Communicating the Economic Value of Tourism
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Transcript of Communicating the Economic Value of Tourism
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The Economic Value of Tourism
in Ontario’s Southwest
March 20, 2014
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Aileen Murray
• Economic development consultant
• 25+ years helping businesses and communities grow
• Clients include municipalities, counties, BIAs, workforce development councils, economic development agencies and the private sector
• Specializing in strategic planning, marketing and communication
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What’s the ROI?
Source: http://www.mtc.gov.on.ca/en/research/quick_facts/facts.shtml
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Goals for today’s presentation
• Review economic development terminology and concepts
• Prepare credible statements on the contribution tourism makes to the community
• Apply economic development goals to tourism programming.
http://www.psdgraphics.com/backgrounds/bulls-eye-target/
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Economic Development
“Improving the economic well being of a community through efforts that entail job creation, job retention, tax base enhancements and quality of life.”
The International Economic Development Council
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Why Measure Economic Impact?
• Accountability• Sponsorship• Funding Programs• Government support• Community support• Compare event performance
o To previous eventso To similar events in other regionso To other events in the community
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The Economic Impact Statement
Tourism brought ______ visitors to the community. These tourists generated $_______ in economic impact, ______ jobs for the community and added $______ to the local coffers.
Photo: http://allareoneplus.blogspot.ca/2012/03/quote-58-pride-megaphone.html
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The Leaky Bucket
Photoshttp://www.flickr.com/photos/kelehen/6219220797/sizes/z/in/photostream/
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Photoshttp://www.flickr.com/photos/kelehen/6219220797/sizes/z/in/photostream/
Local Economy
The Leaky Bucket
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Photoshttp://www.flickr.com/photos/kelehen/6219220797/sizes/z/in/photostream/
Local Economy
Exports of Goods and Services
Tourism Foreign Investment
Goods and services purchased outside region
Payments for Imports
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Photoshttp://www.flickr.com/photos/kelehen/6219220797/sizes/z/in/photostream/
Local Economy
Maximize Inputs
Minimize Outputs(Leakage)
Economic Development Goals
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The History of Economic Development
Industrial Development
Investment Readiness
Business Retention & Expansion
Economic Gardening
Creative Economy
Knowledge Workers
Free Agent Economy
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Net Change in Cdn. Employment2007 - 2012
Manufacturing Service Sector-400,000
-200,000
0
200,000
400,000
600,000
800,000
1,000,000
-245,400
805,800
13Source: Statistics Canada, CANSIM, table 282-0008 and Catalogue no. 71F0004XCB.
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Supply & Demand Tourism System
POPULATIONInterest in TravelAbility to Travel
TRANSPORTATION
ATTRACTIONS
INFORMATION &PROMOTION
SERVICES• Hotels/Motels• Restaurant• Retailing
Demand
Supply
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Economic Development Definitions
• Basic Industry – industries that produce goods and services sold to consumers outside the region
• Non-basic industry – industries that produce goods and services consumed locally
Photo: http://www.sfl2000.com/wp-content/uploads/2011/03/Export-box.jpg
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Tourism Economic Impact
Change in sales, income and jobs because tourists came to the community and spent money there.
Guidelines: Survey Procedures for Tourism Economic Impact assessment of Ungated or Open Access Events and Festivals
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The MultiplierThe ripple effect from the contribution of
new money to the community.
Photo: http://beta.images.theglobeandmail.com/b19/migration_catalog/article3966214
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The Multiplier Effect
Photos: http://maytermthailand.files.wordpress.com/, http://www.crucell.com http://fourteenip.com
Direct Indirect Induced
Sales of goods & services to tourists ie.
restaurants & accommodation
Increased demand by tourism businesses
ie. Food suppliers
Respending labour income
Ie. Shelter, food, clothing
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The Multiplier• Most impact at the centre• Larger communities have larger multipliers• Smaller communities have smaller multipliers• Manufacturing multipliers are typically larger
than service industry multipliers • Manufacturing multipliers ~ 2 to 3 net jobs
for every 1 new job• Service industries <1.2 jobs for every 1 new
job created
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Tourism Economic Impact Model
Sector
Transportation
Entertainment
Recreation
Retail
Food & Beverage
Accommodation
Impact
Direct
Indirect
Induced
Effect
Production
Jobs
Wages
Taxes
TouristSpending
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What is a tourist?
Photo: http://blog.vegas.com/wp-content/uploads/2010/10/tacky.jpg
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Same Day Domestic Tourist
• Out of town trip that takes the traveller at least 40 km. (25 mi.) one way from home
• Not for commuting or a routine trip
Source: Guidelines: Survey Procedures for Assessment of On-Site Spending at Gated Events and Festivals p. 90
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Overnight Domestic Tourist
• Out of town trip of at least one night away from home
• Not for commuting or a routine trip
Source: Guidelines: Survey Procedures for Assessment of On-Site Spending at Gated Events and Festivals p. 90Photo: http://www.journeyetc.com/wp-content/uploads/2010/08/bellboy.jpg
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Special Event Tourists
Ministry of Tourism does not include:
o Localso Time switcherso Casuals
Source: Guidelines: Survey Procedures for Tourism Economic Impact Assessments of Gated Events and Festivals p. 19
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Tourist Spending
≠Tourism Economic
Impact• Remember the leaky bucket• Not all purchases are made
locally• Not all businesses source locally
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15.8 Million Visits
RTO 1 in 2011
4.3 million
overnight
11.4 million same
day
Source: Ontario Ministry of Tourism, Culture and Recreation with data from Statistics Canada
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Tourism’s Contribution to Ontario’s Southwest
$1.46 BillionSource: Statistics Canada Travel Survey of Residents 2011
Cdn Total Tourism Receipts 2011
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Average Visitor Spending
$92per
person
Source: Ministry of Tourism & Culture Regional Tourism Profile RTO 1, Statistics Canada Travel Survey of Residents & International Travel Survey 2011
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Average Visitor Spending
$160 per overnight visitor
$ 67 per same day visitor
Source: Ministry of Tourism & Culture Regional Tourism Profile RTO 1, Statistics Canada Travel Survey of Residents & International Travel Survey 2011
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TREIMTourism Region Economic Impact Model
• Direct, Indirect & Induced impacts
• Gross Domestic Product
• Labour Income• Employment• Tax Impacts
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What does it measure?
Economic Impact of:• Visitor Spending• Operational Expenses• Investment
Expenditures• Convention Centre
Activity
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Sample Scenario
• Visitor Spending• 100 Day trip visitors
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Economic ImpactFor 100 Same Day Visitors
Source: Ontario Ministry of Tourism and Culture Tourism Region Economic Impact Model
Haldimand-Norfolk
Oxford
Middlesex
Elgin
Chatham-Kent
Lambton
Essex
$0
$500
$1,0
00
$1,5
00
$2,0
00
$2,5
00
$3,0
00
$3,5
00
Labour Income GDP
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Economic ImpactFor 100 Same Day Visitors RTO 1
Source: Ontario Ministry of Tourism and Culture Tourism Region Economic Impact Model
$3,400 GDP
$2,100 Labour Income
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Hotel Investment Scenario
$10 Million Investment in RTO 1
Source: Ontario Ministry of Tourism and Culture Tourism Region Economic Impact Model
GDP Labour Income0
500,0001,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,000
$2,631,577
1,678,037
$460,555
325,468
$696,520
434,437 InducedIndirectDirect
3,788,653 2,437,942
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Jobs in the Tourism Sector
• The largest share of jobs in the tourism sector is in food and beverage services at 46%
Source : http://discovertourism.ca/en/about_tourism/industry_information
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EMSI Analyst
Web-based labour market analysis tool• Canadian Business Patterns• Census data• Employment, payroll & hours• Labour Force Surveys• Demographics• Occupation Projections
Census divisions, census subdivisions, census metropolitan areas
Arrange for access from the Ontario Ministry of Agriculture and Food
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Traveller Accommodation
RTO 1 NAICS 7211
• $18,835Average earnings per job
• LQ .79Provincial Location Quotient
2009 2013
2,1
10
2,3
19
Employment
Source: EMSI Analyst Employees 2013.3
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RV Parks & Recreational Camps
RTO 1 NAICS 7212
• $33,755Average earnings per job
• LQ 1.81Provincial Location Quotient
Employment
2009 2013
46
9
53
3
Employment
Source: EMSI Analyst Employees 2013.3
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Tourism Related Businesses
14,000 tourism related businesses in Ontario’s Southwest
Source: Statistics Canada, Canadian Business Patterns, December 2011
Retail
Other Services
Food & Beverage Services
Recreation & Entertainment
Transportation
Accommodation
Travel Services
- 2,000 4,000 6,000 8,000
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Other Measurement Tools• Festival and Events Ontario
Economic Impact Study Grants
• Sport Tourism Economic Assessment Model
• Motor Coach Estimates
• DIY
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D.I.Y.Case Study:
Elvis Festival Collingwood
Photo: http://0.tqn.com/d/gocanada/1/0/k/F/-/-/Elvis_impersonators.jpg
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Common Goals
• More Tourists• Higher spend per tourist• Greater local share
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Higher Spend per Tourist
• Greater length of stay• Serve and target high
spending tourists• Tourists need help to spend
money• Increased availability of
goods & services
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Greater Local Share
• Create links between food and accommodation sector and retailers
• SME supporto Entrepreneurship trainingo Customer serviceo Tourism education
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Boost Local Inputs in the Supply Chain
• Networking events hoteliers, attractions, retailers, restaurants & producers
• Regular communication• Encourage established businesses to mentor
start ups
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It’s Your Move
Source: http://www.mtc.gov.on.ca/en/research/quick_facts/facts.shtml
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Further information
• Ontario Tourism Research Resources including TREIM http://www.mtc.gov.on.ca/en/tourism/research.shtml
• Ontario Ministry of Agricuture and Food Analyst Toolhttp://www.omaf.gov.on.ca/english/rural/edr/edar/index.html
• Ontario Major Festivals and Events Attraction Research Study, PKF Consulting 2009
• Measuring the Economic Impact of Park and Recreation Services, National Recreation and Park Association
• Guidelines: Survey Procedures for Tourism Economic Impact assessment of Ungated or Open Access Events and Festivals
• Guidelines: Survey Procedures for Tourism Economic Impact Assessment of Gated Events and Festivals
• Sport Tourism Planning Template www.mtc.gov.on.ca/en/publications/sport_tourism_planning_template.pdf
Photo: http://mikeduran.com/2011/02/should-everyone-get-you/