Economic Impact of Disney World on Florida

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1-20-1967

Economic Impact of Disney World on Florida Economic Impact of Disney World on Florida

Economics Research Associates

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I I I I I I I I I I I I I I I I I I I


ECONOMIC IMPACT OF

DISNEYWORLD, FLORIDA

Prepared for

WALT DISNEY PRODUCTIONS

January 20, 1967

ECONOMICS RESEARCH ASSOCIATES LOS ANGELES. CALIFORNIA


S ec tion

I

II

III

TABLE OF CONTENTS

INTRODUCTION .....

SUMMAR Y OF FINDINGS

ECONOMIC IMPACT OF DISNEYWORLD ON THE STATE OF FLORIDA ... , .....

Construct io n Exp e nditure s at Di sneywor ld. . Net Increas e in Tourism . ......... .

New Employment Generated by Disneyworld. State T ax Reve nues . ... , ....... .

ECONOMIC IMPACT OF DISNEYWORLD ON CENTRAL FLORIDA ... ... . .

Tourism and Visitor Expenditures ... Employee Exp e nditure s ...... , .. Construction Materials and Equipment. Local Tax Revenues ......... . Effect of Disncyworld on Basic Economic

Activities . .............. . Effect on Other Visitor Orie nted Facilities

I - I

II - I II - I II -4 II -8 II - II

III - I III - I I11-3 III - 3 III -4

III- 5 III - 8


Number

I

II

LIST OF TABLES

SUMMARY: DISNEYWORLD IMPACT ON FLORIDA ECONOMY, 1968-1982 .....

PROJECTED NET GENERA TION OF TOURISM AT DISNEYWORLD YEARS 1 - 10 .. .... .

III SUMMARY OF BASIC ECONOMIC PROJECTIONS RELATED TO DISNEYWORLD .......... .

IV INCREASED STATE TAX REVENUES RESULTING

V

FROM DISNEYWORLD .............. .

SUMMARY: DISNEYWORLD IMPACT ON THE TRICOUNTY AREA ECONOMY, 1968-1982 .... .

VI POPU LA TION TRENDS AND PROJECTIONS FOR THE TRI-COUNTY AREA ....... .

VII INCREASED RETAIL SPACE REQUIREMENTS IN TRI-COUNTY AREA ...... .

ii

ll- 2

II -7

II - 10

II - 12

III - 2

III -6

I11-9


This report is the sole property of Walt Disney Productions. The c ontents and conclusions are intended for the exclusive use of the client. No abridgement or summa ry of the material contained h erein shall be m ade without the exp r ess written c onsent of Walt Disney Productions and E c onomics Research Associates.


INTRODUCTION

Disncyworld, ncar Orlando, Florida. is to be a unique and anlbitious new type of development. It will consist not only of an imaginative theme park built with the experience and knowledge gained in deve loping Disneyland, but will also contain a model community representing the optin,um living patte rns o f the future. This model community, c all e d EPCOT -- Experimental Prototyp e Community of Tomorrow -- will featur e a town ce nter with a full con1plement of commercial facilities, office space, and a cultural-recreation conlpl e x. The town center will be surrounde d by r e sidential areas and necessary comnlunity services, as well as an industrial park d es igne d to be a showplace and showcase for Arnerican industry.

It is ev ide nt that a development of the size and s c ope planned will have an inlpo rtant economic impact on the econonlY of the area in which it is

built. E c ono l11i cs Research Associates was r e taine d to measure and analyze the probable economic effect of Disneyworld on the ec onomy of Florida as a whol e and o n the in,mcdiately surrounding ar e a. Considerable economic data and information regarding all aspects of Disne ywodd, the economy of Florida, and Florida tourism in particular, have becn d e v e l o p e d by E c onomics Research As sociates durin g numerous preliminary planning studies for Disneyworld. This knowledge and information has been us e d ex t e nsiv e ly in this report.

SOURCE OF ECONOMIC BENEFITS

The eco no n1i c effects of a recreational- e duc ational dev e lopnlent such as Disnc ywo rld flow in a variety of channels, all r e sulting from the spending and em plo yme nt generated by the attraction. From thes e ne w spending inputs conle ne w wages and cnlploynlent, in c r e ased r e tail sales, increased tax r ece ipts, and a general rise in econonli c a c tivity pr o portionate to the size of th e basi c inputs. In this study each of the se maj o r elements is dis c ussed and r e lated to the specific areas dire c tly affe c ted.

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ORGANIZATION OF THE REPORT

The first section of this report summarizes the research findings. giving an avera 11 picture of the economic impact to be expected from Disneyworld on both the state economy and on the economy of Central Florida and the Orlando Metropolitan ar e a in particular. Section II describes in greater detail the economic inputs associated with Disneyworld's development. and indicates the probable effect of these inputs on the Florida economy. Section III details the direct impact D isneyworld will have on the Orlando m e tropolitan area which for the purpose of this report is defined as in c luding Orange, Seminole . and Osceola counti e s. It points up the importanc e of the development as a stimulus to future e c onomic growth in th e ar e a.

The r e s e arch was conducted bl' Sanger C. Hedrick under the administrativ e supervision of William S. Lund. Executive V ice Preside nt of Economics Research Associates.

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Section I

SUMMAR Y OF FINDINGS

Although a great deal of detailed planning remains to be done , it is evident from the scope of Disneyworld that the project will have a very significant impact on the economy of Florida and the Orlando metropolitan area. This inlpact may be summarized as follows:

l. During its initial construction stage and first ten years of operation, Disneyworld will directly generate a measurable addition in excess of $6. 6 billion in new wealth to the economy of Florida. The total impact of the new surge o f spending in the economy will undoutedly be much greater, but it is impossible to project precis e ly the increased wholesale and retail sales and employment c reated throughout Florida via the multiplier effect.

2. The economic impact will be felt in all parts of the state, primarily in terms of increased tourist volume and the facilities and service employment it will requir e . Th e impact in terms of new construction, ernployrnent, wages, and retail sales generated by Disneyworld, however, will be most apparent in the Orlando metropolitan a r ea and surrounding counties of Central Florida.

IMPACT ON THE STATE ECONOMY

Disneywor ld - Generated Expenditures

The amount of new spending directly resulting from the construction and o p e ration of Disneyworld during the first ten years is estimated at about $6.6 billion. This achievement will be accomplished as fo ll ows:

New vis itor expenditures New payrolls Construction materials and equipment

Total

1- 1

Spending Input $3,978,000,000

2, 26l, 600, 000 4l4,300,OOO

$6,653,900,000


New visitor expenditures represent the amount spent in Florida by new tourists attracted to the state by Disneyworld. New payrolls represent wages and salaries for jobs created by Disneyworld, including construction workers. tourist oriented employment, industrial employment, and the additional retail and service employment created. Construction materials and equipment represent the amount estimated to be spent in Florida during the construction of Disneyworld and necessary support facilities.

New Employment Created

Disneyworld will bring into being the equiva lent of 50, 000 full-time jobs by the end of its tenth operating year, plus the equivalent of 4,800 full-time construction jobs during this period. The figure combines basic employment at Disneyworld with the secondary employment these jobs will create. It does not, however, include the further employment that will be indirectly generated by Disneyworld purchasing and by new visitor spending at other attractions throughout the remainder of the state.

This level of employment will support a population of about 128, 000. Total housing required by this population is estimated to be over 37,700 dwelling units, representing a total value of $750 million. Additional commercial and retail space totaling at least 2,640, 000 square feet will be required to serve this population.

State Tax Revenue Generated

Increased state tax revenues generated by Disneyworld will corne from two major sources: sales tax revenues on new tourist expenditures and tax revenues generated by spending by the new population. These new l'evenues will total about $243 million by the end of Disneyworld's tenth yeal', accruing to the state at an annual rate of over $31 million at that time.

IMPACT ON THE TRI-COUNTY AREA

Tourist Expenditul"eS

The major part of Disneyworld's economic impact will be felt in the Orlando metropolitan area, including the three counties of Orange, Seminole, and Osceola. Visitors to Disneyworld will spend an

1-2


estimated $2.7 billion at Disneyworld, and while traveling through the tricounty area during the first ten years of operation. This is money brought into the area specifically and directly by the new attraction. These visitors will spend an estimated $1. 5 billion on retail goods and services while in the area. The remaining $1. 2 billion will be spent on lodging, amusements, and ree reation.

Expenditures of New Population

Visitor spending and investment in the construction and operation of Vlsltor oriented facilities, as well as new industrial development, will directly create new payrolls sufficient to support full-time employment of 50,000 persons. Of these payrolls an estimated $1. 8 billion will be spent within the l:'i -county area for retail goods and services and other living expenses during the study period.

New Housing Reguirements

A total of about 32,800 dwelling units will be required by the new population anticipated in the tri -county area. Some of this required housing will ultimately be provided within the city of EPCOT and its satellite comITlunities. However, a significant proportion of the total housing demand will be ITlet in developITlents located throughout the greater Orlando metropolitan area and surrounding counties.

Local Tax Revenues Generated

Additional tax revenues will be collected by the county and ITlunicipal governments of the tri -county area as a result of this developITlent and new spending. Total additional tax revenues to these governments will amount to about $101. 9 million during the study period. Increased property taxes derived from the expanded tax base will account for the major portion of this total, contributing at least $60 million.

1- 3


Effe ct on Visitor Oriented Facilities

The development of Disneyworld will have a substantial impact on all types of visitor and tourist oriented facilities within the tri - county region and throughout Florida. Demand for visitor accommodations created by the additional visitors both at the Disneyworld site and throughout the L:i-county region will grow from 8,800 units in year one to about 20,800 units by the tenth year of operation. It is also likely the large increased numbers of tourists remaining in the Orlando area will attract a further investment in basic tourist oriented commercial and recreation attractions.

At the same time, existing well-known attractions in Central Florida, such as Silver Springs and Cypress Gardens, can be expected to benefit greatly from the larger potential audiences traveling in the area. Minimum net gains in attendance at any existing attraction should be at least 10 percent. Much higher gains can be realized by attractions of high quality which are exposed to major tourist traffic flows.

1- 4


Section II

ECONOMIC IMPACT OF DISNEYWOR LD ON THE STATE OF FLORIDA

Although the economic impact of a development such as Disneyworld will be greatest in relative terms on the immediate area, it will also have a substantial and widespread effect on the economy of the entire state. Since the impact on anyone specific area cannot be measured directly at the present state of development, this study first analyzes the impact the development will have on the economy of Florida as a whole.

Within the context of this broad impact it is possible to dete,'minc the proportional impact on the tri-county area of Orange, Seminole, and Osceola.

This study is concerned with the net addition of new wealth to the Florida economy. As nearly as possible, only that part of the total spending impact gene rated by Disneyworld that otherwise might not have been spent in Florida will be treated. This new wealth will result from many new spending elements created by the construction and operation of Disneyworld. Each of these elements is analyzed in detail in this section.

The entire 15 -year economic effect produced by the construction and operation of Disneyworld will come from the three basic spending elements shown in Table 1. The grand total of new spending input directly generated by Disneyworld over this period amounts to more than $6.6 billion. This can be considered the net increase in the flow of money into the Florida economy resulting from Disneyworld.

CONSTRUCTION EXPENDITURES AT DISNEYWORLD

The first major element constituting a nd addition to the Florida economy is the investment required to establish Disneyworld as a major tourist attraction. The total construction expenditure needed to develop all facilities supporting the basic economic activities at Disneyworld is estimated to be in excess of $620 million during the first 15 years of construction and operation. This includes the cost of

II -I


Table I

SUMMARY: DISNEYWORLD IMPACT ON FLORIDA ECONOMY

1968-1982 (Mi Ilions)

Tourism

Net increase of 19.5 million visi to rs, 12 days ave rage stay, $17 per day

New Employment and Payrolls

Pre -openi ng and cons truction T ou rist-orie nted employment Indus tria 1 employment Service employment created Constru c tion of housing and

support facilities

T otal payrolls

Construction Materia Is and Equipment (Non-labor costs less contractors overhead and profit and land costs)

Construction of Disneywor ld faciliti es H o using and support facil i ties

Total materials and equipment

Total Impact

T o tal Wages or Expenditures

$ 232.8 632.8 588. I

1,220.0

342.0

$3,015.7

$ 294.7 381.3

$ 676.0

Sour ce: Economics Research Associates.

1I- 2

Amount Spent in State

$3, 978 .0

$ 174.6 474.4 441 . 1 915.0

256.5

$2,261.6

$ 176 .8 237.5

$ 414.3

$6,653 .9


developing the theITle park, EPCOT's cOITlITlercial, cOITlITlunity, and adn1inistrativc facilities, necessary tourist accomITlociations, a transportation complex, and industrial facilities. This investment is, in effect, the basic catalyst for all aspects of econoITlic iITlpact.

Since ITlany of the planned facilities will be unique in concept and design, the construction cost estimates are necessarily preliminary. Still, it is quite evident that an expenditure of this size, even over a period of 10 to 15 years, will have an iITlportant iITlpact on the statewide construction labor ITlarkct and on local and statewide suppliers of ITlaterials and equipITlent.

New Construction Payrolls

ApproxiITlately $233 ITlillion in new payrolls will be created by the construction of basic facilitie s at Disncyworld through the tenth year of operation. A major proportion of these expenditures will occur during the four or five years before the initial opening. However, a continuing program of construction will maintain a high level of construction wages and eITlploYITlcnt. At present wage levels these payrolls represent the equivalent of about 30,000 ITlan-years of construction eITlploYrrlent, or an average of 2,000 construction jobs per year over the 15 years of intensive construction activi.ty.

DeITland for Construction Materials

Total cost of ITlaterials and equipITlent required in the construction of Disneyworld is estiITlated at about $295 ITlillion. A large proportion of these supplies will be ITlanufactured and purchased in Florida, giving significant iITlpetus to the local as well as statewide economy. Because of the specialized nature of many construction projects at Disneyworld, detailed estiITlates of the ITlaterial and equipITlent inputs are not yet available. However, it can be expected that about 60 percent of the total rcquiren1ents for construction supplies will be ITlet by suppliers within Florida.

II- 3


NET INCREASE IN TOURISM

Disneyworld's most important single net addition to the economy of Florida will be the increased volum e of tourists it helps attract to the s ta te. An attraction of this type can be expected to add to the total volume of tourism and tourist expenditur es in the following ways: (1) by inducing some tourists to lengthe n their planned stay in Florida; (2) by c ausing tourists to spend more money while in Florida b ec ause of the added worthwhile aITluseITlent, r ec r eatio n, and commercial attra c tions ; and (3) by attracting lTIOre r epeat visitors to Florida as well as an additional increment of first-tim e visitors.

No close preced e nt exists for proj ec ting the impact of a developme nt such as Disneyworld on the volume of tourism in Florida. There have been no developments with an investITlcnt of cOITlparable size in aITluseITlent,

ente rtainment, and re c r e ation faciliti es . The level of investment in th ese fa c ilities in Disneywo rld's Theme Park alone is expected to equal or exceed that in the Disneyland Park. The only other similar attractions from the standpoint of inves tment and quali ty of attractions offered have be e n the Seattle and New York World's Fairs. From the e xpe rience and data gathered at Disneyland and the two World's Fairs, it is possible to estimat e the increased numbers of visitors to be expected in Florida as a r es ult of Disneyworld.

While each of thes e attractions has existed in its own unique tourism setting, it is evident from survey as well as froOl actual co unts of tourists that the attractions have had a significant impact on the volume of tourism in the ir r espec tive states. The experience in Washington, N ew York, and California will serve as the primary guid e to the impact Disneyworld will have on Florida tourism.

Although the othe r two effects on tourism, lengthened stays and increased spending, also ar e likely to o cc ur , insufficient data and information on the behavior of Florida tourist s are a v ailabl e to es timate the importance of these e ffe cts.

Experi e nce of World's Fairs

About 60 per ce nt of the Seattle World's Fair visitors were from out of state and about 40 perc e nt were visiting Washington for the first time. It is thus evi d e nt that the fair itself was important in inducing peo ple to visit the state .

II-4


Surv eys conducted at the New York Wo rld's Fair found that about 60 to 65 percent of the 1964 attendance consisted of visito r s from outside the New York metropolitan area who had made a s p ecial trip to attend the fair.

Experience at Disneyland

While World' s Fairs can be exp ected to exhibit a substa ntial a nd concentrated drawing power because of their limited duration and widespread publicity, it is also evident that Disneyland as a large , high quality, permanent attraction has b ecome an importa nt factor in draw ing tourists to California. In r ece nt surveys o f California visitors 38 percent mentioned special interest commercial attractions, primarily Disneyland, as the outstanding travel attract ion in the state. About 40 percent of all out-ofstate visitors to California visit Disneyland.

Probable Disneyworld Generation of Tourism to Florida

It i s appa rent that an attraction the size of Disneyworld, with a n investment of over $100 million in the theme park alone and an ultimate investment in all tourist generating facilities of over $500 million, combined with the cumulative knowledge and exp erience gained in operating Disneyland, will exert considerable attraction by itself that will complement Florida's na tural attractio ns. While Florida has nume r ous a ttractions that have made it more suc ces sful in dra wing tourists tha n any other single s tate, an attrac tion of the scope planned for Disneyworld \vill generate enough additional interest o n its own to bring more rep eat visitors to Florida as well as a substantial increment of first-time visito rs.

Florida's beaches, c lima te, and atmosphere of relaxation and fun have been and will continue to be the primary attraction and ge nel'ator of tourism for th e state. Howev e r, experience has shown tha t large scale, quality commerCial, amuseme nt, and r ec reation attractions also generate tourism. In 1965 only 8 percent o f all ac t ivities which visitors looke d forwa rd to on a tr ip to Florida con s i s ted of c o m mercial a t tractions . I t i s likely tha t Disneyworld will ra ise thi s p att e rn of expe cta t ions concer ning commercial attractions i n Florida t o a much highe r lev e \.

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Disneyworld should therefore be viewed as an important increment to Florida's overall attractiveness to tourists, as both an exciting commercial attraction and as an addition to the state's atmosphere of relaxation and fun.

Disneyland's fame throughout the Eastern half of the United States, where Disneyland's market penetration rate is relatively low because of the great travel distances involved, will very likely generate increased tourism to the similar Florida attraction. Only in the North East Central region has Disneyland's annual market penetration exceeded I percent. The state of Florida's present penetration is highest in the Eastern areas, ranging from 6.5 percent to 12.7 percent. Since few of these people have visited Disneyland it is reasonable to expect that more repeat visits as well as an increased number of first-time visits to Florida will take place as a result of Disneyworld.

In view of these facts, Economics Research Associates believes it is reasonable to expect that an average of 30 percent of Disneyworld attendance during the first ten years of operation will be composed of persons making a special trip to Florida to see Disneyworld. This ratio could easily be much higher during the first several years, as a result of the greater initial impact on tourism. Development of EPCOT as an ambitious and dynamic model community of the future as well as the extensive theme park and other recreation facilities are expected to contribute to the overall success of the attraction.

It should be noted that this ratio is quite conservative in relation to those experienced by both the Seattle and New York World's Fairs. Yet the proportion is considered appropriate because of the lack of time pl·essures to see Disneyworld and because of the very large established flow of tourism to Florida. It is also possible that the ratio is low in relation to past expel·ience at Disneyland.

Projected total Disneyworld attendance and number of generated or special trip visitors are presented in Table II for years one through ten. Disneyworld's total net impact on Florida tourism is estimated to be over 19.5 million additional visitors to Florida throughout the first ten years of operation. The ultimate effect of this increased tourism on the Florida economy assuming an average length of stay of 12 days and an average daily per capita expenditure of about $17.

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Year

1

2

3

4

5

6

7

8

9

10

10-Year Total

Table II

PROJECTED NET GENERATION OF TOURISM AT DISNEYWORLD YEARS I - 10

Total Projected Numbe r of Special Trip Theme Park Attendance Visitors to Florida

(thousands) (thousands)

6,000 1, 800

6, 100 1, 830

6,200 1, 860

6,300 1,890

6,500 1, 950

6,600 1,980

6,700 2,010

6,800 2,040

6,900 2, 070

7,000 2, 100

65,100 19, 530

Source: Economics Research Associates.

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amounts to a total addition of over $3.9 billion to the state's economy. These additions represent a n increase of approximately 10 percent in tota l Florida tourism over the ten-year period. It should be noted again, however, that this analysis has not included an estimat ion of the other potentia l beneficial aspects, such as extending the planned length of stay in Florida for many tourists and increasing their daily pc r capita expenditures.

NEW EMPLOYMENT GENERATED BY DISNEYWORLD

The dcvelopment and operation of Disneyworld will create many opportunities for new employment, not only in construction and tourist oriented areas of employment, but in industrial activity as well. This subsection analyzes the extent of new employment created in each of the major job catego ries and its meaning to the State of Florida in terms of basic economic activities. Although many part-time jobs are created in a seasonal, tourist oriented activity, only full-time employment will b e treated in this report.

New employment in basic economic activities which will be directly cl·cated by Disneywor ld is summarized as follows:

Number Eme lo:z:ed T:z:e e of Basic Emelo:z:ment Year I Year 10

Recreation and amusement facilities 1,680 1,960

Hote l and motel employees 2,025 4,520

Visitor oriented sales and services 3,880 8, 525

Industria I employment 10,000

Tota I 7,585 25,005

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In its first year of operation Disneyworld can be expected to create a ne e d for 7,585 new full-tim e jobs in basic tourist oriented economic activities. These jobs will be located both on the site and in touri st support facilities throughout the tri-county area. By the tenth year tourist support activities will require full-time employment of 15,005, w hile industrial employment is expec ted to reach 10,000 .

This total of 25, 000 new jobs created by the end of the tenth year repr esents the net increase in the basic economy of th e state and of the surrounding area in pa rticular . In addition to these jobs, at le as t a n equal number will be created indirectly in service , retail trade, and other types of employment r equi red to support th e tourist facilities and all employees involv e d in the basic economic activities. Thus, a total full-time employme nt of about 50,000 will be supported by all ac tivities related to Disneyworld by the end of its tenth year of ope ration.

Basic Measures of Economic Importance

The 50,000 full-time jobs can be translated into the economic measures that are of the greatest Significance to th e developing economy of C e ntral Florida and the entire state. These measures include population and population growth, new wages, demand for new housing, and a need for new commercial and retail faciliti es of all kinds. Table III summarizes the projections of each of these measures for Disneyworld's first ten years of operation. All projections indicate the leve l of demand genera t ed during that time, and no attempt has been made to identify the extent of development anticipated on the Disneyworld site and i n the sur rounding areas. Actual lev e ls of achievement m ay lag behind or exceed those projected because of the many exogenous economic influenc es affecting the movement of people and construction of support facilities .

It is evident from Table III that the initial investment in Disneyworld will hav e a gr ea tly magnified effect on the economies of Florida and many counties within the Central Florida region . Total wages accruing to dir ect ly and indirectly generate d full-time employment over the first ten years can be expected to total about $2.44 billion. Total housing demanded by the new popUlation will be abo ut 37,772 dwelling units, representing a total value of over $750 million. Additional commercial a nd r etai l space totaling at least 2,640,000 square feet and costing about $55 million will be required to serve this population.

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Table III

SUMMAR Y OF BASIC ECONOMIC PROJECTIONS RELATED TO DISNEYWORLD.U

H ou sing Den"land Comrne rc ial and Retail Annual Wages (number of Space Requir eme nts

Year Employment Population (millions) dwelling units) ( thousands of square feet~ /

I 15, 170 38, 897 $ 75.5 11,440 526.3

2 20,570 52,743 lIb. 8 15,512 815.2

3 25,970 66,590 160.0 19,585 1,116.2

4 31, 370 80,435 204.9 23,657 1,429.6

5 36,770 94, 282 252. I 27,730 1,758.8

6 39 ,420 101,076 276.2 29,728 1,926.5

7 42,070 107,871 300. 7 31,726 2,097.9

8 44,720 114,666 325.8 33,725 2,272.9

9 47,370 121,461 351. 4 35,723 2,451.7

10 50,020 128,256 377.5 37,772 2,640. I

1/ All totals except wages are cumulative, and all totals include effect o f directly and indirectly generated full- time employment.

2/ Does not include space required to serve tourists.

S ou rce: Economics Research Associates.


These totals do not include the effects of wages generated by

construction of Disneyworld and all related support facilities as well as part-time and seasonal wages. \Vages to construction workers for all types of new construction could total as much as $575 million over a 15-year period. This amount represents the equivalent employment of an additional 4,800 construction workers over the 15 ~rears of intensive construction activity.

STATE TAX REVENUES

A substantial increase in state tax revenues may be expected as a result of Disneyworld. These revenues wi II come from two major sources: sales tax revenues on tourist expenditures and tax revenues on the expenditures of the new population. Total state tax revenues are estimated in Table IV.

The general sales tax rate of 3 percent on retail sales, rentals, and admissions can be expected to apply to about 80 percent of the total net increase in tourist expenditures Disneyworld generates. Given the projected net increase in total Florida tourists ranging from 1.8 million in year one to 2. I million in year ten, and assuming each stays an average of 12 days and spends an average of $17 per day, net increased sa Ie s tax revenue s from tour ists wi II tota I $95.6 mi Ilion by yea r ten.

Increased tax receipts resulting from the new employment and population can be expected from . a number of sources. The general categories of receipts and the annual amounts are indicated in Table IV. The main categories of taxes in which increased receipts can be expected include: (l) the general 3 percent sales tax; (2) selective sales taxes, including gasoline, alcohol, and tabacco; (3) licenses, including motor vehicle and business licenses; and (4) other, including property, gift, and stock transfer taxes.

Projected annual tax revenues exhibit a significant rate of growth from an annual rate of $13.5 million in the first year of operation to an annual rate of $31.6 million in the tenth year. The major portion of this growth is attributed to the rapid increase in the personal incomes of Disneyworld-generated population. Total increased tax receipts accruing to the State of Florida over the first ten years of Disneyworld operation are estimated at $243 million.

I I - II

-------------------Table IV

INCREASED STATE TAX REVENUES RESULTING FROM DISNEYWORLD (Thousands)

Revenue Generated b~ New POj2ulation New Tourist Generated General Selective T()tal

Year Tax Rev enues Sales Tax Sales Tax Licenses Other Rec c ij2ts Pre-

Opening $ 1,705 $ 2, 175 $ 930 $ 480 $ 5,290

$ 8, 814 I, 518 I, 936 827 427 13,522

2 8, 958 2, 311 2,947 1,259 649 16, I 24

3 9, 105 3,303 4,212 1,799 925 19, 344 ..... ..... , 4 - 9, 255 4,216 5, 378 2, 298 I, 185 22, 332 N

5 9,546 4,760 6, 070 2,594 I, 337 24, 307

6 9,693 5,067 6,463 2,762 1,424 25,409

7 9, 861 5,503 7, 019 2,997 I, 546 26,926

8 9, 990 5,948 7,584 3,240 I, 671 28,433

9 10, I 34 6,4 07 8, 170 3,492 I, 800 30,003

10 10,281 6,876 8,769 3,744 1,932 3 1,602

Total $95,637 $47,614 $60,723 $25,942 $13,376 $243,292

Source: Florida Development Commission, Florida Taxes; and Economics Research Associates.


Section III

ECONOMIC IMPACT OF DISNEYWOR LD ON CENTRAL FLORIDA

Disneyworld will exert a substantial direct impact on all areas of Central Florida. The increased economic activity will be i nitiated by the additional tourist travel throughout the region as well as the new spending by Disneyworld generated population . Each a rea in Central Florida is likely to experience the economic g rowth in a variety of ways, whether it be through the development of new tourist oriented facilities, or the construction of ne\v housing, commercial, and recreation facilities necessary to serve the new population. The specific impacts for each area cannot be measured precisely at present. However, it is helpful to estimate, as a n example of this potential impact, the effect which Disneyworld is likely to h ave on the three closely related counties of Seminole, Orange, and Oseola.

This section, therefore, estimates the e xte nt to which the basic economic impact will be felt in the tri-county area, and the effect this will have in terms of population growth, housing r equi rement, and other related economic activities. Estimate d new spending inputs and economic benefits to the tri-county area are summarized in Table V. They amount to over $4.9 billion for the IS-year period cove ring preopening and construction through the tenth year of operation, or approximatel}' 1968 through 1982. As will be seen, these expenditures will have a tremendous effect in stimulating economic growth in the tri -county a rea.

TOURISM AND VISITOR EXPENDITURES

As in the case of the state economy, the most important addition to the economy of the tri-county region will be the increased da ys spent in the area b y tourists. The new money spent for amusements, recreation, retail goods, food and accommodations, along withthe new industrial activity expected to be attracted by Disneyworld, represents a base for extensive economic growth. An estimated 63 million outof-area visitors will spend 150 million visitor days in the tri- county area while attending Disneyworld during th e first ten years of operation. In view of the extent and quality of attractions to be offered, these

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Table V

SUMMARY: DISNEYWORLD IMPACT ON THE TRI-COUNTY AREA ECONOMY.

1968-1982

Tourism

63 million visitors. 150 million visitor days in area

New Emp loyee Expenditure s

Pre -opening and construction e mp loye e s

Tourist-oriented employment Industr ia 1 employment Servic e employment created Housing and support facilities

Expenditures

$18 . 50 per day

80 pe rcent of statewide

Amo unt Spent in Tri-County Area

(millio ns)

$2.775.0

$ 139.7 379.5 352.9 732.0 205.2

Total employee expenditures $1.809.3

Construction Materials and Equipment 80 percent of statewide

Construction of Disneyworld Housing and support facilities

Total materials and equipment

T o tal Impact

Source: Economics Research Associates.

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$ 141. 4 190.0

$ 331.4

$4.915.7


visitors can be expected to spend an average of $18.50 per person per day on all categories of expenditure while in the area. This represents a total expenditure by outside visitors to the area of over $2.7 billion during the first ten years of Disneyworld operation.

EMPLOYEE EXFENDITURES

Total employee wages generated by Disneyworld are estimated in Section ll. The net amount to be spe nt in the state after taxes, savings, and sales leakage were also estimated previously. From these totals it is possible to project the proportion of the wages which will be spent in the tri-county area, and particularly in the shopping and trading hub of 0 rlando.

Generally it can be expected that 80 percent of employee expenditures for all living expenses will take place within the tri-county area. This ratio is likely to be higher in the initial years of development in view of the size of the area and the existing trading patterns around Orlando. In later years of development, however, it is possible that retail trade will become more dispersed into outlying areas and surrounding counties as population continues to grow. Therefore an 80 percent expenditure rate within the tri-county area by all new wage earners is assumed. Thus, the new wage earners can be expected to spend about $1.8 billion in the tri-county area in retail goods and services , housing, and all other living expenses during the 1968-1982 period.

CONSTRUCTION MATERIALS AND EQUIPMENT

Estimates of the amount of construction materials and equipment needed to build Disneyworld, necessary supporting facilities, and new housing are made in Section II. In view of th e specialized type of construction and materials involved in Disneyworld, a preliminary estimate of the amount which can be supplied from within the state was also made. Since the Orlando area has a well developed building industry, it will again be assumed that at least 80 percent of the materials supplied from within the State of Florida will be purchased within the tri -county area.

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Under these conditions the construction of Disneyworld itself will result in local purchases of construction material and equipment totaling $141.4 million. The construction of ne cessa ry support facilities and hOUSing for the new population will mean additional purchases of about $190.0 million. Total purchases of material and equipment, then, in the Orlando tri-county area alone will total $331.4 million during the 1968-1982 period. Expenditures of this amount will undoubtedly provide the impetus for exte nsive expansion within the local and statewide construction and building supply industrie s.

LOCAL TAX REVENUES

It is much more difficult to project the anticipated increase in county and municipal tax reve nues which will result from Disneyworld than it is to project sta t e tax revenues. The main r easo n for this lies in the fact that property taxes constitute the major portion of tax revenues for loca l governments. Property tax rates are likely t o vary conSiderably between va rious counties and cities, between incorporated and unincorpo rated areas in a single county, and from year t o year. Even more important, h owever, is the impossibility of determining at this time the extent o f development that will take place in any particular area. Therefore, fo r purposes of estimation it will be necessary to assume that the general relationship between total state revenues and local taxes collected in Florida will remain about the same as in 1964. In that year ccunty revenues totaled about 30.7 percent of sta te tax revenues, and property tax revenues were 63.3 percent of this total. Municipal tax revenues equaled about 21.4 percent of state tax re ve nues. Property tax re ve nue s constituted 40.5 percent of total municipal reve nues. These relationships a re used in projecting local tax r evenues as follows:

L oca l Tax Revenues Generated by Disneyworld, 19 68- 1982 ( Mi llions)

Tax Revenues State tax revenue County prope rty tax Oth e I' county revenues Muni cipa 1 prope rty tax Other municipal revenues

Tota 1

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Statewide Total $243.3

47.4 28.5 20.9 30.7

Tri-County Area

$ 37.9 16.7 22.8 24.5

$101.9


It is possible to say that development of Disneyworld will greatly enhance the tri-county area's local tax base. Total local tax revenues resulting from the measurable direct economic effects of Disneyworld can be estimated at about $101.9 million during the period of construction and first ten operating years. A growth in annual revenues similar to that experienced on the state level can be anticipated. Thus, additiona I annua I revenue s acc ruing to loca I gove rnment in the tricounty area should grow from a rate of about $5.7 million in the first year of operation to an annual rate of about $13.2 million within ten years.

EFFECT OF DlSNEYWOR LD ON BASIC ECONOMIC ACTIVITIES

It is clear that Disneyworldwillhave a great effect on all aspects of economic growth in the tri-county area. This section places the projected impact of Disneyworld in better pe rspective by examining the estimated effects in terms of past and projected future growth of the area.

Population Growth

The tri-county area has established an impressive record of population growth during the past 15 years. Population increased by over 156 percent between 1950 and 1965, reflecting an average annual growth rate of about 5.5 percent. As shown in Table VI, most of this increase occurred between 1950 and 1960. The rate of growth decreased considerably between 1960 and 1965, to an average of under 2.5 percent per year. Despite this recent slowdown in growth, the tri-county area is expectedtoreacha population of over 450,000 by 1970 and 630, 000 by 1982.

Table VI summarizes past growth trends in the tri-county area and projected population increases through 1982, both with and without the effect of Disneyworld-generated population. The table indicates that if the tri-county area attracts 80 percent of the new population generated by Disneyworld, its net increase in population by 1982 will be 105, 000 persons. This figure represents an increase of almost 45 percent over the projected population growth without the impact of Disneyworld. Thus, by 1982 Disneyworld is likely to increase the tri-county area population from a level of 630, 000 to about 735, 000. At this point Disneyworld-generated population will represent about 15 percent of the tri-county area's total population.

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Year

1950

1960

1965

1970

1975

1980

1982

Table VI

POPULATION TRENDS AND PROJECTIONS FOR THE TRI-COUNTY AREA

Tri-County Net Increase Disneyworld A rea Over 1965 Generated Additions-.!.I

153,239

337,239

393,300

456,700 63,400 5,000

519,900 126,600 64,000

595,000 201,700 97,000

630, 000 321,800 105, 000

Tota I Inc luding Disneyworld

46 I , 7 00

583,900

692, 000

735,000

-.!.I Assuming 80 percent of new population locates in Tri -County area.

Source: Florida Development Commission; Bureau of Economics and Business Research, University of Florida; and Economics Research Associates.

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New Housing Requirements

Disneyworld can be expected to have essentially the same effect on demand for new housing as it will on population growth. Conversion of new population to demand for new housing is accomplished as fOllows:

Disneyworld Effect on T ri -County A rea Housing Requirements ( Thousands)

Without Disne:z:world Disne:z:world Addition Total New New New

Dwe lling Dwe lling Dwelling Popu lation Units Popula tion Units Units

Pe riod Growth Required Growth Required Required

1964-1969 63.4 19.8 5.0 I .6 21.4 1970- 1974 63.2 19.7 59.0 18.4 38. I 1975-1979 75. I 23.5 33.0 10. 3 33.8 1980-1982 35.0 10.9 8.0 2.5 13.4

Tota 1 236.7 73.9 105.0 32.8 106 . 7

Disneyworld's total net addition to housing requirements in the tri-county area by 1982 will amount to 32,800 dwelling units. This represents a net gain of over 44 percent in the tota l of new housing units r e quired to accommodate the increase in population. The total value of these 32,800 additional dwelling units will probably b e about $600 million.

New R e tail Sales and Space Requirements

Increased retail space requirements in the tri-county area will be ge nerated by Disneyworld because of the need to serve new visitors staying in the area, and to serve the new population related to Disneyworld. By 1982 the annual value of retail goo ds and services demanded by these two groups in the tri-county area is estimated to be $204.6 million and $181.2 million, respectively. A ssuming relatively high productivity

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ratio s of about $98 per square foot for tourist sales a nd $86 per square foot for resident sales yields conservative space requirements of about 2.07 million square feet related to tourist activitie s a nd 2.11 million square feet to serve the needs of Disneyworld-g e nera t e d population. Actual supportable retail space generated could be much higher if s uch a hig h producti v ity of retail space were not assumed. It is like ly, however, that most new shopping areas constructed by 1982 will yi e Id a much highe I' sa Ie s pe r squa re foot tha n pre sent ave rage s indicate.

The additional retail sales totaling $385.8 million annua lly by 1982 repre s ent an incl'ease of about 22 percent in projected retail sale s gene rated by Disneyworld for the tri -county area. Th e projected retai 1 space requirements of over 4.1 million square feet required to support these sales represents an increase of about 20 percent in total supportable retail sales space for the tri-county area in 1982. T able VII sets forth total retail space requirements generated by Disne yworld during each year of operation.

EFFECT ON OTHER VISITOR ORIENTED FACILITIES

The ten-year effect of an additional 65 million visitors traveling throughout Central Florida and remaining in the tri-county ar e a for a total of 150 million visitor days will undoubtedly give great impetus to further development of tourist and visitor oriented facilities in the area. The average increased demand for all types of accommodations created by Disneyworld in the tri-county area alone will amount to 8,800 rooms in year one, growing to 20,800 rooms by year ten.

This figure assumes an average party size of three and a normal occupancy factor of 70 percent, with 80 percent of out-ofar e a visitors desiring commercial accommodations ranging from camping site s to l\L"mry hote 1 rooms. The dema nd wi II be met by the construction of accommodations both on the site of Disne yworld and throughout the tri-county area.

Ot he r important commercia 1 and rec reation deve lopments are likely to be attracted to the Orlando area and Central Florida as a result of the inc rea sed numbe I' of vis ito I' s in the a rea. This wi II c rea te a further investment in basic visitor oriented facilities. At present, however , it is impossible to estimate accurat e ly the extent of this deve lopment .

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Yea r of Operation

2

3

4

5

6

7

8

9

10

Table VII

INCREASED RETAIL SPACE REQUIREMENTS IN TRI-COUNTY AREA

(Thousands of Square Feet)

Space Required Total Space Space by Disneyworld Requi rements

Require d Generated Gene rated by Tourists Population by Disneyworld

1,131.3 421. 0 1,552.3

1,253.3 652.2 1,905.5

1,371.0 893.0 2,264.0

1,483.8 1,143.7 2,627.5

1,590.7 1,407.0 2,997.7

1,694.7 1,541. 2 3,235.9

1,794.9 1,678. 3 3,473.2

1,889.9 1,818.3 3,708.2

1, 981 . 7 1,961.4 3,943.1

2,070.5 2,112.0 4,182.5

Source: EconolTIics Research Assoc iates.

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Existing major tourist attractions in Central Florida, such as Silver Springs, Citrus Tower, Singing Tower, Cypress Gardens, and Busch Gardens, will receive substantial benefit from Disneyworld in terms of larger potential audiences. Experience in Southern Crtlifornia and other areas of major development in visitor oriented attractions has shown that visitors will make an effort to see as many worthwhile attractions as possible. Therefore, the significant increase in travel throughout Central Florida will result in increased market exposure for all existing developments and increased attendance leve Is.

Exact levels of increased attendance attributable to Disneyworld are difficult to project. The gain will probably be a minimum of 10 p e rcent throughout the state, as a result of overall increased tourism. Percentage rates of increase can be expected to be much higher for any specific attraction depending on its distance from Disneywodd, accessibility by major highway, and level of capital investment as well as quality of attraction.

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Economic Impact of Disney World on Florida

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