Transcript
Page 1: Communicating the Economic Value of Tourism

The Economic Value of Tourism

in Ontario’s Southwest

March 20, 2014

Page 2: Communicating the Economic Value of Tourism

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/

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Thank youAileen Murray Ec.D. (F)Mellor Murray [email protected]

mellormurray