economic impact of tourism in hillsborough county - 2014 august 2015
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Economic Impact of Tourism in Hillsborough County - 2014August 2015
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Key findings for 2014
Almost 21 million people visited Hillsborough County in 2014.
Visitors to Hillsborough County spent $3.5 billion, and this spending supports total sales of over $5.4 billion in Hillsborough.
Over 47,000 jobs, with associated incomes of $2.0 billion, were sustained by visitors to Hillsborough County.
One-in-13 jobs in Hillsborough is supported by visitor spending.
Tourism in Hillsborough generated almost $330 million in state and local tax revenues, equivalent to $698 per Hillsborough County household.
Local tourism trends
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Positive tourism trends for Hillsborough County
Consumer confidence in the US has rebounded to near pre-recession levels.
Employment growth in key source markets is strong.
Local employment in the recreation sector and the accommodation sector have been is growing quickly and are outpacing the overall Hillsborough County economy.
Hillsborough County hotels have seen increases in occupancy, average daily rate, and revenue per available room.
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Consumer confidence is up
Consumer confidence has returned to near pre-recession levels.
Consumers are feeling more optimistic about the state of the economy and their personal financial situations.
Continued increases in consumer confidence should lead to increases in household travel and travel budgets.
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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Confidence index Expectations index
Consumer sentimentIndex score
Source: The Conference Board
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Employment gains in source markets
Major source markets have experienced 4 straight years of employment growth.
Employment and wage growth should lead to increases in tourism spending.
While Florida employment has not reached pre-recession levels, it is increasing rapidly (up 9% since 2010) which bodes well for in-state visits and spending.
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Florida
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Employment growth in key source marketsAnnual % change
Source: BLS
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Tourism related employment is growing
Employment in the recreation and food services have exceeded their pre-recession highs.
Employment in the recreation sector was largely unaffected by the recession.
Employment in tourism related sectors is growing faster than the general economy.
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All industriesRecreationAccommodationFood services
Hillsborough County employmentRelative level, 2009=1
Source: BLS
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Key hotel metrics are all rising
RevPAR currently stands at $67.40, and is up 36% from 2009.
Occupancy rates have risen from 53% in 2009 to 69% in 2014.
Over 5.5 million hotels room-nights were booked in Hillsborough County in 2014
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Average daily rate (L)Revenue per room (L)Occupany rate (R)
Hotel MetricsUS $
Source: STR
Percentage
Trends in visits and spending
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Growth in number of visits
20.8 million people visited Tampa in 2014.
This includes 20.3 million domestic visitors and 514,000 international visitors.
Visits are up 22.5% from 2009, when 17.0 million people visited.
2014 was a year of strong growth, with the number of visits increasing by 6.2%.
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2009 2010 2011 2012 2013 2014
Visits (L)
% Change (R)
Visits to Hillsborough CountyVisits (millions)
Source: Tourism Economics
% Change
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Visits to Hillsborough County by source
Total visits are up 22.5% from 2009, and were up 6.2% in 2014 alone.
Domestic day visitors make up 60% of all trips to Hillsborough County.
The international market is growing at more than double the rate of the domestic market.
Overnight Day Interntional Total
Visits 7,890,000 12,450,000 514,000 20,854,000
Change Since 2009
19.0% 24.0% 47.5% 22.5%
Visits by Source
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Growth in visitor spending
Visitors spent $3.5 billion in Hillsborough County in 2014.
Spending is up 31% from 2009, when visitors spent $2.7 million.
Spending increased by 8.3% in 2014 alone.
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Spending (L)
% Change (R)
Visitor spending in Hillsborough County$ (billions)
Source: Tourism Economics
% Change
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Visitor spending in Hillsborough County
Domestic overnight visitors make up 59% of all visitor spending in Hillsborough County.
Spending from international visitors is growing at more than double the rate of the domestic market.
Overnight Day Interntional Total
Spending 1,783.9 884.7 637.7 3306.3**
Change Since 2009
25.0% 25.5% 69.6% 31.8%
**Airfare is not estimated for individual segements, but represents an additional $190 million in revenue for the Hillsborough County economy.
(US$ Million)
Total Visitor Spending
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Visitor spending breakdown
The largest share of the visitor dollar was spent on food and beverages – 27% of the average dollar.
Spending on recreation represents 25% of visitor spending.
Lodging19.0%
Local trans.13.1%
Food & bev.26.6%
Retail16.5%
Recreation24.9%
Visitor spending profile
Avg spending per person per trip
$158.55
Source: Longwoods International
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Total Visitor Spending in Hillsborough County
Expenditures by overnight domestic visitors make up over half of total spending.
Spending by international visitors is approaching the level of spending by domestic day visitors.
Overnight Day Interntional Total
Lodging 461.7 0.0 165.0 626.7
Local trans 222.1 131.5 79.4 432.9
Food & bev. 454.0 261.8 162.3 878.1
Retail 259.3 192.8 92.7 544.9
Recreation 386.8 298.6 138.3 823.7
SUBTOTAL 1783.9 884.7 637.7 3306.3
Airfare** -- -- -- 189.6
TOTAL 1783.9 884.7 637.7 3495.9
Total Visitor Spending(US$ Million)
** Airfare total refers to only the portion of spending that accrues to Hillsborough County
The domestic market
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Domestic visitor segments
Tampa hosted 20.3 million domestic trips in 2014.
7.9 million were overnight trips and 12.4 million were day night trips.
10.3 million trips can be considered marketable leisure trips, i.e. non-VFR(visiting friends and relatives) leisure trips.
Overnight39%
Day61%
VFR39%
Marketable51%
Business 10%
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Length of Stay Type of Trip
Percentage
Source: Longwoods International; Tourism Economics
Domestic visitor segments
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Domestic stays and spending
On average, overnight visitors spend 2.6 nights in Tampa.
This means that while overnight visitors account for only 39% of total trips, they represent 58% of total person-days in Tampa and 67% of expenditures.
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28.4 $1,784
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12.5 $885
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Total person-trips(millions)
Total person-days(millions)
Total spending(millions)
Day OvernightVisitor segmentsPercentage
Source: Longwoods International; Tourism Economics
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Domestic spending by day and overnight visitors
Overnight visitors spend 2.5 times more per trip than day visitors ($226 vs $71).
Overnight visitors spend the most on lodging and food and beverages; day visitors spend the most on recreation.
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Lodging Local trans. Food & bev. Retail Recreation
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Source: Longwoods International; Tourism Economics
Tourism visitor spending by category
The international market
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International markets are driving growth
Trips and spending by international visitors are increasing rapidly.
Both visitation and spending from international markets have both more than doubled since 2004.
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Trips (L)
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International tourism to Hillsborough CountyTrips (thousands)
Source: Tourism Economics
Spending ($ millions)
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Comparison to domestic visitors
514,000 international travelers visited Tampa last year, compared to 20.3 million domestic visitors.
International visitors spent much more per person per trip than domestic visitors ($1,239 vs $131).
So while international tourists make up only 2.1% of trips, they represent 19.3% of total spending.
International $638
Domestic $2,669
Spending by sourceMillion $
Source: Longwoods International; Tourism Economics
Economic 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 discreet group of sectors (e.g. recreation, transportation). This supports a relative proportion of jobs, wages, taxes, and GDP 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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Visitor sales
The $3.5 billion of visitors’ expenditures in Hillsborough County supports a total of $5.4 billion in sales after accounting for indirect and induced spending.
Sectors such as FIRE, education, and construction do not receive many sales directly from tourists, but the visitors’ spending eventually funnels towards their services
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Visitor sales by industry$ million
F&B: Food and BeverageFIRE: Finance, InsuranceReal EstateBus. Services: Business ServicesGas: Gasoline Stations
Other Transp: Other TransportationManu.: ManufacturingPersonal Serv.: Personal ServicesComm: Communication
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Visitor sales
Direct Indirect Induced TotalAgriculture, Fishing, Mining - 1.4 0.5 1.9
Construction and Utilities - 34.7 20.3 55.0
Manufacturing - 21.5 12.8 34.3
Wholesale Trade - 45.6 55.8 101.4
Air Transport 189.6 5.3 7.6 202.4
Other Transport 283.5 61.1 16.9 361.5
Retail Trade 544.9 28.0 78.9 651.8
Gasoline Stations 96.9 1.7 4.9 103.5
Communications - 70.1 61.3 131.4
Finance, Insurance and Real Estate 52.5 229.2 336.0 617.7
Business Services - 235.3 92.1 327.4
Education and Health Care - 3.1 205.4 208.4
Recreation and Entertainment 823.7 29.0 16.5 869.2
Lodging 626.7 0.8 0.5 628.1
Food & Beverage 878.1 26.4 83.9 988.5
Personal Services - 26.7 56.5 83.2
Government - 42.4 24.6 67.0
TOTAL 3,495.9 862.2 1,074.5 5,432.6
* Direct sales include cost of goods sold for retail sectors
(US$ Million)
Visitor Sales
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Visitor employment
Visitors spending directly supports almost 33,000 jobs and sustains 47,000 jobs when indirect and induced impacts are calculated.
Most employment is generated in industries in which visitors spend directly, such as food and beverage, recreation, and lodging.
Around 3,000 jobs are created in business services and FIRE each, predominately through indirect and induced impacts.
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Visitor employment by industry
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Visitor employment
Direct Indirect Induced TotalAgriculture, Fishing, Mining - 13 6 19
Construction and Utilities - 172 99 271
Manufacturing - 60 25 85
Wholesale Trade - 196 240 437
Air Transport 551 15 22 588
Other Transport 1,971 520 125 2,616
Retail Trade 2,634 347 922 3,903
Gasoline Stations 118 19 56 193
Communications - 194 138 332
Finance, Insurance and Real Estate 259 1,339 1,177 2,776
Business Services - 2,163 932 3,096
Education and Health Care - 53 2,034 2,087
Recreation and Entertainment 8,110 327 223 8,660
Lodging 6,029 8 5 6,042
Food & Beverage 12,959 361 1,252 14,572
Personal Services - 341 897 1,238
Government - 278 111 390
TOTAL 32,631 6,408 8,264 47,303
Visitor Employment
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Employment contribution
5.3% of all jobs in Hillsborough County are directly supported by visitor spending, that is 1 out of every 19 jobs in the county.
5.3%
3.7%
23.8%
59.1%
97.7%
0% 20% 40% 60% 80% 100%
Total
Retail
Foodservices
Recreation
Lodging
Direct employment intensity by industry
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Visitor related income
The direct impacts of visitors directly sustains over $1.3 billion dollars of income and supports $2.0 billion of income when indirect and induced effects are included.
Over $450 billion in income is created in both the food and beverage and recreation sectors.
The average job supported by tourism has an income of over $43,000.
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Visitor labor income by industry$ million
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Visitor related income
Direct Indirect Induced TotalAgriculture, Fishing, Mining - 0.5 0.2 0.7
Construction and Utilities - 10.7 6.3 17.0
Manufacturing - 3.4 1.5 4.8
Wholesale Trade - 15.3 18.7 33.9
Air Transport 35.9 1.0 1.4 38.3
Other Transport 113.7 22.4 5.8 141.9
Retail Trade 78.1 10.9 34.8 123.9
Gasoline Stations 5.9 1.0 2.8 9.6
Communications - 16.2 12.6 28.9
Finance, Insurance and Real Estate 10.2 51.7 53.4 115.2
Business Services - 126.3 51.2 177.5
Education and Health Care - 2.0 117.0 118.9
Recreation and Entertainment 462.6 14.5 7.5 484.5
Lodging 217.7 0.3 0.2 218.2
Food & Beverage 402.9 10.8 38.7 452.4
Personal Services - 15.3 31.7 47.0
Government - 22.4 7.4 29.8
TOTAL 1,326.9 324.6 391.0 2,042.5
(US$ Million)
Visitor Labor Income (Compensation)
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Total Visitor tax generation
DirectIndirect/ Induced
Total
Federal 280.4 164.1 444.5
Personal Income 107.6 52.1 159.7
Corporate 23.1 24.8 47.9
Indirect business 34.5 13.9 48.3
Social Security 115.2 73.4 188.6
State and Local 239.4 89.7 329.1
Sales 106.7 42.8 149.5
Bed Tax 24.4 - 24.4
Personal Income - - -
Corporate 3.3 3.6 6.9
Social Security 1.0 0.6 1.6
Excise and Fees 27.8 12.0 39.8
Property 76.3 30.6 106.9
TOTAL 519.8 253.8 773.6
(US$ Million, Year)
Visitor-Generated Tax Revenues
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State and local tax generation
Visitors generate almost $330 million in state a local tax revenues.
This is equivalent to $698 per Hillsborough County household.
The room tax accounts for 16% of local government tax revenue generated.
TotalState Revenues 175.3 Sales 142.0 Personal Income - Corporate 6.9 Social Security 1.6 Excise and Fees 24.8 Property -
Local Govt. Revenues 153.8
Sales 7.5 Bed Tax 24.4 Personal Income - Corporate - Social Security - Excise and Fees 15.0 Property 106.9 TOTAL 329.1
(US$ Million, Year)
Visitor-Generated Tax Revenues
Key figures in context
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Spending and employment comparisons
20.8 million total trips is equivalent to everyone from the state of Florida visiting Hillsborough County during the year.
The number of people employed directly by visitors (32,631) would exceed the current capacity of Tropicana Field (31,042), and the employees sustained by tourism’s indirect and induced impacts (14,672) would fill up most of the Tampa Bay Times Forum (20,500).
The $3.5 billion in visitor spending means that almost $400,000 was spent by visitors EVERY HOUR in Hillsborough County in 2014.
The $3.5 billion of visitor spending in Tampa is roughly equivalent to total revenue from sales of orange juice in the US ($3.5 billion; source: WSJ).
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Tax revenue comparisons
The $154 million in local taxes generated would be enough to fully fund the Hillsborough Fire Rescue Department ($123m), with almost enough left over to fund the Parks, Recreation and Conservation Department ($36m).
The revenue generated by the bed tax ($24.4m) alone would fund the 9-1-1 Agency ($6.5m), Animal Services ($8m), the Communications & Digital Media Services Department ($3.5m), AND the Strategic Planning Department ($2.3m).
To make up for the $329 million in state and local taxes generated by visitor activity, each household in Hillsborough County would need to contribute an additional $698 annually to maintain the current level of government.
Trends to watch in 2015
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Gas prices are down
Fuel prices have fallen, freeing up resources to spend in other categories.
Low gas prices also boost consumer confidence, encouraging more trips and visitor spending that otherwise might not occur.
The lower gas prices will save each household around $1000. 0.00
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Source: US Energy Information Administration
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Gas prices and airfare
While decreased oil prices may lead to cheaper car travel, the same might not be true of air travel.
Due to fuel hedging and limited pass through costs, the price of airfare tends to be less volatile than the price of gasoline.
This may lead to a greater increase to driving trips than flying trips, and day visits may experience a sharper increase than overnight visits.
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Airfare and oil pricespercent change
Source: US Energy Information Administration; Tourism Economics
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US Dollar concerns
The strengthening US Dollar may be a concern for destinations across the country.
Tourism Economics estimates a further 10% increase in the value of the dollar may lead to a 3.1% decrease in international tourism to the US.
The strong US Dollar may also encourage American tourists to travel abroad rather than domestically.
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Trade-weighted index
Exchange Rate Weighted Value of US$ (1973=100)
Source: Haver Analytics
Methodology
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Methods and data sources
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 adds several categories of spending to these figures:
■ Overseas visitor spending (source: OTTI, TE)
■ Spending on air travel which accrues to all airports and locally-based airlines
■ STR data on hotel revenues
■ Lodging tax receipts
All results are benchmarked and cross-checked against US Bureau of Labor Statistics and the Bureau of Economic Analysis data on wages and employment.
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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 100 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 40 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, Managing [email protected]
Geoff Lacher, Senior [email protected]