april 2015 the economic impact of tourism in wisconsin
TRANSCRIPT
April 2015
The Economic Impact of Tourism in Wisconsin
State Overview
3
Headline results
The Wisconsin visitor economy strengthened in 2014 with a 5.3% increase in visitor spending. This follows a 4.5% gain in 2013.
■ Visitor spending tallied $11.4 billion in 2014.
■ Wisconsin visitor volumes reached 102.4 million in 2014.
■ With improvements in the overall economy and moderating gas prices, both day and overnight visitor volumes grew around 2%.
■ Per trip spending increased as personal income and consumer confidence strengthened in 2014.
■ Visitor spending growth was led by spending on recreational activities along with lodging.
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Headline results
Visitor spending of $11.4 billion generated $18.5 billion in total business sales in 2014 as traveler dollars flowed through the Wisconsin economy.
Visitor activity sustained 187,650 jobs in 2014, both directly and indirectly.
These jobs represent 7.9% of total employment in Wisconsin; 1 in every 12.7 jobs in the state is sustained by tourism
activity.
Including indirect and induced impacts, tourism in Wisconsin generated $1.4 billion in state and local taxes and $1.05 billion in Federal taxes last year.
In the absence of the state and local taxes generated by tourism, each Wisconsin household would need to pay $620 to maintain the current level of government services.
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Industry indicator summary
Visits to Wisconsin destinations grew 2.0% between 2013 and 2014.
Lodging metrics strengthened in 2014, posting their strongest numbers since 2011.
State sales tax revenue on lodging properties grew 6.9% in 2014 (source: State Revenue Office).
Tourism-related employment grew on par with overall state employment growth, increasing 1.1% from the prior year.
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Lodging industry
The hotel sector expanded robustly in 2014, with room demand growing 3.5%.
The occupancy rate increased from 55.1% in 2013 to 56.8% in 2014.
Tighter occupancy boosted average room rates 3.7%.
Rising demand and higher prices generated growth in room revenues of 7.4%.
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2011 2012 2013 2014
Demand
Revenue
ADR
Lodging metrics reflect a strong 2014
Source: Tourism Economics
% change
All lodging metrics posted their best results since the post-recession spike.
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Sales taxes
Sales tax collections in tourism-related industries were robust in 2014 with the exception of retail sales.
Strength in 2014 is evident across several visitor spending categories with lodging and F&B at 5-year highs.
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2010 2011 2012 2013 2014
Lodging F&B Recreation Retail
Taxable sales in tourism-related industries
Source: WI Dept. of Revenue
% change
Visitor Spending
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Overview
Wisconsin visitor volumes reached 102.4 million in 2014. Visitors spent a total of $11.4 billion.
Visits grew 2.0% while spending increased 5.3% in 2014. 88
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2010 2011 2012 2013 2014Visitor Spending, bls (L) Person-Stays, mls (R)
$
Wisconsin Visits and SpendingUS$ Billions
Sources: Longwoods International, OTTI, Stats Can, Tourism Economics
Millions
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Visitor spending
Wisconsin visitor spending reached $11.4 billion in 2014, posting 5.3% growth.
Recreational spending surged, followed by lodging and spending on food & beverages.
$9.2$9.9
$10.4$10.8
$11.4
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2010 2011 2012 2013 2014
$ B
illi
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Spending (L) % Change (R)
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Tourism Industry Sales & Growth RateUS$ Billions
Sources: Longwoods International, OTTI, Stats Can, Tourism Economics
Sector 2009 2010 2011 2012 2013 2014 % ChangeLodging $1,685 $1,840 $1,995 $2,087 $2,182 $2,339 7.2%
Other Transport $834 $958 $1,057 $1,195 $1,244 $1,285 3.3%
Air $384 $388 $405 $408 $407 $421 3.6%
Food & bev. $2,146 $2,252 $2,447 $2,569 $2,729 $2,905 6.4%
Retail $1,850 $2,066 $2,200 $2,222 $2,272 $2,328 2.4%
Recreation $1,162 $1,155 $1,225 $1,311 $1,393 $1,502 7.8%
2nd home rental $462 $540 $569 $584 $613 $638 4.2%
TOTAL $8,522 $9,199 $9,899 $10,376 $10,840 $11,419 5.3%
% Change 7.9% 7.6% 4.8% 4.5% 5.3%
Visitor Spending(US$ Million)
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Visitor spending by sector
Traveler spending neared $3.0 billion on food & beverages.
The lodging sector passed the retail sector to become the second largest spending category with $2.3 billion in sales.
In 2014, visitor spending increased 7.8% on recreation & entertainment, 6.4% on food and beverage, and 7.2% on lodging.Note: In this chart Transportation includes local and air
transportation
2,905
2,3392,328
1,7061,502
638
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$ Million, 2014 values shown
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Visitor spending distribution
With strong growth in leisure visits, the share of spending on recreational activities now exceeds 13% of all visitor spending.
The share of the traveler dollar spent on lodging, the largest sector, grew to 26.1% in 2014.
Food & beverage spending ranks second, capturing a quarter of visitor spending, followed by retail at 20%.
Lodging26.1%
Other Transport11.3%
Air3.7%
Food & bev.25.4%
Retail20.4%
Recreation13.2%
Visitor Spending by Sector
Sources: Longwoods International, OTTI, Stats Can, Tourism Economics
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Visitor spending trends
$2.4 $2.6 $2.7 $2.8 $3.0
$1.0 $1.1 $1.2 $1.2 $1.3 $0.4 $0.4 $0.4 $0.4 $0.4 $2.3
$2.4 $2.6 $2.7 $2.9
$2.1 $2.2
$2.2 $2.3
$2.3 $1.2$1.2
$1.3$1.4
$1.5
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$10
$12
2010 2011 2012 2013 2014
Recreation
Retail
Food & bev.
Air
Other Transport
Lodging
Sources: Longwoods International, OTTI, Stats Can, Tourism Economics
Wisconsin's Visitor Spending by Year, Billions of $
Visitor spending has grown an average of 5.6% annually since 2010.
Lodging sales have increased 25% since 2010.
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Visitor spending by market segment
Leisure tourism represents 88% of visitor spending in Wisconsin.
Overnight visitors spend $7.7 billion in Wisconsin, 67% of the total.
Day visitor spending added $3.8 billion in 2014.
Domestic visitors to Wisconsin spent $10.8 billion in 2014, 94% of all visitor spending.
Business $1.4 Day $3.8 Domestic $10.8
Leisure $10.0 Overnight $7.7 Overseas $0.6
Canada $0.1
Total $11.4 Total $11.4 Total $11.4
Business 12.2% Day 32.9% Domestic 94.3%
Leisure 87.8% Overnight 67.1% Overseas 5.0%
Canada 0.7%
Visitor Spending in 2014(US$ Billion)
Purpose Stay Market
SharePurpose Stay Market
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Visitor spending by market segment
12.2%
32.9%
94.3%
87.8%
67.1%
5.0%
0.7%
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Purpose Stay Market
Per
cent
age
dist
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Leisure
Day
Overnight
Overseas
Domestic
Business
Canada
Sources: Longwoods International, OTTI, Stats Can, Tourism Economics
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Seasonality of lodging
Tourism is a year-round industry in Wisconsin. Its peak is in the third quarter with nearly one-third of all rooms rented. In 2014, room demand in each quarter is at least 20% of all rooms rented.
In 2014, growth was spread throughout the year, with all but Q2 posting room revenue growth of 7% or higher. And Q2 revenue growth only dipped to 5.4%.
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Wisconsin Hotel Room Revenue$ millions
Source: Smith Travel Research
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Rooms
Wisconsin Hotel Rooms and RevenueQuarterly Share, 2013
Source: Smith Travel Research
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Seasonality of visitor spending
Business Day
In 2014, total visitor spending peaked in the 3rd quarter with $3.6 billion in visitor sales.
Spending growth was 3.5% or higher in all four quarters with Q1 posting spending growth of 6.8%.
$2,280
$2,862
$3,645
$2,631
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Wisconsin Quarterly Visitor Spending$ Millions
Source: Tourism Economics
Q1 Q2 Q3 Q42013 $2,135.6 $2,766.2 $3,454.1 $2,484.3
2014 $2,279.9 $2,862.4 $3,645.3 $2,631.5
% Chn 6.76% 3.48% 5.54% 5.93%
Visitor Spending by Quarter Wisconsin
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Seasonality of visitor spending
Business Day
Tourism spending has grown in every quarter since 2011.
Growth did hit a slow patch in the second half of 2012 and first part of 2013 before rebounding in the 2nd half of 2013.
The upward trend in quarterly tourism spending growth continued in 2014.
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Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2011 2012 2013 2014
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Wisconsin Tourism Spending Growth Y-o-Y Growth Rates by Quarter
Source: Tourism Economics
State Tourism Impacts
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How visitor spending generates impact
• Lastly, the induced impact is generated when employees whose incomes are generated either directly or indirectly by tourism, spend those incomes in the local economy.
• Travelers create direct economic value within a discrete group of sectors (e.g. recreation, transportation). This supports a relative proportion of jobs, wages, and taxes within each sector.
• Each directly affected sector also purchases goods and services as inputs (e.g. food wholesalers, utilities) into production. These impacts are called indirect impacts.
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Tourism sales by industry
Direct Indirect Induced TotalAgriculture, Fishing, Mining - 32.3 24.8 57.1 Construction and Utilities - 300.0 112.6 412.6
Manufacturing - 480.1 253.7 733.8
Wholesale Trade - 102.7 154.4 257.1
Air Transport 421.5 4.5 7.5 433.5
Other Transport 447.1 154.8 63.4 665.3
Retail Trade 2,327.9 16.0 293.9 2,637.9
Gasoline Stations 837.9 1.3 19.6 858.8
Communications - 252.0 123.8 375.8
Finance, Insurance and Real Estate 638.5 740.4 1,195.7 2,574.6
Business Services 71.4 775.2 244.4 1,091.0
Education and Health Care - 5.9 727.3 733.2
Recreation and Entertainment 1,236.0 62.2 40.5 1,338.7
Lodging 2,339.3 2.7 2.3 2,344.3
Food & Beverage 2,904.6 128.6 238.2 3,271.3
Personal Services 195.0 124.8 179.1 499.0
Government - 122.2 69.3 191.5
TOTAL 11,419.1 3,305.8 3,750.7 18,475.6
Growth Rate 5.3% 5.7% 5.7% 5.5%* Direct sales include cost of goods sold for retail sectors
Tourism Sales(US$ Million)
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All business sectors of the Wisconsin economy benefit from tourism activity directly and/or indirectly.
Sectors that serve the tourism industry, like business services, gain as suppliers to a diverse tourism industry.
Tourism sales by industry
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Tourism Sales by Industry$ million
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Total tourism employment
The tourism sector directly and indirectly supported 187,643 jobs, or 7.8% of all employment in Wisconsin last year.
Direct Indirect Induced TotalAgriculture, Fishing, Mining - 382 270 653 Construction and Utilities - 1,014 344 1,357
Manufacturing - 1,303 545 1,848
Wholesale Trade - 624 938 1,562
Air Transport 1,812 16 26 1,854
Other Transport 2,195 1,487 611 4,293
Retail Trade 15,459 231 4,352 20,042
Gasoline Stations 1,672 20 307 1,999
Communications - 1,026 426 1,452
Finance, Insurance and Real Estate 3,495 4,190 4,086 11,770
Business Services 463 8,136 2,658 11,257
Education and Health Care - 84 7,183 7,267
Recreation and Entertainment 24,337 1,274 911 26,522
Lodging 32,755 44 38 32,837
Food & Beverage 48,380 2,499 4,662 55,541
Personal Services 2,353 1,329 2,420 6,103
Government - 922 364 1,285
TOTAL 132,920 24,582 30,142 187,643
Growth Rate 1.1% 1.4% 1.3% 1.2%
Tourism Economy Employment
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Total tourism employment
Secondary benefits are realized across the entire economy through the supply chain and incomes as they are spent.
The unemployment rate in Wisconsin was 5.5% in 2014. Without the 187,643 tourism supported jobs, the unemployment rate would nearly double to 10.9%.
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Tourism Employment by Industry
Significant indirect and induced benefits
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Tourism employment intensity
3.7%
4.1%
22.8%
33.8%
92.4%
0% 20% 40% 60% 80% 100%
Total
Retail
Food & bev.
Recreation
Lodging
Tourism Employment Intensity by Industry
Tourism is a significant part of several industries – 92% of lodging, 34% of recreation, and 23% of food & beverage employment is directly supported by tourism spending.
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Tourism personal income
Direct Indirect Induced TotalAgriculture, Fishing, Mining - 5.9 5.2 11.1 Construction and Utilities - 80.9 28.9 109.9
Manufacturing - 76.1 32.1 108.1
Wholesale Trade - 44.1 66.3 110.4
Air Transport 99.0 0.9 1.4 101.2
Other Transport 108.0 70.5 27.8 206.3
Retail Trade 346.8 6.7 120.4 473.8
Gasoline Stations 42.6 0.5 7.7 50.8
Communications - 58.2 26.3 84.5
Finance, Insurance and Real Estate 60.9 137.0 138.8 336.7
Business Services 22.5 386.9 125.5 534.9
Education and Health Care - 3.1 384.8 387.9
Recreation and Entertainment 414.3 23.2 14.9 452.4
Lodging 660.1 0.7 0.6 661.4
Food & Beverage 776.9 39.4 82.8 899.0
Personal Services 79.8 57.3 71.2 208.3
Government - 68.6 24.4 93.0
TOTAL 2,610.9 1,060.0 1,159.0 4,829.9
Pch Change 3.9% 3.9% 3.1% 3.7%
Tourism Labor Income (Compensation)(US$ Million)
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Tourism personal income
Substantial employment in F&B and recreation supports significant labor income in those industries.
Business services and the FIRE (finance, insurance and real estate) sectors depend on tourism activity as suppliers to tourism companies and their employees.
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Tourism Labor Income by Industry$ million
Significant indirect and induced benefits
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Tourism tax generation
Taxes of $2.5 billion were directly and indirectly generated by tourism in 2014.
State and local taxes alone tallied $1.4 billion.
Tax Type 2010 2011 2012 2013 2014
Federal Taxes Subtotal 917.6 944.5 977.0 1,011.0 1,052.3
Corporate 81.9 87.4 91.5 95.6 100.8
Indirect Business 104.8 112.0 117.2 122.4 129.1
Personal Income 212.6 216.8 223.5 230.7 239.2
Social Security 518.2 528.4 544.8 562.3 583.1
State and Local Taxes Subtotal 1,202.1 1,269.8 1,312.3 1,356.3 1,412.3
Corporate 113.2 120.9 126.6 132.2 139.4
Personal Income 101.9 103.9 107.2 110.6 114.7
Sales 425.3 453.1 473.4 490.4 514.8
Bed 72.7 77.3 80.9 84.6 90.7
Property 370.9 391.7 397.8 408.3 417.5
Excise and Fees 108.5 113.0 116.4 119.9 124.4
State Unemployment 9.6 9.8 10.1 10.4 10.8
TOTAL 2,119.6 2,214.3 2,289.3 2,367.3 2,464.6
Traveler Generated Taxes(US$ Million)
In 2014, each household in Wisconsin would have been taxed an additional $620 to replace the tourism taxes received by state and local governments.
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Tourism tax generation – state & local government
Of the $1.4 billion collected by state and local governments from traveler activity, $767 million (54%) accrued to state government.
Local government revenues from visitor activity grew to $647 million.
Property tax revenue, along with local excise and fees and lodging taxes, comprise the major revenue streams for local governments.
Tax Type 2012 2013 2014
State Tax Subtotal 706.0 731.8 767.1
Corporate 126.6 132.2 139.4
Personal Income 107.2 110.6 114.7
Sales 438.0 453.7 476.3
Lodging 0.0 0.0 0.0
Property 0.0 0.0 0.0
Excise and Fees 24.2 25.0 25.9
State Unemployment 10.1 10.4 10.8
Local Tax Subtotal 606.3 625.5 647.3
Corporate 0.0 0.0 0.0
Personal Income 0.0 0.0 0.0
Sales 35.4 36.7 38.5
Lodging 80.9 85.6 92.7
Property 397.8 408.3 417.5
Excise and Fees 92.2 95.0 98.5
State Unemployment 0.0 0.0 0.0
Traveler Generated Taxes - State and
Local Government Revenues
(US$ Million)
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Were the Wisconsin tourism industry a single business, it would rank #242 on the Forbes 500 list, similar in size to Visa, Inc. and CarMax and larger than Norfolk Southern or Office Depot.
Visitor spending of $11.4 billion is equal to the total revenue of the Wisconsin Lottery… since 1988.
Total sales in supported by tourism in Wisconsin reached $18.5 billion in 2014.
By comparison, worldwide revenue of Wisconsin’s 4th largest company – Kohl’s – was $19 billion in 2014
How important is tourism?
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Were the 133,000 direct tourism jobs located all in one county, it would be enough jobs for EVERY resident in Washington County – the 11th largest county in the state.
The total tourism employment of 187,643 is more than the total employment of the Appleton AND Janesville-Beloit MSA’s.
How important is tourism?
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Each household in Wisconsin benefits from tourism, saving $620 in 2014 in taxes as visitor activity supports state and local governmental revenue.
■ That is enough for a annual golfing membership at Christmas Mountain Village or
■ 20-Game Fan's Choice Plan in the outfield for the Milwaukee Brewers or
■ About 20 separate admissions to a waterpark in Wisconsin Dells (assuming average price of $30).
How important is tourism?
Methodology and Background
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By monitoring tourism’s economic impact, policy makers can make informed decisions regarding the funding and prioritization of tourism development.
It can also carefully monitor its successes and future needs.
In order to do this, tourism must be measured in the same categories as other economic sectors – i.e. tax generation, employment, wages, and gross domestic product.
Why quantify the tourism economy?
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Why is this a challenge?
Most economic sectors such as financial services, insurance, or construction are easily defined within a country’s national accounts statistics.
Tourism is not so easily measured because it is not a single industry. It is a demand-side activity which affects multiple sectors to various degrees.
Tourism spans nearly a dozen sectors including lodging, recreation, retail, real estate, air passenger transport, food & beverage, car rental, taxi services, travel agents…
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• Domestic visitor expenditure estimates are provided by Longwoods International’s representative survey of US travelers. These are broken out by sectors (lodging, transport at destination, food & beverage, retail, and recreation), by purpose (business and leisure), and by length of stay (day and overnight).
• Tourism Economics then adjusts these levels of spending based on a range of known measures of tourism activity:
• Overseas visitor spending (source: OTTI, TE)
• Canada visitor spending (source: Statistics Canada, TE)
• Sales tax receipts
• Spending on air travel which accrues to all airports and locally-based airlines
• Gasoline purchases by visitors (source: TE calculation)
• Smith Travel Research data on hotel revenues
• Industry data on employment, wages, GDP, and sales (source: BEA, BLS, Census)
Methods and data sources
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• An IMPLAN model was compiled for the State of Wisconsin. This traces
the flow of visitor-related expenditures through the local economy and
their effects on employment, wages, and taxes. IMPLAN also quantifies
the indirect (supplier) and induced (income) impacts of tourism.
• All results are benchmarked and cross-checked and adjusted based on
the following:
• US Bureau of Labor Statistics and Bureau of Economic Analysis
(employment and wages by industry)
• US Census (business sales by industry)
• The source of the employment and wage data is the Regional Economic
Information System (REIS), Bureau of Economic Analysis, U.S.
Department of Commerce. All employment rankings are based on Bureau
of Labor Statistics (ES202/QCEW) data.
Methods and data sources
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Selected recent economic impact clients
Cities
Baltimore, MD
Columbus, OH
Kansas City, MO
London, United Kingdom
New York City
Omaha, NE
Orlando, FL
Philadelphia, PA
Pittsburgh, PA
Rockford, IL
Countries / Provinces
Bahamas
Bermuda
Cayman Islands
Dubai
Ontario Canada
St. Lucia
United Kingdom
Associations / Companies
Center for Exhibition Industry Research (Economic Impact of Visa Restrictions)
DMAI (Event Impact Calculator for 80 CVBs)
US Travel Association (Impact of travel promotion)
InterContinental Hotels
States
California
Georgia
Maryland
New York
North Carolina
Ohio
Pennsylvania
Wisconsin
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About Tourism Economics
Tourism Economics, headquartered in Philadelphia, is an Oxford Economics company dedicated to providing high value, robust, and relevant analyses of the tourism sector that reflects the dynamics of local and global economies. By combining quantitative methods with industry knowledge, Tourism Economics designs custom market strategies, project feasibility analysis, tourism forecasting models, tourism policy analysis, and economic impact studies.
Our staff have worked with over 300 destinations to quantify the economic value of tourism, forecast demand, guide strategy, or evaluate tourism policies.
Oxford Economics is one of the world’s leading providers of economic analysis, forecasts and consulting advice. Founded in 1981 as a joint venture with Oxford University’s business college, Oxford Economics is founded on a reputation for high quality, quantitative analysis and evidence-based advice. For this, it draws on its own staff of 90 highly-experienced professional economists; a dedicated data analysis team; global modeling tools; close links with Oxford University, and a range of partner institutions in Europe, the US and in the United Nations Project Link.
For more information: [email protected].
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For more information:
Adam Sacks, President
Christopher Pike, Senior Economist