TOURISM AND TRAVEL INDUSTRY – 2009 AND 2011
EXECUTIVE SUMMARY
A detailed examination of the expenditure, employment, and tax impacts generated by the Hendricks County tourism and travel industry, as well as the industry structure, has been conducted for the Hendricks County Convention & Visitors Bureau. The major findings of the 2011 study follow:
•The tourism and travel industry contributed $219.3 million to Hendricks County’s economy in 2011 compared to $192.3 million in 2009. Direct expenditures by tourists accounted for $155.7 million of this
•The tourism industry generated over $51.6 million in tax revenues to government - $19.0 million to the state, $10.2 million locally, and $22.4 million to the federal government. Total taxes in 2009 were $45.9 million.
•Residents of Hendricks County spent an additional $37.4 million with the local tourism industry. This direct spending created 541 jobs.
•A total of 2,879 jobs in Hendricks County resulted from the industry in 2011 compared to 2,679 in 2009. Direct expenditures created 2,254 of these jobs.
•Over
•The
•Destination travelers to the county totaled nearly 2.1 million persons. Over 453,700
•Expenditures by category showed that food and beverage, attraction, and shopping purchases accounted for over seven of every ten dollars spent.
•Expenditures by industry sector reflected the importance of the attractions and lodging sectors to the local tourism industry. Over
INTRODUCTION
The purpose of this study is to quantify the magnitude of the economic impact of the Hendricks County tourism and travel industry in 2011 and show any changes since 2009. Economic benefits begin when a traveler to Hendricks County, either an
These direct expenditures create a
The total economic impact of Hendricks County tourism is the combination of the direct expenditures and the multiplier effect expressed in terms of spending, jobs, wages, and taxes. It is important to note that tourism impacts all sectors of the local economy.
Tourism is a large, growing business in Hendricks County. The research findings presented in this report show the importance of tourism to the local economy in 2009 and 2011. This is accomplished through the use of the Certec Model© designed for estimating tourism impacts at the state and local levels, in conjunction with an
Table 1
HENDRICKS COUNTY TOURISM AND TRAVEL INDUSTRY ECONOMIC IMPACT – 2009 AND 2011
|
2009 |
2011 |
Total Expenditures |
$192,298,439 |
$219,321,579 |
Direct Expenditures |
$136,556,199 |
$155,746,044 |
Indirect Expenditures |
$55,742,240 |
$63,575,535 |
Change Between 2009 and 2011 |
|
7.0% |
(Direct Expenditures Only) |
|
|
Change Between 2009 and 2011 |
|
3.7% |
(Adjusted for Inflation) |
|
|
Total Wages |
$41,104,440 |
$46,771,067 |
Total Taxes |
$45,948,097 |
$51,615,492 |
State |
$16,634,909 |
$18,972,564 |
Local |
$8,963,829 |
$10,223,490 |
Federal |
$20,349,359 |
$22,419,438 |
Total Employment |
2,679 |
2,879 |
Jobs (Direct Expenditures) |
2,098 |
2,254 |
Jobs (Indirect Expenditures) |
581 |
625 |
ECONOMIC IMPACT OF TOURISM
Expenditures
The tourism and travel industry made a total contribution to Hendricks County's economy of $219.3 million in 2011 (Table 1). The purchases made by travelers while in the county accounted for $155.7 million of this total. This represents an annual increase in spending of 7.0 percent over 2009 levels. After adjusting for inflation between the two years, the annual real growth in spending is 3.7 percent.
The difference between the total economic impact and the purchases of travelers was a result of the multiplier effect, i.e. the indirect expenditures. This was triggered by the initial infusion of dollars in the economy - the $155.7 million. These direct expenditures had a
The expenditure data were further classified by type of purchase. The countywide distribution of these expenditures is provided in Chart 1. Spending on food and beverage accounted for 33 percent of these $155.7 million in direct purchases. Attractions accounted for 19 percent of all travel expenditures. Shopping and lodging collected 18 percent and 13 percent of the total, respectively. Lodging was at 12 percent in 2009. Transportation accounted for eleven percent of the purchases and souvenirs six percent.
Chart 1
Shopping | 18% |
Lodging | 13% |
Attractions | 19% |
Transportation | 11% |
Souvenirs | 6% |
Food & Beverage |
33% |
Total Expenditures = $155,746,044 |
Where does this money go once it is in the Hendricks County economy? Many hold the idea that it all goes to the service and retail sectors to support only low wage jobs. In reality, the economic benefits to the Hendricks area are far more widespread. It helps support dozens of local businesses that do not directly serve the county's tourists. It impacts banking, insurance, and real estate; transportation and public utilities; construction; agriculture, and manufacturing.
Expenditures by Sector
The contribution of the individual tourism sectors to the visitor expenditures varies widely. The countywide distribution of these expenditures is provided in Chart 2. Attraction visitors accounted for 32 percent of these $155.7 million in purchases. Lodging guests accounted for the next largest share of this spending (over 31
The importance of the lodging and the attractions sectors to tourism spending in Hendricks are substantial. They are the cornerstones of the area’s tourism industry. The lodging sector, in particular, grew the most between 2009 and 2011 while attractions increased slightly.
Their growth is the key to a healthy tourism industry in Hendricks County. The volume of traffic passing through the area on Interstates 70 and 74 also makes an important contribution with food and beverage, gasoline, and other retail store purchases.
Chart 2
Travel Expenditures by Industry Sector
Campground | 4% |
Pass-Through | 9% |
Attractions | 32% |
VFR | 24% |
Lodging |
31% |
Total Expenditures = $155,746,044 |
Employment
In 2011, a total of 2,879 jobs (in FTEs [full time equivalents]) in Hendricks County were due to the expenditures made in the tourism and travel industry (Table
The employment opportunities were distributed throughout the county. A number of the jobs in the community are supported, in part, by tourism. Since tourism jobs are dispersed throughout the local economy, they are more difficult to identify than factory jobs. This contributes to the misunderstanding of the size and importance of tourism to the local economy.
The individual sectors of the industry had different impacts on the creation of employment. The travelers in the attractions sector lead the industry in job creation. The expenditures of the visitors within this sector generated 944
The jobs created by tourism can be found throughout the occupational structure, not just in the service sector (Table 2). Over
Table 2
TOURISM GENERATED EMPLOYMENT BY OCCUPATION
Occupation |
Jobs |
Professional & technical |
133 |
Managerial |
205 |
Marketing & sales |
283 |
Administrative support |
337 |
Construction |
52 |
Craftsman |
165 |
Agriculture & forestry |
49 |
Operatives & fabricators |
149 |
Laborers |
104 |
Personal services |
1,402 |
Total |
2,879 |
Tourism stimulates
Wages
The expenditures of travelers are the business receipts of the establishments patronized. A portion of these revenues is used by the businesses to pay their employees. In 2011 every 8 dollar spent by travelers in Hendricks County produced an average of 21.3 cents in wage and salary income.
The total wage and salary income generated by tourism and paid by local businesses was nearly $46.8 million in 2011 (Table
Taxes
Tourism generates state and local as well as federal tax revenues. Hendricks County tourism expenditures resulted in the collection of over $51.6 million in tax revenues in 2011 (Table 1) compared to $45.9 million in 2009. Over
The Indiana state treasury benefited from the addition of nearly $19.0 million in tax revenues generated by tourism activity within the county compared to $16.6 million in 2009. A major portion of these revenues were obtained through sales and excise taxes, and taxes on individual and corporate income.
Local government operations in Hendricks County such as the cities and towns, county government, and the Convention & Visitors Bureau also benefited from tourism in the county. County and municipal governments received over $10.2 million in tax revenues as a result of the tourism industry compared to $9.0 million in 2009. Property tax, business taxes, and the innkeeper’s tax contributed to these local tax revenues.
APPENDIX A
DATA AND METHODS
In simplest terms the economic impact of tourism is a function of the number of visitors to the county and how much they spend while there. The research challenge is to accurately measure these quantities. A number of factors contribute to the complexity of this type of economic analysis. Among these factors are:
•the distribution of tourism attractions and industry infrastructure in the county;
•the type of lodging facilities visitors use since this choice greatly impacts level of spending;
•the length of time the tourist spends in the county;
•the size of the travel party, and
•the reason for visiting the county.
These are a few of the critical factors affecting the spending patterns of visitors. Only the spending of
The Certec approach to this research challenge is based on information collected directly from tourists and tourism businesses
It is the Certec position that tourism economic impact begins with the purchase of goods and services by tourists. Therefore, to most accurately measure the sum of these economic transactions requires data collected from both tourists and tourism businesses that answer questions directly related to the research task at hand.
The Certec Model© was developed in the 1970s, and updated annually, to measure the direct tourism economic impacts at the state and local levels. The data required as inputs include the spending pattern of visitors, in great detail, and business data such as rooms sold at lodging facilities and the number of visitors to attractions.
Expenditure Data
The information on the spending pattern of travelers to Hendricks County is currently available for 2009 and 2011 through the research of Certec Inc. This research provides very detailed information on the spending of visitors in the area. For this project the 2012 data were adjusted to 2011 by correcting for inflation. For each sector, the expenditure figure includes purchases for lodging (excluding attractions, VFR, and pass through), food & beverage, transportation, souvenirs, attractions, and shopping/retail.
The expenditures per person per day were calculated. They are, by sector:
|
2009 |
2011 |
lodging |
$82.70 |
$88.85 |
attractions |
$36.83 |
$39.31 |
VFR |
$49.90 |
$52.91 |
pass through |
$28.84 |
$30.92 |
campground |
$45.92 |
$48.92 |
Hendricks County is divided into tourism sectors. Certec identified tourism and travel businesses operating in 2011 from a review of local tourism publications. This information was used to update the 2009 database developed for the previous year’s study.
Certec designed surveys to collect business data from a stratified random sample of these businesses. The questionnaires are available in Appendix D. The information was collected through the Hendricks County Convention & Visitors Bureau with the assistance of Jaime Bohler Smith, Associate Director. Mail interviews were received from the owner and/or manager of each of those establishments during the period March through May 2012. The interview had as its primary focus the number of units sold (lodging rooms or campsites) or visitors to the facility. Complete interviews were obtained from 53.3 percent of the businesses in the sample.
Once the processing of these data sets was complete, participant days by type of business were determined. The results of this analysis are presented in Chart 3. Total participant days to Hendricks County in 2011 approached 3.1 million. Attractions, after adjusting for multiple visits, accounted for nearly 42 percent of all visitor days followed by VFR travelers (22 percent). The lodging and
Destination travelers to Hendricks County totaled nearly 2.1 million persons (2,076,088) compared to 1.9 million (1,963,492) in
Chart 3
Total Participant Days
Campground | 4% |
Pass-through | 14% |
Attractions | 42% |
Lodging | 18% |
VFR | 22% |
Total Participant Days = 3,099,252 |
The information on participant days in Chart 3 in combination with the expenditure data in Chart 2 shows the importance of lodging guests and their much higher spending per person per day. Even though they account for just over
Direct Effects
Once the basic inputs to the Model were calculated, several statistical analyses were conducted using the equations of the Certec Model©. Note that the Model was modified for use in this project to reflect the Hendricks County tourism industry. This Model was designed to provide expenditure estimates at the
The data collected from the business questionnaires also allowed for the calculation of the direct effects of the local residents. The business survey asked for the proportion of visitors/patrons from outside Hendricks County. The remainder would be local residents who used local tourism facilities. These data were used in the Model with the expenditure data to calculate spending which could then be translated into jobs created by the spending.
Multiplier Effects
The indirect and induced expenditures resulting from the initial infusion of money into the Hendricks County economy were calculated using the RIMS II
The tax revenues resulting from this industry were also estimated. State and local tax revenues as well as federal tax revenues were obtained by using sector output generated by the Certec Model©with expenditure/tax relationships derived from
Estimates of tourism and travel industry employment were generated in a similar fashion. Sector output from the Certec Model© was applied to expenditure/job relationships obtained from the
The addition of the multiplier effects, as determined from the
Appendix B
Definition of Terms
Direct Expenditure |
the exchange of money or the promise of money |
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for goods or services while traveling in |
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Hendricks County, including any advance |
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purchase of public transportation, tickets, |
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lodging or other items normally considered an |
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incident of travel, but which may be purchased |
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in advance of the trip. |
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Indirect Expenditure |
the second and subsequent rounds of spending |
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of the travel dollars (direct expenditures) in |
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Indiana for |
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services; i.e. the multiplier effect. |
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an economic analysis method which is designed |
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to measure the indirect and induced effects of a |
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direct change in a region's economy. |
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Participant Day |
an individual spending one day or part of a day |
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at a tourism or travel facility |
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visitors spending one day is equivalent to one |
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visitor spending three days. |
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Travel and Tourism Industry |
the tourism industry consists of all those firms, organizations and facilities (including accomodations, food, transportation, and related services) which areintended to serve the specific needs of travelers. |
VFR |
Visit to friends or relatives. |
Findings From Visitor Survey
The visitor survey results presented below should be interpreted with caution. They are based on a research sample that has +10 percent sampling variability. Had the purpose of this survey been to document the county’s market, instead of measuring visitor spending, a much larger sample of visitors would have been obtained.
Currently, Hendricks County derives a substantial majority of its visitation from three states. These states accounted for over
The strongest state markets for the area are, in rank order:
1) |
Indiana |
50.0% |
2) |
Illinois |
12.0 |
3) |
Michigan |
7.0 |
While these findings indicate that the county's strongest draw among travelers comes from Indiana, Illinois and nearby states, the county does receive visitation from more distant locations such as Ohio, Florida, Missouri, Kentucky, New York, North Carolina, and Wisconsin. In all, visitors from eighteen different states and two foreign countries (Switzerland and Germany) were identified.
Demographics
The typical visitor to the Hendricks area is most likely to be a college graduate (62.5 percent) and working in a professional/technical job (43.1 percent). Another one out of seven visitors is retired (14.0%).
DEMOGRAPHICS OF VISITORS TO HENDRICKS COUNTY
EDUCATION |
|
College Graduate |
42.7% |
Some College |
22.9 |
Post Graduate |
19.8 |
High School Graduate |
12.5 |
Some High School |
2.1 |
OCCUPATION |
|
Professional/technical |
43.1% |
Retired |
14.0 |
Manager |
9.7 |
Craftsman |
8.5 |
Sales |
8.5 |
Personal Service |
5.4 |
Laborer |
4.3 |
Clerical |
3.2 |
Construction |
1.1 |
Unemployed |
2.2 |
Trip Characteristics
The destination tourism business Hendricks County enjoys is derived primarily from visitors on either a short trip (47.0%) of one to three nights in length or a day trip (40.0%). Nearly one in ten was on a vacation of four or more nights in length (9.0%). Over nine in ten (93.2%) of those who spent the night on this trip, i.e. excluding day visitors, stayed in motels. Nationally, pleasure travel accounted for over 80 percent of the one billion plus trips in 2010. The remainder results from business travel.
Four in ten of these travelers to the county (40.0%) are on their first visit to the county. This ranges from one out of ten for attraction visitors to three out of five for motel guests. Overall, visitors have taken an average of 4.4 trips to the area in the past two
The information sources mentioned by the respondents as most likely to be used when making travel plans include (in rank order): the Internet (73 percent), friends and relatives (41 percent), ), a local visitors bureau (15 percent), an auto club (10 percent), newspapers (8 percent), magazines (5 percent), a state tourism office (4 percent), and a travel agent (2 percent).
Travelers visited a number of attractions in the Hendricks County area. On average a travel party visited 1.3 attractions. The most visited attractions by those interviewed were:
•Lucas Oil Raceway
•Chateau Thomas Winery
•Indianapolis Motor Speedway
•Metropolis
•Indianapolis Zoo
•Sodalis Nature Park
•Art Museum
•Shopping (general)
•Local Parks
The most frequently mentioned activities that visitors participated in while in Hendricks County were visiting friends or relatives (20 percent), watching auto racing (18 percent), music concert (18 percent), dining (17 percent), sports event (17 percent), shopping (12 percent), and swimming (one percent). Visitors participated in an average of 1.4 activities.
APPENDIX F
Economic Impact Data Tables (Time Series)
HENDRICKS COUNTY TOURISM AND TRAVEL INDUSTRY ECONOMIC IMPACT – 2007 AND 2009
|
2007 |
2009 |
|
Total Expenditures |
$174,793,754 |
$192,298,439 |
|
Direct Expenditures |
$124,125,660 |
$136,556,199 |
|
Indirect Expenditures |
$50,668,094 |
$55,742,240 |
|
Change Between 2007 and 2009 |
|
5.0% |
|
(Direct Expenditures Only) |
|
|
|
Change Between 2007 and 2009 |
|
3.3% |
|
(Adjusted for Inflation) |
|
|
|
Total Wages |
$37,362,755 |
$41,104,440 |
|
Total Taxes |
$41,765,500 |
$45,948,097 |
|
State |
$15,120,654 |
$16,634,909 |
|
Local |
$8,147,863 |
$8,963,829 |
|
Federal |
$18,496,983 |
$20,349,359 |
|
Total Employment |
2,581 |
2,679 |
|
Jobs (Direct Expenditures) |
2,021 |
2,098 |
|
Jobs (Indirect Expenditures) |
560 |
581 |
HENDRICKS COUNTY TOURISM AND
TRAVEL INDUSTRY ECONOMIC IMPACT – 2003 AND 2007
|
2003 |
2007 |
Total Expenditures |
$126,278,098 |
$174,793,754 |
Direct Expenditures |
$89,673,412 |
$124,125,660 |
Indirect Expenditures |
$36,604,686 |
$50,668,094 |
Change Between 2003 and 2007 |
|
9.6% |
(Direct Expenditures Only) |
|
|
Change Between 2003 and 2007 |
|
5.6% |
(Adjusted for Inflation) |
|
|
Total Wages |
$26,992,370 |
$37,362,755 |
Total Taxes |
$30,173,091 |
$41,765,500 |
State |
$10,923,774 |
$15,120,654 |
Local |
$5,886,346 |
$8,147,863 |
Federal |
$13,362,971 |
$18,496,983 |
Total Employment |
1,978 |
2,581 |
Jobs (Direct Expenditures) |
1,549 |
2,021 |
Jobs (Indirect Expenditures) |
429 |
560 |