Arizona travel impacts

              Arizona Travel Impacts
1998-2005p
April 2006
Prepared for the
Arizona Office of Tourism
Phoenix, Arizona
photo by George Stocking
ARIZONA TRAVEL IMPACTS
1998-2005P
Arizona Office of Tourism
Primary Research Conducted By:
Dean Runyan Associates
Portland, Oregon
April 2006
EXECUTIVE SUMMARY
• Total direct travel spending in Arizona in 2005 was $17.5 billion. This
represents a 9.9 percent increase over 2004, and it follows a 7.4 percent
increase the preceding year. In constant (inflation-adjusted) dollars, travel
spending has increased by 4.5 percent from 2003 to 2004 and 5.7 percent
from 2004 to 2005.
• Much of the increased travel activity in Arizona was related to increased
passenger air travel. Approximately 7.7 million domestic visitors traveled to
Arizona in 2005 by air. This is 5.7 percent increase over 2004.
• Visitors that stayed overnight in lodging establishments accounted for 42.3
percent of all visitor spending in 2005. Visitors that stayed in the private
homes of friends or relatives accounted for 28.8 percent. Day travelers
accounted for about 21.5 percent.
• More than one-half (52.7 percent) of all spending by visitors was for leisure
and hospitality services (arts, entertainment, recreation, accommodations,
food service). Retail spending (which includes food and beverages
purchased for off-premise consumption) amounted to 23.3 percent.
Transportation (including motor fuel) comprised the remaining 24 percent.
• In 2005, direct travel spending generated $456 million in local taxes, $583
million in state taxes and $1.1 billion in federal taxes. The total of $2.1
billion in tax revenues generated by direct travel spending in Arizona is
equivalent to $850 dollars of tax revenue for each household in the state.
• Direct travel spending in Arizona generated 168,100 jobs with earnings of
$4.5 billion in 2005. Three-fourths of these jobs were in the
accommodations, food services, and arts, entertainment and recreation
industries.
• Travel spending in Arizona generated a total (direct and secondary) impact of
313,000 jobs with earnings of $9.3 billion in 2005. Most of the secondary
impacts were in professional and business services.
• As a percentage of Gross State Product, the tax receipts generated by the
travel industry are high relative to other industries (13.2 percent for the travel
industry versus 7.8 percent for all industries in the state). And in contrast to
other industries, most of the taxes generated by travel industry taxes are
imposed on visitors rather than residents.
• The employment, earnings, and tax revenues generated by travel spending
are relatively more important for the non-urban areas of the state, than for the
more urbanized areas of greater Phoenix and Tucson.
DEAN RUNYAN ASSOCIATES PAGE I
TABLE OF CONTENTS
page
I. Introduction 1
Direct Impacts 1
Secondary Impacts 1
Preliminary Estimates 2
Types of Travel Impacts Included 2
Transportation Impacts 2
Impact Categories 3
Visitor Categories 3
Reporting Format 4
Interpretation of Impact Estimates 5
II. National Travel Trends 7
III. Arizona Travel Impacts 11
Impacts of Travel in Arizona: A Summary 12
Travel Trends 13
Visitor Spending by Type of Traveler Accommodation 15
Visitor Spending by Type of Commodity Purchased 16
Travel-Generated Employment 16
Visitor Origin 17
Travel Industry Gross State Product 20
Secondary Impacts 21
IV. State and Local Government Revenue Generated by
Travel Spending 25
V. County Travel Impacts 31
VI. Appendices 53
PAGE II DEAN RUNYAN ASSOCIATES
LIST OF TABLES AND FIGURES
page
II. National Travel Trends 7
Direct Travel Spending in U.S., 1998-2005 7
U.S. Travel Spending in Current & Constant Dollars, 1998-2005 7
Overseas Arrivals to the United States, 1996-2005 8
U.S. Domestic Passenger Air Arrivals 9
U.S. Travel-Generated Employment, 1998-2005p 9-10
III. Arizona Travel Impacts 11
Arizona Travel Trends, 1998-2005p 13
Direct Travel Spending in Arizona Adjusted for Inflation 14
Domestic Air Passenger Visitor Arrivals to Arizona 14
Visitor Spending by Type of Traveler Accommodation 15
Visitor Spending by Commodity Purchased 16
Direct Travel-Generated Employment by Industry 16
Arizona Travel Impacts by Origin of Visitor 17
Visitor Spending in Arizona by Origin of Visitor 17
Arizona Direct Travel Impacts, 1998-2001 18
Arizona Direct Travel Impacts, 2002-2005p 19
Arizona Travel Spending and Gross State Product 20
Total Employment and Earnings 21
Secondary Employment & Earnings 23-24
IV. State and Local Government Revenue Generated by
Travel Spending 25
Arizona State & Local Tax Revenue, 2001-02 FY 25
Arizona State & Local Travel-Generated Tax Revenue, 2005p 26
Selected Industries, GSP & Taxes 27
State Transaction Privilege Taxes 28-29
V. County Travel Impacts 31
Travel-Generated Earnings Shares 32-33
Travel-Generated Employment and Earnings Shares by County 34
County Impact Summary Tables 35-38
County Impact Detail Tables 39-52
DEAN RUNYAN ASSOCIATES PAGE III
PREFACE
The purpose of this study is to document the economic significance of the travel
industry in Arizona from 1998 to 2005. These findings show the level of travel
spending by visitors traveling to and within the state, and the impact this spending
had on the economy in terms of earnings, employment and tax revenue.
Dean Runyan Associates prepared this study for the Arizona Office of Tourism.
Dean Runyan Associates has specialized in research and planning services for the
travel, tourism and recreation industry since 1984. With respect to economic
impact analysis, the firm developed and currently maintains the Regional Travel
Impact Model (RTIM), a proprietary computer model for analyzing travel economic
impacts at the state, regional and local level. Dean Runyan Associates also has
extensive experience in project feasibility analysis, market evaluation, survey
research and travel and tourism planning.
Many individuals and organizations provided data and assistance for this report.
State agencies include the Department of Revenue, Department of Commerce,
Gaming Commission and State Parks. Information was also provided by the College
of Business and Public Administration at the University of Arizona and the School of
Hotel and Restaurant Management at Northern Arizona University. Federal
agencies that provided essential data for this report include the Bureau of Economic
Analysis, the Department of Labor, the Department of Transportation, the U.S.
Forest Service, and the National Park Service.
Special thanks are due to AnnDee Johnson, Director of Research & Strategic
Planning for the Arizona Office of Tourism. Without her support and assistance,
this report would not have been possible.
Dean Runyan Associates
833 SW 11th Ave., Suite 920
Portland, OR 97205
(503) 226-2973
info@deanrunyan.com
www.deanrunyan.com
PAGE IV DEAN RUNYAN ASSOCIATES
I. INTRODUCTION
This report describes the economic impacts of travel to and through Arizona and
each of its 15 counties over the time period 1998 to 2005. The estimates for 2005
are preliminary. This introductory section provides a brief overview of
methodology, terminology and limitations of these impact estimates. The various
appendices in this report provide greater detail for many of these topics.
DIRECT IMPACTS
The estimates of the direct impacts associated with traveler spending in Arizona
were produced using the Regional Travel Impact Model (RTIM) developed by Dean
Runyan Associates. The input data used to detail the economic impacts of the
Arizona travel industry were gathered from various local, state and federal sources.
Travel impacts consist of estimates of travel spending and the employment, earnings
and tax receipts generated by this spending. These estimates are also broken out by
type of traveler accommodation and by the type of business in which the
expenditures occur. A description of RTIM methodology is included in Appendices
A and B.
SECONDARY (INDIRECT AND INDUCED) IMPACTS
Direct impacts are reported for all counties within Arizona. Secondary employment
and earnings impacts over and above direct impacts are reported at the state level
only for the year 2005. These indirect and induced impacts are generated from the
direct impacts produced by the RTIM, discussed above, and an input-output model
of the Arizona economy prepared by the Minnesota IMPLAN Group, Inc. Indirect
impacts represent the purchases of goods and services from other firms by
businesses that directly receive expenditures from travelers. Hotels, for example,
purchase maintenance services from independent contractors. Induced impacts
represent the purchase of goods and services by employees whose earnings are in
part derived from travel expenditures. The sum of the direct, indirect and induced
impacts equals the total impact of all spending by visitors in the state. The
“multiplier” refers to the ratio of the total impacts to the direct impacts for
employment or earnings.
DEAN RUNYAN ASSOCIATES PAGE 1
PRELIMINARY ESTIMATES
Preliminary estimates for 2005 were prepared at the state and county level. These
estimates take advantage of the most current available data. However, because full-year
data was not available in all cases, these estimates are subject to subsequent
revision as additional information relating to travel and its economic impact in 2005
becomes available.
TYPES OF TRAVEL IMPACTS INCLUDED
Most of the travel that occurs in Arizona is included in the scope of this analysis.
The purpose of such travel can be for business, pleasure, shopping, to attend
meetings, or for personal, medical or educational purposes. All trips to Arizona by
U.S. residents and foreign visitors are included. The travel of Arizona residents to
other destinations within Arizona is included, provided that it is neither commuting
nor other routine travel. Travel to non-Arizona destinations by Arizona residents is
not included as a component of visitor spending. Outbound air travel impacts and
spending on travel arrangement services are included in the “Other Travel”
category.
The impacts associated with both overnight and day travel are included if the
travelers remain at the destination overnight or the destination is over 50 miles, one-way,
from the traveler's home. These definitions are used to screen and, if
necessary, to interpret and adjust local data used for travel impact measurements.
The most conservative interpretation is employed where data limitations cause
deviations from the above definition.
TRANSPORTATION IMPACTS
The focus of this analysis is on the destination-specific impacts of visitors. This is
straightforward with respect to the spending on commodities such as
accommodations, food services, recreation and retail purchases. It is less obvious
with respect to ground and air transportation services, in that transportation provides
a link between an origin and destination. In this report, the impacts related to
spending on transportation are allocated to the location (i.e., county) in which those
spending impacts occur, regardless of whether that location is the ultimate
destination of the visitor. For this reason, urban counties will tend to have relatively
greater transportation impacts even though some of that spending on transportation
will be related to visits at other destinations.
PAGE 2 DEAN RUNYAN ASSOCIATES
IMPACT CATEGORIES
The specific categories of travel impacts included in this analysis are as follows:
Impact Category Description
Expenditures Purchases by travelers during their trip, including lodging taxes and other
applicable local and state taxes, paid by the traveler at the point of sale.
Earnings The earnings (wage and salary disbursements, earned benefits and
proprietor income) of employees and owners of businesses that receive
travel expenditures. Only the earnings attributable to travel expenditures
are included; this typically is only a portion of all business receipts.
Employment Employment associated with the above earnings; this includes both full-and
part-time positions of wage and salary workers and proprietors.
Local Tax
Receipts
Tax receipts collected by counties and municipalities, as levied on
applicable travel-related purchases, including lodging, food and beverage
service, retail goods and auto rental. The local share of the state
transaction privilege tax is also included in this category. Property taxes
are not included.
State Tax
Receipts
The state share of the transaction privilege tax, personal and business
income taxes, motor fuel tax and contributions from tribal gaming revenue
is included in state tax receipts.
VISITOR CATEGORIES
Travelers are classified according to the type of accommodation in which they stay.
The types of visitors are as follows:
Type of Visitor Description
Hotel/Motel Travelers staying in hotels, motels, resorts, bed & breakfast
establishments, and other commercial accommodations, excluding
campgrounds, where a transient lodging tax is collected.
Campground Travelers staying in a privately owned (i.e., commercial) or
publicly managed campgrounds.
Private Home Travelers staying as guests with friends or relatives.
Vacation Home Travelers using their own vacation home or timeshare and those
borrowing or renting a vacation home where a transient lodging
tax is not collected.
Day Visitor Both in-state and out-of-state residents whose trip does not include
an overnight stay at a destination in Arizona.
DEAN RUNYAN ASSOCIATES PAGE 3
REPORTING FORMAT
A description of the headings and categories of the detailed direct impact tables is
provided below.
• Total Direct Travel Spending includes the total visitor spending at
destination, described above, plus spending on travel agencies and resident
air travel (other spending). Total direct travel spending does not include
secondary (indirect and induced) effects.
• Visitor Spending by Type of Traveler Accommodation refers to the total
direct spending of each category of visitor at that destination (county or
state). For example, the spending of visitors that stayed at hotels or motels
includes their spending on accommodations, food & beverage service,
recreation, transportation and all other visitor related commodities.
• Visitor Spending by Commodity Purchased refers to the total spending on
each commodity for all types of visitors. For example, the total spending on
Food & Beverage Services includes spending by visitors staying in hotels,
private campgrounds, private homes and the other types of accommodation.
The total spending on commodities is identical to the total spending by type
of accommodation.
The next two sections, Travel-Generated Earnings and Employment by Industry,
provide estimates of travel-generated earnings and employment that are based on an
industry, rather than a commodity, classification. A business that is classified in a
particular industry may include more than one commodity. For example, a resort
that is classified in the accommodation industry may provide accommodations, food
and beverages, and recreation.
• Industry Earnings Generated by Travel Spending includes the payroll, other
earned benefits and proprietor income of all employees in that industry
classification.
• Industry Employment Generated by Travel Spending includes all full- and
part-time employees. This includes payroll employees covered by
unemployment insurance and those that are not, as well as proprietors.
The final section provides an estimate of tax receipts generated by travel spending.
• Tax Revenues Generated by Travel Spending provides a breakout of local,
state and federal tax receipts at the state level, and local and state tax receipts
at the county level. Local taxes include all room taxes, local sales taxes and
local auto rental taxes plus the local share of the state transaction privilege
tax. The state share of the transaction privilege tax, personal and business
income taxes, motor fuel tax and contributions from tribal gaming revenue
are included in state tax receipts. Federal taxes include income and payroll
taxes, the motor fuel excise tax and airline ticket taxes.
PAGE 4 DEAN RUNYAN ASSOCIATES
INTERPRETATION OF IMPACT ESTIMATES
Users of this report should be aware of several issues regarding the interpretation of
the impact estimates contained herein.
• The monetary estimates in this report are expressed in current dollars. There
is no adjustment for inflation, with the exception of the graphs on pages 7
and 14.
• The employment estimates in this report are estimates of the total number of
full- and part-time jobs directly generated by travel spending, rather than the
number of individuals employed. Both payroll jobs and self-employment are
included in these estimates. Caution should therefore be used in comparing
these estimates with other employment data series.
• In general, estimates of small geographic areas (e.g., rural counties) are less
reliable than estimates for regions or metropolitan counties. Trend analysis
and comparisons of counties with relatively low levels of travel-related
economic activity should therefore be interpreted cautiously.
• The estimates of travel impacts published in this report will necessarily differ
somewhat from estimates generated from different models, methodologies
and data sources. Nonetheless, it should be emphasized that all credible
estimates of direct travel impacts at the state level, including those of Dean
Runyan Associates, are of similar magnitude.
DEAN RUNYAN ASSOCIATES PAGE 5
DEAN RUNYAN ASSOCIATES PAGE 7
II: NATIONAL TRAVEL TRENDS
Travel spending by domestic and international visitors in the United States was $611
billion in 2005. This represents a 7.6 percent increase over 2004.
Domestic International Total Pct. Int'l.
1998 $387 $71 $459 16%
1999 $406 $75 $480 16%
2000 $434 $82 $516 16%
2001 $421 $72 $493 15%
2002 $428 $67 $495 13%
2003 $455 $64 $520 12%
2004 $491 $74 $566 13%
2005 $529 $82 $611 13%
Annual Percentage Change
98-05 4.5% 2.1% 4.2%
04-05 7.6% 10.7% 8.0%
Direct Travel Spending In U.S., 1998-2005
($Billions)
Source: Dean Runyan Associates and Bureau of Economic Analysis
(BEA).
Travel spending in inflation-adjusted constant (2005) dollars is shown in the graph
below. The 2004-2005 annual increase in travel spending in constant dollars was
4.8 percent, following a 6.2 percent increase from 2003 to 2004.
U.S. Travel spending in Current and Constant Dollars, 1998-2005
($Billions)
98 99 00 01 02 03 04 05
450
500
550
600
650
$Billions
Constant
Current
Source: Dean Runyan Associates and Bureau of Economic Analysis. Constant
(2005) travel spending estimates derived from BEA constant (2000) dollar estimates.
The recent changes in travel spending can be considered in terms of three factors:
• International visitation
• Air travel
• Economic conditions affecting business and leisure travel.
With respect to the first factor, the decline in international travel spending was
steeper from 2000 to 2001 and has been slower to recover than domestic travel
spending. During 2005, travel spending by international visitors in current dollars
was $82 billion – the same level as in 2000. If the share of travel spending by
international visitors was at the same 16% level as is it was in 2000, it would
amount to $98 billion. Most of the decline in international travel spending is due to
a general decline in overseas visitation, as is shown in the graphic below. Note that
arrivals from all three places of origin (Western Europe, Asia, and all other) are
below their 2000 levels. However, arrivals for all three segments have been
increasing over the past two years.
Overseas Arrivals to the United States, 1996-2005
(Millions)
9.4
7.5
5.8
10.0
7.8
6.4
10.3
6.7
6.7
10.8
6.9
6.7
11.2
7.6
7.2
9.1
6.3
6.4
8.2
5.7
5.2
8.3
5.0
4.7
9.3
5.8
5.2
9.9
6.2
5.6
96 97 98 99 00 01 02 03 04 05
0
5
10
15
20
25
30
Millions of Arrivals
Other
Asia
W. Europe
Source: Dean Runyan Associates and U.S. Department of Commerce,
International Trade Administration, Office of Travel and Tourism Industries.
Approximately 90% of all overseas arrivals are visitors. Canada and Mexico
are not included (less than 20 percent of all international visitor spending).
Domestic air travel was also profoundly affected by the events of September 11,
2001. As shown in the graph on the following page, domestic air travel has
recovered (even if the industry has not). This is an indication that the volume of
both domestic leisure and business travel has increased in recent years.
PAGE 8 DEAN RUNYAN ASSOCIATES
DEAN RUNYAN ASSOCIATES PAGE 9
U.S. Domestic Passenger Air Arrivals, 1996-2005
96 97 98 99 00 01 02 03 04 05
500
550
600
650
700
Millions
Source: Bureau of Transportation Statistics (U.S. Department of
Transportation). T-100 domestic market data.
Although travel-generated employment began to recover in 2004, it is still
substantially below its peak level attained in 2000.
U.S. Travel-Generated Employment, 1998-2005p
(Millions of Jobs)
98 99 00 01 02 03 04 05p
5.40
5.45
5.50
5.55
5.60
5.65
5.70
5.75
Millions of Jobs
Source: Dean Runyan Associates and Bureau of Economic Analysis (BEA).
Preliminary 2005 estimate based on data for 3 quarters of year.
There are several reasons for the lag in employment in relation to travel spending.
Many of the jobs in the travel industry are entry-level and part-time positions.
Because of this, employers will generally increase the hours worked by individual
employees before hiring new employees.
In addition, there have been significant structural changes in the travel industry that
have affected the overall level of employment. The emergence of lower-cost air
carriers and the impact of new information technology on travel arrangement
services have resulted in structural employment losses in these two industries.
Employment in travel accommodations has also not fully recovered despite strong
growth in lodging sales over the past two years. This is primarily due to the fact that
the increase in lodging sales has been driven by prices (room rates) rather than the
construction and operation of new lodging establishments.
US Travel-Generated Employment, Selected Travel Industries, 1998-2005p
Air Passenger Transportation Traveler Accommodations
98 99 00 01 02 03 04 05p
1,300
1,320
1,340
1,360
1,380
1,400
1,420
Thousands of Jobs
98 99 00 01 02 03 04 05p
450
500
550
600
650
Thousands of Jobs
All Other Direct Travel-Generated Employment
98 99 00 01 02 03 04 05p
3,600
3,620
3,640
3,660
3,680
3,700
3,720
3,740
Thousands of Jobs
Source: Dean Runyan Associates and Bureau of Economic
Analysis, Payroll Employment only.
PAGE 10 DEAN RUNYAN ASSOCIATES
III: ARIZONA TRAVEL IMPACTS
1998-2005P
Direct
168
53.8%
Indirect
38
12.2%
Induced
106
34.0%
Employment (Thousands)
DEAN RUNYAN ASSOCIATES PAGE 11
The multi-billion dollar travel industry in Arizona is an important part of the state
and local economies. The industry is represented primarily by businesses in the
leisure and hospitality sector, transportation, and retail. The money that visitors
spend on various goods and services while in Arizona produces business receipts at
these firms, which in turn generate earnings and employment for Arizona residents.
In addition, state and local governments collect taxes that are generated from visitor
spending. Most of these taxes are imposed on the sale of a goods and services to
visitors, thus avoiding a tax burden on local residents.
The economic impacts directly generated by visitor spending also contribute to
significant secondary impacts. A portion of the business receipts generated by
visitor spending is spent within Arizona for other goods and services. Visitor
generated earnings are also spent by employees for goods and services produced in
Arizona. This re-spending of visitor-generated revenues creates indirect and
induced (secondary) impacts.
IMPACTS OF TRAVEL IN ARIZONA: A SUMMARY
• Total direct travel spending in Arizona in 2005 was $17.5 billion. This
represents a 9.9 percent increase over 2004, and it follows a 7.4 percent
increase the preceding year. In constant (inflation-adjusted) dollars, travel
spending has increased by 4.5 percent from 2003 to 2004 and 5.7 percent
from 2004 to 2005.
• Much of the increased travel activity in Arizona was related to increased
passenger air travel. Approximately 7.7 million domestic visitors traveled to
Arizona in 2005 by air. This is 5.7 percent increase over 2004.
• Visitors that stayed overnight in lodging establishments accounted for 42.3
percent of all visitor spending in 2005. Visitors that stayed in the private
homes of friends or relatives accounted for 28.8 percent. Day travelers
accounted for about 21.5 percent.
• More than one-half (52.7 percent) of all spending by visitors was for leisure
and hospitality services (arts, entertainment, recreation, accommodations,
food service). Retail spending (which includes food and beverages
purchased for off-premise consumption) amounted to 23.3 percent.
Transportation (including motor fuel) comprised the remaining 24 percent.
• In 2005, direct travel spending generated $456 million in local taxes and
$583 million in state taxes.
• Direct travel spending in Arizona generated 168,100 jobs with earnings of
$4.5 billion in 2005. Three-fourths of these jobs were in the
accommodations, food services, and arts, entertainment and recreation
industries.
• Travel spending in Arizona generated a total (direct and secondary) impact of
313,000 jobs with earnings of $9.3 billion in 2005.
PAGE 12 DEAN RUNYAN ASSOCIATES
TRAVEL TRENDS
Total direct travel spending in Arizona in 2005 was $17.5 billion. This represents a
9.9 percent increase over the preceding year. Travel industry employment also
increased by 3.3 percent from 2004 to 2005. This is the third consecutive year of
positive growth in employment after several years of contraction.
Spending Earnings Employment
($Billion) ($Billion) (Thousand) Local State Federal Total
1998 12.3 3.3 155 348 391 647 1,386
1999 13.3 3.6 161 368 429 712 1,509
2000 14.2 3.8 163 391 454 743 1,588
2001 13.8 3.8 159 372 457 795 1,623
2002 14.0 3.8 157 379 484 853 1,716
2003 14.8 4.0 159 391 503 914 1,808
2004 15.9 4.3 163 413 535 987 1,936
2005p 17.5 4.5 168 456 583 1,064 2,104
Annual Percentage Change
04-05p 9.9 6.0 3.3 10.6 8.9 7.8 8.7
98-05p 5.2 4.6 1.2 3.9 5.9 7.4 6.1
Tax Revenue ($Million)
Arizona Travel Trends, 1998-2005p
Note: p = preliminary. The percent change for 1998-2005p refers to the average annual percentage
change. Direct Travel Impacts do not include secondary (indirect and induced) impacts. All visitor
spending, airfares and local spending on travel agencies are included. Total Earnings include wage
and salary disbursements, other earned income, and proprietor income. The employment estimates in
this report are estimates of the total number of full- and part-time jobs directly generated by travel
spending, rather than the number of individuals employed. Both payroll jobs and self-employment are
included in these estimates.
In terms of inflation-adjusted (constant) dollars, travel spending was also strong,
despite increases in room rates and gasoline. In constant (inflation-adjusted) dollars,
travel spending increased by 5.7 percent from 2004 to 2005, following a 4.5
percent from 2003 to 2004. A comparison of travel spending trends in current and
constant dollars is shown on the following page. Since 1998, travel spending has
increased at an average annual rate of 2.8 percent in constant dollars.
DEAN RUNYAN ASSOCIATES PAGE 13
Direct Travel Spending in Arizona Adjusted for Inflation
98 99 00 01 02 03 04 05p
Year
$10
$11
$12
$13
$14
$15
$16
$17
$18
Billions
Constant
Current
Note: Constant dollar travel spending was deflated by a composite of the
West Urban CPI and room rates reported by Smith Travel. The average
annual increase in travel spending in constant dollars for 1998-2005p is 2.8
percent.
In 2005, almost 7.7 million domestic visitors traveled to Arizona by air. This
represents more than one-fourth of all overnight visitors to Arizona.1 Since the
trough of 2002, domestic air travel to Arizona has increased on average 8.2 percent
per year.
Domestic Air Passenger Visitor Arrivals to Arizona
98 99 00 01 02 03 04 05p
Year
5.0
5.5
6.0
6.5
7.0
7.5
8.0
Millions of Domestic Air Visitors
Source: Dean Runyan Associates and Airline Origin and
Destination Survey, U.S. Bureau of Transportation Statistics. Note:
These estimates are for air arrivals only. They do not include return
travel of Arizona residents or connecting flights normally reported
in air passenger statistics.
1 Visitors that travel to Arizona by air also stay longer and spend more. According to the 2001
National Household Transportation Survey, about 45 percent of all visitor nights by domestic
travelers can be attributed to visitors that traveled by air.
PAGE 14 DEAN RUNYAN ASSOCIATES
VISITOR SPENDING BY TYPE OF TRAVELER ACCOMMODATION
The pie chart below provides a breakout of total visitor spending in Arizona (all
spending on leisure and hospitality services, transportation, and retail) by the type of
accommodation in which the visitor stayed. As is indicated, the three primary
categories for Arizona (as well as most other states) are (1) the hotel, motel category
(this also includes B&B’s, Dude Ranches, and other commercial lodging facilities
with the exception of campgrounds), (2) the private homes of friends or relatives,
and (3) visitors that do not stay overnight away from home.
Arizona is somewhat atypical in two respects. First, a relatively high portion of
visitor spending (28.8 percent) is generated by visitors that stay in the homes of
friends and relatives. In part, this is probably due to the large influx in recent
decades of residents from other states. A “visit” with these transplants by friends
and family members entails a visit to Arizona. Such visits are often attractive due to
Arizona’s many attractions and its warm winter season. Second, much of the
spending by day travelers in Arizona is generated by Mexican travel across the
border. The primary purpose of most of this travel is for retail goods and groceries.2
Visitor Spending by Type of Traveler Accommodation
2005p
(Billions)
Hotel, Motel
42.3% $6.9
Campground
$0.7
4.3%
Private Home
$4.7
28.8%
Vacation Home
$0.5
3.1%
Day Travel
$3.5
21.5%
2 Approximately one-fourth of all spending by day travelers is of Mexican origin. See page 17 of this
report.
DEAN RUNYAN ASSOCIATES PAGE 15
VISITOR SPENDING BY TYPE OF COMMODITY PURCHASED
The following pie chart provides a breakout of visitor spending for all types of
travelers by the type of commodity (good or service) purchased. Approximately
one-half (52.7 percent) of all spending by visitors was for leisure and hospitality
services (arts, entertainment, recreation, accommodations, food service). Retail
spending (which includes food and beverages purchased for off-premise
consumption) amounted to 23.3 percent. Transportation (including motor fuel)
comprised the remaining 24.0 percent.
Visitor Spending by Type of Commodity Purchased, 2005p
(Billions)
Lodging
$2.5
15.3%
Food/Bev. Serv.
$3.6
22.1%
Arts/Entertain./Rec.
$2.5
15.3%
Retail/Food Stores
$3.8
23.3%
Ground Tran/Gas
$2.6
16.0%
Air Transportation
$1.3
8.0%
TRAVEL-GENERATED EMPLOYMENT
While about one-half of all visitor spending is in leisure and hospitality services,
about three-fourths of all travel-generated employment is in the accommodations,
food service, arts, entertainment and recreation industries. This is because leisure
and hospitality is more labor-intensive than retail trade (including gasoline service).
Direct Travel-Generated Employment by Industry, 2005p
(Thousands)
Accomm./Food Serv.
86
51.2%
Arts/Entertain./Rec.
44.8
26.7%
Retail/Gas Serv.
19.9
11.8%
Other Visitor Tran.
9.5
5.7%
Other Travel
7.9
4.7%
Note: Other Visitor Transportation includes passenger air travel
and all local ground transportation excluding motor fuel. Other
Travel includes travel agencies and resident air travel. Gasoline
Service is included in the Retail Industry category.
PAGE 16 DEAN RUNYAN ASSOCIATES
DEAN RUNYAN ASSOCIATES PAGE 17
VISITOR ORIGIN
More than three-fourths of the visitor impacts in Arizona are generated by out-of-state
travelers. Visitors from other states are the largest segment (over 64 percent of
spending), while international travel comprises more than 13 percent of visitor
impacts. Mexican day travel (4.3% of spending) is especially significant for the
counties on the national border.
Origin Spending Earnings Employment
($ Billion) ($ Billion) (Thousand) Local State Federal
Arizona 3.6 0.8 33 90 133 145
Other U.S. 10.5 2.8 108 303 368 616
International 2.2 0.5 20 64 76 7
All Visitors 16.3 4.0 160 456 577 833
Other Travel 1.2 0.5 8 0 6 232
Total Travel 17.5 4.5 168 456 583 1,064
Tax Receipts ($ Million)
Arizona Travel Impacts by Origin of Visitor, 2005p
1
Sources: Dean Runyan Associates, International Trade Administration and Bureau of Economic
Analysis (U.S. Dept. of Commerce), 2001 Household Transportation Survey (U.S. Dept. of
Transportation), Statistics Canada, and A.H. Charney and V.K. Pavlakovich, “The Economic
Impacts of Mexican Visitors to Arizona, 2001” (Karl Eller College of Business and Public
Administration, University of Arizona). Other travel includes travel agencies and resident air
travel.
Visitor Spending in Arizona by Origin of Visitor, 2005p
(Billions)
Arizona
$3.6
22.1%
Other U.S.
$10.5
64.4%
Overseas & Canada
$1.5
9.2%
Mexican Day
$0.7
4.3%
Sources: See table note, above.
Detailed direct travel impacts for the state of Arizona, 1998-2005p, are reported on
pages 18 and 19.
1998 1999 2000 2001
Total Direct Travel Spending ($Billion)
Visitor Spending at Destination 11.4 12.4 13.2 12.9
Other Travel* 0.9 1.0 1.0 0.9
Total Direct Spending 12.3 13.3 14.2 13.8
Visitor Spending by Type of Traveler Accommodation ($Billion)
Hotel, Motel 5.0 5.4 5.8 5.3
Campground 0.5 0.5 0.6 0.6
Private Home 3.1 3.4 3.6 3.7
Vacation Home 0.4 0.4 0.4 0.4
Day Travel 2.4 2.7 2.9 2.9
Spending at Destination 11.4 12.4 13.2 12.9
Visitor Spending by Commodity Purchased ($Billion)
Lodging 1.9 2.0 2.1 1.9
Food & Beverage Services 2.4 2.6 2.8 2.8
Food Stores 0.7 0.7 0.7 0.7
Ground Tran. & Motor Fuel 1.2 1.5 1.8 1.7
Arts, Entertainment & Recreation 1.7 1.9 2.0 2.0
Retail Sales 2.5 2.6 2.7 2.7
Air Transportation (visitor only) 1.0 1.0 1.0 1.0
Spending at Destination 11.4 12.4 13.2 12.9
Industry Earnings Generated by Travel Spending ($Billion)
Accommodation & Food Services 1.4 1.5 1.6 1.6
Arts, Entertainment & Recreation 0.7 0.7 0.8 0.8
Retail** 0.5 0.5 0.5 0.5
Auto Rental & other ground tran. 0.1 0.1 0.1 0.1
Air Transportation (visitor only) 0.4 0.4 0.4 0.4
Other Travel* 0.4 0.4 0.4 0.4
Total Direct Earnings 3.3 3.6 3.8 3.8
Industry Employment Generated by Travel Spending (Thousand jobs)
Accommodation & Food Services 78.3 82.4 84.8 80.4
Arts, Entertainment & Recreation 35.8 36.9 36.7 38.4
Retail** 20.0 20.8 20.8 20.0
Auto Rental & other ground tran. 2.4 2.3 2.3 2.1
Air Transportation (visitor only) 8.5 8.8 8.3 8.3
Other Travel* 9.8 10.1 10.1 9.4
Total Direct Employment 154.8 161.3 163.0 158.6
Government Revenue Generated by Travel Spending ($Million)
Local 348 368 391 372
State 391 429 454 457
Federal 647 712 743 795
Total Direct Gov't. Revenue 1,386 1,509 1,588 1,623
Details may not add to totals due to rounding.
*Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline.
Arizona
Direct Travel Impacts, 1998-2001
PAGE 18 DEAN RUNYAN ASSOCIATES
DEAN RUNYAN ASSOCIATES PAGE 19
2002 2003 2004 2005p
Total Direct Travel Spending ($Billion)
Visitor Spending at Destination 13.2 13.8 14.8 16.3
Other Travel* 0.9 1.0 1.1 1.2
Total Direct Spending 14.0 14.8 15.9 17.5
Visitor Spending by Type of Traveler Accommodation ($Billion)
Hotel, Motel 5.2 5.6 6.1 6.9
Campground 0.6 0.6 0.7 0.7
Private Home 3.8 4.1 4.3 4.7
Vacation Home 0.4 0.5 0.5 0.5
Day Travel 3.1 3.1 3.2 3.5
Spending at Destination 13.2 13.8 14.8 16.3
Visitor Spending by Commodity Purchased ($Billion)
Lodging 1.9 2.0 2.2 2.5
Food & Beverage Services 3.0 3.1 3.3 3.6
Food Stores 0.8 0.8 0.8 0.8
Ground Tran. & Motor Fuel 1.6 1.9 2.2 2.6
Arts, Entertainment & Recreation 2.1 2.2 2.4 2.5
Retail Sales 2.8 2.7 2.8 2.9
Air Transportation (visitor only) 1.0 1.1 1.2 1.3
Spending at Destination 13.2 13.8 14.8 16.3
Industry Earnings Generated by Travel Spending ($Billion)
Accommodation & Food Services 1.6 1.7 1.8 1.9
Arts, Entertainment & Recreation 0.8 0.9 0.9 1.0
Retail** 0.5 0.5 0.5 0.6
Auto Rental & other ground tran. 0.1 0.1 0.1 0.1
Air Transportation (visitor only) 0.4 0.4 0.5 0.5
Other Travel* 0.4 0.4 0.5 0.5
Total Direct Earnings 3.8 4.0 4.3 4.5
Industry Employment Generated by Travel Spending (Thousand jobs)
Accommodation & Food Services 80.1 80.8 82.6 86.0
Arts, Entertainment & Recreation 38.4 41.2 43.1 44.8
Retail** 20.5 19.7 19.7 19.9
Auto Rental & other ground tran. 2.2 2.2 2.2 2.2
Air Transportation (visitor only) 7.1 7.1 7.3 7.3
Other Travel* 8.3 8.0 8.0 7.9
Total Direct Employment 156.5 158.9 162.8 168.1
Government Revenue Generated by Travel Spending ($Million)
Local 379 391 413 456
State 484 503 535 583
Federal 853 914 987 1,064
Total Direct Gov't. Revenue 1,716 1,808 1,936 2,104
Details may not add to totals due to rounding.
*Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline.
Arizona
Direct Travel Impacts, 2002-2005p
TRAVEL INDUSTRY GROSS STATE PRODUCT
In concept, the Gross State Product (GSP) of a particular industry is equal to gross
output (sales or receipts) minus intermediate inputs (the goods and services
purchased from other industries). GSP is always smaller than output or sales
because GSP measures only the “value added” of an industry and does not include
the cost of the inputs that are also necessary to produce a good or service.
Alternatively, GSP can be thought of as the sum of earnings, indirect business taxes
(primarily excise and property taxes) and other operating surplus (including profits).
Estimates of travel spending and travel industry GSP are shown in the chart below.
Travel industry Gross State Product (GSP) amounted to $6.4 billion in 2005. This
represents 3.0 percent of the total Arizona GSP. Nationally, the travel industry
comprises 2.6 percent of Gross Domestic Product.
About 63 percent of all travel spending in Arizona is attributed to intermediate
inputs and goods resold at retail. Intermediate inputs cover a range of goods and
services that are purchased by travel industry businesses for the purpose of creating
a product or service for the traveler. For example, lodging establishments purchase
cable television services. Restaurants purchase food and beverages from vendors.
In both cases, these inputs are classified as the GSP of other industries. In addition,
travel spending occurs at many retail establishments where the goods purchased
from the retailer are purchased as finished goods from suppliers. These resold
goods are also counted as products of other industries. This would include motor
fuel, groceries and most of the commodities sold at retail establishments.3
Arizona Travel Spending and Gross State Product, 2005p
11.0
4.5 4.5
1.9 1.9
Spending ($17.5) GSP ($6.4)
$0
$5
$10
$15
$20
$11.0 Inputs
$4.5 Earnings
$1.9 Surplus & Taxes
Source: Dean Runyan Associates, Bureau of Economic Analysis, and
Minnesota Implan Group.
3 About 38 percent of the $11 billion of inputs and goods resold are purchased from other Arizona
businesses. The total direct and indirect travel industry gross state product is $10.6 billion.
PAGE 20 DEAN RUNYAN ASSOCIATES
DEAN RUNYAN ASSOCIATES PAGE 21
SECONDARY IMPACTS
Travel spending within Arizona brings money into many Arizona communities in
the form of business receipts. Portions of these receipts are spent within the state for
labor and supplies. Employees, in turn, spend a portion of their earnings on goods
and services in the state. This re-spending of travel-related revenues creates indirect
and induced impacts. To summarize:
• Direct impacts represent the employment and earnings attributable to travel
expenditures made directly by travelers at businesses throughout the state.
• Indirect impacts represent the employment and earnings associated with
industries that supply goods and services to the direct businesses (i.e., those
that receive money directly from travelers throughout the state).
• Induced impacts represent the employment and earnings that results from
purchases for food, housing, transportation, recreation, and other goods and
services made by travel industry employees, and the employees of the
indirectly affected industries.
Total Employment and Earnings Generated by
Travel Spending in Arizona, 2005p
Direct
$4.5
48.4%
Indirect
$1.3
14.0%
Induced
$3.5
37.6%
Earnings (Billions)
Direct
168
53.8%
Indirect
38
12.2%
Induced
106
34.0%
Employment (Thousands)
Source: Dean Runyan Associates and Minnesota Implan Group.
The impacts in this section are presented in terms of the employment and earnings
of eleven major industry groups. These industry groups are similar, but not identical
to the business service (or commodity) categories presented elsewhere in this report.
(The specific industries that comprise these major groups are listed in Appendix D.)
Direct travel impacts, such as those discussed in the first part of this section and the
regional and county impacts presented elsewhere in this report are found in the
following industry groups:
• Accommodations & Food Services
• Arts, Entertainment, and Recreation
• Retail Trade
• Transportation
As is indicated in the following tables and graphs, the total direct employment and
earnings of these four industry groups is identical to the total direct employment and
earnings shown in the first part of this section. The only difference is that these
industry groups represent industry groupings (firms) rather than commodity or
business service groupings.
The indirect and induced impacts of travel spending are found in all eleven-industry
groupings shown in the following tables and graphs. The remainder of this section
summarizes the secondary impacts of travel spending in the primary industry
groups.
• Professional Services (31,000 jobs and $1,479 million earnings). Legal,
medical, educational and other professional services are utilized by travel
businesses (indirect effect) and by employees of these firms (induced effect).
• Other Services (13,000 jobs and $324 million earnings). Employees of
travel-related businesses purchase services from various providers, such as
dry cleaners and repair shops. Similarly, travel businesses utilize a number
of service providers, such as laundry, maintenance, and business services.
• Government (23,000 jobs and $1,060 million earnings). Employees of
travel-related businesses pay fees to attend public educational institutions
and to operate motor vehicles.
• Finance, Real Estate (11,000 jobs and $421 million earnings). Employees
and businesses use the services of financial institutions, insurers, and real
estate businesses.
• Construction (11,000 jobs and $512 million earnings). Structures that house
travel-related businesses, such as hotels and restaurants, require ongoing
maintenance. (Note: this category does not include new construction
premised on future travel activity.)
PAGE 22 DEAN RUNYAN ASSOCIATES
DEAN RUNYAN ASSOCIATES PAGE 23
Direct and Secondary Employment
Generated by Travel in Arizona, 2005p
Accomm. & Food Serv.
Arts, Entertain., Rec.
Retail Trade
Prof. Services
Transportation
Government
Other Services
Finance, Ins., & Real Estate
Construction
Mining & Manufacturing
Agric.& Food Processing
0 20 40 60 80 100 120
(Thousands)
Direct & Secondary Employment
Direct Secondary
Direct and Secondary Earnings
Generated by Travel in Arizona, 2005p
Accomm. & Food Serv.
Prof. Services
Transportation
Arts, Entertain., Rec.
Government
Retail Trade
Construction
Finance, Ins., & Real Estate
Other Services
Mining & Manufacturing
Agric.& Food Processing
$0 $500 $1,000 $1,500 $2,000 $2,500
(Millions)
Direct & Secondary Earnings
Direct Secondary
Source: Dean Runyan Associates and Minnesota Implan Group.
Industry Groups are defined in appendix.
Detailed estimates are reported in the following table. It should be emphasized that
the estimates of indirect and induced impacts reported here apply to the entire state
of Arizona and do not necessarily reflect economic patterns for individual counties,
regions or sub-regions within the state. While total economic impacts can be
calculated on a county or regional level, such a detailed analysis is not included in
this study. In general, geographic areas with lower levels of aggregate economic
activity will have smaller secondary impacts within those same geographic
boundaries.
Grand
Industry Group Direct Indirect Induced Total Total
Accommodation & Food Services 86 4 9 13 99
Arts, Entertai nment & Recreation 45 5 2 8
Retail Trade 20 3 18 21 41
Professional Services 0 8 23 31 31
Transportation 17 5 4 9
Government 0 1 22 23 23
Other Services 0 5 8 13 13
Finance, Ins., & Real Estate 0 4 7 11 11
Construction 0 1 10 11 11
M ining &Manufacturing 0 1 2 4
Agriculture & Food Processing 0 1 1 2
All Industries 168 38 106 145 313
Direct & Secondary Visitor-Generated Employment in Arizona, 2005p
(thousand jobs)
Secondary
53
26
4
2
Grand
Industry Group Direct Indirect Induced Total Total
Accommodation & Food Services 1,938 61 138 199 2,138
Professional Services 0 436 1,043 1,479 1,479
Transportation 1,042 103 31 134 1,176
Arts, Entertainment & Recreation 979 165 47 211 1,190
Government 0 71 990 1,060 1,060
Retail Trade 564 10 118 128 692
Construction 0 41 471 512 512
Finance, Ins., & Real Estate 0 147 274 421 421
Other Services 0 156 168 324 324
Mining & Manufacturing 0 91 150 241 241
Agriculture & Food Processing 0 27 30 57 57
All Industries 4,523 1,308 3,458 4,766 9,289
Source: Dean Runyan Associates & Minnesota Implan Group.
Industry Groups are defined in Appendix E.
Direct & Secondary Visitor-Generated Earnings in Arizona, 2005p
($ Million)
Secondary
PAGE 24 DEAN RUNYAN ASSOCIATES
IV. STATE AND LOCAL GOVERNMENT REVENUE
GENERATED BY TRAVEL SPENDING
This section of the report provides an analysis of the state and local government
revenue generated by visitor spending. Most major sources of government revenue,
including sales and income taxes are included.4 However, due to data limitations it
is not possible to provide reliable estimates of property tax receipts attributable to
travel nor taxes and fees based on a variety of selective goods or activities (e.g.,
tobacco taxes, license taxes). Hence, the travel-generated tax impacts reported here
are generally conservative. Furthermore, these estimates are for tax revenues
generated directly from visitor spending. Estimates of total tax revenues (direct,
indirect and induced) are necessarily greater (see pages 21 through 24 for secondary
employment and earnings impacts).
The pie chart below, adapted from the Bureau of the Census’ State and Local
Government Finance, shows the broad sources of tax revenue in Arizona. About
one-half of all state and local tax revenue in Arizona is derived from excise or sales
taxes. The next largest category is property taxes -- paid primarily by homeowners
to local governments. Income taxes (which are primarily personal rather than
business) comprised 16.7 percent of all state and local taxes in the 2001-02 fiscal
year.
Arizona State and Local Government Tax Revenues,
2001-02 Fiscal Year
St. Gen. Sales
29.9%
Loc. Gen. Sales
10.4%
St./Loc. Select. Sales
9.0%
St. Income
16.7%
St./Loc. Property
29.9%
All Other
4.2%
Source: Dean Runyan Associates and Bureau of the Census, State and Local
Government Finance. The state transaction privilege tax is designated as a
general sales tax. Over 90 percent of all property taxes are local. About 85
percent of all income tax receipts are personal (vs. corporate). Selective sales
taxes include taxes on lodging, motor fuel, alcohol, tobacco and public
utilities. Other taxes include license taxes. State tax receipts comprised 59
percent of all state and local tax receipts in the 2001-02 fiscal year.
4 The state transaction privilege tax is considered a sales tax for the purposes of this report.
DEAN RUNYAN ASSOCIATES PAGE 25
The distribution of taxes generated by travel spending is shown in the next pie chart.
Although property taxes are not included, their contribution would not substantially
affect the fact that the overwhelming majority of travel-generated taxes – probably
about 90 percent -- are attributable to general and special purpose sales taxes. 5 This
is a significantly higher proportion than the 50 percent share for all Arizona state
and local tax revenues.
Arizona State and Local Travel-Generated Tax Revenues, 2005p
(Million)
Room Taxes
$249
24.0%
Income Taxes
$53
5.1%
Gaming
$18
1.7%
Gas & Auto Rental Taxes
$197
19.0%
Sales Taxes
$522
50.2%
Source: Dean Runyan Associates. Property taxes and fees and taxes on
selective goods and activities not included. “Other sales” includes the state
transaction privilege tax and other municipal and county sales or transaction
taxes. Total State and Local Tax revenues generated by travel spending were
$1,039 million in 2005.
Because the tax impacts of the travel industry are primarily realized through general
and special purpose sales taxes, the industry generates proportionately more tax
revenue than would be expected based on the industry earnings or gross state
product. The Gross State Product of the Arizona Travel industry is about 3.1
percent of total state GSP (see page 20); travel industry earnings are about 3.3
percent of total state earnings (see page 34), the tax revenues generated by travel
spending are between 5 and 6 percent of total state and local tax revenues.6
The following figures further illustrate this point through a comparison of the travel
industry with some other major industry sectors in the state. The basis of
comparison is Gross State Product (see pages 20 and 61-62), Indirect Business Taxes
(IBT) and Personal Income Taxes (PIT). Indirect business taxes are primarily state
5 Property taxes paid by businesses and travel industry employees would probably be similar to the
share of income taxes (about 5 percent). The majority of property taxes are paid by homeowners,
rather than commercial properties. Travel industry employees are, on average, younger and less
likely to own homes than the general population.
6 According to the Census Bureau’s State and Local Finance, state tax revenues represent 59 percent
of all state and local tax revenues in Arizona in the 2001-02 fiscal year. Gross state tax revenue for
the 2004-05 fiscal year was $11.3 billion. The estimate for total state and local tax revenues based
on the 59 percent share for state taxes is $19.2 billion. Travel-generated tax receipts (excluding
property taxes) are $1 billion, or 5.2 percent of the total.
PAGE 26 DEAN RUNYAN ASSOCIATES
DEAN RUNYAN ASSOCIATES PAGE 27
and local excise or sales taxes (such as the transaction privilege tax). Also included
are property taxes and other fees. Corporate income taxes are not included.
Personal Income taxes (PIT) are the state income taxes paid by employees.
As can be seen, only the retail sector has a greater tax impact than the travel
industry in terms of taxes as a percentage of GSP. It should also be emphasized that
the taxes generated by the travel industry are primarily paid by visitors rather than
residents. As indicated in the previous section (page 17), most of the visitor
spending in Arizona (about 80 percent) is made by international visitors and
residents of other states. In this regard, the local and state tax revenue generated by
travel spending is truly a net benefit to Arizona residents.
Selected Arizona Industry Sectors, 2004
Gross State Product and Indirect Business & Personal Income Taxes
($Millions)
Gross State Indirect Personal Sum of
Product Business Tax Income Tax IBT & PIT
Construction 13,214 279 134 413
Health Care 12,357 100 181 281
Manufacturing 17,871 427 210 637
Retail 16,284 3,677 95 3,772
Travel 6,059 763 34 797
All Industries 194,246 13,233 1,913 15,146
Indirect Business Tax and Personal Income Tax
as Percent of Gross State Product,
Selected Arizona Industry Sectors, 2004
Construction
Health Care
Manufacturing
Retail
Travel
All Industries
0% 5% 10% 15% 20% 25%
Percent of Gross State Product
IBT PIT
Source: Dean Runyan Associates and Bureau of Economic Analysis. Earnings
and Indirect Business Tax (IBT) derived from Bureau of Economic Analysis.
Indirect business taxes include property taxes, fees, and all local, state and
federal excise taxes. The vast majority of indirect business taxes are state and
local sales taxes. Personal Income tax (PIT) estimated by Dean Runyan
Associates.
It is also important to recognize that the local and state tax revenues generated by
travel spending are proportionately more important for non-urban areas. There are
two reasons for this. First, the travel industry generally comprises a larger
proportion of the economy in non-urban areas. Second, counties and municipalities
impose special excise taxes on visitors (lodging, eating and drinking establishments,
auto rentals) that are disproportionately borne by visitors, rather than residents.
The first point is illustrated in the chart below, where the percentage of the state
transaction privilege tax generated by travel spending for two groups of counties is
displayed. Maricopa and Pima counties – the most urbanized counties in the state –
generate relatively lower tax impacts from visitor spending than do the less
urbanized counties in the state.
State Transaction Privilege Taxes Generated
By Direct Travel Spending, 2005p
Maricopa & Pima
All Other
0% 5% 10% 15%
Percent Travel-Generated
Source: Dean Runyan Associates and Arizona Department of Revenue.
Detailed estimates for each county are also shown. The visitor-related share of local
excise taxes would generally be somewhat higher, due to local taxes on lodging,
eating and drinking, and auto rentals, as noted above.
PAGE 28 DEAN RUNYAN ASSOCIATES
DEAN RUNYAN ASSOCIATES PAGE 29
State Transaction Privilege Taxes Generated
by Direct Travel Spending, 2005p
Apache
Cochise
Coconino
Gila
Graham/Greenlee
La Paz
Maricopa
Mohave
Navajo
Pima
Pinal
Santa Cruz
Yavapai
Yuma
0% 5% 10% 15% 20% 25% 30% 35%
Percent Travel-Generated
Source: Dean Runyan Associates and Arizona Department of Revenue.
These estimates represent the total state transaction privilege tax receipts
generated by travel spending. Counties and municipalities generally are
allocated a portion of these receipts based on resident population.
Other county and municipal excise taxes are also imposed on visitors.
To summarize this analysis of the state and local government revenue generated by
travel spending in Arizona:
• Most of the taxes generated by travel industry taxes are imposed on visitors
rather than residents.
• As a percentage of Gross State Product, the tax receipts generated by the
travel industry are high relative to other industries (13 percent for the travel
industry versus 7.5 percent for all industries in the state).
• The tax revenues generated by the travel industry are relatively more
important for the non-urban areas of the state than for the more urbanized
areas of greater Phoenix and Tucson.
V. COUNTY TRAVEL IMPACTS
1998-2005P
DEAN RUNYAN ASSOCIATES PAGE 31
The analysis of travel impacts at the county level provides a valuable overview of
how the economic benefits of travel and tourism are distributed throughout the
state.
Urban areas, such as Maricopa county, tend to have highly developed travel
industry infrastructure consisting of large inventories of amusement and recreation
opportunities, commercial accommodations, and well-developed transportation
links. Hotel/motel guests are important to these areas and, hence, a large
proportion of travel expenditures are spent on overnight lodging.
In many of the less urbanized areas of Arizona, however, the economic significance
of travel and tourism is actually relatively more important. The infrastructure that
serves visitors to Maricopa county also serves local residents. Most of the spending
on recreation and food services in Maricopa county is by local residents. This is not
the case in most other less urbanized areas of the state – leisure and hospitality
businesses are generally much more dependent on visitor spending rather than local
residents.
In the graph below, the two most populous counties in Arizona, Maricopa and
Pima, are compared with the thirteen other counties in the state with respect to their
share of total earnings – more than three-fourths of all travel-generated earnings
occur within the two most populous counties in the state.
Share of Travel-Generated Earnings, 2004p
Maricopa & Pima Compared with Other Arizona Counties
Maricopa & Pima
All Other Counties
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Percent of State Direct Travel-Generated Earnings
Source: Dean Runyan Associates, U.S. Bureau of Labor Statistics, and U.S.
Bureau of Economic Analysis. Total and travel-generated earnings estimates
by Dean Runyan Associates.
PAGE 32 DEAN RUNYAN ASSOCIATES
DEAN RUNYAN ASSOCIATES PAGE 33
However, as a group the less urbanized counties in the state actually have a higher
proportion of travel-generated earnings in relation to total earnings. This is shown
graphically below. About three percent of all earnings in Maricopa and Pima
counties are travel-generated. By contrast, the proportion is over five percent in all
other Arizona counties.
Percentage of Total Earnings
Generated by Travel Spending, 2005p
Maricopa & Pima
All Other Counties
0% 1% 2% 3% 4% 5% 6%
Percent of Total Earnings that is Travel-Generated
Source: Dean Runyan Associates, U.S. Bureau of
Labor Statistics, and U.S. Bureau of Economic Analysis.
Total and travel-generated earnings estimates by Dean Runyan Associates.
In general, the earnings estimates provided in the preceding figures are probably the
best measure at the county level of the relative importance of travel and tourism for
local economies. The following table provides estimates for individual counties.
Total employment includes all full-time and part-time salaried employees and
proprietors. Because total employment includes all jobs, regardless of the hours
worked or the average annual earnings of the job, this indicator may less useful than
earnings estimates. Nonetheless, the distribution of counties is similar. The ranking
of the seven most tourism dependent counties – La Paz, Santa Cruz, Coconino,
Gila, Yavapai, Navajo, and Mohave – are the same for earnings and employment.
Percent Percent
Total Travel Travel Total Travel Travel
Apache 26,310 1,730 6.6 $874 $27 3.0
Cochise 60,370 4,190 6.9 $2,346 $71 3.0
Coconino 79,860 10,740 13.5 $2,594 $222 8.6
Gila 21,550 2,860 13.3 $609 $56 9.1
Graham/Greenlee 16,830 860 5.1 $574 $9 1.5
La Paz 8,200 1,430 17.4 $244 $31 12.6
Maricopa 2,111,160 91,160 4.3 $97,691 $2,981 3.1
Mohave 69,480 5,110 7.4 $2,194 $99 4.5
Navajo 38,220 3,040 8.0 $1,248 $58 4.6
Pima 484,720 25,550 5.3 $18,666 $544 2.9
Pinal 66,570 4,400 6.6 $2,677 $84 3.1
Santa Cruz 17,370 2,280 13.1 $630 $50 8.0
Yavapai 84,050 8,780 10.4 $2,535 $166 6.5
Yuma 87,370 5,990 6.9 $2,963 $127 4.3
Arizona 3,172,040 168,130 5.3 $135,844 $4,523 3.3
Employment Earnings (Million)
Travel-Generated Employment and Earnings as Percent of Total, 2005p
Source: Dean Runyan Associates, U.S. Bureau of Labor Statistics, and U.S.
Bureau of Economic Analysis. Total and travel-generated employment
estimates by Dean Runyan Associates.
Detailed direct travel impact estimates for 1998 through 2005p can be found on the
following pages. As noted in the introductory section to this report, county level
estimates are necessarily less reliable than the statewide estimates. Furthermore,
estimates for the smallest counties are less reliable than those for larger counties due
to survey sample sizes and other data limitations. For this reason, small changes in
year-to-year estimates are less important than longer-term trends.
PAGE 34 DEAN RUNYAN ASSOCIATES
Total Visitor Earnings Employment Local Taxes State Taxes Total Taxes
($Million) ($Million) ($Million) (jobs) ($Million) ($Million) ($Million)
Apache 128.5 128.5 26.6 1,730 2.9 5.1 8.0
Cochise 322.4 321.6 70.9 4,190 10.6 11.3 21.9
Coconino 836.5 834.1 222.4 10,740 24.1 31.0 55.0
Gila 232.6 232.5 55.6 2,860 2.9 6.4 9.4
Graham/Greenlee 36.4 36.3 8.7 860.0 0.9 1.5 2.4
La Paz 205.9 205.9 30.8 1,430 2.1 8.5 10.6
Maricopa 10,960.6 9,824.1 2,980.6 91,160 311.5 345.9 657.4
Mohave 434.3 432.6 98.6 5,110 9.2 17.4 26.5
Navajo 259.1 258.8 57.7 3,040 5.5 9.8 15.3
Pima 2,198.3 2,170.0 543.8 25,550 47.2 82.3 129.5
Pinal 359.6 359.2 83.9 4,400 6.6 13.6 20.2
Santa Cruz 282.3 282.2 50.3 2,280 5.5 8.7 14.2
Yavapai 638.1 637.0 165.8 8,780 14.0 20.7 34.8
Yuma 566.3 563.2 127.3 5,990 13.4 20.5 33.9
Arizona 17,460.9 16,285.9 4,523.0 168,130 456.4 582.8 1,039.2
Travel Spending Related Travel-Generated Impacts
2005p Arizona County Travel Impacts
DEAN RUNYAN ASSOCIATES PAGE 35
Annual Percent Chg.
1998 1999 2000 2001 2002 2003 2004 2005p 04-05p 98-05p
Apache 83.1 95.9 109.2 104.7 105.2 107.8 113.2 128.5 13.5 6.4
Cochise 215.2 238.3 257.7 261.6 283.7 280.2 301.8 322.4 6.8 5.9
Coconino 678.8 714.1 733.9 697.5 699.6 735.9 780.5 836.5 7.2 3.0
Gila 181.2 190.3 205.9 205.9 207.8 213.6 220.5 232.6 5.5 3.6
Graham/Greenlee 24.9 27.1 31.2 29.6 29.7 30.7 31.8 36.4 14.6 5.6
La Paz 127.7 147.1 160.0 162.7 161.8 173.5 184.2 205.9 11.8 7.1
Maricopa 7,630.4 8,166.8 8,770.5 8,486.0 8,464.8 9,125.4 9,886.4 10,960.6 10.9 5.3
Mohave 261.7 298.2 320.9 328.6 336.5 362.7 396.7 434.3 9.5 7.5
Navajo 183.5 215.5 238.4 224.5 228.0 229.2 236.5 259.1 9.5 5.0
Pima 1,620.5 1,764.7 1,874.0 1,805.3 1,892.4 1,897.8 2,019.4 2,198.3 8.9 4.5
Pinal 219.4 244.1 262.7 271.5 278.6 293.8 323.3 359.6 11.2 7.3
Santa Cruz 207.6 227.2 236.8 237.9 299.7 262.2 272.2 282.3 3.7 4.5
Yavapai 437.8 583.9 555.6 554.5 558.9 581.3 588.2 638.1 8.5 5.5
Yuma 379.0 410.3 439.9 442.5 498.7 498.1 527.5 566.3 7.3 5.9
Arizona 12,250.8 13,323.5 14,196.7 13,812.7 14,045.4 14,792.3 15,882.3 17,460.9 9.9 5.2
Arizona County Total Travel Spending, 1998-2005p
($ Millions)
DEAN RUNYAN ASSOCIATES PAGE 36
Annual Percent Chg.
1998 1999 2000 2001 2002 2003 2004 2005p 04-05p 98-05p
Apache 19.7 22.3 25.2 24.2 25.0 24.3 24.5 26.6 8.4 4.3
Cochise 48.1 53.1 57.2 58.6 63.3 62.7 67.7 70.9 4.7 5.7
Coconino 187.0 196.1 200.8 191.0 193.2 202.2 214.1 222.4 3.9 2.5
Gila 43.5 45.4 49.4 49.4 50.2 51.5 53.0 55.6 4.9 3.6
Graham/Greenlee 6.6 7.0 8.0 7.6 7.8 7.8 7.9 8.7 10.7 4.1
La Paz 22.0 24.6 25.9 27.0 27.6 28.4 28.9 30.8 6.7 4.9
Maricopa 2,173.2 2,313.2 2,508.0 2,478.6 2,455.3 2,619.1 2,811.5 2,980.6 6.0 4.6
Mohave 63.5 71.3 75.4 78.8 82.5 87.1 94.1 98.6 4.8 6.5
Navajo 44.7 52.7 58.1 54.1 56.0 54.5 54.8 57.7 5.3 3.7
Pima 411.5 447.7 475.2 457.4 476.5 478.5 510.0 543.8 6.6 4.1
Pinal 53.0 58.2 61.8 65.1 68.2 70.8 77.4 83.9 8.5 6.8
Santa Cruz 37.5 40.9 42.2 42.0 52.4 46.2 48.4 50.3 3.8 4.3
Yavapai 113.6 156.1 146.4 146.6 148.9 153.8 154.9 165.8 7.0 5.6
Yuma 85.5 91.8 98.3 99.5 111.2 113.0 119.8 127.3 6.2 5.9
Arizona 3,309.3 3,580.3 3,832.1 3,779.7 3,818.1 3,999.8 4,267.0 4,523.0 6.0 4.6
Arizona County Travel-Generated Earnings, 1998-2005p
($ Millions)
DEAN RUNYAN ASSOCIATES PAGE 37
Annual Percent Chg.
1998 1999 2000 2001 2002 2003 2004 2005p 04-05p 98-05p
Apache 1,490 1,560 1,650 1,750 1,560 1,590 1,680 1,730 3.0 2.2
Cochise 3,670 3,940 4,000 3,970 4,120 3,970 4,060 4,190 3.2 1.9
Coconino 11,230 11,260 11,110 10,410 10,220 10,480 10,630 10,740 1.0 -0.6
Gila 2,730 2,720 2,850 2,990 2,970 2,980 2,820 2,860 1.4 0.7
Graham/Greenlee 510 520 560 680 730 810 790 860 8.9 7.8
La Paz 1,390 1,460 1,460 1,440 1,430 1,440 1,390 1,430 2.9 0.4
Maricopa 87,580 88,820 90,400 85,490 82,290 84,610 87,410 91,160 4.3 0.6
Mohave 4,030 4,410 4,530 4,610 4,740 4,830 5,000 5,110 2.2 3.5
Navajo 3,210 3,520 3,750 3,440 3,310 3,210 3,070 3,040 -1.0 -0.8
Pima 22,290 23,840 24,420 23,410 24,000 23,910 25,120 25,550 1.7 2.0
Pinal 2,990 3,160 3,180 3,900 3,900 4,080 4,110 4,400 7.1 5.7
Santa Cruz 2,070 2,130 2,140 2,120 2,520 2,260 2,270 2,280 0.4 1.4
Yavapai 6,910 9,140 8,070 8,830 8,870 9,010 8,620 8,780 1.9 3.5
Yuma 4,660 4,800 4,940 5,590 5,870 5,770 5,830 5,990 2.7 3.7
Arizona 154,770 161,300 163,040 158,630 156,530 158,940 162,790 168,130 3.3 1.2
Arizona County Travel-Generated Employment, 1998-2005p
DEAN RUNYAN ASSOCIATES PAGE 38
DEAN RUNYAN ASSOCIATES PAGE 39
1998 2000 2001 2002 2003 2004 2005p
Total Direct Travel Spending ($Million)
Visitor Spending at Destination 83.1 109.2 104.7 105.2 107.8 113.2 128.5
Other Travel* 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Direct Spending 83.1 109.2 104.7 105.2 107.8 113.2 128.5
Visitor Spending by Type of Traveler Accommodation ($Million)
Hotel, Motel 39.9 57.5 52.1 53.1 51.7 52.3 62.
Campground 8.5 10.8 11.1 10.7 12.3 14.0 15.4
Private Home 20.4 23.8 24.4 24.3 25.7 27.4 29.1
Vacation Home 11.7 13.6 13.8 13.7 14.5 15.5 16.5
Day Travel 2.6 3.5 3.4 3.4 3.6 4.0 4.5
Spending at Destination 83.1 109.2 104.7 105.2 107.8 113.2 128.5
Visitor Spending by Commodity Purchased ($Million)
Lodging 14.7 20.0 18.2 18.5 17.3 17.3 20.
Food & Beverage Services 16.4 21.2 20.3 21.3 20.9 20.9 23.5
Food Stores 7.5 8.1 8.1 8.3 8.3 8.4 8.6
Ground Tran. & Motor Fuel 16.3 26.5 25.7 24.3 29.4 34.8 42.7
Arts, Entertainment & Recreation 11.7 14.8 14.7 15.1 15.1 15.4 16.3
Retail Sales 16.6 18.5 17.7 17.7 16.9 16.4 17.
Air Transportation (visitor only) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Spending at Destination 83.1 109.2 104.7 105.2 107.8 113.2 128.5
Industry Earnings Generated by Travel Spending ($Million)
Accommodation & Food Services 10.6 14.0 13.2 13.6 13.0 13.0 14.4
Arts, Entertainment & Recreation 4.9 6.2 6.1 6.3 6.3 6.4 6.8
Retail** 4.1 4.8 4.7 4.9 4.8 4.9 5.1
Auto Rental & other ground tran. 0.2 0.2 0.2 0.2 0.2 0.2 0.3
Air Transportation (visitor only) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other Travel* 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Direct Earnings 19.7 25.2 24.2 25.0 24.3 24.5 26.6
Industry Employment Generated by Travel Spending (Jobs)
Accommodation & Food Services 900 1,010 1,030 950 860 820 890
Arts, Entertainment & Recreation 310 320 420 300 430 550 540
Retail** 290 310 290 300 290 300 290
Auto Rental & other ground tran. 10 10 10 10 10 10
Air Transportation (visitor only) 0 0 0 0 0 0
Other Travel* 0 0 0 0 0 0
Total Direct Employment 1,490 1,650 1,750 1,560 1,590 1,680 1,730
Government Revenue Generated by Travel Spending ($Million)
Local 2.2 2.9 2.6 2.7 2.6 2.6 2.9
State 3.5 4.5 4.3 4.5 4.6 4.7 5.1
Total Direct Gov't. Revenue 5.7 7.3 7.0 7.1 7.2 7.4 8.0
Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations.
*Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline.
Apache County
Travel Impacts, 1998-2005p
9
0
3
10
0
0
1998 2000 2001 2002 2003 2004 2005p
Total Direct Travel Spending ($Million)
Visitor Spending at Destination 214.3 256.8 260.8 282.8 279.4 301.0 321.6
Other Travel* 0.9 0.8 0.8 0.8 0.8 0.8 0.9
Total Direct Spending 215.2 257.7 261.6 283.7 280.2 301.8 322.4
Visitor Spending by Type of Traveler Accommodation ($Million)
Hotel, Motel 40.2 54.4 53.8 54.2 57.3 69.4 78.
Campground 35.5 41.8 42.6 41.8 44.8 47.5 50.0
Private Home 46.3 53.0 54.8 55.6 57.8 60.3 63.1
Vacation Home 5.0 5.6 5.7 5.8 6.0 6.3 6.5
Day Travel 87.3 102.0 103.9 125.4 113.5 117.6 123.0
Spending at Destination 214.3 256.8 260.8 282.8 279.4 301.0 321.6
Visitor Spending by Commodity Purchased ($Million)
Lodging 22.2 27.8 27.7 27.8 28.8 33.6 37.
Food & Beverage Services 46.1 55.5 57.1 63.0 62.3 67.4 72.2
Food Stores 49.8 56.0 57.3 69.8 62.2 63.3 64.0
Ground Tran. & Motor Fuel 16.9 27.6 26.6 25.2 30.5 36.1 44.4
Arts, Entertainment & Recreation 25.8 31.4 32.9 33.8 35.3 38.5 39.8
Retail Sales 53.4 58.5 59.2 63.2 60.2 61.9 63.
Air Transportation (visitor only) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Spending at Destination 214.3 256.8 260.8 282.8 279.4 301.0 321.6
Industry Earnings Generated by Travel Spending ($Million)
Accommodation & Food Services 21.2 25.9 26.4 28.4 28.4 31.6 33.7
Arts, Entertainment & Recreation 11.4 13.9 14.5 14.9 15.6 17.0 17.6
Retail** 14.7 16.6 16.9 19.2 17.9 18.3 18.7
Auto Rental & other ground tran. 0.2 0.2 0.2 0.2 0.2 0.2 0.3
Air Transportation (visitor only) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other Travel* 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Direct Earnings 48.1 57.2 58.6 63.3 62.7 67.7 70.9
Industry Employment Generated by Travel Spending (Jobs)
Accommodation & Food Services 1,700 1,960 1,960 2,010 1,960 2,040 2,120
Arts, Entertainment & Recreation 1,170 1,160 1,160 1,190 1,180 1,190 1,230
Retail** 750 840 820 890 800 810 820
Auto Rental & other ground tran. 10 10 10 10 10 10
Air Transportation (visitor only) 0 0 0 0 0 0
Other Travel* 40 30 30 20 20 20
Total Direct Employment 3,670 4,000 3,970 4,120 3,970 4,060 4,190
Government Revenue Generated by Travel Spending ($Million)
Local 7.4 8.6 8.8 9.4 9.2 9.9 10.6
State 7.4 8.7 9.1 10.1 10.0 10.7 11.3
Total Direct Gov't. Revenue 14.8 17.4 17.9 19.5 19.3 20.6 21.9
Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations.
*Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline.
Cochise County
Travel Impacts, 1998-2005p
9
6
5
10
0
20
PAGE 40 DEAN RUNYAN ASSOCIATES
DEAN RUNYAN ASSOCIATES PAGE 41
1998 2000 2001 2002 2003 2004 2005p
Total Direct Travel Spending ($Million)
Visitor Spending at Destination 678.6 730.2 694.0 697.7 734.8 778.4 834.1
Other Travel* 0.2 3.7 3.5 1.9 1.1 2.2 2.4
Total Direct Spending 678.8 733.9 697.5 699.6 735.9 780.5 836.5
Visitor Spending by Type of Traveler Accommodation ($Million)
Hotel, Motel 486.4 515.1 477.9 478.7 505.8 538.1 580.3
Campground 37.8 45.0 46.4 46.2 48.1 50.4 52.2
Private Home 50.0 54.7 56.7 59.1 61.6 64.0 67.3
Vacation Home 23.4 26.1 26.9 27.4 28.2 29.4 30.7
Day Travel 80.9 89.2 86.1 86.3 91.1 96.4 103.6
Spending at Destination 678.6 730.2 694.0 697.7 734.8 778.4 834.1
Visitor Spending by Commodity Purchased ($Million)
Lodging 186.0 198.6 183.3 180.9 188.6 203.0 220.6
Food & Beverage Services 173.5 186.8 178.7 184.3 194.7 205.7 220.2
Food Stores 37.9 39.9 39.5 40.1 41.2 42.3 43.2
Ground Tran. & Motor Fuel 29.5 47.3 45.6 43.4 52.2 61.5 75.3
Arts, Entertainment & Recreation 100.9 111.4 108.9 111.0 117.6 124.8 128.8
Retail Sales 147.5 146.1 138.0 136.1 137.5 138.8 143.3
Air Transportation (visitor only) 3.3 0.0 0.0 1.8 2.9 2.3 2.5
Spending at Destination 678.6 730.2 694.0 697.7 734.8 778.4 834.1
Industry Earnings Generated by Travel Spending ($Million)
Accommodation & Food Services 118.5 127.1 119.3 120.5 126.3 134.7 140.3
Arts, Entertainment & Recreation 41.2 45.5 44.5 45.3 48.0 50.9 52.6
Retail** 25.4 26.1 25.1 25.1 25.5 26.0 26.9
Auto Rental & other ground tran. 0.5 0.6 0.6 0.6 0.6 0.6 0.7
Air Transportation (visitor only) 1.2 0.0 0.0 0.8 1.2 0.9 0.9
Other Travel* 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Direct Earnings 187.0 200.8 191.0 193.2 202.2 214.1 222.4
Industry Employment Generated by Travel Spending (Jobs)
Accommodation & Food Services 7,310 7,230 6,680 6,650 6,790 6,820 6,690
Arts, Entertainment & Recreation 2,540 2,590 2,520 2,400 2,550 2,690 2,910
Retail** 1,320 1,230 1,150 1,110 1,090 1,070 1,090
Auto Rental & other ground tran. 20 20 20 20 20 20
Air Transportation (visitor only) 30 0 0 10 20 10 10
Other Travel* 0 30 30 20 20 20 20
Total Direct Employment 11,230 11,110 10,410 10,220 10,480 10,630 10,740
Government Revenue Generated by Travel Spending ($Million)
Local 20.2 21.3 20.0 19.9 21.3 22.5 24.1
State 24.1 26.0 25.6 26.6 27.8 29.2 31.
Total Direct Gov't. Revenue 44.2 47.3 45.5 46.6 49.1 51.7 55.0
Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations.
*Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline.
Coconino County
Travel Impacts, 1998-2005p
20
0
1998 2000 2001 2002 2003 2004 2005p
Total Direct Travel Spending ($Million)
Visitor Spending at Destination 181.0 205.7 205.7 207.6 213.4 220.4 232.5
Other Travel* 0.2 0.2 0.2 0.2 0.1 0.1 0.1
Total Direct Spending 181.2 205.9 205.9 207.8 213.6 220.5 232.6
Visitor Spending by Type of Traveler Accommodation ($Million)
Hotel, Motel 32.0 36.9 32.4 32.3 34.0 35.0 42.
Campground 10.9 12.3 12.5 12.6 13.1 13.6 14.0
Private Home 14.9 16.9 17.5 17.8 18.2 18.8 19.4
Vacation Home 10.3 11.4 11.7 11.8 12.1 12.4 12.7
Day Travel 112.9 128.2 131.6 133.0 136.1 140.6 143.8
Spending at Destination 181.0 205.7 205.7 207.6 213.4 220.4 232.5
Visitor Spending by Commodity Purchased ($Million)
Lodging 13.4 15.5 13.7 13.5 14.0 14.6 17.
Food & Beverage Services 32.4 37.2 36.9 38.1 39.2 40.5 43.8
Food Stores 11.0 11.8 11.9 12.1 12.3 12.5 12.8
Ground Tran. & Motor Fuel 5.9 9.6 9.3 8.8 10.7 12.6 15.5
Arts, Entertainment & Recreation 75.0 86.5 89.5 91.3 94.1 97.6 99.3
Retail Sales 43.3 45.0 44.4 43.8 43.1 42.6 43.
Air Transportation (visitor only) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Spending at Destination 181.0 205.7 205.7 207.6 213.4 220.4 232.5
Industry Earnings Generated by Travel Spending ($Million)
Accommodation & Food Services 16.4 18.8 18.2 18.6 19.1 19.8 21.6
Arts, Entertainment & Recreation 19.2 22.2 22.9 23.3 24.1 25.0 25.5
Retail** 7.7 8.2 8.1 8.1 8.1 8.1 8.3
Auto Rental & other ground tran. 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Air Transportation (visitor only) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other Travel* 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Direct Earnings 43.5 49.4 49.4 50.2 51.5 53.0 55.6
Industry Employment Generated by Travel Spending (Jobs)
Accommodation & Food Services 1,210 1,330 1,270 1,310 1,270 1,250 1,290
Arts, Entertainment & Recreation 1,100 1,090 1,300 1,260 1,330 1,200 1,210
Retail** 410 420 400 380 360 360 360
Auto Rental & other ground tran. 0 0 0 0 0 0
Air Transportation (visitor only) 0 0 0 0 0 0
Other Travel* 10 10 10 10 10 10
Total Direct Employment 2,730 2,850 2,990 2,970 2,980 2,820 2,860
Government Revenue Generated by Travel Spending ($Million)
Local 2.1 2.3 2.2 2.2 2.3 2.4 2.9
State 2.6 3.0 2.9 3.0 4.0 5.1 6.4
Total Direct Gov't. Revenue 4.6 5.3 5.1 5.2 6.3 7.6 9.4
Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations.
*Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline.
Gila County
Travel Impacts, 1998-2005p
5
3
8
0
0
0
PAGE 42 DEAN RUNYAN ASSOCIATES
DEAN RUNYAN ASSOCIATES PAGE 43
1998 2000 2001 2002 2003 2004 2005p
Total Direct Travel Spending ($Million)
Visitor Spending at Destination 24.8 31.1 29.5 29.6 30.6 31.7 36.3
Other Travel* 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Total Direct Spending 24.9 31.2 29.6 29.7 30.7 31.8 36.4
Visitor Spending by Type of Traveler Accommodation ($Million)
Hotel, Motel 12.1 16.0 14.1 14.3 14.4 14.4 17.9
Campground 1.0 1.2 1.2 1.1 1.2 1.4 1.5
Private Home 9.2 10.7 11.0 11.1 11.6 12.3 12.9
Vacation Home 0.7 0.8 0.8 0.8 0.9 0.9 1.0
Day Travel 1.9 2.4 2.4 2.3 2.5 2.7 3.1
Spending at Destination 24.8 31.1 29.5 29.6 30.6 31.7 36.3
Visitor Spending by Commodity Purchased ($Million)
Lodging 4.3 5.5 4.8 4.8 4.7 4.7 5.9
Food & Beverage Services 6.5 8.0 7.6 8.0 8.1 8.1 9.1
Food Stores 1.1 1.2 1.2 1.2 1.2 1.2 1.2
Ground Tran. & Motor Fuel 3.4 5.6 5.4 5.1 6.2 7.3 9.0
Arts, Entertainment & Recreation 3.8 4.6 4.5 4.7 4.7 4.8 5.2
Retail Sales 5.7 6.2 5.9 5.9 5.7 5.6 5.9
Air Transportation (visitor only) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Spending at Destination 24.8 31.1 29.5 29.6 30.6 31.7 36.3
Industry Earnings Generated by Travel Spending ($Million)
Accommodation & Food Services 3.5 4.4 4.0 4.2 4.2 4.2 4.7
Arts, Entertainment & Recreation 1.9 2.3 2.3 2.3 2.4 2.4 2.6
Retail** 1.1 1.3 1.2 1.2 1.2 1.2 1.3
Auto Rental & other ground tran. 0.0 0.0 0.0 0.0 0.0 0.1 0.1
Air Transportation (visitor only) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other Travel* 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Direct Earnings 6.6 8.0 7.6 7.8 7.8 7.9 8.7
Industry Employment Generated by Travel Spending (Jobs)
Accommodation & Food Services 300 340 370 370 380 360 390
Arts, Entertainment & Recreation 140 140 240 290 360 370 400
Retail** 70 70 70 60 60 60 7
Auto Rental & other ground tran. 0 0 0 0 0 0
Air Transportation (visitor only) 0 0 0 0 0 0
Other Travel* 0 0 0 0 0 0
Total Direct Employment 510 560 680 730 810 790 860
Government Revenue Generated by Travel Spending ($Million)
Local 0.7 0.8 0.7 0.7 0.7 0.7 0.9
State 1.1 1.3 1.3 1.4 1.4 1.4 1.5
Total Direct Gov't. Revenue 1.8 2.1 2.0 2.1 2.1 2.1 2.4
Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations.
*Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline.
Graham & Greenlee Counties
Travel Impacts, 1998-2005p
0
0
0
0
1998 2000 2001 2002 2003 2004 2005p
Total Direct Travel Spending ($Million)
Visitor Spending at Destination 127.7 160.0 162.7 161.8 173.5 184.2 205.9
Other Travel* 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Direct Spending 127.7 160.0 162.7 161.8 173.5 184.2 205.9
Visitor Spending by Type of Traveler Accommodation ($Million)
Hotel, Motel 9.3 12.9 14.4 14.1 15.5 14.8 22.3
Campground 36.4 45.8 45.9 45.9 49.6 53.5 58.1
Private Home 15.1 18.6 18.9 19.0 19.9 21.1 22.6
Vacation Home 15.1 18.5 18.7 18.6 19.7 20.9 22.3
Day Travel 51.8 64.2 64.7 64.2 68.7 74.0 80.6
Spending at Destination 127.7 160.0 162.7 161.8 173.5 184.2 205.9
Visitor Spending by Commodity Purchased ($Million)
Lodging 6.2 7.1 7.5 7.5 7.8 7.7 9.4
Food & Beverage Services 14.4 17.1 17.9 18.4 19.0 19.3 21.2
Food Stores 12.7 13.8 14.0 14.3 14.5 14.5 14.6
Ground Tran. & Motor Fuel 29.7 48.5 46.9 44.4 53.7 63.6 78.0
Arts, Entertainment & Recreation 39.8 47.2 49.8 50.8 52.6 53.9 56.7
Retail Sales 24.8 26.3 26.6 26.3 25.9 25.3 26.
Air Transportation (visitor only) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Spending at Destination 127.7 160.0 162.7 161.8 173.5 184.2 205.9
Industry Earnings Generated by Travel Spending ($Million)
Accommodation & Food Services 6.0 7.0 7.4 7.6 7.8 7.9 8.9
Arts, Entertainment & Recreation 9.3 11.1 11.7 11.9 12.4 12.7 13.2
Retail** 6.4 7.3 7.5 7.7 7.8 7.8 8.2
Auto Rental & other ground tran. 0.3 0.4 0.4 0.4 0.4 0.5 0.5
Air Transportation (visitor only) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other Travel* 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Direct Earnings 22.0 25.9 27.0 27.6 28.4 28.9 30.8
Industry Employment Generated by Travel Spending (Jobs)
Accommodation & Food Services 500 540 550 520 530 500 530
Arts, Entertainment & Recreation 530 530 510 520 530 510 500
Retail** 340 370 370 370 360 370 390
Auto Rental & other ground tran. 10 10 10 10 10 10
Air Transportation (visitor only) 0 0 0 0 0 0
Other Travel* 0 0 0 0 0 0
Total Direct Employment 1,390 1,460 1,440 1,430 1,440 1,390 1,430
Government Revenue Generated by Travel Spending ($Million)
Local 1.5 1.7 1.7 1.7 1.8 1.8 2.1
State 4.9 5.9 6.0 6.1 6.8 7.5 8.5
Total Direct Gov't. Revenue 6.3 7.6 7.7 7.9 8.6 9.3 10.6
Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations.
*Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline.
La Paz County
Travel Impacts, 1998-2005p
0
10
0
0
PAGE 44 DEAN RUNYAN ASSOCIATES
DEAN RUNYAN ASSOCIATES PAGE 45
1998 2000 2001 2002 2003 2004 2005p
Total Direct Travel Spending ($Million)
Visitor Spending at Destination 6,799 7,849 7,620 7,613 8,186 8,854 9,824
Other Travel* 832 921 866 851 940 1,033 1,137
Total Direct Spending 7,630 8,771 8,486 8,465 9,125 9,886 10,961
Visitor Spending by Type of Traveler Accommodation ($Million)
Hotel, Motel 3,244 3,673 3,361 3,269 3,535 3,871 4,431
Campground 150 181 184 182 194 206 219
Private Home 2,240 2,601 2,681 2,752 2,951 3,164 3,408
Vacation Home 129 153 160 165 174 185 198
Day Travel 1,037 1,241 1,234 1,246 1,331 1,428 1,569
Spending at Destination 6,799 7,849 7,620 7,613 8,186 8,854 9,824
Visitor Spending by Commodity Purchased ($Million)
Lodging 1,135 1,296 1,174 1,129 1,192 1,314 1,536
Food & Beverage Services 1,441 1,683 1,677 1,738 1,843 1,975 2,168
Food Stores 225 246 246 252 262 273 287
Ground Tran. & Motor Fuel 829 1,157 1,107 1,086 1,248 1,417 1,683
Arts, Entertainment & Recreation 886 1,050 1,067 1,093 1,163 1,249 1,319
Retail Sales 1,330 1,418 1,394 1,387 1,408 1,441 1,521
Air Transportation (visitor only) 953 998 955 929 1,070 1,184 1,310
Spending at Destination 6,799 7,849 7,620 7,613 8,186 8,854 9,824
Industry Earnings Generated by Travel Spending ($Million)
Accommodation & Food Services 833 965 925 932 986 1,069 1,168
Arts, Entertainment & Recreation 365 433 439 449 479 515 544
Retail** 222 247 245 248 254 263 278
Auto Rental & other ground tran. 43 48 44 48 51 53
Air Transportation (visitor only) 361 401 416 390 435 469 478
Other Travel* 350 410 410 390 410 440 450
Total Direct Earnings 2,173 2,508 2,479 2,455 2,619 2,811 2,981
Industry Employment Generated by Travel Spending (Thousand Jobs)
Accommodation & Food Services 42.8 45.6 43.0 42.0 43.1 44.4 46.8
Arts, Entertainment & Recreation 16.9 16.6 15.4 15.5 16.9 18.1 19.5
Retail** 8.8 9.0 8.6 8.6 8.6 8.6 8.7
Auto Rental & other ground tran. 1.8 1.7 1.6 1.6 1.6 1.6 1.7
Air Transportation (visitor only) 8.3 8.2 8.1 6.9 6.9 7.1 7.1
Other Travel* 8.9 9.3 8.8 7.8 7.5 7.5 7.5
Total Direct Employment 87.6 90.4 85.5 82.3 84.6 87.4 91.2
Government Revenue Generated by Travel Spending ($Million)
Local 241 267 253 255 266 281 312
State 236 273 274 285 299 318 346
Total Direct Gov't. Revenue 477 541 527 540 565 599 657
Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations.
*Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline.
Maricopa County
Travel Impacts, 1998-2005p
58
1998 2000 2001 2002 2003 2004 2005p
Total Direct Travel Spending ($Million)
Visitor Spending at Destination 253.7 319.4 327.9 335.3 361.3 395.1 432.6
Other Travel* 8.0 1.5 0.7 1.2 1.4 1.6 1.7
Total Direct Spending 261.7 320.9 328.6 336.5 362.7 396.7 434.3
Visitor Spending by Type of Traveler Accommodation ($Million)
Hotel, Motel 84.8 106.1 109.4 113.6 123.8 138.8 152.7
Campground 23.9 29.3 28.7 28.6 30.5 32.5 35.0
Private Home 75.0 96.3 100.2 102.4 109.0 117.3 127.5
Vacation Home 26.8 32.8 33.7 34.3 36.7 39.4 42.7
Day Travel 43.2 54.9 55.9 56.3 61.3 67.2 74.7
Spending at Destination 253.7 319.4 327.9 335.3 361.3 395.1 432.6
Visitor Spending by Commodity Purchased ($Million)
Lodging 32.8 38.6 39.5 41.0 43.5 48.6 53.
Food & Beverage Services 56.3 67.8 71.5 76.4 81.4 88.2 95.0
Food Stores 21.4 23.7 24.4 25.4 26.3 27.3 28.3
Ground Tran. & Motor Fuel 39.2 64.0 61.9 58.6 70.8 83.9 103.0
Arts, Entertainment & Recreation 42.1 50.9 54.2 56.9 60.5 65.4 67.8
Retail Sales 61.9 67.5 69.1 70.3 71.4 73.6 76.
Air Transportation (visitor only) 0.0 6.8 7.3 6.7 7.3 8.0 8.9
Spending at Destination 253.7 319.4 327.9 335.3 361.3 395.1 432.6
Industry Earnings Generated by Travel Spending ($Million)
Accommodation & Food Services 28.6 34.2 35.8 37.8 40.3 44.2 46.7
Arts, Entertainment & Recreation 17.9 21.8 23.1 24.3 25.9 28.0 29.1
Retail** 13.3 15.3 15.7 16.3 16.7 17.4 18.2
Auto Rental & other ground tran. 0.4 0.5 0.5 0.5 0.5 0.6 0.6
Air Transportation (visitor only) 0.0 2.7 3.2 2.8 3.0 3.2 3.2
Other Travel* 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Direct Earnings 63.5 75.4 78.8 82.5 87.1 94.1 98.6
Industry Employment Generated by Travel Spending (Jobs)
Accommodation & Food Services 2,150 2,390 2,360 2,450 2,450 2,580 2,660
Arts, Entertainment & Recreation 1,170 1,330 1,450 1,520 1,630 1,660 1,700
Retail** 610 700 710 680 660 670 660
Auto Rental & other ground tran. 20 20 20 20 20 20
Air Transportation (visitor only) 0 60 60 50 50 50 50
Other Travel* 90 30 20 20 20 20
Total Direct Employment 4,030 4,530 4,610 4,740 4,830 5,000 5,110
Government Revenue Generated by Travel Spending ($Million)
Local 6.1 7.0 7.3 7.5 7.9 8.6 9.2
State 11.0 13.2 13.7 14.6 15.3 16.3 17.
Total Direct Gov't. Revenue 17.1 20.2 21.0 22.1 23.2 24.9 26.5
Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations.
*Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline.
Mohave County
Travel Impacts, 1998-2005p
1
4
20
20
4
PAGE 46 DEAN RUNYAN ASSOCIATES
DEAN RUNYAN ASSOCIATES PAGE 47
1998 2000 2001 2002 2003 2004 2005p
Total Direct Travel Spending ($Million)
Visitor Spending at Destination 183.2 238.1 224.1 227.6 228.9 236.3 258.8
Other Travel* 0.4 0.3 0.3 0.3 0.2 0.2 0.2
Total Direct Spending 183.5 238.4 224.5 228.0 229.2 236.5 259.1
Visitor Spending by Type of Traveler Accommodation ($Million)
Hotel, Motel 85.5 121.9 105.3 108.5 102.4 101.1 113.7
Campground 22.7 27.2 28.0 27.4 30.0 32.7 35.3
Private Home 27.2 31.8 33.0 33.5 35.1 37.3 39.7
Vacation Home 35.7 41.3 42.5 42.9 45.1 47.8 50.8
Day Travel 12.2 15.9 15.3 15.3 16.2 17.3 19.3
Spending at Destination 183.2 238.1 224.1 227.6 228.9 236.3 258.8
Visitor Spending by Commodity Purchased ($Million)
Lodging 31.5 44.0 37.7 38.3 36.1 35.9 39.
Food & Beverage Services 32.4 43.8 40.0 42.1 41.3 41.2 45.0
Food Stores 22.7 25.2 25.2 25.8 26.2 26.6 27.3
Ground Tran. & Motor Fuel 22.6 36.9 35.6 33.8 40.8 48.3 59.3
Arts, Entertainment & Recreation 35.6 44.0 44.1 46.1 44.6 45.1 47.0
Retail Sales 38.4 44.2 41.5 41.5 40.0 39.1 40.
Air Transportation (visitor only) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Spending at Destination 183.2 238.1 224.1 227.6 228.9 236.3 258.8
Industry Earnings Generated by Travel Spending ($Million)
Accommodation & Food Services 22.3 30.7 27.2 28.2 27.1 27.0 28.7
Arts, Entertainment & Recreation 13.0 16.5 16.2 16.9 16.7 17.0 17.6
Retail** 8.8 10.4 10.1 10.3 10.3 10.3 10.
Auto Rental & other ground tran. 0.2 0.3 0.3 0.3 0.3 0.3 0.4
Air Transportation (visitor only) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other Travel* 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Direct Earnings 44.7 58.1 54.1 56.0 54.5 54.8 57.7
Industry Employment Generated by Travel Spending (Jobs)
Accommodation & Food Services 1,650 2,180 1,870 1,830 1,730 1,620 1,570
Arts, Entertainment & Recreation 1,040 990 1,030 960 970 950 960
Retail** 500 550 520 500 490 480 490
Auto Rental & other ground tran. 10 10 10 10 10 10
Air Transportation (visitor only) 0 0 0 0 0 0
Other Travel* 20 10 10 10 10 10
Total Direct Employment 3,210 3,750 3,440 3,310 3,210 3,070 3,040
Government Revenue Generated by Travel Spending ($Million)
Local 4.4 5.8 5.2 5.3 5.1 5.1 5.5
State 6.6 8.6 8.2 8.5 8.8 9.0 9.8
Total Direct Gov't. Revenue 11.1 14.4 13.4 13.8 13.9 14.1 15.3
Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations.
*Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline.
Navajo County
Travel Impacts, 1998-2005p
6
6
8
10
0
10
1998 2000 2001 2002 2003 2004 2005p
Total Direct Travel Spending ($Million)
Visitor Spending at Destination 1,594 1,847 1,779 1,869 1,874 1,993 2,170
Other Travel* 26 27 26 23 24 26 2
Total Direct Spending 1,621 1,874 1,805 1,892 1,898 2,019 2,198
Visitor Spending by Type of Traveler Accommodation ($Million)
Hotel, Motel 700 812 724 737 743 814 931
Campground 57 66 67 67 71 75 78
Private Home 372 431 448 460 479 501 527
Vacation Home 27 31 32 32 34 35 37
Day Travel 438 506 508 573 547 568 597
Spending at Destination 1,594 1,847 1,779 1,869 1,874 1,993 2,170
Visitor Spending by Commodity Purchased ($Million)
Lodging 290 338 300 302 300 332 395
Food & Beverage Services 369 431 422 448 454 484 522
Food Stores 90 100 100 112 106 109 112
Ground Tran. & Motor Fuel 161 215 205 204 230 258 303
Arts, Entertainment & Recreation 226 268 268 277 286 305 317
Retail Sales 443 480 471 512 481 488 502
Air Transportation (visitor only) 14 16 15 14 16 18 20
Spending at Destination 1,594 1,847 1,779 1,869 1,874 1,993 2,170
Industry Earnings Generated by Travel Spending ($Million)
Accommodation & Food Services 217 254 239 249 250 270 294
Arts, Entertainment & Recreation 90 107 107 110 114 122 127
Retail** 72 80 79 86 82 83 8
Auto Rental & other ground tran. 11 13 12 13 13 14 15
Air Transportation (visitor only) 5 6 6 6 7 7
Other Travel* 10 20 20 10 10 10 1
Total Direct Earnings 412 475 457 476 478 510 544
Industry Employment Generated by Travel Spending (Jobs)
Accommodation & Food Services 11,880 13,370 12,590 12,890 12,660 13,250 13,840
Arts, Entertainment & Recreation 6,080 6,630 6,650 6,810 7,260 7,860 7,660
Retail** 3,210 3,350 3,190 3,410 3,130 3,160 3,200
Auto Rental & other ground tran. 480 460 420 430 440 430 440
Air Transportation (visitor only) 130 130 120 110 100 110 110
Other Travel* 520 470 440 360 320 310 310
Total Direct Employment 22,290 24,420 23,410 24,000 23,910 25,120 25,550
Government Revenue Generated by Travel Spending ($Million)
Local 36.2 41.2 38.1 39.5 39.1 41.9 47.2
State 57.1 65.7 65.7 72.1 72.0 76.1 82.3
Total Direct Gov't. Revenue 93.3 106.9 103.8 111.5 111.1 118.0 129.5
Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations.
*Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline.
Pima County
Travel Impacts, 1998-2005p
8
6
7
0
PAGE 48 DEAN RUNYAN ASSOCIATES
DEAN RUNYAN ASSOCIATES PAGE 49
1998 2000 2001 2002 2003 2004 2005p
Total Direct Travel Spending ($Million)
Visitor Spending at Destination 219.3 262.6 271.4 278.5 293.4 322.8 359.2
Other Travel* 0.1 0.1 0.1 0.1 0.4 0.4 0.4
Total Direct Spending 219.4 262.7 271.5 278.6 293.8 323.3 359.6
Visitor Spending by Type of Traveler Accommodation ($Million)
Hotel, Motel 43.6 46.4 48.2 48.8 46.5 51.9 60.
Campground 13.8 16.6 16.5 16.2 17.4 18.5 19.6
Private Home 72.3 89.7 93.7 98.0 105.7 116.9 130.0
Vacation Home 30.0 36.7 38.0 39.5 42.6 47.0 52.0
Day Travel 59.7 73.3 75.0 76.0 81.2 88.5 97.7
Spending at Destination 219.3 262.6 271.4 278.5 293.4 322.8 359.2
Visitor Spending by Commodity Purchased ($Million)
Lodging 17.5 18.4 19.0 19.1 18.1 20.2 22.
Food & Beverage Services 49.1 58.0 61.5 65.6 68.3 75.3 84.1
Food Stores 20.5 23.1 24.0 25.1 26.3 28.2 30.3
Ground Tran. & Motor Fuel 26.9 43.9 42.4 40.2 48.6 57.5 70.7
Arts, Entertainment & Recreation 45.0 53.8 57.3 60.0 63.0 68.9 73.4
Retail Sales 60.2 65.4 67.3 68.6 69.2 72.8 78.
Air Transportation (visitor only) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Spending at Destination 219.3 262.6 271.4 278.5 293.4 322.8 359.2
Industry Earnings Generated by Travel Spending ($Million)
Accommodation & Food Services 21.6 24.8 26.1 27.5 28.1 31.1 34.3
Arts, Entertainment & Recreation 19.6 23.5 25.1 26.3 27.7 30.5 32.6
Retail** 11.5 13.1 13.5 13.9 14.3 15.1 16.2
Auto Rental & other ground tran. 0.3 0.3 0.3 0.4 0.4 0.4 0.4
Air Transportation (visitor only) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other Travel* 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Direct Earnings 53.0 61.8 65.1 68.2 70.8 77.4 83.9
Industry Employment Generated by Travel Spending (Jobs)
Accommodation & Food Services 1,490 1,580 1,610 1,720 1,810 1,820 1,930
Arts, Entertainment & Recreation 890 970 1,680 1,550 1,640 1,640 1,790
Retail** 590 620 600 610 610 620 660
Auto Rental & other ground tran. 10 10 10 10 10 10
Air Transportation (visitor only) 0 0 0 0 0 0
Other Travel* 10 0 0 0 20 20 10
Total Direct Employment 2,990 3,180 3,900 3,900 4,080 4,110 4,400
Government Revenue Generated by Travel Spending ($Million)
Local 4.4 4.9 5.2 5.3 5.4 5.9 6.6
State 8.2 9.7 10.2 10.9 11.4 12.4 13.
Total Direct Gov't. Revenue 12.6 14.6 15.4 16.2 16.8 18.3 20.2
Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations.
*Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline.
Pinal County
Travel Impacts, 1998-2005p
0
6
2
10
0
6
1998 2000 2001 2002 2003 2004 2005p
Total Direct Travel Spending ($Million)
Visitor Spending at Destination 207.6 236.8 237.9 299.6 262.2 272.2 282.2
Other Travel* 0.0 0.0 0.0 0.1 0.1 0.1 0.1
Total Direct Spending 207.6 236.8 237.9 299.7 262.2 272.2 282.3
Visitor Spending by Type of Traveler Accommodation ($Million)
Hotel, Motel 27.5 29.0 25.6 28.0 27.3 32.6 37.
Campground 3.8 4.4 4.4 4.5 5.0 5.3 5.5
Private Home 6.8 8.0 8.4 8.7 9.1 9.7 10.4
Vacation Home 0.8 0.9 1.0 1.0 1.0 1.1 1.2
Day Travel 168.7 194.4 198.5 257.5 219.7 223.5 227.3
Spending at Destination 207.6 236.8 237.9 299.6 262.2 272.2 282.2
Visitor Spending by Commodity Purchased ($Million)
Lodging 11.0 11.6 10.3 11.1 10.8 12.8 14.
Food & Beverage Services 25.9 29.1 28.8 35.6 31.9 33.9 36.4
Food Stores 79.3 90.4 92.3 120.2 102.1 103.5 104.6
Ground Tran. & Motor Fuel 5.3 8.7 8.4 8.0 9.6 11.4 14.0
Arts, Entertainment & Recreation 6.2 6.9 6.7 7.3 7.4 8.4 9.1
Retail Sales 79.8 90.1 91.4 117.5 100.4 102.2 103.2
Air Transportation (visitor only) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Spending at Destination 207.6 236.8 237.9 299.6 262.2 272.2 282.2
Industry Earnings Generated by Travel Spending ($Million)
Accommodation & Food Services 11.9 13.1 12.6 15.1 13.7 15.0 16.2
Arts, Entertainment & Recreation 2.9 3.3 3.1 3.4 3.5 3.9 4.3
Retail** 22.6 25.8 26.2 33.7 28.8 29.3 29.7
Auto Rental & other ground tran. 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Air Transportation (visitor only) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other Travel* 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Direct Earnings 37.5 42.2 42.0 52.4 46.2 48.4 50.3
Industry Employment Generated by Travel Spending (Jobs)
Accommodation & Food Services 830 830 820 970 890 930 960
Arts, Entertainment & Recreation 230 250 250 250 240 250 270
Retail** 1,010 1,060 1,050 1,300 1,120 1,080 1,040
Auto Rental & other ground tran. 0 0 0 0 0 0
Air Transportation (visitor only) 0 0 0 0 0 0
Other Travel* 0 0 0 0 0 0
Total Direct Employment 2,070 2,140 2,120 2,520 2,260 2,270 2,280
Government Revenue Generated by Travel Spending ($Million)
Local 4.2 4.7 4.6 5.8 5.0 5.3 5.5
State 5.9 6.7 7.0 9.2 8.1 8.4 8.7
Total Direct Gov't. Revenue 10.0 11.3 11.6 14.9 13.1 13.7 14.2
Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations.
*Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline.
Santa Cruz County
Travel Impacts, 1998-2005p
9
9
0
0
0
PAGE 50 DEAN RUNYAN ASSOCIATES
DEAN RUNYAN ASSOCIATES PAGE 51
1998 2000 2001 2002 2003 2004 2005p
Total Direct Travel Spending ($Million)
Visitor Spending at Destination 434.7 552.7 551.6 556.0 580.4 587.2 637.0
Other Travel* 3.1 2.9 2.9 3.0 0.9 1.0 1.0
Total Direct Spending 437.8 555.6 554.5 558.9 581.3 588.2 638.1
Visitor Spending by Type of Traveler Accommodation ($Million)
Hotel, Motel 138.7 208.1 197.1 194.9 205.9 197.9 230.7
Campground 35.7 39.8 40.5 40.8 42.2 44.1 45.5
Private Home 69.6 82.1 86.4 89.9 94.5 99.9 105.6
Vacation Home 14.6 16.8 17.6 18.2 19.1 20.1 21.0
Day Travel 176.1 205.8 210.0 212.1 218.7 225.2 234.1
Spending at Destination 434.7 552.7 551.6 556.0 580.4 587.2 637.0
Visitor Spending by Commodity Purchased ($Million)
Lodging 59.0 86.0 81.3 79.6 83.1 81.5 97.
Food & Beverage Services 100.3 132.4 133.2 137.8 145.0 145.9 159.7
Food Stores 27.0 30.8 31.1 31.8 32.8 33.2 34.3
Ground Tran. & Motor Fuel 16.7 27.3 26.4 25.0 30.2 35.8 43.9
Arts, Entertainment & Recreation 118.1 146.1 150.7 153.9 160.7 165.2 170.4
Retail Sales 113.5 130.2 128.9 127.8 128.4 125.5 131.0
Air Transportation (visitor only) 0.0 0.0 0.0 0.1 0.1 0.1 0.1
Spending at Destination 434.7 552.7 551.6 556.0 580.4 587.2 637.0
Industry Earnings Generated by Travel Spending ($Million)
Accommodation & Food Services 52.0 71.3 70.1 71.2 74.7 74.5 82.1
Arts, Entertainment & Recreation 40.7 51.5 53.0 54.1 56.8 58.2 60.4
Retail** 18.4 21.2 21.2 21.2 21.5 21.2 22.2
Auto Rental & other ground tran. 0.2 0.2 0.2 0.2 0.2 0.3 0.3
Air Transportation (visitor only) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other Travel* 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Direct Earnings 113.6 146.4 146.6 148.9 153.8 154.9 165.8
Industry Employment Generated by Travel Spending (Jobs)
Accommodation & Food Services 3,500 4,410 4,210 4,240 4,210 3,900 3,930
Arts, Entertainment & Recreation 2,350 2,580 3,570 3,620 3,890 3,840 3,920
Retail** 930 970 950 900 870 850 890
Auto Rental & other ground tran. 10 10 10 10 10 10
Air Transportation (visitor only) 0 0 0 0 0 0
Other Travel* 120 100 90 90 30 30 30
Total Direct Employment 6,910 8,070 8,830 8,870 9,010 8,620 8,780
Government Revenue Generated by Travel Spending ($Million)
Local 8.9 12.0 11.7 11.7 12.4 12.3 14.
State 11.0 14.5 14.8 15.5 17.1 18.1 20.
Total Direct Gov't. Revenue 19.9 26.5 26.5 27.2 29.5 30.4 34.8
Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations.
*Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline.
Yavapai County
Travel Impacts, 1998-2005p
6
10
0
0
7
1998 2000 2001 2002 2003 2004 2005p
Total Direct Travel Spending ($Million)
Visitor Spending at Destination 373.8 434.4 439.5 496.2 496.1 524.7 563.2
Other Travel* 5.2 5.5 3.0 2.5 2.0 2.8 3.1
Total Direct Spending 379.0 439.9 442.5 498.7 498.1 527.5 566.3
Visitor Spending by Type of Traveler Accommodation ($Million)
Hotel, Motel 86.1 95.5 90.6 103.1 118.2 132.2 154.8
Campground 48.9 57.5 58.7 58.2 61.5 64.8 67.0
Private Home 63.6 77.0 81.4 83.3 87.7 92.1 97.2
Vacation Home 28.4 33.8 35.0 35.4 37.1 38.9 40.8
Day Travel 146.8 170.6 173.9 216.2 191.6 196.6 203.5
Spending at Destination 373.8 434.4 439.5 496.2 496.1 524.7 563.2
Visitor Spending by Commodity Purchased ($Million)
Lodging 29.4 32.2 30.5 33.4 36.7 40.8 47.
Food & Beverage Services 61.0 71.2 72.4 82.2 83.9 89.1 97.0
Food Stores 62.0 69.9 71.4 85.0 77.8 79.3 80.6
Ground Tran. & Motor Fuel 21.0 34.2 33.1 31.3 37.9 44.9 55.1
Arts, Entertainment & Recreation 77.9 90.8 92.1 99.4 108.0 116.9 124.9
Retail Sales 122.5 136.1 137.8 162.2 148.2 150.5 153.9
Air Transportation (visitor only) 0.0 0.0 2.2 2.7 3.7 3.4 3.7
Spending at Destination 373.8 434.4 439.5 496.2 496.1 524.7 563.2
Industry Earnings Generated by Travel Spending ($Million)
Accommodation & Food Services 28.2 32.4 32.2 36.3 37.9 40.8 44.7
Arts, Entertainment & Recreation 28.4 33.5 34.2 36.7 39.6 42.7 45.4
Retail** 26.4 29.9 30.3 35.6 32.8 33.4 34.2
Auto Rental & other ground tran. 0.2 0.3 0.3 0.3 0.3 0.3 0.3
Air Transportation (visitor only) 0.0 0.0 1.0 1.1 1.5 1.3 1.4
Other Travel* 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total Direct Earnings 85.5 98.3 99.5 111.2 113.0 119.8 127.3
Industry Employment Generated by Travel Spending (Jobs)
Accommodation & Food Services 2,020 2,080 2,040 2,190 2,250 2,310 2,430
Arts, Entertainment & Recreation 1,340 1,480 2,210 2,210 2,200 2,240 2,230
Retail** 1,230 1,310 1,280 1,410 1,260 1,220 1,270
Auto Rental & other ground tran. 10 10 10 10 10 10
Air Transportation (visitor only) 0 0 20 20 20 20 20
Other Travel* 60 60 40 30 30 30
Total Direct Employment 4,660 4,940 5,590 5,870 5,770 5,830 5,990
Government Revenue Generated by Travel Spending ($Million)
Local 9.2 10.4 10.4 11.9 11.7 12.3 13.
State 11.4 13.2 13.9 16.3 16.8 18.4 20.
Total Direct Gov't. Revenue 20.7 23.6 24.3 28.2 28.5 30.7 33.9
Details may not add to totals due to rounding. Estimates for 1999 not printed due to space limitations.
*Other Travel includes resident air travel and travel arrangement. **Retail includes gasoline.
Yuma County
Travel Impacts, 1998-2005p
9
10
30
4
5
PAGE 52 DEAN RUNYAN ASSOCIATES
APPENDICES
Appendix A. Travel Industry Accounts: A comparison of the
Regional Travel Impact Model and
Travel & Tourism Satellite Accounts
Appendix B. Travel Impact Estimation Procedures
Appendix C. Definition of Terms
Appendix D. Secondary Impacts Industry Groups
Appendix E. Rounding and Format of Detailed Tables
DEAN RUNYAN ASSOCIATES PAGE 53
APPENDIX A
TRAVEL INDUSTRY ACCOUNTS: A COMPARISON OF THE
REGIONAL TRAVEL IMPACT MODEL AND
TRAVEL & TOURISM SATELLITE ACCOUNTS
An economic account is a method for displaying inter-related information about a set
of economic activities. A travel industry account is a method to report different types
of related information about the purchase of goods and services by visitors. The
Bureau of Economic Analysis (BEA), which now provides annual and quarterly
estimates of travel and tourism at the national level describes a Travel and Tourism
Satellite Account (TTSA) as “present(ing) a rearrangement of information from the
National Income and Product Accounts, from the industry accounts, and from other
sources so that travel and tourism activities can be analyzed more completely than is
possible in the structure of the traditional national economic accounts.”7 Similarly,
the RTIM has been developed by Dean Runyan Associates to estimate travel
spending, earnings, employment, and tax receipts at the state, county, and regional
levels. These initial findings can, in turn, be used as input data for deriving estimates
of other economic measures, such as value-added and indirect effects.
This appendix provides an overview of the Regional Travel Impact Model (RTIM) and
travel and tourism satellite accounts (TTSAs). Although there is no single or absolute
form of a TTSA, the one developed by the Bureau of Economic Analysis (BEA) will be
the basis of the analysis here. The definitions, framework, and estimating methods
used for the U.S. BEA TTSA follow, as closely as is practicable, the guidelines for
similar travel satellite accounts that were developed by the World Tourism
Organization (WTO) and the Organization for Economic Co-operation and
Development (OECD).
The primary focus is on the direct impacts of visitor spending. Visitors are defined as
persons that stay overnight away from home, or travel more than fifty miles one-way
on a non-routine trip. Only the expenditures related to specific trips are counted as
visitor spending. Other travel related expenditures such as the consumption of
durable goods (e.g., recreational vehicles or sporting equipment) or the purchase of
vacation homes are not considered.
While such a definition of the travel industry (i.e., the trip related expenditures of
visitors) is conservative, it is also in keeping with the notion of the travel industry as
being an export-oriented industry for specific local communities. That is, visitors are
important to regions because they inject money into the local economy. This focus
on the export-oriented nature of the travel industry for local communities becomes
blurred if the industry is defined so as to include non-trip related expenditures.
7 Peter D. Kuhbach, Mark A. Planting, and Erich H. Strassner, “U.S. Travel and Tourism Satellite
Accounts for 1998-2003,” Survey of Current Business 84 (September 2004): 43-59.
PAGE 54 DEAN RUNYAN ASSOCIATES
PRIMARY CONCEPTS, CATEGORIES & DATA REQUIREMENTS
There are three primary types of information that are measured and/or estimated in a
travel industry account. The first is a measure of the travel industry in terms of both
the characteristics of the business firms that sell travel goods and services and the
characteristics of consumers that purchase travel industry goods and services. The
second is measure of the demand segments that consume travel industry goods and
services. For example, the distinction between business and leisure travel is a
measure of demand segments. The third is a measure of the components of
economic output associated with the travel industry. The employee earnings
generated by visitor spending is one such component. Travel-generated tax receipts
are another. These three categories of information represent different aspects of the
accounting ledger – they represent different ways of viewing or analyzing the travel
industry.
The bulk of this paper will discuss these three types of information in terms of their
conceptual foundations, the data requirements, and some of the more salient issues
that users of this information should be aware of. There will also be some discussion
of indirect and induced effects in that these effects can be reasonably estimated from
the direct travel industry accounts. These secondary (versus direct) effects describe
the relationship of the travel industry to other sectors of the larger economy.
The intent of this discussion will be to provide a general overview of the process of
constructing travel industry accounts and the underlying similarity between the RTIM
and a TTSA. More technical issues are generally placed in footnotes.
TRAVEL INDUSTRY
Defining the travel industry is probably the most critical and data intensive effort
involved in developing a travel industry account. It is an exercise in matching supply
(sellers of goods and services) with demand (the travelers that purchase those
particular goods and services). It is complicated by the fact that no single industrial
classification scheme provides a valid measure of the travel industry.8 There are only
three significant industrial classifications, accommodations (NAICS 721) and
Scheduled Passenger Air Transportation (NAICS 481111) and Travel Arrangement
and Reservation Services (NAICS 5615) that primarily sell travel industry goods and
services.9 Firms in other industries (retail, recreation, transportation) provide goods
and services to both travelers and other types of consumers.
Because of this, most satellite accounts, as well as the RTIM, incorporate at least
some information about the expenditures of visitors in order to define the supply of
visitor industry firms. For example, if there is an estimate of visitor-days and an
8 The North American Industrial Classification System (NAICS) is the current standard in the United
States.
9 Even these industries are not purely travel. For example, the accommodations industry provides
services to local residents (food service and meeting rooms). Passenger airlines also ship cargo on the
same planes that carry passengers. Fortunately, it is usually possible to make adjustments for these
non-travel components through the use of additional data.
DEAN RUNYAN ASSOCIATES PAGE 55
estimate of how much the average visitor spends on food services per day, then an
estimate of visitor spending on food services can be calculated. In most cases, this
will be only a fraction of all food service sales in that residents are a larger market for
most restaurants.10
The industry sectors that are usually matched to visitor spending in this way are:
accommodations (NAICS 721), food service (722), arts, entertainment and recreation
(71), and retail trade (44-45). A portion of transportation business is also part of the
travel industry for obvious reasons.
In the case of the transportation sector, the definition and measurement of the travel
industry component is more complicated because most transportation spending by
visitors involves travel to and from the destination, rather than travel at or within the
destination market. This is not an issue if the geographic scope of the travel industry
market includes the origin and destination of travel. National travel industry accounts
thus include all domestic passenger air transportation in the travel industry. The issue
is more complicated at the state or regional level, however. Suppose, for example,
that the focus of a travel industry account is the state of Arizona. How should the
purchase of a round trip airline ticket by a Chicago resident traveling to Phoenix be
treated in that only some of the economic impact of this spending will occur in
Arizona? A reasonable approach would be to allocate only a portion of this spending
(and related payroll, taxes, etc.) to Arizona and ignore the remainder for the purpose
of creating a travel industry account for Arizona. However, if this procedure were
followed for every state, the sum of the state accounts would be less than the national
travel account. The state accounts would be additive if outbound air travel from each
state were included. However, this is methodologically inconsistent with the
construction of a national account, which does not include outbound travel as a
component of domestic tourism demand. The approach used in the RTIM is to make
a distinction between the visitor industry, that includes only visitor demand, and the
travel industry, which includes visitor demand and that portion of outbound travel
that can be attributed to the resident economy. For example, the passenger air
transportation employment in Arizona can be divided between three groups of
travelers: inbound, outbound, and pass-through. Only that employment attributable
to inbound travel is part of the Arizona visitor industry. Employment attributable to
outbound and pass-through travelers is included with the larger travel industry.11
10 The proportion can vary enormously among regions and localities, however. In many popular
visitor destinations, the primary market for food service will be visitors. It should also be noted that
even with reliable visitor survey data, there is still the issue of how to translate spending on food
service commodities to the supply of food service by industry. As indicated in the footnote above,
food service is also supplied by the accommodation industry.
11 The same issue arises with Travel agencies and reservation services (NAICS 5615). Most of these
services are probably related to outbound travel and are treated as such in the RTIM.
PAGE 56 DEAN RUNYAN ASSOCIATES
The following two tables display the specific industries that are included in the travel
industry for the BEA��s national TTSA and the RTIM. Although not identical, the
industries are equivalent with only a few exceptions.12
Accommodations & Food Service 35.4%
Traveler accommodations 21.0%
Food services and drinking places 14.3%
Transportation 29.2%
Air transportation 20.7%
Rail transportation 0.5%
Water transportation 0.9%
Interurban bus transportation 0.4%
Interurban charter bus transportation 0.3%
Urban transit systems & other tran. 1.6%
Taxi service 0.9%
Automotive equipment rental & leasing 2.4%
Automotive repair services 1.2%
Parking lots and garages 0.2%
Toll highways 0.1%
Recreation 11.1%
Scenic and sightseeing transportation 0.5%
Motion pictures and performing arts 1.2%
Spectator sports 2.2%
Participant sports 2.5%
Gambling 2.4%
All other recreation and entertainment 2.3%
Retail & nondurable goods production 16.2%
Petroleum refineries 0.2%
Industries producing nondurable PCE
commodities, excluding petroleum refineries 4.7%
Wholesale trade & tran. services 4.2%
Gasoline service stations 0.9%
Retail trade services, excluding
gasoline service stations 6.2%
Travel arrangement & reservation services 7.0%
All other industries 1.1%
Total Tourism Compensation 100.0%
Bureau of Economic Analysis Tourism Industries
Distribution of United States Domestic
Travel-Generated Compensation, 2002
Source: Adapted from Peter D. Kuhbach, Mark A. Planting, and Erich H.
Strassner, “U.S. Travel and Tourism Satellite Accounts for 1998-2003,” Survey of
Current Business 84 (September 2004): 59, table 5.
12 The major exception is that the BEA includes the production of consumer non-durables that are sold
through retail outlets. This is not a major component and would be even less so at the level of the
state.
DEAN RUNYAN ASSOCIATES PAGE 57
RTIM Travel Impact Industries Matched to NAICS
Travel Impact Industry NAICS Industry (code)
Accommodation & Food Services
Accommodation (721)
Food Services and Drinking Places (722)
Arts, Entertainment & Recreation
Performing Arts, Spectator Sports (711)
Museums (712)
Amusement, Gambling (713)
Scenic and Sightseeing Transportation (487)
Retail
Food & Beverage Stores (445)
Gasoline Stations (447)
Clothing and Clothing Accessories Stores (448)
Sporting Goods, Hobby, Book, and Music Stores (451)
General Merchandise Stores (452)
Miscellaneous Store Retailers (453)
Ground Transportation
Interurban and rural bus transportation (4852)
Taxi and Limousine Service (4853)
Charter Bus Industry (4855)
Passenger Car Rental (532111)
Parking Lots and Garages (812930)
Air Transportation
Scheduled Air Passenger Transportation (481111)
Support Activities for Air Transportation (4881)
Travel Arrangement Services
Travel Agencies (56151)
Tour Operators (56152)
Source: Dean Runyan Associates
PAGE 58 DEAN RUNYAN ASSOCIATES
DEMAND SEGMENTS
The distinction between inbound and outbound travel has already been discussed in
the previous section and in terms of the concepts of the visitor industry and the travel
industry. Three other types of demand segments that are related exclusively to the
visitor industry will be discussed here. The first two demand categories are reported
by the BEA in their national TTSA. They are: leisure versus business travel, and
resident versus non-resident travel. The third demand category is typically reported
in the RTIM: type of traveler accommodation. These three demand categories will
be discussed in turn.
The distinction between leisure versus business travel is useful for several reasons.
Economists like to distinguish between personal consumption expenditures on the
one hand and business expenditures on the other. Indeed, this distinction is central
for the National Income and Product Accounts (NIPAs). Those in the travel industry
are more likely to be interested in this distinction because leisure travelers represent a
more “marketable” segment because their travel choices are less determined by
economic and business factors. Furthermore, business and leisure travelers tend to
have different spending profiles. The availability of this information in either a state
or regional TTSA or RTIM is essentially dependent on the availability of survey data
(as it is at the national level). It should be noted, however, that such estimates are
considerably less reliable for smaller geographic areas because of the limitations of
survey data. Even at the state level, year-to-year changes in the composition of this
demand segment should be interpreted in conjunction with other data.
The distinction between resident versus non-resident travel is fundamental to a
national TTSA because it mirrors the distinction between the domestic economy and
international transactions. Non-resident travel in the United States is considered an
export in the official international transaction accounts.13 The distinction is obviously
also important because it is based on different political, legal, and currency regimes –
factors that in themselves influence travel behavior. At the level of the state or
region, the distinction between resident and nonresident travel is less important,
although it is often reported.14 There are at least two reasons why this distinction is
less useful at state and regional levels.
First, there is considerably less of an economic rationale for distinguishing resident
and non-resident travel at the level of the state, or any other political jurisdiction
within the United States, than there is at the national level. States do not maintain
interstate trade balance sheets that chart the flow of goods and services across state
boundaries. From an economic point of view, the administration of the tax system is
the primary, if only, reason for this distinction. In the case of travel and tourism, the
13 Conversely, the spending of U.S. visitors in other countries is treated as an import in the
international transaction accounts.
14 The issues discussed with regard to the reliability of survey data for leisure versus business travel
also applies to this category
DEAN RUNYAN ASSOCIATES PAGE 59
evaluation of the tax impacts of resident versus nonresident travel might also be
important.15
Second, travel is behaviorally defined by length of distance from home (usually at
least 50 miles one-way), trip purpose (non-routine), and/or the use of an overnight
accommodation away from home. Rarely is domestic travel defined by virtue of
crossing a geographic boundary.16 The operators of tourist attractions in local
communities are generally less interested in the origin of visitors than in the revenue
that they generate for their businesses. In terms of the economic impacts at the local
level, the distinction between in-state residents, out-of-state residents and
international visitors may not be relevant other than for the purpose of marketing.
However, other geographic characteristics of the visitor (e.g., distance traveled, the
specific area of origin) are generally more useful measures of the visitor market than
whether the visitor is a resident or nonresident.
Finally, the distinction among different types of traveler accommodations is
generally reported in the RTIM. Typically, these categories are:
• Visitors who stay in hotels, motels, B&Bs., and similar lodging facilities
• Visitors who stay at campsites
• Visitors who stay in the private homes of friends or relatives
• Visitors who stay in vacation or second homes
• Visitors who do not stay in overnight accommodations on their trip away from
home (day visitors).
These distinctions can be useful because estimates of economic impacts are often
used for different purposes. The total of all accommodation types, of course, is an
estimate of the total magnitude of the visitor industry. Visitors who stay in
commercial lodging such as hotels and motels are most likely to have the greatest
economic impact on a person-day basis. These visitors are also more likely to be
influenced by marketing efforts. In urban areas, a large proportion will represent
business travel. In other words, the type of accommodation category can be used in
conjunction with other types of data to analyze the market characteristics of visitors.
15 Nonresident visitors who pay taxes in their destination state represent an unambiguous gain for the
state. This effect is less clear for resident travelers within the state.
16 In essence, state level travel impact estimates really represent an aggregation of smaller geographic
units, such as counties or regions. Populous states with large landmasses (e.g., California or Texas)
will have a higher proportion of resident travel than small states (e.g., Rhode Island or Delaware).
PAGE 60 DEAN RUNYAN ASSOCIATES
COMPONENTS OF INDUSTRY OUTPUT
Because both the RTIM and the TTSA are empirically linked to NAICS industry
accounts, it is possible to provide estimates of different components of economic
output. The major economic components most often estimated are:17
• Travel spending (Gross Output)
• Value-added (Gross Product)
• Earnings (labor income)
• Indirect business taxes (sales, excise, property taxes & fees).
The relationship of these components is shown below. As indicated, the value-added
of a particular industry (the bar on the right) is equal to gross output (travel spending)
minus the intermediate inputs used by travel industry businesses to produce the good
or service. Restaurants, for example, prepare and serve the food products that are
purchased from suppliers. Airlines purchase or lease airplanes from other firms.
These intermediate inputs are not counted as part of the value-added of the travel
industry. They are counted as value-added in other industries (e.g., agriculture,
aerospace manufacturing).
Components of Industry Output
Output (Spending) Value-Added
Inputs/Goods Resold
Operating Surplus
Indirect Taxes
Labor Income
The distinction between gross output and value-added is probably even more
important at the state or regional level. This is because the intermediate inputs that
are purchased from other industries are even more likely to be purchased from
businesses located in different regions or states. The economic impact of air
17 There are some small differences between the BEA TTSA and the RTIM in what these components
include. The BEA allocates proprietor income to Operating Surplus; the RTIM allocates it to Labor
Income. The RTIM does not have an estimate of property taxes in indirect taxes. Overall, property
taxes on businesses are a relatively small proportion of indirect taxes.
DEAN RUNYAN ASSOCIATES PAGE 61
passenger travel in the state of Hawaii should not include the purchase of airplanes
manufactured in the United States mainland by Boeing or in Europe by Airbus.
Travel industry value-added is a more meaningful measure of the true economic
impact visitor spending in Hawaii because some of economic impact of that spending
will occur elsewhere.18
Value-added can also be viewed in terms of the distribution or payout of industry
receipts, exclusive of those paid to other firms for intermediate inputs. Some of the
receipts are distributed to labor as wages, benefits, and proprietor income. Some
receipts are paid to government as indirect taxes. These taxes are called “indirect”
because most of them are actually paid by consumers in the form of sales or excise
taxes.19 The remainder leaves gross operating surplus. Out of gross operating surplus
various payments are made in the form of dividends, interest, and other payments, or
retained by the firm. The sum of these three broad categories of payments is equal to
travel industry value-added. To summarize:
Value-added = Spending less intermediate goods & services, or
Value-added = Labor Income plus indirect business taxes plus gross
operating surplus.
The RTIM is similar to the TTSA in that it also provides estimates of these components
of economic output. Travel spending, earnings, and tax impacts are generally
provided at the state or regional level. Value-added is generally reported at the state-level
only (sometimes referred to as Travel Industry Gross State Product). At the level
of the state, travel industry value-added or GSP is an important measure – more
economically meaningful than travel spending.20 For smaller geographic areas,
however, the rationale for reporting value-added is less clear. First, there are real
data limitations and data costs in deriving these estimates. Second, the most
important components of value added for the travel industry are earnings and tax
receipts. Because the travel industry is relatively labor intensive and because a large
proportion of travel industry goods and services are subject to excise and sales taxes,
these two components of value-added (labor income and indirect taxes) are relatively
high for the travel industry. The local effects of gross operating surplus are generally
less important and certainly much more difficult to assess than are earnings and tax
impacts. The relevance of earnings and tax receipts is also in keeping the export-oriented
emphasis of the travel industry: earnings and tax receipts are more likely to
stay in the local economy than is operating surplus.
18 It should also be noted the value of the intermediate inputs used by travel industry firms will not
necessarily disappear if the travel industry stops buying them. Aerospace firms will shift their
production to other users (e.g., military). Agriculture will seek new markets for their products.
19 Other taxes included here are property taxes, business franchise taxes, and other fees. Income taxes
are not included, because they are paid out of operating surplus.
20 It is also possible to compare different industries with respect to their value-added. It is more
difficult and less useful to compare industries on the basis of sales.
PAGE 62 DEAN RUNYAN ASSOCIATES
INDIRECT, INDUCED AND SECONDARY EFFECTS
To this point, the discussion of travel industry accounts has referred only to the direct
output components. That is, the ripple effects of the re-spending of travel industry
receipts throughout the larger economy have not been analyzed. The structure of
both the TTSA and the RTIM permit such analysis.
• Indirect effects refer to the intermediate inputs used to produce the final
product or service, providing that those inputs are themselves produced within
the designated geographic area.
• Induced effects refer to the purchase of goods and services by employees that
are attributable to direct and indirect impacts. These induced impacts are
derived from economic data that describe the purchasing patterns of
households. For example, employees of all the designated export-oriented
industries will spend their income on food, household durables, health care,
and so on.
• The sum of indirect and induced impacts is sometimes referred to as the
secondary effect. These secondary impacts may be as great or greater than the
direct impact alone.
• The ratio of the total effects (direct plus either indirect, induced, or secondary)
to the direct effects is the multiplier.
The BEA reports the indirect components of economic output. This is equivalent to
domestic travel spending less the goods and services imported from abroad to meet
domestic demand. For travel, these imports would include souvenirs manufactured
in China and petroleum extracted in Saudi Arabia. The indirect output multiplier for
2002 was 1.76. The ratio of domestic travel spending to travel industry value-added
was 1.88. The difference reflects the intermediate inputs for travel imported from
abroad.
At the state level, these indirect output multipliers are typically lower because
relatively more of the intermediate inputs are purchased from outside of the state. At
the county or metropolitan level, the multipliers are generally even lower for the
same reason. Furthermore, the estimates are usually less reliable because of the data
limitations of the regional input-output model used to estimate the indirect effects.
The BEA does not report induced effects – the effect of household spending of the
direct and indirect labor income. Typically, these induced effects will be larger than
the indirect effects at the state or regional level, in part because they are based on
both the direct and indirect components.21 As with indirect effe