity Purchased ($Million) Accommodations 79.6 81.5 109.8 Food Service 130.8 146.5 172.8 Food Stores 31.2 33.2 35.7 Local Tran. & Gas 23.5 35.9 50.0 Arts, Ent. & Rec. 149.9 165.6 177.4 Retail Sales 121.9 126.1 137.9 Visitor Air Tran. 0.2 0.6 0.3 Destination Spending 537.1 589.4 684.0 Industry Earnings Generated by Travel Spending ($Million) Accom. & Food Serv. 68.8 74.7 90.8 Arts, Ent. & Rec. 52.2 58.3 66.6 Retail** 20.3 21.6 24.5 Ground Tran. 0.2 0.3 0.3 Visitor Air Tran. 0.0 0.1 0.2 Other Travel* 2.1 0.8 0.7 Total Direct Earnings 143.8 155.7 183.1 Industry Employment Generated by Travel Spending (Jobs) Accom. & Food Serv. 4,090 3,910 4,170 Arts, Ent. & Rec. 3,490 3,850 3,800 Retail** 870 870 980 Ground Tran. 10 10 10 Visitor Air Tran. 0 0 0 Other Travel* 90 30 30 Total Direct Employment 8,540 8,660 8,990 Government Revenue Generated by Travel Spending ($Million) Local Tax Receipts 11.2 12.4 15.5 State Tax Receipts 15.4 18.9 23.4 Total Direct Gov't Revenue 26.7 31.3 38.8 2008 2009 2010 2011p 701.9 1.4 703.2 622.4 1.3 623.8 641.3 0.8 642.1 676.6 0.6 677.2 268.4 45.4 111.7 25.0 251.4 701.9 226.9 42.9 100.4 24.4 228.0 622.4 241.5 40.0 101.9 24.6 233.2 641.3 258.6 44.1 105.5 25.9 242.5 676.6 115.7 180.8 38.5 55.3 176.7 134.5 0.3 701.9 95.2 169.5 37.3 36.4 157.3 126.2 0.6 622.4 99.1 175.4 36.0 45.4 156.5 128.4 0.4 641.3 106.0 183.7 38.8 55.4 159.9 132.6 0.1 676.6 103.6 68.5 24.8 0.3 0.3 1.1 198.6 91.6 61.9 21.3 0.3 0.4 1.0 176.5 91.8 60.4 21.5 0.3 0.5 0.7 175.2 98.4 60.9 22.6 0.3 0.5 0.8 183.6 4,460 3,750 980 10 10 30 9,240 3,930 3,370 850 10 10 30 8,190 3,860 3,110 830 10 10 20 7,830 4,070 3,280 850 10 10 20 8,240 15.9 23.7 39.6 13.9 21.0 35.0 14.7 22.4 37.1 15.9 24.9 40.8 Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel agencies. **Retail includes gasoline. DEAN RUNYAN ASSOCIATES PAGE 45 Yuma County Travel Impacts, 2002-2011p 2002 2004 2006 Total Direct Travel Spending ($Million) Destination Spending 484.7 534.0 590.5 Other Travel* 4.4 6.0 10.1 Total Direct Spending 489.1 540.0 600.6 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 104.1 134.0 179.4 Campground 57.9 64.6 68.4 Private Home 69.9 94.2 106.9 Vacation Home 35.3 38.8 43.3 Day Travel 217.5 202.3 192.5 Destination Spending 484.7 534.0 590.5 Visitor Spending by Commodity Purchased ($Million) Accommodations 33.4 40.8 56.1 Food Service 77.2 90.8 104.1 Food Stores 84.6 79.4 75.4 Local Tran. & Gas 29.4 45.0 62.8 Arts, Ent. & Rec. 96.4 117.9 134.7 Retail Sales 158.4 152.5 147.7 Visitor Air Tran. 5.3 7.6 9.8 Destination Spending 484.7 534.0 590.5 Industry Earnings Generated by Travel Spending ($Million) Accom. & Food Serv. 34.7 41.4 49.7 Arts, Ent. & Rec. 35.2 43.2 51.5 Retail** 34.9 34.0 34.4 Ground Tran. 0.3 0.3 0.3 Visitor Air Tran. 0.4 2.9 0.2 Other Travel* 0.7 2.4 0.5 Total Direct Earnings 106.0 124.3 136.7 Industry Employment Generated by Travel Spending (Jobs) Accom. & Food Serv. 2,090 2,350 2,630 Arts, Ent. & Rec. 2,120 2,270 2,450 Retail** 1,390 1,240 1,270 Ground Tran. 10 10 10 Visitor Air Tran. 10 60 10 Other Travel* 20 60 20 Total Direct Employment 5,630 5,990 6,390 Government Revenue Generated by Travel Spending ($Million) Local Tax Receipts 11.6 12.6 14.2 State Tax Receipts 16.2 19.3 22.2 Total Direct Gov't Revenue 27.8 31.9 36.4 2008 2009 2010 2011p 605.7 13.8 619.5 583.8 14.1 597.8 566.3 14.1 580.3 603.3 13.0 616.4 189.6 66.9 107.3 48.3 193.6 605.7 171.6 59.1 100.9 46.5 205.6 583.8 178.4 55.8 105.2 48.5 178.3 566.3 206.3 65.7 109.1 51.2 171.0 603.3 58.7 107.5 79.1 69.3 133.3 144.7 13.0 605.7 54.1 110.5 85.0 45.7 120.6 155.3 12.6 583.8 53.2 110.1 74.0 56.9 119.8 139.5 12.8 566.3 60.9 117.5 74.5 69.5 132.3 136.3 12.3 603.3 56.0 52.7 35.1 0.3 0.3 0.6 145.0 58.3 49.1 33.9 0.4 0.6 1.0 143.3 59.9 47.8 30.7 0.4 0.7 1.1 140.6 66.4 51.4 30.4 0.4 0.7 1.2 150.6 2,700 2,110 1,240 10 10 20 6,090 2,760 2,000 1,190 10 10 30 6,000 2,750 2,060 1,070 10 10 30 5,920 3,060 2,190 1,030 10 10 30 6,330 14.4 22.1 36.5 14.6 21.8 36.4 14.1 22.0 36.1 15.2 24.4 39.6 Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel agencies. **Retail includes gasoline. PAGE 46 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 47 This page intentionally blank 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 2009. 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. 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 DEAN RUNYAN ASSOCIATES PAGE 49 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. PAGE 50 DEAN RUNYAN ASSOCIATES COMPARISON WITH OTHER EXPORT-ORIENTED INDUSTRIES Export-oriented industries are those industries that primarily market their products and services to other regions, states or nations. Agriculture, mining, and manufacturing are the best examples of export-oriented industries. Clearly, there are cases in each of these three sectors where the products are sold within the local or regional market. Nonetheless, in general most businesses within these industries depend on export markets. The travel industry is also an export-oriented industry because goods and services are sold to visitors, rather than residents. The travel industry injects money into the local economy, as do the exports of other industries. Exports are not necessarily more important than locally traded goods and services. However, diverse export-oriented industries in any economy are a source of strength – in part because they generate income that contributes to the development of other local services and amenities. Such industries characterize the “comparative advantage” of the local economy within larger regional, national and global markets. For the purposes of this report, we have defined five major export-oriented industries in Arizona.  Aerospace. This industry comprises establishments engaged in aerospace product and parts manufacturing.  Microelectronics. This industry includes establishments that manufacture computers, communications equipment and similar products and components that utilize integrated circuits. This is the largest manufacturing subsector (NAICS 334).  Food. The food group encompasses parts of two major industry categories: agriculture, and food manufacturing or processing.  Mining. This industry is comprised primarily of copper mining companies.  Travel. A portion of the transportation, retail, leisure, and hospitality industries as estimated in this report. These industries are compared in terms of earnings and GDP in order to illustrate the significance of the travel industry in the larger economy. This type of comparison is more meaningful for the travel industry than comparisons with non-export oriented industries (e.g., health care, retail trade, government) where industry growth is largely a function of population and demographic factors. See Appendix C for a list of Arizona industries. TRAVEL RELATED CONSTRUCTION ACTIVITY Investment in the infrastructure of the travel industry represents another aspect of the travel economy. In the short term, such investments provide employment in the construction trades and architectural professions. In the longer term, investments in accommodations, attractions and other facilities serve to maintain and enhance Arizona’s share of the visitor market. The statewide estimate of travel related construction activity is based on McGrawHill Dodge Construction statistics. DEAN RUNYAN ASSOCIATES PAGE 51 PRELIMINARY ESTIMATES Preliminary estimates for 2011 were prepared at the state and county level. These estimates take advantage of the most current available data. These estimates are subject to subsequent revision as additional information relating to travel and its economic impact in 2011 becomes available. STATEWIDE TAX IMPACTS As with last year’s report, the sum of travel-generated state and local tax revenues at the county level is less than the statewide estimate of state and local tax revenues. This is because property taxes and the sales tax revenues attributable to the spending of travel industry employees are included at the statewide level. Data limitations do not permit the estimate of these taxes at the county level. TYPES OF TRAVEL IMPACTS INCLUDED Most of the travel that occurs in Arizona is included in the scope of this analysis. The purpose of such travel can be for business, pleasure, shopping, to attend meetings, or for personal, medical or educational purposes. All trips to Arizona by U.S. residents and foreign visitors are included. The travel of Arizona residents to other destinations within Arizona is included, provided that it is neither commuting nor other routine travel. Travel to non-Arizona destinations by Arizona residents is not included as a component of visitor spending. Outbound air travel impacts and spending on travel arrangement services are included in the “Other Travel” category. The impacts associated with both overnight and day travel are included if the travelers remain at the destination overnight or the destination is over 50 miles, one-way, from the traveler's home. These definitions are used to screen and, if necessary, to interpret and adjust local data used for travel impact measurements. The most conservative interpretation is employed where data limitations cause deviations from the above definition. TRANSPORTATION IMPACTS The focus of this analysis is on the destination-specific impacts of visitors. This is straightforward with respect to the spending on commodities such as accommodations, food services, recreation and retail purchases. It is less obvious with respect to ground and air transportation services, in that transportation provides a link between an origin and destination. In this report, the impacts related to spending on transportation are allocated to the location (i.e., county) in which those spending impacts occur, regardless of whether that location is the ultimate destination of the visitor. For this reason, urban counties will tend to have relatively greater transportation impacts even though some of that spending on transportation will be related to visits at other destinations. IMPACT CATEGORIES The specific categories of travel impacts included in this analysis are as follows: PAGE 52 DEAN RUNYAN ASSOCIATES Impact Category Description Expenditures Purchases by travelers during their trip, including lodging taxes and other applicable local and state taxes, paid by the traveler at the point of sale. Earnings The earnings (wage and salary disbursements, earned benefits and proprietor income) of employees and owners of businesses that receive travel expenditures. Only the earnings attributable to travel expenditures are included; this typically is only a portion of all business receipts. Employment Employment associated with the above earnings; this includes both fulland part-time positions of wage and salary workers and proprietors. Local Tax Receipts Tax receipts collected by counties and municipalities, as levied on applicable travel-related purchases, including lodging, food and beverage service, retail goods and auto rental. The local share of the state transaction privilege tax is also included in this category. Property taxes are included for the statewide total. They are not included for county level estimates. State Tax Receipts The state share of the transaction privilege tax, personal and business income taxes, motor fuel tax and contributions from tribal gaming revenue is included in state tax receipts. Also included at the state level only is an estimate of the sales tax payments associated with travel industry earnings. VISITOR CATEGORIES Travelers are classified according to the type of accommodation in which they stay. The types of visitors are as follows: Type of Visitor Description Hotel/Motel Travelers staying in hotels, motels, resorts, bed & breakfast establishments, and other commercial accommodations, excluding campgrounds, where a transient lodging tax is collected. Campground Travelers staying in a privately owned (i.e., commercial) or publicly managed campgrounds. Private Home Travelers staying as guests with friends or relatives. Vacation Home Travelers using their own vacation home or timeshare and those borrowing or renting a vacation home where a transient lodging tax is not collected. Day Visitor Both in-state and out-of-state residents whose trip does not include an overnight stay at a destination in Arizona. DEAN RUNYAN ASSOCIATES PAGE 53 REPORTING FORMAT A description of the headings and categories of the detailed direct impact tables is provided below.  Total Direct Travel Spending includes the total visitor spending at destination, described above, plus spending on travel agencies and resident air travel (other spending). Total direct travel spending does not include secondary (indirect and induced) effects.  Visitor Spending by Type of Traveler Accommodation refers to the total direct spending of each category of visitor at that destination (county or state). For example, the spending of visitors that stayed at hotels or motels includes their spending on accommodations, food & beverage service, recreation, transportation and all other visitor related commodities.  Visitor Spending by Commodity Purchased refers to the total spending on each commodity for all types of visitors. For example, the total spending on Food & Beverage Services includes spending by visitors staying in hotels, private campgrounds, private homes and the other types of accommodation. The total spending on commodities is identical to the total spending by type of accommodation. The next two sections, Travel-Generated Earnings and Employment by Industry, provide estimates of travel-generated earnings and employment that are based on an industry, rather than a commodity, classification. A business that is classified in a particular industry may include more than one commodity. For example, a resort that is classified in the accommodation industry may provide accommodations, food and beverages, and recreation.  Industry Earnings Generated by Travel Spending includes the payroll, other earned benefits and proprietor income of all employees in that industry classification.  Industry Employment Generated by Travel Spending includes all full- and part-time employees. This includes payroll employees covered by unemployment insurance and those that are not, as well as proprietors. The final section provides an estimate of tax receipts generated by travel spending.  Tax Revenues Generated by Travel Spending provides a breakout of local, state and federal tax receipts at the state level, and local and state tax receipts at the county level. Local taxes include all city and county room taxes, sales taxes, auto rental taxes and the city/county share of the state transaction privilege tax. Passenger facility charges (a fee added to passenger air tickets) attributable to visitors that traveled by air are also included for counties with airports. The state share of the transaction privilege tax, personal and business income taxes, motor fuel tax and contributions from tribal gaming revenue are included in state tax receipts. Federal taxes include income and payroll taxes, the motor fuel excise tax and airline ticket taxes. PAGE 54 DEAN RUNYAN ASSOCIATES INTERPRETATION OF IMPACT ESTIMATES Users of this report should be aware of several issues regarding the interpretation of the impact estimates contained herein.  The monetary estimates in this report are generally expressed in current dollars. There is no adjustment for inflation unless noted.  The employment estimates in this report are estimates of the total number of fulland part-time jobs (positions) directly generated by travel spending, rather than the number of individuals employed. Both payroll jobs and self-employment are included in these estimates. Caution should therefore be used in comparing these estimates with other employment data series.  In general, estimates of small geographic areas (e.g., rural counties) are less reliable than estimates for regions or metropolitan counties. Trend analysis and comparisons of counties with relatively low levels of travel-related economic activity should therefore be interpreted cautiously.  The estimates of travel impacts published in this report will necessarily differ somewhat from estimates generated from different models, methodologies and data sources. Nonetheless, it should be emphasized that all credible estimates of direct travel impacts at the state level, including those of Dean Runyan Associates, are of similar magnitude. DEAN RUNYAN ASSOCIATES PAGE 55 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.”1 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 exportoriented nature of the travel industry for local communities becomes blurred if the industry is defined so as to include non-trip related expenditures. PRIMARY CONCEPTS, CATEGORIES & DATA REQUIREMENTS 1 Peter D. Kuhbach, Mark A. Planting, and Erich H. Strassner, “U.S. Travel and Tourism Satellite Accounts for 1998-2003,” Survey of Current Business 84 (September 2004): 43-59. PAGE 56 DEAN RUNYAN ASSOCIATES 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.2 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.3 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 estimate of how much the average visitor spends on food services per day, then an estimate of visitor 2 The North American Industrial Classification System (NAICS) is the current standard in the United States. 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. 3 DEAN RUNYAN ASSOCIATES PAGE 57 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.4 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.5 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.6 4 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. 5 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. 6 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 58 DEAN RUNYAN ASSOCIATES Bureau of Economic Analysis Tourism Industries Distribution of Travel-Generated Compensation in United States, 2007 Accommodation & Food Services Traveler accommodations Food services and drinking places 38.1% 21.5% 16.6% 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 23.3% 15.4% 0.4% 1.2% 0.3% 0.2% 1.7% 1.0% 2.0% 0.8% 0.2% 0.1% Recreation Scenic and sightseeing transportation Motion pictures and performing arts Spectator sports Participant sports Gambling All other recreation and entertainment 11.2% 0.4% 1.1% 2.3% 2.4% 3.0% 2.0% 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% 0.6% 4.4% 4.2% 1.3% 5.8% Travel Arrangement 7.3% All other industries 2.2% Total Tourism Compensation 100.0% Source: Adapted from Eric S. Griffith and Steven L. Zemanek, “U.S. Travel and Tourism Satellite Accounts for 2005-2008,” Survey of Current Business (June 2009): 37, table 6. DEAN RUNYAN ASSOCIATES PAGE 59 RTIM Travel Impact Industries Matched to NAICS Travel Impact Industry NAICS Industry (code) Accommodation & Food Services Accommodation (721) Food Services and Drinking Places (722) Arts, Entertainment & Recreation Performing Arts, Spectator Sports (711) Museums (712) Amusement, Gambling (713) Scenic and Sightseeing Transportation (487) Retail Food & Beverage Stores (445) Gasoline Stations (447) Clothing and Clothing Accessories Stores (448) Sporting Goods, Hobby, Book, and Music Stores (451) General Merchandise Stores (452) Miscellaneous Store Retailers (453) Ground Transportation Interurban and rural bus transportation (4852) Taxi and Limousine Service (4853) Charter Bus Industry (4855) Passenger Car Rental (532111) Parking Lots and Garages (812930) Air Transportation Scheduled Air Passenger Transportation (481111) Support Activities for Air Transportation (4881) Travel Arrangement Services Travel Agencies (56151) Tour Operators (56152) Source: Dean Runyan Associates PAGE 60 DEAN RUNYAN ASSOCIATES DEMAND SEGMENTS The distinction between inbound and outbound travel has already been discussed in the previous section and in terms of the concepts of the visitor industry and the travel industry. Three other types of demand segments that are related exclusively to the visitor industry will be discussed here. The first two demand categories are reported by the BEA in their national TTSA. They are: leisure versus business travel, and resident versus non-resident travel. The third demand category is typically reported in the RTIM: type of traveler accommodation. These three demand categories will be discussed in turn. The distinction between leisure versus business travel is useful for several reasons. Economists like to distinguish between personal consumption expenditures on the one hand and business expenditures on the other. Indeed, this distinction is central for the National Income and Product Accounts (NIPAs). Those in the travel industry are more likely to be interested in this distinction because leisure travelers represent a more “marketable” segment because their travel choices are less determined by economic and business factors. Furthermore, business and leisure travelers tend to have different spending profiles. The availability of this information in either a state or regional TTSA or RTIM is essentially dependent on the availability of survey data (as it is at the national level). It should be noted, however, that such estimates are considerably less reliable for smaller geographic areas because of the limitations of survey data. Even at the state level, year-to-year changes in the composition of this demand segment should be interpreted in conjunction with other data. The distinction between resident versus non-resident travel is fundamental to a national TTSA because it mirrors the distinction between the domestic economy and international transactions. Non-resident travel in the United States is considered an export in the official international transaction accounts.7 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. 8 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 evaluation of the tax impacts of resident versus nonresident travel might also be important.9 7 Conversely, the spending of U.S. visitors in other countries is treated as an import in the international transaction accounts. 8 The issues discussed with regard to the reliability of survey data for leisure versus business travel also applies to this category 9 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. DEAN RUNYAN ASSOCIATES PAGE 61 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.10 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 instate 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. 10 In essence, state level travel impact estimates really represent an aggregation of smaller geographic units, such as counties or regions. Populous states with large landmasses (e.g., California or Texas) will have a higher proportion of resident travel than small states (e.g., Rhode Island or Delaware). PAGE 62 DEAN RUNYAN ASSOCIATES COMPONENTS OF INDUSTRY OUTPUT Because both the RTIM and the TTSA are empirically linked to NAICS industry accounts, it is possible to provide estimates of different components of economic output. The major economic components most often estimated are:11  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 passenger travel in the state of Hawaii should not include the purchase of airplanes manufactured in the United States mainland 11 There are some small differences between the BEA TTSA and the RTIM in what these components include. The BEA allocates proprietor income to Operating Surplus; the RTIM allocates it to Labor Income. The RTIM does not have an estimate of property taxes in indirect taxes. Overall, property taxes on businesses are a relatively small proportion of indirect taxes. DEAN RUNYAN ASSOCIATES PAGE 63 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.12 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.13 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 state-level 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.14 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. 12 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. 13 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. 14 It is also possible to compare different industries with respect to their value-added. It is more difficult and less useful to compare industries on the basis of sales. PAGE 64 DEAN RUNYAN ASSOCIATES INDIRECT, INDUCED AND SECONDARY EFFECTS To this point, the discussion of travel industry accounts has referred only to the direct output components. That is, the ripple effects of the re-spending of travel industry receipts throughout the larger economy have not been analyzed. The structure of both the TTSA and the RTIM permit such analysis.  Indirect effects refer to the intermediate inputs used to produce the final product or service, providing that those inputs are themselves produced within the designated geographic area.  Induced effects refer to the purchase of goods and services by employees that are attributable to direct and indirect impacts. These induced impacts are derived from economic data that describe the purchasing patterns of households. For example, employees of all the designated export-oriented industries will spend their income on food, household durables, health care, and so on.  The sum of indirect and induced impacts is sometimes referred to as the secondary effect. These secondary impacts may be as great or greater than the direct impact alone.  The ratio of the total effects (direct plus either indirect, induced, or secondary) to the direct effects is the multiplier. The BEA reports the indirect components of economic output. This is equivalent to domestic travel spending less the goods and services imported from abroad to meet domestic demand. For travel, these imports would include souvenirs manufactured in China and petroleum extracted in Saudi Arabia. The indirect output multiplier for 2002 was 1.76. The ratio of domestic travel spending to travel industry value-added was 1.88. The difference reflects the intermediate inputs for travel imported from abroad. At the state level, these indirect output multipliers are typically lower because relatively more of the intermediate inputs are purchased from outside of the state. At the county or metropolitan level, the multipliers are generally even lower for the same reason. Furthermore, the estimates are usually less reliable because of the data limitations of the regional input-output model used to estimate the indirect effects. The BEA does not report induced effects – the effect of household spending of the direct and indirect labor income. Typically, these induced effects will be larger than the indirect effects at the state or regional level, in part because they are based on both the direct and indirect components.15 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. 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. 15 The induced effects can be estimated with the Implan model maintained by the Minnesota Implan Group. DEAN RUNYAN ASSOCIATES PAGE 65 THE REGIONAL TRAVEL IMPACT MODEL AND TRAVEL & TOURISM SATELLITE ACCOUNTS COMPARED This appendix has provided an overview of Dean Runyan Associates RTIM and the Bureau of Economic Analysis’ domestic TTSA. These travel industry accounts are similar in terms of how they define the travel industry and the measures of the industry that are reported. The differences stem largely from their different levels of analysis – the BEA provides estimates at the national level only, while the RTIM’s are typically constructed on a state or regional level. Because of this geographic focus, the RTIM provides a distinction between the visitor industry and the travel industry. The RTIM also provides measures of all of the components of economic output and secondary effects at the state or large region level. At smaller units of analysis, however, the emphasis is on earnings and tax receipts generated by travel spending as these are the most reliable and meaningful measures of the economic impact of travel at the local level. PAGE 66 DEAN RUNYAN ASSOCIATES APPENDIX C Arizona Earnings and Employment by Industry Sector, 2010 Earnings Industry Sector Primarily Export-Oriented Agriculture, Forestry, Fishing and related Mining Manufacturing **Travel Primarily 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 Mixed Transportation and warehousing Information Finance and insurance Professional and technical services Educational services Health care and social assistance Leisure and Hospitality Arizona Total** ($Billion) 15.1 1.2 1.0 12.9 4.7 Percent Employment of Total (Thousand) 9.9% 0.8% 0.7% 8.4% Percent of Total 3.1% 219 42 17 161 152 6.9% 1.3% 0.5% 5.0% 4.8% 78.8 8.7 1.6 8.1 12.1 3.4 2.3 8.9 5.4 28.3 51.5% 5.7% 1.0% 5.3% 7.9% 2.2% 1.5% 5.8% 3.5% 18.5% 1,725 162 12 109 358 189 31 253 161 449 53.9% 5.1% 0.4% 3.4% 11.2% 5.9% 1.0% 7.9% 5.0% 14.0% 59.0 4.8 2.9 9.8 12.4 2.5 19.0 7.6 152.9 38.6% 3.1% 1.9% 6.4% 8.1% 1.7% 12.4% 5.0% 100.0% 1,257 88 47 205 205 67 340 304 3,201 39.3% 2.8% 1.5% 6.4% 6.4% 2.1% 10.6% 9.5% 100.0% **Travel is not included in the sub and grand totals because it is also represented in other sectors (primarily leisure and hospitality, transporation, and retail trade). DEAN RUNYAN ASSOCIATES PAGE 67 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 PAGE 68 DEAN RUNYAN ASSOCIATES 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 DEAN RUNYAN ASSOCIATES PAGE 69 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 PAGE 70 DEAN RUNYAN ASSOCIATES 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 DEAN RUNYAN ASSOCIATES PAGE 71