Assessing the Impact of Tourism in your Community

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Assessing the Impact of Tourism in your Community

Created by Charlie French
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Tourism Development
Well, ummm, what is it?
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What it isnt

• It is not a solution to all economic woes.
• It is not easy to develop.
• It is not easy to sustain.
• It is not going to happen overnight.
• It is not something to be ignored.

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What we want is More Economic Development
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Economic Development and Tourism Development are
not Mutually Exclusive
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DIVERSIFY
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NH Tourism Economy Quick Facts

• New Hampshire received over 10 million visitors
  last year
• These visitors spent over 8.6 billion dollars
• The average tourist spent about 100 per day
• Food, gas and lodging make up 75 of tourist
  expenditures
• One tourist dollar generates an additional 78
  cents for the local economy
• Over 60,000 are employed directly as result of
  tourism
• NH ranks 7th in its economic reliance on tourism

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Well-Planned Tourism Development

• Can improve a communitys image.
• Diversifies local and regional economies.
• Forms an impetus for community action.
• Helps maintain a communitys heritage and
  culture.
• Strengthens the business community.
• Can increase tax revenues (liquor,
  hotel/motel...)

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Typical Areas of Tourism Impact

• Business Tourism provides numerous business
  opportunities. Furthermore, business development
  by locals fuels the local economy
• Employment One job created for every 71,000
  tourist dollars spent
• Tax Revenue Tax revenues help to fund
  infrastructure, and can be used to promote
  economic and tourism development. 8.5 motel tax.
• Infrastructure Tourism typically requires less
  infrastructure investment than manufacturing
  industries.
• Housing Development Once a community becomes a
  popular destination site, it becomes more
  attractive to potential residents.
• Tourism can be used to preserve and celebrate a
  communitys culture and history, if planned
  correctly.

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Potential Drawbacks of Tourism

• Low-wage Jobs
• Uncontrolled Growth
• Demand on Public Facilities
• Operational Costs

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Ways to Mitigate Undesirable Consequences of
Tourism

• Good Decision Making
• Good Planning
• Local Coordination
• Maintenance of local control (when possible)
• Determine business capacity
• Community and Economic Analysis
• Maintenance of Local Control

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What Can Happen if Tourism Development is Not
Well Planned?
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Economic Impacts of Tourism Development
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Spending Flow for 100 Hotel/Motel Stay

• Salaries and wages 25.08
• Laundry, dry cleaning, and linen 3.89
• Cleaning and other supplies 3.05
• Advertising/sales promotion 3.21
• Telephone 2.78
• Travel and auto expenses 1.52
• Fuel, water, electricity 6.19
• Repairs/maintenance 4.11
• Other operating expenses 4.15
• Total operating expenses 53.98
• Licenses/taxes 6.70
• Insurance 1.94
• Interest 10.72
• Depreciation 12.21
• Total Capital items 31.57
• NET PROFIT 14.45

(Source UIUC. 1999)
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Leakage in a Typical Community
Initial impact 1.00 .40 .16
.10 .03 .01 full impact
1.66
60 leakage
Initial 1.00 of Basic Income
24 leakage
40 respent locally
10 leakage
16 respent locally
3 leakage
2 leakage
6 respent locally
1
3 respent locally
Source Hustedde, Shaffer, Pulver. 1991.
Community Economic Analysis. NCRCRD
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Non-Quantitative Methods to Gage the Economic
Impact of Tourism

• Critical Factor Analysis
• Attractions/activities
• location
• facilities and services
• infrastructure
• community coordination
• competition

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Non-Quantitative Methods to Gauge the Economic
Impact of Tourism

• Case Studies
• Surveys

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Quantitative Impact Assessment Methodologies

• Input-Output Models (IMPLAN)
• Local Economic Analysis

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How to Get a Handle on Your Economic Profile
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Business Profile

• Are businesses locally owned?
• Can/could local businesses satisfy consumer
  needs?
• Whats the potential for business
  growth/expansion?
• Whats the leakage of dollars from the community?

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Community Vision

• What are local attitudes towards econ.
  development?
• What do local residents want the town to look
  like?
• What strategies worked for other communities?
• Does local zoning effectively control/direct
  growth?

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Economic Trends

• Where does the labor force come from?
• What types of people are unemployed?
• What is considered a living wage?
  http//www.childrennh.org

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Consumer Profile

• Where do residents spend money for goods and
  services?
• What new opportunities would consumers like?
• Where do consumers come from?

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How do you Collect this Information?

• Basic Data Collection
• Case Study Comparisons
• Community and Business Surveys
• IMPLAN Analysis

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The Survey Process
University of Illinois Extension Laboratory for
Community and Economic Development
http//www.ag.uiuc.edu/lced/cfarsriit.ht
ml
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COMMUNITY DATA PROFILE

• How the rest of the world knows your community

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1999 Per Capita Income
Source ScanUS database
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Employment by Sector, Sullivan County
1990
1999
Unemployment Rate 8.3 3.1
Source 2001. Nhetwork Labor Market Information
Bureau, NH Employment Security
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Average Weekly Wages (1999)

• Manufacturing 615
• Retail Trade 334
• Eating Drinking 184
• Wholesale Trade 669
• Services 440
• Government 445

Source 2001. Nhetwork Labor Market Information
Bureau, NH Employment Security
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Largest Employers
Company Name Employees

• 1) Sturm Ruger Company 1,242
• 2) Dorr Woolen Company 287
• 3) Arlington American Sample Co. 140
• 4) LaValley Building Supply 100
• 5) Gloenco-Newport, Inc. 75
• 6) Hartford/Eiclenhauer 70
• 7) Latva Machine Company 53

Source 2001. Nhetwork Labor Market Information
Bureau, NH Employment Security