economic trends & georgia tourism - what's on the horizon? aleksandar (sasha) tomic, ph.d

Economic Trends & Georgia Tourism - What's on the Horizon?

Aleksandar (Sasha) Tomic, Ph.D.

Trends to watch

• DEMOGRAPHIC– Influx of population into SE US– Aging– Immigration (and non-immigrants)

• ECONOMIC– US Economy– Labor Market– Oil prices– International issues

DEMOGRAPHIC TRENDS--Population

• Population inflow into South Eastern US is not abating– GA population increased 4.3 % since 2010– South population increased 4.5% since 2010 – US population increased 3.3% since 2010

• Population is aging

DEMOGRAPHIC TRENDS--Population

US Bureau of Census (www.census.gov)

DEMOGRAPHIC TRENDS--Population

• Implication– Decent market within drivable distance.– Larger portion of population will have time to

travel.– Focus some marketing on nearby states.– Income might be a concern.

IMMIGRATION

• Crackdown on illegal immigration

• Side effects: – Toughening of standards for non-immigrant visas– Might also complicate legal immigration

IMMIGRATION

2006 2007 2008 2009 2010 2011 2012 2013 2014

520 526634

689

817

669744 705

860

Foreign Visitors to GA ('000s)

U.S. Department of Commerce, International Trade Administration, Office of Travel and Tourism Industries (travel.trade.gov)

IMMIGRATION

http://www.georgia.org/industries/georgia-tourism/industry-research/

IMMIGRATION

• IMPLICATION– More difficult for foreign visitors to come to the

US and GA.– Might impose further challenges with finding

talent.

ECONOMICS—US ECONOMY

• Recovery is ongoing, economy out of the woods (?).

• (Less of a) Chance that Fed will increase interest rates.

• No real threats on the horizon (despite China).

ECONOMICS—US ECONOMY

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ECONOMICS—US ECONOMY

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ECONOMICS—US ECONOMY

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ECONOMICS—US ECONOMY

• IMPLICATION– Might want to rush the projects before the rates

rise.– Consumers’ optimism should yield higher

domestic demand (together with other factors).

ECONOMY—Labor Market

• Demographics are finally kicking in, retirements up.

• Hiring is up, competition for talent.• Wages and perks (including time off) will

increase

ECONOMY—Labor Market

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ECONOMY—Labor Market

• IMPLICATIONS– More people with disposable income and time to

travel.– Must increase wages and perks.• SIDE NOTE: Minimum wage, not an issue for some,

horrible for others.

ECONOMY—Oil Prices

• Oil prices are at 6 year low, and are not likely to raise substantially.

• However, gasoline prices are not as fast to adjust due to refining capacity

• Demand is decreasing so downward trend will stay (electric cars, etc.)

ECONOMY—Oil Prices

US Energy Information Administration (www.eia.gov)

ECONOMY—Oil Prices

• IMPLICATION– More demand for travel within drivable distance.– More money in consumers’ pockets.

INTERNATIONAL ISSUES

• Europe—still a mess, but still under the carpet.

• China—lots of dollars are “burning a hole” in Chinese pockets. However, uncertain outlook over the medium term. Slower growth.

• Russia—not likely to recover soon due to falling oil and commodity prices.

• Weak dollar—question how long it will last.

INTERNATIONAL ISSUES

• IMPLICATIONS– Global demand might soften, and GA tourism

industry might be affected by it. However, this is not a huge part.

– If dollar strengthens relative to other currencies, particularly euro, it is possible that some domestic tourists might be siphoned away.

LAST WEEK

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LAST WEEK

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PROPER RESPONSE

PROPER RESPONSE

TO SUMMARIZE

• While situation is far from clear, it is not alarming.

• There are no strong macro headwinds.• However, competition is fierce and innovation

is fast, so pay special attention to staying ahead of the competition.

• “Change before you have to.”-Jack Welch

THANK YOU

Aleksandar (Sasha) Tomic, Ph.D.Program Director

Master of Science in Applied Economicsa.tomic@bc.edu