Morse Econ Tourism Transylvania Brevard 10 15 09

Tourism’s Importance to theTourism s Importance to the Transylvania County & Brevard Economy

Steve Morse, Ph.D.

Director & Economist T i I tit tTourism Institute

University of TennesseeKnoxville, TN

Ph: (865) 974‐6249smorse@utk.edu

October 15, 2009Brevard, NC

Tourism’s Importance to theTourism s Importance to the Transylvania County & Brevard Economy

Brevard CollegeSteve Morse, Ph.D.

Brevard CollegeBrevard, NC

October 15, 2009Director & Economist Tourism Institute

University of TennesseeyKnoxville, TN

Ph: (865) 974 6249Ph: (865) 974‐6249smorse@utk.edu

Outline of Topics

1) Tourist spending trends in Transylvania Co. 2) Tourism’s importance to the Transylvania Co. economyy

3) Employment trends in Transylvania Co.4) The U S recession – city analysis4) The U.S. recession  city analysis5) Three recovery models for U.S. Economy

But first, something very important to mention about the Brevard College g

Football Team ……..

How ‘Bout Them Tornadoes! 

Areas of FocusFocus

Top 10 Western NC Counties for Tourist Spending in 2008Spending in 2008

1) Buncombe Co. $711.0 million2) Swain Co. $233.2 million3) Macon Co.  $120.5 million4) Henderson Co. $198.6 million5) Haywood Co. $113.4 million6) Transylvania Co. $77.1 million7) Jackson Co. $69.1 million8) Cherokee Co. $35.3 million9) Graham Co. $23.4 million10)Clay Co. $12.0 million

Source:  TIA & NC Division of Tourism, Film & Sport Development

Transylvania Co. Tourist Spending, 1999 ‐ 2008

$90 $ illi t i t di

$80

$90

$$75.6

$80.1 $77.1

$ million tourist spending

$60

$70

$$59.6 $60.8 $62.0 $62.9 $64.8

$69.9

$50

$60 $55.7

$40

Source:  TIA & NC Division of Tourism, Film & Sport Development

Percent Change in Tourist Spending, 2006 2007 (b f th i )2006 – 2007 (before the recession)

6 5%Jackson Co

0%

6.0%

6.5%

H d C

Transylvania Co.

Jackson Co.

4.4%

5.0%Clay Co.

Haywood Co.

3.8%

4.2%Macon Co.

Swain Co.

2.1%

2.8%Graham Co.

Cherokee Co.

0% 1% 2% 3% 4% 5% 6% 7%Source:  TIA & NC Division of Tourism, Film & Sport Development

How did gas prices & the recession impact tourist spending from 2007–2008? p g

(during recession)

7 1% Swain Co

6%

‐4.8%

‐7.1%

G h C

Jackson Co.

Swain Co.

‐4.5%

‐4.6%Macon Co.

Graham Co.

‐3.2%

‐3.8%Clay Co.

Transylvania Co.

‐0.8%

‐2.7%Cherokee Co.

Haywood Co.

‐8% ‐6% ‐4% ‐2% 0%Source:  TIA & NC Division of Tourism, Film & Sport Development

Transylvania Co. Taxable Sales per Month 2006 2009 (J )Month, 2006 – 2009 (June)

2006 Sales ($) 2007 Sales ($) 2008 Sales ($) 2009 Sales ($)Jan 17,848,627  22,792,959  23,575,889  17,576,189 Feb 15,620,400  20,023,522  14,407,642  13,330,437 Mar 19,424,263  21,462,701  25,250,520  17,771,279 Apr 21,317,240  23,888,196  21,902,111  17,389,467 May 16,804,648  21,703,412  24,245,485  19,821,655 Jun 27,416,615  27,585,527  26,511,608  21,959,170 Jul 31,572,861  23,968,190  25,485,617 Aug 22,789,090  28,673,645  23,228,671 Sep 19,977,364  16,904,337  22,220,731 Oct 24,775,646  23,724,631  21,927,384 Nov 21,791,530  22,856,574  15,874,102 Dec 21,569,548  22,389,814  23,080,437 

Total 260,907,832  275,973,508  267,710,197 Source:  North Carolina Department of Revenue & Dr. Steve Morse, University of Tennessee

Transylvania Co. Taxable Sales per Month 2006 2009 (J )Month, 2006 – 2009 (June)

$35,000,000 2006 Sales

2007 Sales2006

$25,000,000

$30,000,000 2008 Sales

2009 Sales

2006

2008

$20,000,000

2007

$10,000,000

$15,000,0002009

$0

$5,000,000Note of interest:  Easter holiday 2008 fell on March 23, earliest Easter date since 1913

$0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec.Source:  NC Dept. of Revenue & Dr. Steve Morse, University of Tennessee

Brevard City Taxable Sales per Month 2006 2009 (M )Month, 2006 – 2009 (May)

2006 Sales ($) 2007 Sales ($) 2008 Sales ($) 2009 Sales ($)Jan 9,610,271  15,478,986  15,878,725  12,815,770 Feb 9,961,570  13,988,550  9,374,594  9,556,853 Mar 11,698,280  12,327,840  17,915,415  12,968,858 Apr 12,866,293  14,308,849  15,237,249  12,418,334 May 10,111,828  13,958,708  14,900,235  13,464,408 Jun 13,766,927  15,435,354  17,798,291 Jul 20,791,541  12,944,426  16,106,983 Aug 14,925,596  16,604,424  15,061,201 Sep 10,671,812  9,731,041  15,363,941 Oct 15,256,854  13,187,508  14,873,720 Nov 13,026,426  14,320,140  11,274,934 Dec 13,672,469  14,100,531  17,778,673 

Total 156,359,867  166,386,357  181,563,961 Source:  North Carolina Department of Revenue & Dr. Steve Morse, University of Tennessee

Brevard City Taxable Sales per Month, 2006 – 2009 (May)2006  2009 (May)

$25,000,0002006 Sales2007 Sales

$20,000,000 2008 Sales2009 Sales

2006

2008

$15,000,000

$10,000,000 20072009

$5,000,000

Note of interest:  Easter holiday 2008 fell on March 23, earliest Easter date since 1913

$0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec.Source:  NC Dept. of Revenue & Dr. Steve Morse, University of Tennessee

Annual Taxable Sales for Transylvania Co. & Brevard City, 2006 ‐ 2008Co. & Brevard City, 2006  2008

$260,907,832$275,973,508 $267,710,197

$300,000,000

$ , ,$260,000,000

Transylvania Co.

$181,563,961

$220,000,000

$156,359,867$166,386,357$180,000,000

Transylvania Co.Brevard City$140,000,000Transylvania Co.

Brevard City

Brevard City

$100,000,000

2006 2007 2008Source:  NC Dept. of Revenue & Dr. Steve Morse, University of Tennessee

Impacts of Tourism on the T l i C E 2008Transylvania County Economy, 2008

Tourist  Worker Spending:$77 1 Million

Payroll:

$14 9 Million$77.1 Million $14.9 Million

Employment: State Taxes: Local Taxes:Employment:

780 Jobs

State Taxes:

$2.99 Million

Local Taxes:

$3.71 Million

Source:  NC Division of Tourism. Film & Sport Development & U.S. Travel Association

Q:  If tourists to Transylvania Co. yspent $77.1 million in 2008, how 

h d i dmuch do tourists spend on an average day inaverage day in 

Transylvania County?

$211,23217Source: Dr. Steve Morse, University of Tennessee

Also on an Average Day in Transylvania Co., tourist spendingTransylvania Co., tourist spending 

generates…

Paychecks worth $40,821 daily

State taxes worth $8 191 dailyState taxes worth $8,191 daily

T l i C t thTransylvania Co. taxes worth $10,164 daily$10,164 daily

18Source: Dr. Steve Morse, University of Tennessee

How much in NC State and Transylvania Co. taxes did Tourism Generate in 2008?

• NC State sales taxes $2.99 million

• Transylvania Co. local taxes + $3.71 million

• Total State & Local Taxes $6 7 million• Total State & Local Taxes $6.7 million

19Source: NC Division of Tourism, Film and Sport Development

If we spread out the $6.7 million in taxes  generated by tourism across all 

households in Transylvania County, howhouseholds in Transylvania County, how much would this be per household?

• According to the U.S. Census Bureau, hthere were 17,242 permanent resident households in Transylvania yCounty in 2007.

20Source: Dr. Steve Morse, University of Tennessee & U.S. Census Bureau

Tourism Tax Relief for Transylvania CoTransylvania Co.

• Each household in Transylvania Co. pays $388 less in State and local taxes as a result of tourism economic activityresult of tourism economic activity

$388Tax relieff hfor each 

Transylvania a sy a aCo. household

Source: Dr. Steve Morse, University of Tennessee

A Big Check for $388 to Each Transylvania County HouseholdTransylvania County Household

For tourism taxFor tourism tax relief of $388 each householdeach household does not have to pay Providedto pay. Provided by taxes generate bygenerate by tourist spending in Transylvania

Amount:  $388in Transylvania County.

Source: Dr. Steve Morse, University of Tennessee

For every $1 invested in tourism for Transylvania County, each $1 generates…Transylvania County, each $1 generates…

$22.70$12.57 

$22.70 

$10.13  in localin combined

in State taxes

in local Transylvania Co. taxes

combined State & local taxestaxes local taxes

Source: Dr. Steve Morse, University of Tennessee

What is the Return on Investment (ROI) of Transylvania County’s Tourism Budget ofTransylvania County s Tourism Budget of 

$295,000?

•$12.57 in local taxes (ROI = 12 57%)

Each $1 taxes (ROI = 12.57%)

•$10.13 in State t (ROI 10 13%)

spent on tourism in  taxes (ROI = 10.13%)

•$22.70 in State & Transylvania

Co local taxes           (ROI = 22.7%)

Co. generates…

Source: Dr. Steve Morse, University of Tennessee

How have Transylvania Co. Employment Trends Changed Since 2002?Trends Changed Since 2002?

Industry 2002 2008Manufacturing 22.0%Education & Health Services 19.1%

Retail, Wholesale Trade, Transp & Utilities 18.8%Transp. & Utilities

Tourism & Hospitality 15.8%

Construction 9.0%Prof & Business Services 5.1%

Financial Activity 4.2%Source:  U.S. Dept. of Commerce, Bureau of Labor Statistics & Dr. Steve Morse, Univ. of Tennessee

How have Transylvania Co. Employment Trends Changed Since 2002?Trends Changed Since 2002?

Industry 2002 2008Manufacturing 22.0% 4.8%Education & Health Services 19.1% 22.6%

Retail, Wholesale Trade, Transp & Utilities 18.8% 26.6%Transp. & Utilities

Tourism & Hospitality 15.8% 17.8%

Construction 9.0% 10.3%Prof & Business Services 5.1% 8.0%

Financial Activity 4.2% 4.0%Source:  U.S. Dept. of Commerce, Bureau of Labor Statistics & Dr. Steve Morse, Univ. of Tennessee

How has Transylvania Co.     emplo ment chan ed since 2002?employment changed since 2002?

26.6%30%2002 2008

Percent of total employment

22.0%19.1% 18.8%

15 8%

22.6%

17.8%20%

25% 2002 2008

15.8%

9.0%10.3%

8.0%10%

15%

5.1% 4.2%4.8%4.0%

0%

5%

0%

Source:  U.S. Dept. of Commerce, Bureau of Labor Statistics & Dr. Steve Morse, Univ. of Tennessee

Today’s U.S. Economic Health

• Significant drop in GDP in 4th Qtr. ’08,                U.S. 

Economy has Slowed

g p1st Qtr. ’09, & 2nd Qtr. ‘09

• Consumer Confidence Index                        hit 25 0 l t i 30Consumer 

Confidence

hits 25.0, lowest in 30 years

U.S. unemploy

• U.S. unemployment rate 9.5%                   is highest in 30 years (Oct. ‘09)unemploy

ment rate g y ( )

Source:  U.S. Dept. of Commerce

Top 10 Ways Tourists Reduced Travel Spending in 2009

1) Take shorter trips (miles) 58%2) Look for discounts 38%3) Less on paid attractions 35%4) Buy less souvenirs 33%5) L i l d i 27%5) Less expensive lodging 27%6) Less nights away home 25%7) More meals in room 18%7) More meals in room 18%8) Drive different vehicle 10%9) Split costs with others 9%9) Split costs with others 9%10) More fast food 8%

Source:  Jerry Henry and Associates29

When did the recession start?Percent Change in Real Gross DomesticPercent Change in Real Gross Domestic Product (GDP) from Previous Quarter

6.0

2.0

4.0

‐2.0

0.0% change 

6 0

‐4.0

‐8.0

‐6.0 (2006) (2007) (2008) (2009)Source: U.S. Bureau of Economic Analysis

Recessions impact some areas harder than othersareas harder than others

Let’s identify:20 strongest Metro areas (cities hit least by recession)

y

(cities hit least by recession)20 middle strength Metro areas

20 second‐most weakest20 second most weakest Metro areas

20 weakest Metro areas20 weakest Metro areas

(cities hit hardest by recession)

Percent employment  Change in p ychange from peak to 

Q2 ‐ 2009

gunemployment rate March 08–June 09Q

4 Key Economic Indicators Used to Rank Economic Strength of 

Percent change in h i

Metro AreasPercent change in 

Gross Metro Product produced peak to

Percent change in housing prices Q1 –produced, peak to 

Q2 ‐ 2009 08 to Q2 ‐ 2009

20 Strongest Economic Metro Areas, as of Q2 – 2009

Albuquerque, NMAustin TX , Q

(cities hit least by recession)Austin, TXBaton Rouge, LADallas‐FW, TXDallas FW, TXDes Moines, IAEl Paso, TXHarrisburg, PAHouston, TXLittl R k ARLittle Rock, ARMcAllen, TXNew Haven CTNew Haven, CTOkla City, OKOmaha, NE

Rochester, NYSan Antonio, TX

VA Beach, VAWashington, DC

Pittsburg, PA Tulsa, OK Wichita, KS

Source: U.S. Bureau of Labor Statistics & Brookings Institute

Allentown, PAAtlanta GAAtlanta, GABaltimore, MDBuffalo, NYBuffalo, NY Charleston, SCCharlotte, NCChattanooga, TNCol. Springs, COG ill SCGreenville, SCIndianapolis, INKansas City MOKansas City, MOKnoxville, TNNashville, TN

Springfield, MASt. Louis, MO

Provo, UTRichmond, VA

New York, NY Wooster, MASeattle, WA

Source: U.S. Bureau of Labor Statistics & Brookings Institute

Akron, OHBakersfield CABakersfield, CABirmingham, ALBoise City, IDBoise City, IDChicago‐Naper, ILCincinnati, OHCleveland, OHDayton, OHG b NCGreensboro, NCLouisville, KYMilwaukee WIMilwaukee, WIMinn‐St.Paul, MNNew Orleans, LA

San Francisco, CASan Jose, CA

Phoenix, AZPortland, OR

Orlando, FL Tucson, AZSan Diego, CA

Source: U.S. Bureau of Labor Statistics & Brookings Institute

20 Weakest Economic Metro Areas, as of Q2 – 2009Sarasota, FL

Ft Myers FL ,(cities hit hardest by recession)

Ft. Myers, FLDetroit, MIFresno, CAFresno, CA Grand Rapids, MIJacksonville, FLLakeland, FLLas Vegas, NVL A l CALos Angels, CAMiami‐Ft. Laud, FLModesto CAModesto, CAVentura, CAMelbourne, FL

Tampa, FLToledo, OH

Riverside, CASacramento, CA

Providence, RI Youngstown, OHStockton, CA

Source: U.S. Bureau of Labor Statistics & Brookings Institute

SummaryEconom to

= strongest metro areasiddl t th tEconomy to 

Q2 ‐ 2009= middle strength metro areas= weakest metro areas

Source: U.S. Bureau of Labor Statistics & Brookings Institute

Outlook for 2009 & 2010( i i di ?)(Swimming or treading water?)

“Predictions are difficultdifficult, Especially when 

lkiyou are talking about the future.”

Y i B‐ Yogi Berra

What will be the shape of our recovery?

V‐Shaped?1.2Economic Growth

1

1.2

N

0.6

0.8 NowOct. 2009

0.4

0

0.2

2007 2008 2009 2010 2011 2012

Source: Dr. Steve Morse, University of Tennessee

What will be the shape of our recovery?

U‐Shaped?1 2Economic Growth

1

1.2

0.6

0.8

Now

0.4

0.6Oct. 2009

0

0.2

2007 2008 2009 2010 2011 2012Source: Dr. Steve Morse, University of Tennessee

What will be the shape of our recovery?H i t l L Sh d?Horizontal L‐Shaped?

1 2Economic Growth

1

1.2

Now

0.6

0.8

Now Oct. 2009

0.4

0.6

0

0.2

2007 2008 2009 2010 2011 2012Source: Dr. Steve Morse, University of Tennessee

What is today’s consensus for recovery?

• V‐shaped recovery: 10% ( t d )–(steady)

• U‐shaped recovery: 80% p y–(getting weaker)

• Horizontal L‐shaped: 10% –(getting stronger)(getting stronger)

Source: Dr. Steve Morse, University of Tennessee

For an electronic copy of this presentation email me atpresentation, email me at ……

smorse@utk edusmorse@utk.eduSubject:  Oct. 15 presentationj p

Contact Information:Contact Information:

Dr. Steve Morse

Director & Economist, Tourism InstituteUniversity of Tennessee; Knoxville, TN

Ph: (865) 974‐6249E‐mail:  smorse@utk.edu

Th k f i itiThank you for inviting meQuestions?  Comments?Q