2016 Economic Impact of Tourism in Tippecanoe County. Methodology, Metrics and Evaluation

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1 2016 Economic Impact of Tourism in Tippecanoe County Methodology, Metrics and Evaluation

2 Key Inputs & Data Tools Indiana Office of Tourism Development 2016 Tourism Economic Impact Study Tourism Support/Promo Spending Longwoods International Visitor Volume & Spending Panel survey of 600,000 households per year Government Sources Bureau of Labor Statistics Bureau of Economic Analysis IN Gaming Commission Indiana Office of Fiscal & Management Analysis Private Data Sources Tippecanoe County Tourism Economic Impact Value-Added (GDP) Wages & Income Jobs Smith Travel Research IMPLAN Model Local economic model Defacto standard for most economic impact work Taxes 2

3 Background & Methodology Study Overview A research cooperative was formed in 2016 by the Indiana Office of Tourism Development and Tourism Tomorrow to make this county-level economic impact study possible. The research cooperative engages leading and nationally recognized tourism research and economics experts. It was established to align the state of Indiana, its counties and largest cities around common research methodologies and industry best practices. This 2016 Economic Impact Study of Tourism in Tippecanoe County was conducted by Rockport Analytics, an independent market & economic research firm. Methodology The total economic impact of travelers is separated into three distinct effects: direct, indirect, and induced. The direct impacts represent the value-added of those sectors that interact directly with, or touch, the visitor. The indirect impact represents the benefit to local suppliers to those direct sectors. This would include, for example, Tippecanoe County-based food suppliers to restaurants. The induced impact adds the impact of tourism-generated wages as they are spent throughout the local economy on an array of goods & services. The economic impacts reported in this study are based on traveler spending as reported in the 2016 Economic Impact of Tourism in Indiana Study, augmented by other data from Longwoods International ( Reach Market Planning, and Office of Travel & Tourism Industries data on international visitation and spending ( These traveler data are reconciled with Bureau of Labor Statistics (BLS) reported employment data, Bureau of Economic Analysis (BEA) reported earnings data, and reported county tax collections to derive spending levels that are representative at the county level. >> 3

4 Background & Methodology Methodology Cont. An economic model of Indiana is also critical to estimating how traveler spending resounds through the state and county-level economies. Rockport Analytics has chosen the IMPLAN model for Tippecanoe County ( a non-proprietary economic model that is the defacto standard for most economic impact assessments in the United States. This model is critical to measuring the direct, indirect, and induced impacts of visitation to the state. IMPLAN also to measure how much of each tourism dollar remains in the local economy. Total traveler spending generally exceeds the direct impact of tourism. This is because not all goods and services purchased by travelers are supplied by firms located in Indiana. The IMPLAN model accounts for these import leakages to suppliers located outside of the county. Generally, the more diversified a county s economy, the lower are import leakages and the higher the retention and multiplier of visitor spending. 4

5 2016 Tippecanoe County Tourism Highlights Tourism and Impact Jobs and Wages Tax Revenue Generated $380.7 Million Tourism Spending $298.0 Million Total Economic Impact 7,622 Total Traveler Spending Supported Jobs $35.8 Million Total Federal Tax $49.7 Million Total State and Local Tax $56.1 Million Lodging $137.7 Million Food & Beverage $106.4 Million Shopping $45.2 Million Transportation $214.6 Million Direct $33.7 Million Indirect $49.7 Million Induced 6,321 Direct Jobs 562 Indirect Jobs 739 Induced Jobs $18.2 Million Social Security $8.6 Million Personal Income $8.9 Million All Other Taxes $22.3 Million Sales Tax $16.5 Million Property Tax $10.9 Million All Other Taxes $35.2 Million Entertainment and Recreation $173.1 Million Total Wages and Proprietor Income For every tourism dollar spent in Tippecanoe County in 2016, 78 cents 'stayed' local and contributed directly to the gross county product of Tippecanoe County. This includes impact on the direct (tourism-oriented), indirect (supply chain) and induced (income) industries. The remaining 22 cents of every dollar is leaked to the supply chain outside of Tippecanoe County. For every $49,949 spent on tourism in Tippecanoe County in 2016 supported a job, resulting in an average of $22,714 in gross wages. This includes jobs in the industries directly supporting the visitor such as retail trade but also in supply chain sectors like transportation. The income of direct and indirect workers also goes to support industries like retail trade, real estate, transportation, and the arts. For every $1.00 spent on tourism in Tippecanoe County in 2016, 9 cents goes to federal taxes and 13 cents goes to state and local taxes. Federal tax collections include corporate & personal income taxes, excise taxes and social security collections. State and local tourismderived taxes include sales taxes, property taxes and lodging taxes. 5

6 Tippecanoe County At a Glance Tippecanoe County 2016 Tourism Report Card Tourism Sales Per Capita $2, Tourism Spend Per Capita Ranking #15 of Spending by Visitors (Millions) $380.7 County Ranking of Tourism Spend #7 of Tourism Spending Growth 6.6% 2016 Tourism Growth Ranking #31 of 92 Annual Growth in 2016 Tourism Spending 0.0% 2.0% 4.0% 6.0% 8.0% Indiana 5.7% Indianapolis MSA 6.1% Tippecanoe County 6.6% All IN Counties 4.1% Median 6

7 Tippecanoe County Tourism Impact Flows Total Tourism Spending Value to Indiana Economy Impact on Indiana Business Lodging $380.7 Million Tourism Spending Transportation Shopping Food and Beverage Entertainment Other $298.0 Million Total Economic Impact $82.7 Million Minus Import Leakages Examples of import leakage include: retail goods, food, cleaning supplies, computer equipment, and raw materials $214.6 Million Direct Impact Industries directly providing goods and services to the visitor e.g. restaurants $33.7 Million Indirect Impact (Supply Chain) Industries providing goods & services to front-line businesses e.g food suppliers $49.7 Million Induced (Income) Direct & Indirect incomes spent at an array of Indiana businesses e.g health care 7

8 Visitor Spending By Category F&B accounts for the largest share of tourism spend in Tippecanoe County, totaling 36% of visitor expenditures. Distribution of Tourism Spending $380.7 Million USD Expenditure Category Growth Transportation 12% Retail 28% Rec & Entertainment 9% Lodging 15% F&B 36% Lodging $ 56,132, % F&B $ 137,661, % Rec & Entertainment $ 35,276, % Retail $ 106,387, % Transportation $ 45,242, % Total $ 380,700, % Categorical Spending Shares: State Comparisons Tippecan oe County Indiana Source: Longwoods International, OTTI, Reach Market Planning, Smith Travel Research, Rockport Analytics Note: Spending estimation methodology was changed slightly in This methodology was backcast to 2015 spending levels as well, so all growth rates remain valid. Lodging 15% 16% F&B 36% 28% Rec & Entertainment 9% 18% Retail 28% 22% Transportation 12% 16% Total 100% 100% 8

9 Tourism's Bottom Line in Tippecanoe County 2016 Economic Impact Summary (Compared to 2015) 2016 Metric Direct Indirect Induced Total Total Spending $380,700, Y/Y Growth 6.6% Economic Impact (GDP) $214,592,278 $33,657,066 $49,706,241 $297,955, Y/Y Growth 6.7% 4.6% 6.4% 6.4% Wages $129,250,345 $18,196,950 $25,675,424 $173,122, Y/Y Growth 6.7% 4.5% 6.4% 6.4% Jobs 6, , Y/Y Growth 4.5% 2.8% 4.6% 4.4% Tax Receipts $85,460, Y/Y Growth 6.5% Impact Glossary Direct: These impacts represent the value added of those sectors that interact directly, or touch, the visitor. Indirect: These impacts represents the benefit to local suppliers to those direct sectors. This would include, for example, local based food suppliers to restaurants. Induced: These impacts are derived from tourism-generated wages as they are spent throughout the local economy. Source: Rockport Analytics, Longwoods International, STR, BLS, BEA, Indiana Office of Fiscal & Management Analysis, IMPLAN 9

10 Tourism Supports Sales in a Multitude of Industries Source: Rockport Analytics, IMPLAN Tippecanoe Tourism: 2016 Economic Impact (Value Added/GDP) Thousands of $s Industry (NAICS) Direct Indirect Induced Total Retail trade $85,486 $622 $6,828 $92,936 Food services & drinking places $65,405 $1,917 $2,958 $70,280 Real estate & rental $2,266 $9,059 $15,073 $26,399 Accommodations $23,530 $26 $17 $23,573 Transportation & Warehousing $18,860 $1,176 $519 $20,555 Arts- entertainment & recreation $19,045 $162 $464 $19,671 Health & social services $0 $6 $10,606 $10,612 Finance & insurance $0 $3,000 $3,726 $6,726 Professional- scientific & tech services $0 $4,666 $1,475 $6,141 Administrative & waste services $0 $3,965 $1,170 $5,135 Other services $0 $1,150 $2,590 $3,739 Government & non NAICs $0 $2,571 $659 $3,230 Information $0 $1,987 $934 $2,921 Wholesale Trade $0 $833 $1,309 $2,143 Construction $0 $1,174 $392 $1,566 Utilities $0 $710 $300 $1,009 Educational services $0 $39 $532 $572 Management of companies $0 $369 $37 $407 Manufacturing $0 $217 $96 $313 Ag, Forestry, Fish & Hunting $0 $7 $18 $25 Mining $0 $1 $1 $2 Total $214,592 $33,657 $49,706 $297,956 Total $201,205 $32,165 $46,722 $280,092 % change 6.7% 4.6% 6.4% 6.4% 10

11 Jobs in a Wide Array of Sectors Also Impacted by County Tourism Tippecanoe Tourism: 2016 Economic Impact (Employment) Industry (NAICS) Direct Indirect Induced Total Food services & drinking places 2, ,628 Retail trade 2, ,199 Transportation & Warehousing Arts- entertainment & recreation Accommodations Real estate & rental Health & social services Administrative & waste services Professional- scientific & tech services Other services Finance & insurance Information Government & non NAICs Educational services Construction Wholesale Trade Management of companies Manufacturing Utilities Ag, Forestry, Fish & Hunting Mining Total 6, ,622 Total , ,302 % change 4.5% 2.8% 4.6% 4.4% Source: Rockport Analytics, IMPLAN 11

12 Tourism is the 5 th Largest Industry in Tippecanoe County 2016 Tourism in Tippecanoe County: Ranking of Major Industries By Total Employment Rank Industry 2016 Reported 2016 Tourism Extracted % of Total Employment Growth Rate 1 Government 27,376 27, % 2.2% 2 Manufacturing 14,953 14, % 2.6% 3 Health & Social Services 11,502 11, % 2.1% 4 Retail trade 9,497 7, % 0.4% 5 Tourism N/A 6, % 4.5% 6 Accomodation & Food Services 8,648 5, % 3.1% 7 Administrative & Waste Services 4,504 4, % -2.5% 8 Other Services 3,255 3, % 0.1% 9 Construction 3,011 3, % 0.6% 10 Professional Services 2,735 2, % 0.2% 11 Finance & Insurance 2,105 2, % 0.0% 12 Wholesale Trade 1,856 1, % 3.2% 13 Real Estate 1,239 1, % 4.0% 14 Transportation & Warehousing 1,947 1, % 0.1% 15 Information % 4.1% 16 Educational Services % -4.5% 17 Management of Companies % -0.9% 18 Utilities % -4.6% 19 Arts, Entertainment & Recreation % 12.6% 20 Mining % 2.5% Total County Employment 94,501 94, % 1.7% Source: Rockport Analytics, BLS, Moody s Analytics, IMPLAN Reported: As released by the Bureau of Labor Statistics and the Indiana Department of Labor Tourism Extracted: Tourism s contribution to jobs in each industry is removed and placed in Allen s Tourism Industry 12

13 Tourism Tax Sources Federal Taxes 2016 Tax Total: $35.8 Million State & Local Taxes 2016 Tax Total: $49.7 Million Corporate Income 1% Social Insurance Taxes 1% Corporate Income 14% Other Taxes 8% Personal Income 7% Tourism Excises 5% Social Security & Other Taxes 51% Personal Income 24% Property Taxes 33% Sales Taxes 45% Excise & Fees 11% 2016 Total County Tourism-Initiated Taxes: $85.5 Million 13

14 Tourism Tax Revenue Collections Tourism-Initiated Tax Revenue % Change Thousands Federal: US Corporate Income $4,796.1 $5, % Personal Income $8,097.3 $8, % Excise & Fees $3,595.4 $3, % Social Security & Other Taxes $17,115.2 $18, % Federal Total $33,604.0 $35, % State & Local Corporate Income $694.1 $ % Personal Income $3,099.0 $3, % Social Insurance Taxes $347.8 $ % Tourism Excises Hotel Tax $2,315.6 $2, % Food & Beverage $0.0 $0.0 $0.0 Rental Car Excise $153.0 $ % Sales Taxes $20,942.1 $22, % Property Taxes $15,467.1 $16, % Other Taxes $3,626.3 $3, % State & Local Tax Total $46,645.0 $49, % Total County Tourism-Initiated Taxes $80,248.9 $85, % Source: Rockport Analytics, IMPLAN, Indiana Department of Revenue Tippecanoe County tourism generated over $85.5 million in total taxes in 2016, up 6.5% over Federal tax collections resulting from tourism in Tippecanoe County include income taxes and social security and totaled $35.8 million in State & local tax collections totaled $49.7 million, including $22.3 million in sales taxes contributing to state collections and $16.5 million in property taxes supporting the local tax base. 14

15 Tippecanoe County Tourism in Perspective How Does Tourism Benefit Tippecanoe County? By Promoting a Healthy Job Market Approximately 6.7% of all jobs in Tippecanoe County are supported by tourism to the region. In addition to the hotel and restaurant industry, tourism directly supports jobs in retail trade, transportation and the arts. By Contributing to the Health of the Public Education System Revenue collected from tourism in Tippecanoe County is sufficient to support 5,130 Indiana public school students. By Playing a Significant Role in the County s Industrial Make up Tourism is the 5 h largest industry (4 th not including Government) in Tippecanoe County (by jobs). By Providing Tax Revenue to Support Federal, State & Local Government In addition to hotel occupancy levies ($2.4 million in 2016), Tippecanoe County tourism activity generated over $737.3 thousand ion in Indiana corporate taxes, $3.3 million in Indiana personal income tax, and $16.5 million in local property taxes during By Helping to Relieve the Tax Burden of Tippecanoe County Households If Tippecanoe County tourism did not exist, each of the 75,124 households in the county would have to pay an additional $661 per year in taxes to maintain current state & local tax levels. By Capturing and Retaining the Expenditures Made By Visitors Of every dollar spent by visitors in Tippecanoe County, 78 in economic impact is retained in the local area. 15

16 Contact Rockport Analytics West Chester, PA Annapolis, MD web: rockportanalytics.com phone: (866)