The Economic Impact of Tourism in Buncombe County, North ...

The Economic Impact of Tourism in Buncombe County, North Carolina

2017 Analysis

September 2018

2

Introduction and definitions

⚫ This study measures the economic

impact of tourism in Buncombe

County, North Carolina.

⚫ Visitors included those who stayed in

overnight accommodations or

travelers who came from a distance

greater than 50 miles and deviated

from their normal routine.

⚫ The impact of tourism includes direct

spending, the indirect (supply-chain)

effects, and induced (income) effects.

⚫ Impacts were measured in terms of

employment, income, business sales,

and tax revenues.

Headline Results

4

Headline results

⚫ Tourism is an integral part of the

Asheville regional economy, and the

industry continues to make

significant contributions to economic

growth, generating business sales,

employment, and tax revenues.

⚫ Visitors to Asheville spent $2.0

billion in 2017, which generated $3.1

billion in total business sales,

including indirect and induced

impacts.

⚫ Tourism in Asheville generated $368

million in tax revenues in 2017,

including $199 million in state and

local revenues.

5

Headline results

⚫ Including direct, indirect, and

induced impacts, 27,241 jobs

were sustained by visitors to

Asheville in 2017 with total

income of $840 million.

⚫ Approximately 15% (1-in-7) of all

jobs in Buncombe County were

sustained by tourism.

⚫ An estimated 26% of tourism-

supported jobs were in the food

and beverage industry, 18% in

lodging, 13% were in retail, 12%

in recreation, and 31% were in

other categories.

Key Trends in 2017

7

Key themes for 2017

⚫ Visitor volume and spending expanded in 2017.

⚫ An estimated 11.1 million visitors spent a total of $2.0 billion in 2017,

increases of 2.6% and 4.4%, respectively, from 2016.

Asheville Visitor Volume and Spending Summary

2013 2014 2015 2016 2017Visitor volume (mils) 9.48 9.86 10.32 10.86 11.15

Overnight 3.28 3.42 3.58 3.80 3.92

Day 6.20 6.44 6.74 7.06 7.23

Visitor spending ($mils) 1,635.9 1,710.4 1,826.9 1,949.5 2,034.4

Overnight 1,120.0 1,172.0 1,256.5 1,347.8 1,411.0

Day 515.8 538.3 570.4 601.7 623.3

Visitor volume % ch 4.4 3.9 4.7 5.2 2.6

Overnight 5.2 4.1 4.7 6.2 3.0

Day 3.9 3.8 4.7 4.7 2.5

Visitor spending % ch 6.9 4.6 6.8 6.7 4.4

Overnight 7.6 4.6 7.2 7.3 4.7

Day 5.4 4.4 6.0 5.5 3.6

Sources: Longwoods Int'l and Tourism Economics

8

Key themes for 2017

⚫ Asheville’s hotel room demand

has outpaced supply in recent

years.

⚫ In 2017 however, room supply

expanded 4.7% and room

demand grew 3.7%.

⚫ With supply growing faster than

demand, the occupancy rate

ticked down to 73.0% from

73.7% in 2016.

⚫ Demand and rising prices are

driving balanced room revenue

growth. Average rates were up

2.5% in 2017, and total room

revenues rose 6.3%.

90

100

110

120

130

140

150

10 11 12 13 14 15 16 17

Hotel room supplyHotel room demand

Hotel Sector: Lodging Demand Is Outpacing

Source: Smith Travel Research

Supply and demand of room-nights indexed to

Jan 2010=100

-15

-10

-5

0

5

10

15

20

08 09 10 11 12 13 14 15 16 17

ADR

Demand

Revenues

Demand and Prices Drive Hotel RevenuesContribution to % change year ago

Source: Smith Travel Research

9

Key themes for 2017

⚫ The use of non-hotel lodging,

such as AirBnB and Vacation

Rental By Owner, continues to

expand.

⚫ Short-term rentals account for

an increasing share of total

reported taxable lodging sales

in Buncombe County.

⚫ In 2017, spending on short-

term rentals reached an

estimated $53.8 million and

accounted for nearly 15% of

the total.

$2.1m (0.9%)

$10.7m (3.7%)

$28.3m (8.4%)

$53.8m(14.9%)

0

10

20

30

40

50

60

2014 2015 2016 2017

Expansion of Short-term Rentals

Sources: Asheville CVB, AirDNA, Tourism EconomicsNote: Some growth is attributable to improved reporting of short-term rental sales.

Estimated lodging sales in $mils, share of total in parentheses

10

Key themes for 2017

⚫ Buncombe County employment

growth is outpacing that of

North Carolina and the U.S.

overall.

⚫ Within the County, tourism

employment is expanding

faster than overall job growth.

Industry employment is 21.4%

higher than in 2009, versus

19.9% for the County overall.

⚫ In 2017, the unemployment

rate in the county was 3.5%.

Without tourism it would have

been 14.9%.

90

95

100

105

110

115

120

125

05 06 07 08 09 10 11 12 13 14 15 16 17

USNorth CarolinaBuncombe CountyBuncombe Tourism

Tourism Jobs Outpace in Buncombe County

Sources: BEA, BLS, Tourism Economics

Employment indexes, 2009=100

Visitors and Spending

12

Visitor details in 2017

⚫ Asheville hosted a total of

11.1 million visitors in 2017,

including 3.9 million overnight.

⚫ Most visitors were day visitors

(65.4%) and most came for

leisure (93.3%). Day visitors

tend to come to visit friends

and family, tour the city,

outdoors activities, and

shopping.

⚫ Average daily spending for

overnight visitors was $121

per person, compared with

$86 for day visitors.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Day/Overnight Domestic/Int'l Liesure/Business

Visitor Characteristics2017

Sources: Longwoods Int'l, Tourism EconomicsNote: Overnight/Day and Bus./Leisure segments are domestic only

Overnight(34.6%)

Day(65.4%)

Int'l(0.8%)

Domestic(99.2%)

Bus.(6.7%)

Leis. (93.3%)

13

Composition of tourism spending

⚫ Food and beverage accounted for most visitor spending with $544

million, followed by lodging at $453 million, retail at $437 million, and

$275 million in recreation spending.

⚫ About half of visitor spending was on food and beverage and retail

combined, and lodging accounted for 23.4% of visitor spending.

543.9

453.1 437.4

274.9230.2

0

100

200

300

400

500

600

Food Lodging Retail Rec Trans

2016

2017

Visitor Spending by Category$ million

Source: Tourism Economics

Food 28.0%

Lodging 23.4%

Retail 22.6%

Rec 14.2%

Trans 11.9%

Visitor Spending Profile for 2017Avg per person per

day = $102


14

Fuel prices are creeping up

⚫ After more than three years of

decline, fuel prices are on the

rise.

⚫ Despite recent increases,

prices are still relatively low

and encourage trips and

visitor spending that otherwise

might not occur.

⚫ Oxford Economics forecasts

oil prices to remain under $70

per barrel on average through

2020, implying gasoline prices

in Asheville under $3.25 per

gallon for an extended period.

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

06 07 08 09 10 11 12 13 14 15 16 17 18

South Atlantic, PADD 1C

12-mo MA

Fuel Prices Are Low But Rising

Source: Energy Information Administration

South Atlantic Region average gasoline price, dollars per gallon

15

Visitor spending trends

⚫ Visitor spending increased 4.4% in 2017, led by lodging and food and

beverage. Lodging spending grew 6.3% as both prices and room-

night demand increased.

⚫ Visitor spending on food and beverage and recreation increased 4.7%

and 3.5%, respectively, rates of growth slightly lower than that of

recent years.

2013 2014 2015 2016 20172016-17

% ch

Food and beverage 420.6 449.0 485.0 519.7 543.9 4.7%

Retail 395.1 398.9 411.5 430.8 437.4 1.5%

Lodging 301.7 328.7 374.9 426.5 453.1 6.3%

Recreation 226.6 236.5 248.2 265.5 274.9 3.5%

Transportation (local) 232.8 234.6 221.2 222.0 230.2 3.7%

Second homes value 55.8 59.1 82.6 81.2 90.4 11.4%

Air 3.2 3.4 3.6 3.8 4.4 15.4%

Total 1,635.9 1,710.4 1,826.9 1,949.5 2,034.4 4.4%

% change 6.9% 4.6% 6.8% 6.7% 4.4%

Visitor Spending By Category

(US$ Million)

16

Asheville visitor spending

⚫ Most visitor spending occurs at businesses in the City of Asheville:

79% of food and beverage, 73% of retail, 81% of lodging, and 84% of

recreation spending.

Asheville

Rest of

County Total

Food and beverage 427.6 116.3 543.9

Retail 317.8 119.6 437.4

Lodging 365.6 87.5 453.1

Recreation 232.1 42.8 274.9

Transportation (local) 174.1 56.1 230.2

Second homes value 27.6 62.9 90.4

Air - 4.4 4.4

Total 1,544.8 489.6 2,034.4

Visitor Spending by Location

(US$ Million)

Economic Impacts

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How visitor spending generates impact

▪ Induced: Lastly, the induced

impact is generated when

employees whose incomes

are generated either directly

or indirectly by tourism,

spend those incomes in the

Buncombe County economy.

• Direct: Travelers create direct economic value within a discreet group of sectors (e.g.

recreation, transportation). This supports a relative proportion of jobs, wages, taxes, and

GDP within each sector.

• Indirect: Each directly affected sector also purchases goods and services as inputs (e.g.

food wholesalers, utilities) into production. These impacts are called indirect impacts.

19

Tourism sales

⚫ Including indirect and induced business sales, tourism generated

more than $3.1 billion in revenue in 2017.

Direct Indirect Induced Total

Agriculture, Fishing, Mining - 0.3 0.2 0.4

Construction and Utilities - 48.8 15.5 64.3

Manufacturing - 17.2 7.4 24.6

Wholesale Trade - 9.8 17.2 27.0

Air Transport 4.4 2.7 4.3 11.4

Other Transport 71.1 24.1 8.9 104.1

Retail Trade 437.4 5.0 46.6 488.9

Gasoline Stations 133.9 0.3 4.0 138.2

Communications - 39.9 17.4 57.3

Finance, Insurance and Real Estate 115.7 141.8 155.5 413.0

Business Services - 150.8 40.4 191.2

Education and Health Care - 1.7 114.1 115.8

Recreation and Entertainment 231.1 10.8 8.2 250.1

Lodging 453.1 0.9 0.5 454.6

Food & Beverage 543.9 25.9 38.7 608.6

Personal Services 43.8 18.9 24.9 87.5

Government - 20.9 8.5 29.4

TOTAL 2,034.4 519.8 512.3 3,066.5

* Direct sales include cost of goods sold for retail sectors

Tourism Sales

(US$ Million)

20

0

100

200

300

400

500

600

700

F&

B

Reta

il T

rade

Lodgin

g

FIR

E

Recre

ation

Bus. S

erv

ices

Ga

s

Education

Oth

er

Tra

nsp

Pers

onal

Serv

.

Constr

uction

Com

m.

Induced

Indirect

Direct

Tourism Sales by Industry$ million

F&B: Food and BeverageFIRE: Finance, Insurance, Real EstateBus. Services: Business ServicesGas: Gasoline StationsOther Transp: Other TransportationManu.: ManufacturingPersonal Serv.: Personal ServicesComm: Communication

Tourism sales

* Direct sales include retail cost of goods sold

Significant indirect

benefits

21

Tourism share of key industry employment

⚫ Tourism is a significant part of several industries – tourism directly

supports nearly all of lodging employment, 47.3% of recreation,

and 46.8% of food and beverage employment.

14.9%

16.5%

46.8%

47.3%

98.9%

0% 20% 40% 60% 80% 100%

TotalEconomy

Retail

Food & bev.

Recreation

Lodging

Direct

Indirect and induced

Tourism Employment Intensity by Industry


Share of industry employment

22

Tourism employment details

⚫ The tourism industry supported 27,241 jobs or 15.0% of employment

(1-in-7 jobs) in Buncombe County in 2017, including indirect and

induced impacts.


Agriculture, Fishing, Mining - 4 3 7

Construction and Utilities - 274 61 335

Manufacturing - 57 12 69

Wholesale Trade - 62 108 170

Air Transport 13 8 13 35

Other Transport 808 209 75 1,092

Retail Trade 2,673 73 670 3,417

Gasoline Stations 183 3 38 224

Communications - 155 51 207

Finance, Insurance and Real Estate 120 786 450 1,356

Business Services - 1,842 498 2,340

Education and Health Care - 31 1,138 1,169

Recreation and Entertainment 2,895 206 127 3,228

Lodging 4,812 8 4 4,823

Food & Beverage 6,142 413 640 7,195

Personal Services 699 290 360 1,350

Government - 171 52 223

TOTAL 18,346 4,593 4,302 27,241

Tourism Employment

23

Tourism employment summary

⚫ As a labor intensive

collection of services,

tourism-related industries

are significant Asheville

area employers.

⚫ The more than 27,000

jobs supported by

Asheville area tourism

span every sector of the

economy, either directly

or indirectly.

⚫ The most significant

indirect impacts are in

business services and

finance, real estate and

insurance.

F&B: Food and Beverage

FIRE: Finance, Insurance, Real Estate

Bus. Services: Business Services

Gas: Gasoline Stations

Other Transp.: Other Transportation

Personal Serv.: Personal Services

Wholesale Tr.: Wholesale Trade

0

1,000

2,000

3,000

4,000

5,000

6,000

F&

B

Lodgin

g

Reta

il T

rade

Recre

ation

Bus. S

erv

ices

FIR

E

Pers

onal S

erv

.

Education

Oth

er

Tra

nsp

Constr

uction

Gas

Gov.

Induced

Indirect

Direct

Tourism Employment by Industry

24

Tourism personal income

⚫ Employees in the Asheville area earned $840 million as a

result of visitor activity in 2017.






Air Transport 0.9 0.5 0.8 2.2


Retail Trade 67.0 2.2 20.2 89.3







Lodging 126.7 0.3 0.1 127.1

Food & Beverage 184.8 9.5 15.1 209.4


Government - 12.7 3.5 16.2

TOTAL 526.0 153.2 160.4 839.6

Tourism Labor Income (Compensation)

(US$ Million)

25

Tourism personal income

⚫ The average compensation of tourism-generated jobs was

just under $31,000 per year in 2017






Air Transport 63.9 63.9 63.9 63.9


Retail Trade 25.1 29.5 30.1 26.1







Lodging 26.3 33.3 33.3 26.3

Food & Beverage 30.1 23.0 23.6 29.1


Government - 74.3 67.4 72.7

TOTAL 28.7 33.3 37.3 30.8

Average Tourism Compensation

(US$ thousands per job)

26

Tourism tax generation

⚫ Tourism generated $199.1 million

in state and local revenues,

providing tax relief of $1,950 in tax

relief per household in the County.

⚫ Including property tax sustained by

tourism, the industry supported

$27.9 million in revenues for the

City of Asheville.

⚫ In Asheville, Tourism supported

taxes would fund:

■ the entire fire budget ($24.4m)

■ the entire police budget ($26.9m)

■ Parks and Rec 2.8 times ($10.1m)

Total

Federal 169.0

Personal Income 39.5

Corporate 24.5

Indirect business 20.0

Social Security 85.0

State 108.2

Personal Income 16.7

Corporate 3.0

Sales 73.7

Social Security 0.8

Other Taxes and Fees 14.0

Local - City 27.9

Sales 6.2

Property 20.6


Local - Rest of County 63.1

Sales 28.7

Property 32.4


TOTAL 368.1

Tourism-Generated

Tax Revenues2017, Millions

27

Buncombe County tourism in context

⚫ Taken as an industry, with

more than 18,000 direct

jobs Tourism is the third

largest employer in the

County, larger than

Manufacturing,

Construction, Finance,

Education, and Information.

0 5 10 15 20 25 30

InformationEducation

State Gov'tAccommodation

FinanceRecreation

Local Gov''tConstruction

Prof/Bus ServReal Estate

ManufacturingFood serv.

TourismRetail

Healthcare

Asheville Region Jobs by IndustryBuncombe County, thousands, 2017

Sources: BEA, BLS, Tourism Economics

Methodology and Background

29

⚫ By monitoring tourism’s economic impact, policy makers

can make informed decisions regarding the funding and

prioritization of tourism development.

⚫ It can also carefully monitor its successes and future

needs.

⚫ In order to do this, tourism must be measured in the

same categories as other economic sectors – i.e. tax

generation, employment, wages, and gross domestic

product.

Why quantify the tourism economy?

30

Why is this a challenge?

⚫ Most economic sectors such as financial services,

insurance, or construction are easily defined within a

region’s economic statistics.

⚫ Tourism is not so easily measured because it is not a

single industry. It is a demand-side activity which affects

multiple sectors to various degrees.

⚫ Tourism spans nearly a dozen sectors including lodging,

recreation, retail, real estate, air passenger transport, food

& beverage, car rental, taxi services, travel agents,

museums, and theme parks.

31

• Estimates of visitor expenditures in Buncombe County were based on several sources:

• Smith Travel Research (STR) data on hotel room demand, supply, and revenues.

• County level tax data on sales and hotel occupancy receipts.

• Visitor profile and volume, and spending estimates from Longwoods International, a

national tourism research firm.

• Industry data on employment, wages and sales from the U.S. Census, the Bureau

of Economic Analysis, and the Bureau of Labor Statistics.

• Data on short-term rentals available from the Asheville CVB and AirDNA

• An IMPLAN input-output model was constructed for Buncombe County. The model

traces the flow of visitor-related expenditures through the local economy and their

effects on employment, wages, and taxes. IMPLAN also quantifies the indirect (supplier)

and induced (income) impacts of tourism. Tourism Economics then cross-checked these

findings with employment and wage data for each sector to ensure the findings are

within reasonable ranges.

• The primary source of the employment and wage data is the Regional Economic

Information System (REIS), Bureau of Economic Analysis. This is more comprehensive

than Bureau of Labor Statistics (ES202/QCEW) data because sole-proprietors do not

require unemployment insurance and are not counted in the ES202 data.

• Gasoline price data were obtained from the U.S. Energy Information Administration.

Methods and data sources

32

Description of spending categories

Spend Category Description

Lodging Includes visitor spending in the accommodation sub-sector. This includes

food and other services provided by hotels and similar establishments.

Recreation Includes visitors spending within the arts, entertainment and recreation sub-

sector.

Local transport

Includes visitor spending on local transport services such as taxis, limos,

trains, rental cars, and buses.

Shopping

Includes visitor spending in all retail sub-sectors within the Buncombe

County economy.

Service stations

Visitor spending on gasoline. Only the margin counts as local economic

impact.

Second homes

Where applicable, spending associated with the upkeep of seasonal second

homes for recreational use as defined by the Census Bureau.

Food and beverage Includes all visitor spending at restaurants and bars.

33

About Tourism Economics

⚫ Tourism Economics, headquartered in Philadelphia, is an Oxford Economics

company dedicated to providing high value, robust, and relevant analyses of

the tourism sector that reflects the dynamics of regional and global economies.

By combining quantitative methods with industry knowledge, Tourism

Economics designs custom market strategies, project feasibility analysis,

tourism forecasting models, tourism policy analysis, and economic impact

studies.

⚫ Our staff have worked with over 100 destinations to quantify the economic

value of tourism, forecast demand, guide strategy, or evaluate tourism policies.

⚫ Oxford Economics is one of the world’s leading providers of economic analysis,

forecasts and consulting advice. Founded in 1981 as a joint venture with Oxford

University’s business college, Oxford Economics is founded on a reputation for

high quality, quantitative analysis and evidence-based advice. For this, it draws

on its own staff of 70 highly-experienced professional economists; a dedicated

data analysis team; global modeling tools; close links with Oxford University,

and a range of partner institutions in Europe, the US and in the United Nations

Project Link.

34

For more information:

[email protected]

mailto:[email protected]

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