Presentation by Dr. Steve morse, economist, to the TN Association of Convention and Visitors Bureaus titled, "How to Pereserve Your tourism Budget in Slow Economic Times." Good destination management tips for telling the economic significance of tourism your your community.
3. Today’s U.S. & Tennessee’s
Economic Health
• Slowest growth since 1986
3rd & 4th Qtr. Negative U.S.
U.S.
Economy
Economic Growth
has Slowed
•TN sales tax collections
Tennessee
•lowest levels in 12 years
Sales Tax
Revenues
• Decreasing tax revenues for each
Tennessee
Tennessee County
County Tax
Revenues
3
Source: U.S. Dept. of Commerce
5. TN County Newspaper Headlines
• County Tax Revenues • Hotel Bed Tax to
Fall Short Cover Economic
Development Projects
• Budget Shortfall
Worries • Tourism Budget Cut to
Commissioners Save Road Paving
Project
• County Workers Face
Layoffs • Tourism Promotion &
Marketing Budget
• City Officials Mull
Eyed for County
Spending Cuts
Deficit
7. Benefits of Tourism to Your
Community
Diversifies the economy
•
Generates many support businesses
•
Brings in “new money” creating growth
•
Generates additional tax revenue helping to
•
fund community services and infrastructure
• Creates jobs & new business growth
• Promotes business development – today’s
visitor may be tomorrows investor
• Improves appearance of a community
7
8. During a Normal Economy, Equally
Emphasize Both Private & Public
Economic Benefits of Tourism
Private Sector Public Sector
Benefits of Benefits of
Tourist Spending Tourist Spending
Local Taxes
Profits Generated
Job Creation &
State Taxes
Employee
Generated
Payroll
Econ. Dev.
New Business
Creation Effect
11. What Makes Tourism a
Different Program & Investment?
• Unlike other government programs
that only take in tax revenues to
operate…
• Tourism programs attract tourists to
spend money in an area, and
ultimately generates additional
new tax revenues for an area
12. Tourist
Spending
Employ‐
Payroll Impacts of ment
Travel on
Your
County
State Local
Taxes Taxes
13. Example: Impacts of Tourism on
Wilson County, TN, 2007
Source: TN Dept. of Tourist Dev. & TIA
Employment:
Payroll:
Spending:
880 Jobs
$18.64 Million
$97.59 Million
State Taxes: Local Taxes:
$5.75 Million $2.86 Million
14. Many officials in your county may not
have a complete definition of
“Tourism”
• Some officials think tourism is just
hotels
• Some think it’s restaurants
• Some think it’s attractions and events
• Some may thin tourism does not exist
at all!
16. It’s a big
leaf
It’s a horse
It’s an
anteater
It’s a
snake
It’s a
tree
trunk
17. It’s attractions, It’s restaurants
entertainment & & food service
retail
It’s travel
& transp. It’s hotels
& lodging
Tourism Industry
It’s marketing
destinations &
conventions
18. Reality – tourism is not one sector, but
all sectors combined as a system
Hotels & Lodging
Restaurants & Food
Service Tourism Industry
Attractions,
Entertainment, Retail
Travel & Transportation
Conventions & Visitor
Bureaus
19. Average Tourist Spending in
Tennessee, 2007
Entertainment
Foodservice
& Rec.
11.0% 32.5%
Retail
11.8%
Lodging
17.3%
Transportation
27.3%
19
Source: TN Dept. of Tourist Dev. & TIA
20. Tourists Generates Many Taxes
(Example)
5% Hotel 7% TN 2.5% Local
Tourist
Occupancy State Sales County Sales
Spending Area
Tax Tax Tax
Lodging
Restaurant &
Food Service
Transportation
& Fuel
Shopping &
Retail
Attractions &
Amusements
21. Tax Relief Generated by Tourism:
County Tourism Economic
Fact Sheets
• Tax Relief: Defines how
much tourism benefits
each household in your
county in terms of less
taxes paid per household
22. Tourism Taxes Generated in
Wilson County, TN
2006 Tourism spending in Wilson Co.
generated:
• $5.4 million in TN State Taxes
• $2.67 million in local Wilson Co.
taxes
Source: TN Dept. of Tourist Development & TIA
24. Tax Relief Example:
Wilson County, TN, 2006
As a result of taxes generated by
tourist activity in Wilson County:
Each household pays $201 less in
local and State taxes
Each household pays $67 less in
local county taxes
Each household pays $134 less in
State taxes
25. Be Dramatic – Present the Big Check
Check Payable to:
Each Wilson Co.
Household
Amount: $201
For: Tax Relief of
State & Local
taxes generated by
tourists
26. To Protect Your 2009 Tourism
Budget:
Show local officials that tourism
budgets used in promotion &
advertising…
Is a good investment that generates
additional and new tax revenues
UT Tourism Institute at
www.utk.edu/tourism
28. Spring Meeting &
SE TTRA Symposium
Montgomery, Alabama | March 23 – 25, 2009
www.southeasttourism.org/spring
“The Heart of the Economic Matter”
• Roger Dow, United States Tourism Association
• Bob Stewart, former commissioner of Kentucky
• David Bohan, BOHAN
• Dr. Suzanne Cook, U.S. Tourism Association
• Dr. David Bronner, Retirement Systems of Ala.
29. Thank you for inviting me
Questions? Comments?
Stephen C. Morse, Ph.D.
Director & Economist
Tourism Institute
University of Tennessee
Knoxville, TN
PH: (865) 974‐6249
Email: smorse@utk.edu