The U.S. Travel Association has rolled out an interesting new tool that lets those in the travel industry put a number to their economic impact.
It’s not at all uncommon within the hotel industry, or other parts of the broader travel industry, to hear commentary or, dare I say, complaints that the overall positive impact of investing in this segment of the economy isn’t appreciated.
Maybe these are the lingering effects of tourism being looked down upon as a method of fueling economic growth compared to other sectors like manufacturing or technology. Or maybe it’s a true reflection of the fact that the general public, and by extension leadership, don’t truly understand or value how meaningful travel is to the overall economic engine.
So to that point, I recently came across an interesting tool the U.S. Travel Association rolled out earlier in the year called the Travel Economic Impact Calculator. It shows you historical data on things like growth rates in travel spending and how that translates to jobs and dollars spent nationally or by state along with additional tax revenue generated by that spending.
The fun part is it lets you play with hypotheticals in terms of growth rates to help make the argument that investment in the sector that has a clear return on investment. Hotel News Now is based in Ohio, which according to the calculator has an average annual growth in travel spending of 2.2% and was up 1.78% during 2015-2016, the most recent year included in the data set.
For reference, the data is working off the baseline (for Ohio) of 2016, which saw $19.3 billion in revenue, 191,230 jobs, $4.8 billion in payroll and $1.3 billion in state and local taxes, all related to travel.
It’s easy to see that growth had a truly positive economic impact, with $343 million additional dollars spent, accounting for 3,410 jobs and $24 million in state and local taxes.
But if that state were to make the proper investments to draw more tourists to equate to say a 4% increase in travel spend, those numbers grow exponentially to $770 million in revenue, 7,650 jobs with a collective $192 million in payroll and $53 million in taxes.
The calculator also goes the next step of translating those tax dollars into the meaningful impact on public services. Ohio’s $53-million jump would be enough to pay for 1,180 firefighters, 910 police officers or 900 teachers.
You can also take this to a much higher level, which might be less useful in terms of making an argument to local legislators and other leaders but is fun nonetheless.
Were you aware that if Ohio was able to capture a 20% annual increase in travel spend for a year that would equate to a $3.8-billion jump in revenue with more than 38,000 new jobs, $960 million in payroll and $265 million in new state and local taxes? I suppose it’s fair to say even 20% growth isn’t absurd or impossible given a level of investment and the right conditions.
So if you’re interested at all to see how differing degrees of travel spend trickle down to the rest of the national or local economy, give it a whirl. I guarantee it will be the most fun calculator you play with all day.
Let me know via email or on Twitter.
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