September 2016 The Economic Impact of Out-of-State Visitor Spending in Florida
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September 2016
The Economic Impact of Out-of-State Visitor Spending in Florida
2
What are we measuring here
Out of State VisitorsFlorida
Destination
$$$$$$$$$$$$$$$$$$$$$$
3
What are we measuring here
Florida Jobs
Yes, even Kylo Ren has to pay taxes
The importance understanding impact
6
• Inform decisions regarding the funding and prioritization of tourism marketing
• Compare tourism to other industries
• Track tourism’s role in economic diversification
• Monitor yield per visitor
• Understand how tourism affects specific industries
In order to do this, tourism must be measured in the same categories as other economic sectors – e.g. employment and gross domestic product.
Why quantify the tourism economy?
7
• Most economic sectors such as energy and banking are easily defined within national accounts statistics.
• Tourism is not so easily measured because it is not a single industry. It is a demand-side activity, defined by visitors.
• Tourism spans nearly a dozen sectors including lodging, recreation, retail, real estate, air passenger transport, food & beverage, car rental, taxi services, and travel agents.
Why is this a challenge?
8
Full impact, with industry detail
ACCOMODATION
CATERING, ENTERTAINMENT
RECREATION, TRANSPORTATION
&OTHER TRAVEL RELATED SERVICES
PRINTING/PUBLISHING, UTILITIESFINANCIAL SERVICES, SANITATION SERVICESFURNISHINGS AND EQUIPMENT SUPPLIERS,
SECURITY SERVICES, RENTAL CAR MANUFACTURING,TRANSPORTATION ADMINISTRATION, TOURISM
PROMOTION, SHIP BUILDING, AIRCRAFT MANUFACTURING,RESORT DEVELOPMENT, GLASS PRODUCTS, IRON/STEEL
T&T DIRECT
T&T INDIRECTT&T INDUCED
OVERALL T&T IMPACT
FOOD & BEVERAGE SUPPLY, RETAILERS BUSINESS SERVICES, WHOLESALERS, COMPUTERS,
UTILITIES, MANUFACTURERS, HOUSING, PERSONAL SERVICES
Approach and concepts
10
Multiple datasets inform measurements
Visitor Spending
Tax
Income
Employment
Survey
11
• Syndicated traveler survey projections – D.K. Shifflet
• Bureau of Labor Statistics (employment and income by industry)
• Bureau of Economic Analysis (GDP by industry)
• Census (business sales by industry)
• Smith Travel Research (hotel performance)
• NTTO / US Department of Commerce (international inbound)
• Statistics Canada (visits and spending from Canada)
• Bureau of Transportation Statistics (air arrivals)
• Department of Revenue (tourism taxes)
• Credit Card reports - VisaVue
Data sources
Travel drivers
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The recent past:
1. Domestic consumers improving and confident
2. Fluctuating transportation costs
3. Dollar depreciation in 2013, appreciation in 2015 affecting international travel
14
Household net wealth up 22% from pre-recession peak
14
15
Household balance sheets much improved
16
Healthy employment gains in last three years
Jul 2016
255,000
190,000
204,000
16
17
… & consumers remain optimistic
18
…wage growth picking up
19
Lower fuel prices free up resources
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
06 07 08 09 10 11 12 13 14 15 16
Retail price12-mo moving avg
Gas Prices Are On a Three Year Decline
Source: Energy Information Administration
Texas gasoline price, all grades, dollars per gallon
20
Emergers no longer the locomotive of global growth
-2.00
-1.00
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
World EM-China
World: GDP growth% year
Source: Oxford Economics/Haver Analytics
Forecast
21
US Travel is more expensive for Canadians
Canadian dollar has lost 30% of its value in 3 years – half of the loss was in 2015.
0.8
0.9
1
1.1
1.2
1.3
1.4
1.5
1.6
1.7
2000 2002 2004 2006 2008 2010 2012 2014 2016
Canadian US Exchange rateCN$ per US$
Source: Tourism Economics
22
Thus, visitation declined
As a result, visitation has declined.
0
5
10
15
20
25
0.8
0.9
1
1.1
1.2
1.3
1.4
1.5
1.6
1.7
2000 2002 2004 2006 2008 2010 2012 2014 2016
Canada/US exchange rate & Canadian departures$/C$
Source: Tourism Economics
Millions
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The US has become much more expensive
23
-7%
-9%
-13%
-15%
-20%
-21%
-22%
-23%
-23%
-40%
-42%
-46%
-52%
-60% -50% -40% -30% -20% -10% 0%
IndiaChina
S KoreaJapan
EuroCanada
ChileAustralia
MexicoColombiaArgentina
BrazilRussia
Exchange rate depreciation, 2016 / 2014
Source: Tourism Economics
local per $US
24
Still, air arrivals showing resilience
24
-10.0%0.7%0.7%1.1%
2.4%2.7%3.1%
4.8%5.2%
7.8%8.4%
12.2%18.6%
-20% -10% 0% 10% 20% 30%
BrazilFrance
GermanyJapan
Latin AmericaTotal
EuropeUK
OverseasAustralia
AsiaKoreaChina
Annual % change, YTDYTD growth for air arrivals in the US, May-16
Source: Tourism Economics, APIS
25
Takeaways
International visitation has declined but not as bad as would be expected.
Spending, however, has been affected.
Domestically, lower gas prices, high consumer confidence, increasing employment and wages is driving tourism demand.
This has been a very recent phenomenon – only in the last 24 months or so.
Prior to that, international visitation and spending dominated growth.
Understanding Out-of-State Visitor Spending
27
$108.8 billion in out-of-state visitor spending
$78.7
$87.4$91.5
$98.5
$104.7$108.8
$60.0
$70.0
$80.0
$90.0
$100.0
$110.0
$120.0
2010 2011 2012 2013 2014 2015
Visitor Spending$
$ Billions
Note: This study reports the visitor spending and associated economic impacts for out-of-state visitors to Florida. All spending
and impacts stated in this report occur within the state.
29
Visitor spending shares
Lodging captured 28.3% of out-of-state visitor spending in 2015.
Food & beverage spending followed, comprising 20.4% of visitor spending.
14.3 cents of every visitor dollar was spent on recreational activities in 2015. Lodging
28.3%
Transp w/in destination
12.4%
Food & Beverages
20.4%
Retail14.5% Recreation
14.3%
Air10.2%
Out-of-State Visitor Spending
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Visitor spending profiles
Overseas visitors spend a larger share of their vacation dollars in Florida, when compared with their domestic counterparts, on shopping and recreational activities.
Lodging28.3%
FnB20.9%
Retail 11.6%
Rec10.9%
Trans15.6%
Air9.8%
Other2.8%
Domestic spending profileshare
Source: DKS, Tourism Economics
Lodging18.7%
FnB17.4%
Retail 31.4%
Rec13.9%
Trans5.8%
Air10.6% Other
2.2%
Overseas spending profileshare
Source: NTTO, Tourism Economics
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Visitor spending by industry
$24.6 $26.8 $27.8 $30.8
$12.6 $13.2 $13.9 $13.5$18.1 $19.5 $21.2 $22.2$14.3
$15.2$16.5 $15.8$8.7
$9.6$10.4 $11.1$13.1
$14.3$14.9 $15.5
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
2012 2013 2014 2015
Thou
sand
s
Recreation
Air
Retail
Food &Beverages
Transp w/indestination
Lodging
Florida's Out-of-State Visitor Spendingby Year, Billions of $
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Visitor spending by industry
26.9% 27.2% 26.6% 28.3%
13.8% 13.4% 13.3% 12.4%
19.8% 19.7% 20.3% 20.4%
15.7% 15.4% 15.7% 14.5%
14.3% 14.5% 14.2% 14.3%
9.56% 9.78% 9.89% 10.15%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014 2015
Air
Recreation
Retail
Food/bev
Transp w/indestination
Lodging
Florida's Out-of-State Visitor Spendingby Year, Share of Total
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Visitor spending by travel sector
$58.7 $65.6 $70.3 $73.7 $77.2 $83.1
$20.1$21.8
$21.2$24.8
$27.5$25.7
$0
$20
$40
$60
$80
$100
$120
2010 2011 2012 2013 2014 2015Domestic International
Florida's Out-of-State Visitor Spendingby Year, Billions of $
Understanding the impact on the Florida economy
35
ACCOMODATION
CATERING, ENTERTAINMENT
RECREATION, TRANSPORTATION
&OTHER TRAVEL RELATED SERVICES
PRINTING/PUBLISHING, UTILITIESFINANCIAL SERVICES, SANITATION SERVICESFURNISHINGS AND EQUIPMENT SUPPLIERS,
SECURITY SERVICES, RENTAL CAR MANUFACTURING,TRANSPORTATION ADMINISTRATION, TOURISM
PROMOTION, SHIP BUILDING, AIRCRAFT MANUFACTURING,RESORT DEVELOPMENT, GLASS PRODUCTS, IRON/STEEL
T&T DIRECT
T&T INDIRECTT&T INDUCED
OVERALL T&T IMPACT
FOOD & BEVERAGE SUPPLY, RETAILERS BUSINESS SERVICES, WHOLESALERS, COMPUTERS,
UTILITIES, MANUFACTURERS, HOUSING, PERSONAL SERVICES
Illustrating the concepts
Travel & Tourism IndustryThe direct effect of visitor spending
Focus of Tourism Satellite Account
Travel & Tourism Economic Impact
The flow-through effect of T&T all demand across the economy
Expands the focus to measure the overall impact of T&T on all sectors of the economy
ACCOMMODATION
36
Visitor spending impacts
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000FI
RE
F&B
Ret
ail T
rade
Bus.
Ser
vice
s
Lodg
ing
Rec
reat
ion
Air T
rans
port
Gas
Oth
er T
rans
p
Educ
atio
n
Com
m.
Con
stru
ctio
n
Induced
Indirect
Direct
Tourism Sales by Industry$ million
F&B: Food and BeverageFIRE: Finance, Insurance, Real EstateBus. Services: Business ServicesGas: Gasoline StationsOther Transp: Other TransportationManu.: ManufacturingPersonal Serv.: Personal ServicesComm: Communication
Significant indirect benefits
Note: Direct sales include cost of goods sold for retail
37
Tourism employment surging (direct)
697,396 705,016734,694
762,496787,842
820,353852,495
500,000
550,000
600,000
650,000
700,000
750,000
800,000
850,000
900,000
2009 2010 2011 2012 2013 2014 2015
Direct Supported Employment$
38
Tourism employment growth
And not only is the out-of-state tourism employment industry large, it has consistently grown faster than the state economy, driving Florida’s employment growth.
-0.8%
1.1%
2.0%2.5%
3.2%3.4%
1.1%
4.2%3.8%
3.3%
4.1% 3.9%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
2010 2011 2012 2013 2014 2015Florida Economy Out-of-state tourism employment
growth rate
Source: Tourism Economics
Out-of-state tourism employment driving growth
Source: BEA, Tourism Economics
39
Business Day
7.6%
7.3%
41.2%
53.2%
81.1%
0% 20% 40% 60% 80% 100%
Total
Retail
Foodservices
Recreation
Lodging
Tourism Employment Intensity by Industry
Tourism share of key industry employment
40
Tourism impacts
12
12
27
0
10
20
30
40
50
60
Labor Income
Induced
Indirect
Direct
Source: Tourism Economics
Tourism Labor Income Impact 2015, Billions of $
Source: Tourism Economics
279
266
852
0
200
400
600
800
1,000
1,200
1,400
1,600
Employment
Induced
Indirect
Direct
Source: Tourism Economics
Tourism Employment Impact 2015, Thousands
Source: Tourism Economics
Total Impacts include 1.4 million jobs earning $50 billion in income – all supported by out-of-state visitor spending.
41
Tourism tax generation
Each household in Florida would need to be taxed an additional $1,535 per year to replace the tourism taxes received by state and local governments.
Business Day
Tax Type Direct Indirect/ Induced
Total
Federal 6,879.6 6,185.0 13,064.6 Personal Income 2,298.5 2,063.9 4,362.4 Corporate 674.3 973.5 1,647.8 Indirect business 803.7 440.8 1,244.5 Social Security 3,103.1 2,706.8 5,809.9
State and Local 7,594.5 3,668.0 11,262.5 Sales 3,844.1 1,788.4 5,632.4 Bed Tax 600.4 - 600.4 Personal Income - - - Corporate 90.5 130.7 221.2 Social Security 34.3 29.4 63.7 Excise and Fees 742.1 463.2 1,205.3 Property 2,283.2 1,256.3 3,539.5 TOTAL 14,474.1 9,853.0 24,327.1
Out-of-State Tourism Generated Taxes(US$ Million)
42
Tourism tax generation
Business Day
Tax Type Direct Indirect/ Induced
Total
State Tax Subtotal 4,074.3 2,011.4 6,024.6Corporate 90.5 130.7 221.2Personal Income 0.0 0.0 0.0Sales 3,513.9 1,643.2 5,096.0Lodging 0.0 0.0 0.0Property 0.0 0.0 0.1Excise and Fees 435.6 208.1 643.6State Unemployment 34.3 29.4 63.7
Local Tax Subtotal 3,520.3 1,656.6 5,237.9Corporate 0.0 0.0 0.0Personal Income 0.0 0.0 0.0Sales 330.2 145.2 536.5Lodging 600.4 0.0 600.4Property 2,283.2 1,256.3 3,539.4Excise and Fees 306.5 255.1 561.6State Unemployment 0.0 0.0 0.0
Tourism Generated Taxes - State and Local Government Revenues
(US$ Million)
43
Visitor spending in Florida grew 3.9% in 2015, reaching $108.8 billion with a total impact on business sales of more than $183.5 billion.
Despite a 25% decline in gasoline prices, visitor spending grew, supported by strong increases in accommodations and food & beverage spending.
1-in-6 non-farm jobs in Florida is supported by out-of-state visitor spending.
Out-of-state visitor supported employment growth has been higher than overall state employment growth.
Total state and local tax revenue supported by tourism activity reached $11.3 billion in 2015.
2015 Wrap-up
Tourism in context
45
Tourism in context On average, out-of-state visitors spend
$300 million per DAY in Florida.
The 1.4 million jobs are enough jobs for every resident of Palm Beach County –the 3rd largest county in Florida.
46
Tourism in context The $6.0 billion in state revenue is enough to fully fund six state
agencies – including three of the top ten: Economic Opportunity, Environmental Protection, and Health Departments along with Law Enforcement, Executive Office of the Governor and Citrus Departments.
State and local tax revenue supported by out-of-state visitors reached $11.3 billion. The state’s contribution to all levels of education in the 2014-2015 budget was $10.6 billion – a record amount.
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