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Kingsport, TN and Sullivan Co. impcts of tourism on the local economy, jobs, taxes
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Tourism’s Economic Significance to the Sullivan County Economy
Tourism Works for Sullivan CountyStephen C. Morse, Ph.D.
Director & Economist Tourism Institute
University of TennesseeKnoxville, TN
2
3 Topics Today1. Trends in Sullivan Co. tourists
spending
2. On an average day in Sullivan Co.
3. Tourism’s great investment in Sullivan Co.
Top 10 Tennessee Counties for Tourist Spending in 2007
1) Davidson Co. $3,991 million (Nashville)2) Shelby Co. $3,064 million (Memphis)3) Sevier Co. $1,502 million (Gatlinburg, PF)4) Knox Co. $796 million (Knoxville)5) Hamilton Co. $710 million (Chattanooga)6) Blount Co. $276 million (Maryville, Townsend)
7) Sullivan Co. $270 million (Kingsport, Bristol)8) Williamson Co. $251 million (Franklin, Brentwood)9) Rutherford Co. $237 million (Murfreesboro)10)Washington Co. $188 million (Johnson City)
Source: TIA & TN Dept. of Tourist Development 3
Sullivan Co. Tourist Spending Continues to Grow, 2002 ‐ 2007
$201.01$208.72$219.03
$239.10$258.52$270.23
$0.0
$50.0
$100.0
$150.0
$200.0
$250.0
$300.0
2002 2003 2004 2005 2006 2007
$ Millions
Source: TN Dept. of Tourist Development & TIA4
Impacts of Tourism on the Sullivan County Economy, 2007
Tourist Spending:
$270.2 Million
Worker Payroll:
$79.45 Million
Employment:
2,910 Jobs
State Taxes:
$14.8 Million
Local Taxes:
$7.32 Million
Source: TN Dept. of Tourist Development & U.S. Travel Association
Sullivan Co. Rank of Industries by Employment Percent, 2007
(nearly 1 out of 10 job are in tourism!)
1. Manufacturing 23.1%
2. Retail – Wholesale Trade
Transportation, Utilities 21.48%
3. Education & Health Services 18.8%
4. Hotel, Restaurant, Tourism 9.6%
5. Construction 9.0%
6. Prof & Business Services 8.5%
7. Financial Activities 3.7%
Q: How much do tourists spend on an average day in Sullivan County?
$740,360
7
Also on an Average Day in Sullivan County, tourist spending generates…
Paychecks worth $217,671 daily
State taxes worth $40,547 daily
Sullivan Co. taxes worth $20,054
daily8
How much in TN State and Sullivan Co. taxes did Tourism Generate in 2007?
• TN State sales taxes $14.8 million
• Sullivan Co. local taxes + $7.3 million
• Total State & Local Taxes $22.1 million
9Source: TN Dept. of Tourist Dev.
Tourism Tax Relief – Sullivan Co.
• Each household in Sullivan Co. pays $301 less in State and local taxes as a result of tourism economic activity
$301Tax relieffor each
Sullivan Co. household
Restaurant Sales for Sullivan Co., by month 2006 – 2008 (June)
$15
$17
$19
$21
$23
$25
$27
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
20072008
2006
Airline Survival in 2009
1) Decrease Costs & eliminate empty seats:
Less flights per destinationSmaller airplanes – less seats
2) Increase RevenuesHigher airfares for less seats availableOther non‐seat revenue (bag & meal charges)
12
Tennessee – Percent Changes in Airline Seat Capacity,
March 2008 vs. March 2009
Chattanooga + 2.9% ( + 1,069 seats)
Knoxville ‐ 2.9% ( ‐ 3,023 seats)
Memphis ‐ 7.0% ( ‐ 18,442 seats)
Nashville ‐ 9.5% ( ‐ 17,338 seats)
Tri‐City ‐11.4% (‐ 837 seats)
13
Source: Official Airline Guide, Federal Aviation Adm., U.S. Dept. of Transportation, March 2007 ‐March 2008
Today’s U.S. & Tennessee’s Economic Health
U.S. Economy has Slowed
• Slowest growth since 19863rd & 4th Qtr. Negative U.S. Economic Growth
Tennessee Sales Tax Revenues
•TN sales tax collections•lowest levels in 12 years
Tennessee County Tax Revenues
• Decreasing tax revenues for each Tennessee County
Source: U.S. Dept. of Commerce14
TN County Newspaper Headlines
• County Tax Revenues Fall Short
• Budget Shortfall Worries Commissioners
• County Workers Face Layoffs
• City Officials Mull Spending Cuts
• Hotel Bed Tax to Cover Economic Development Projects
• Tourism Budget Cut to Save Road Paving Project
• Tourism Promotion & Marketing Budget Eyed for County Deficit
In this slow economy…Tennessee City & County governments are searching
for new tax revenues
During a Slowing Economy, More Emphasis on Public Sector Benefits of
Tourism as a Tax Generator
Private Sector Benefits of
Tourist Spending
Public Sector Benefits of Tourist
Spending
NEWEMPHASIS
Tourism is a Net Tax Revenue Generator for Other Govt. Programs
& Services in Sullivan Co.
Tourist Spending in Your Local Area
Generates Additional Local Tax Revenues
Additional Taxes Fund Other Non‐Tourism Programs & Services
Great Return on Investment
• Every $1 invested by the Kingsport CVB…
• Returns $20.10 in State and local tax revenues
Thank you for inviting meQuestions? Comments?
Stephen C. Morse, Ph.D.
Director & Economist Tourism Institute
University of TennesseeKnoxville, TN
PH: (865) 974‐6249Email: [email protected]