the economic impact of tourism in...

The Economic Impact of Tourism in Wisconsin

April 2018

Key Findings

| Tourism Economics 3

Growth continues in 2017 as

economic conditions help spur

travel to Wisconsin

Key facts about Wisconsin’s tourism sector

Visitation reached 110 million in 2017

Visitor spending rose 3.2% in 2017 to $12.7 billion

Tourism spending supports 7.7% of all jobs in Wisconsin

Tourism in Wisconsin generated $1.5 billion in state and local taxes

in 2017

Tourism spending $12,701

Total business sales $20,607

Employment sustained by tourism 195,255

Income sustained by tourism $5,411

Taxes sustained by tourism $2,736

Federal $1,195

State $848

Local $689

Source: Tourism Economics

Key indicators in Wisconsin

2017Dollar figures in millions

Key Findings

4

• As visitor spending growth continues, Wisconsin

tourism’s performance both in 2017 and over the life

of the current expansion impresses.

• Visitor spending grew 3.2% in 2017 and has

increased nearly 40% over 2011 results.

• Visitor spending increased by $390 million in 2017 to

reach $12.7 billion; spending is up by $3.5 billion

since 2011.

• Wisconsin visitor volumes grew by 2.4 million to reach

110 million and have grown by more than 17 million

since 2011.

• Visitor spending growth was led by spending on

recreational activities with strong growth in all food &

beverages and lodging sectors as lower gas prices,

growing wages, and strong consumer confidence

meant both growth in travel and spending per trip.

• Visitor spending of $12.7 billion generated $20.6

billion in total business sales in 2017 as traveler

dollars flowed through the Wisconsin economy.

• Visitor activity sustained 195,255 jobs in 2017, both

directly and indirectly.

• 1-in-13 jobs in the state is sustained by tourism

activity – 7.7% of private non-farm employment in

Wisconsin.

• Including indirect and induced impacts, tourism in

Wisconsin generated $1.5 billion in state and local

taxes and $1.2 billion in Federal taxes in 2017.

• In the absence of the state and local taxes generated

by tourism, each Wisconsin household would need to

pay an additional $660 to maintain the current level of

government services.

Tourism Indicators

Key indicators - lodging


Room demand remains strong while ADR

increases moderate in year 8 of the current

expansion.

Room demand continued to

remain above 2% in 2017 –

marking the fifth straight year

room demand has surpassed the

2% level.

After reaching a high of 5.3%,

ADR increases have moderated,

falling to 2.2% in 2017.

Since 2011, room demand has

grown by more than 2.1 million

rooms. Considering that room

demand in Dane County in 2017

reached 2.2 million rooms, this

growth is like adding a Dane

County to Wisconsin room

demand.

Room revenues have increased

by nearly $600 million since 2011

– overall growth of nearly 50%

over 2011. 0%

1%

2%

3%

4%

5%

6%

7%

8%

2011 2012 2013 2014 2015 2016 2017

Demand

Revenue

ADR

Lodging metrics reflect a maturing expansion

Source: STR

% change

Key indicators – sales tax growth in

tourism-related industries


Sales tax collections from recreational

businesses have boomed over the past

couple of years.

After a down year in 2016,

recreational sales tax growth was

highest among key tourism-

related industries.

2017 saw moderating sales tax

growth in the lodging and food

services industries. Low

inflationary pressures in 2017

was the major cause of this

moderation.

The lodging industries share of all

sales tax collections has growth

from 1.9% in 2011 to nearly 2.1%

in 2017. Lodging sales have

increased at a faster rate than

overall taxable sales in

Wisconsin.

Retail sales growth has been

minimal over the last three years.-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

2011 2012 2013 2014 2015 2016 2017Lodging F&B Recreation Retail

Taxable sales in tourism-related industries

Source: WI Dept. of Revenue

% change

Key indicators – inflation


Inflationary pressures have been near non-

existent over the past couple of years.

TPI is a measure of tourism

prices in the US – including

lodging, food outside of the

home, transportation costs, and

general inflation.

Tourism inflation was negative

during 2015 and 2016 as

declining gas prices led overall

tourism prices to be lower.

Tourism price increases remain

muted in 2017, and are expected

to average around 2%.

Lower price pressures moderate

visitor spending growth.

Historical averages for tourism

price increases are around 3%

with tourism prices increasing an

average of 4.5% during the 2002-

2008 expansion.

-4

-3

-2

-1

0

1

2

3

4

5

2014.1 2015.1 2016.1 2017.1 2018.1

TPI% growth


Forecast

Visitation and Spending

Trends in Wisconsin tourism


Visitation reached 110 million and has grown by between

2.0% and 2.8% in each of the past four years.

Visitor spending growth was led by spending on recreation

and food & beverages – key industries supporting state

impacts.

Consistent visitation growth1

Spending growth is strong in key industry

sectors3

2017 marks the seventh straight year of visitor spending

growth with spending increasing 3.2%.

Visitor spending driven by visitation growth2

2017 Results


110 million visitors traveled to Wisconsin in

2017, spending $12.7 billion in the state.

The number of person-trips

surpassed 110 million in 2017.

The steady climb of visitor

spending continued in 2017 as

increased visitation supported

more spending in a very low

inflationary period.

$10.8

$11.4$11.9

$12.3$12.7

100.4

102.3

105.2

107.7

110.0

94

96

98

100

102

104

106

108

110

112

$9.5

$10.0

$10.5

$11.0

$11.5

$12.0

$12.5

$13.0

2013 2014 2015 2016 2017

Total spending (left axis) Total visitors (right axis)

Visitation and visitor spending in WisconsinBillions


Millions

Visitation


Visitation increased by 2.4 million trips in

2017, growth of 2.2%.

100.4102.3

105.2

107.7110.0

80

85

90

95

100

105

110

115

2013 2014 2015 2016 2017

Total visitors

Visitors to WisconsinVisitors, millions


Visitor spending in Wisconsin


Lodging and spending on food & beverages

capture over half of all visitor spending.

27%

26%20%

14%

13%


$3.4b of spending on lodging

$12.7b of spending

Total$3.3b of spending on food and beverage

$1.7b of spending on transportation

$1.7b of spending on recreation

Visitor spending in Wisconsin, 2017Dollars, millions and percent of total

$2.5b of spending on retail

Tourism spending reached $12.7

billion in 2017


Spending grew 3.2% in 2017, led by

increases in spending on recreation

activities and eating out.

Visitor spending increased by

3.2% in 2017, supported by

growth in spending on

recreational activities and on

eating out.

Visitor spending at lodging

businesses grew 3.1% to reach

$3.4 billion in 2017.

Food & beverage spending has

increased by $580 million since

2013.

With falling gas prices, local

transportation spending in 2017

remained near 2012 levels.

Visitor spending in WisconsinNominal dollars, millions 2017 2013-2017

2013 2014 2015 2016 2017 Growth CAGR

Lodging $2,794.9 $2,977.8 $3,175.5 $3,336.8 $3,441.3 3.1% 4.2%

Food & beverages $2,728.9 $2,904.6 $3,026.5 $3,172.1 $3,310.1 4.3% 3.9%

Retail $2,272.4 $2,327.9 $2,449.0 $2,508.9 $2,513.9 0.2% 2.0%

Recreation $1,393.5 $1,502.4 $1,566.0 $1,631.4 $1,721.8 5.5% 4.3%

Local Transportation $1,242.7 $1,283.8 $1,270.8 $1,219.5 $1,255.9 3.0% 0.2%

Air Transportation $406.6 $421.5 $431.6 $442.1 $458.2 3.6% 2.4%

Total $10,839.0 $11,417.9 $11,919.4 $12,310.7 $12,701.1 3.2% 3.2%

* Lodging includes 2nd home spending


Tourism spending is changing with

prices


With transportation spending plateauing,

spending increases have come from

lodging, food & beverages, and the

recreational sector.

Recreational spending surpassed

$1.7 billion in 2017, increasing by

$90 million.

Lodging spending, including

spending on 2nd homes, rose to


Spending on food & beverages

increased $140 million in 2017,

and has grown 20% since 2013,

rising to $3.3 billion.

Gasoline prices rose minimally

for much of 2017, keeping the

cost to travel down and

supporting minimal overall

transportation cost increases.

$1.65 $1.71 $1.70 $1.66 $1.71

$1.39 $1.50 $1.57 $1.63 $1.72

$2.27 $2.33 $2.45 $2.51 $2.51

$2.73$2.90 $3.03 $3.17 $3.31

$2.79$2.98

$3.18$3.34

$3.44

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

2013 2014 2015 2016 2017

Lodging

Food andbeverage

Retail

Recreation

Transportation*

Wisconsin visitor spendingBillions of $


* Transportation spending includes local transportation costs and

airport spending in support of visitors in the state

Tourism spending is changing with

prices


Low gasoline prices have

reduced the share of spending on

transportation to 14% of the total,

down from 16% in 2013.

Increases in lodging spending

have raised the share of the

visitor dollar going to lodging

costs by 1.6 percentage points,

reaching nearly 23% in 2017.

Recreational spending has

rebounded in recent years to

reach 14.3%.

15.2% 14.9% 14.3% 13.5% 13.5%

12.9% 13.2% 13.1% 13.3% 13.6%

21.0% 20.4% 20.5% 20.4% 19.8%

25.2% 25.4% 25.4% 25.8% 26.1%

25.8% 26.1% 26.6% 27.1% 27.1%

0%

20%

40%

60%

80%

100%

2013 2014 2015 2016 2017

Lodging

Food and beverage

Retail

Recreation

Transportation*

Wisconsin visitor spendingPercent of total


The share of the visitor dollar going to

transportation is decreasing while the

lodging and food & beverages shares are

increasing.

* Transportation spending includes local transportation costs and

airport spending in support of visitors in the state

Travel sectors


In 2017, visitor spending growth was led by

business visitors, day travelers, and

overseas arrivals.

Business spending rebounded in

2017, increasing by 3.3%.

Lower gas prices in 2017 has

spurred day travel visitation

growth, helping support day

visitor spending growth.

Overseas visitor spending led

growth in 2017.

Visitor spending in WisconsinNominal dollars, billions

Leisure $11.16 Day $4.41 Domestic $12.05

Business $1.54 Overnight $8.30 Overseas $0.61

Canada $0.04

Total $12.70 Total $12.70 Total $12.70

Leisure 3.2% Day 6.5% Domestic 3.1%

Business 3.3% Overnight 1.5% Overseas 6.6%

Canada -16.3%

Total 3.2% Total 3.2% Total 3.2%

Leisure 87.9% Day 34.7% Domestic 94.9%

Business 12.1% Overnight 65.3% Overseas 4.8%

Canada 0.3%


Share

Purpose Stay Market

Growth Rates

Travel sectors


Visitor spending in Wisconsin is led by

domestic, leisure, and overnight sectors.

87.9%

34.7%

94.9%

12.1%

65.3%

4.8%

0.3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Purpose Day / Overnight Market

Wisconsin market breakouts

Business


Leisure

Overnight

Day

International

Domestic

CanadaPercent of total visitor spending

Leisure spending makes up

nearly 88% of all visitor spending

in the state.

Despite being a smaller portion of

overall visitation, overnight visitor

spending is nearly two-thirds of

all visitor spending.

International visitor spending

comprised about 5% of all visitor

spending in Wisconsin in 2017.

Seasonality of lodging

Q2 was again the quarter with the

largest revenue growth, increasing

5.9% to $483 million. Over the past

three years, room revenue has

increased by $100 million in Q2.

Room revenue grew by more than

$50 million over the Q2 and Q3

months, two-thirds of the annual

revenue growth.

Room demand growth was strongest

in Q1, increasing by 2.7%, or 93,000

rooms.

0

100

200

300

400

500

600

700

Q1 Q2 Q3 Q42010 2011 2012 2013 2014 2015 2016 2017

Wisconsin Hotel Room Revenue$ millions

Source: STR

0%

5%

10%

15%

20%

25%

30%

35%

40%

Q1 Q2 Q3 Q4

Revenue

Rooms

Wisconsin Hotel Rooms and RevenueQuarterly Share, 2017

Source: STR

Seasonality of visitor spending

20

The summer season is key, but 2017

growth was in the first half of the year.

$2,542

$3,260

$4,032

$2,868

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Q1 Q2 Q3 Q4

2016

2017

Wisconsin Quarterly Visitor Spending$ Millions


Q1 Q2 Q3 Q4

2013 $2,135.4 $2,765.9 $3,453.7 $2,484.0

2014 $2,279.3 $2,861.6 $3,644.3 $2,632.8

2015 $2,346.8 $3,031.2 $3,823.8 $2,717.6

2016 $2,414.0 $3,139.9 $3,953.8 $2,803.0

2017 $2,541.6 $3,260.3 $4,031.7 $2,867.6

% Chn 5.28% 3.83% 1.97% 2.30%

Visitor Spending by Quarter

Wisconsin

The Economic Impact of Tourism

How tourism generates impact


Tourism spending flows through the

economy and generates economic benefit

through multiple channels.

Our analysis of tourism’s impact on Wisconsin starts with actual

spending by tourists, but also considers the downstream effects of this

injection of spending into the local economy. To determine the total

economic impact of tourism in Wisconsin, we input tourism spending

into a model of the Wisconsin’s economy created in IMPLAN. This

model calculates three distinct types of impact: direct, indirect, and

induced.

How tourism spending flows through the

economy and generates economic benefits

Travelers create direct economic value within a

discreet group of sectors (e.g. recreation,

transportation). This supports a relative proportion of

jobs, wages, taxes, and GDP within each sector.

Each directly affected sector also purchases goods and

services as inputs (e.g. food wholesalers, utilities) into

production. These impacts are called indirect impacts.

Lastly, the induced impact is generated when

employees whose wages are generated either directly

or indirectly by tourism, spend those wages in the local

economy.

The impacts on business sales, jobs, wages, and taxes are calculated

for all three levels of impact.

Tourism’s impact on business sales

(1 of 2)


Visitors spent $12.7 billion in Wisconsin in

2017. This supported a total of $20.6 billion

in business sales when indirect and

induced impacts are considered.

Direct Indirect Induced TotalAgriculture, Fishing, Mining - 35.0 26.0 61.0

Construction and Utilities - 325.1 121.8 446.9

Manufacturing - 513.3 265.3 778.6

Wholesale Trade - 110.4 152.6 263.0

Air Transport 458.2 5.0 7.9 471.1

Other Transport 251.2 167.1 70.0 488.3

Retail Trade 3,010.4 24.9 323.1 3,358.4

Gasoline Stations 816.4 2.1 21.3 839.8

Communications - 240.2 124.9 365.1

Finance, Insurance and Real Estate 880.9 883.9 1,355.1 3,119.9

Business Services 68.9 876.4 285.2 1,230.5

Education and Health Care - 7.1 863.3 870.4

Recreation and Entertainment 1,549.6 77.7 48.6 1,675.9

Lodging 2,748.9 3.2 2.6 2,754.7

Food & Beverage 2,813.5 138.4 265.0 3,217.0

Personal Services 103.3 148.4 215.0 466.6

Government - 128.2 72.0 200.2

TOTAL 12,701.1 3,686.5 4,219.8 20,607.4

Growth Rate 3.2% 4.9% 2.0% 3.2%

Tourism economy generated business sales, millions

Tourism’s impact on business sales

(2 of 2)


While the majority of sales are in industries directly serving visitors, nearly $900 million in business sales is happening in business services and finance, insurance and real estate as a result of selling to tourism businesses.

Retail Trade

Food & Beverage

FIRE*

Lodging

Recreation and Entertainment

Business Services

Education and Health Care

Gasoline Stations

Manufacturing

Other Transport

Air Transport

Personal Services

Construction and Utilities

Communications

Wholesale Trade

Government

Agriculture, Fishing, Mining

$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000

Direct

Indirect

Induced

Tourism economy generated business sales, 2017


Dollars, millions*Finance, insurance and real estate

Tourism’s impact on GDP (Value

Added) (1 of 2)


Travel generated $9.2 billion in state GDP

in 2017. This excludes all import leakages

to arrive at the economic value generated

by travel.

Direct Indirect Induced Total

Agriculture, Fishing, Mining - 11.7 7.8 19.5


Manufacturing - 110.9 42.5 153.3


Air Transport 223.0 2.8 3.1 228.8

Other Transport 127.0 95.9 45.3 268.3

Retail Trade 537.7 38.0 172.7 748.4



Finance, Insurance and Real Estate 303.8 629.2 680.6 1,613.6

Business Services 30.8 566.6 160.7 758.0


Recreation and Entertainment 727.7 47.3 27.8 802.7

Lodging 1,541.9 2.0 1.3 1,545.2

Food & Beverage 1,509.7 44.2 125.1 1,679.0


Government - 69.6 25.4 95.0

TOTAL 5,136.3 2,014.9 2,021.0 9,172.2


Visitor generated value added, millions

Tourism’s impact on GDP (Value

Added) (2 of 2)


The restaurant industry has the largest

economic contribution from traveler

spending, followed closely by finance,

insurance and real estate (FIRE).

Food & Beverage

FIRE*

Lodging

Recreation and…

Business Services

Retail Trade

Education and Health…

Other Transport

Personal Services

Air Transport


Wholesale Trade

Manufacturing

Communications

Government

Gasoline Stations

Agriculture, Fishing,…

$0 $1,000 $2,000

Direct

Indirect

Induced

Visitor generated value added by industry, 2017


Dollars, millions*Finance, Insurance and Real Estate

Tourism’s impact on local

employment (1 of 2)


Tourism supported a total of 195,255 jobs

when indirect and induced impacts are

considered.

Direct Indirect Induced TotalAgriculture, Fishing, Mining - 382 273 655

Construction and Utilities - 1,110 382 1,492

Manufacturing - 1,281 534 1,815

Wholesale Trade - 668 949 1,617

Air Transport 1,880 17 27 1,924

Other Transport 2,368 1,571 663 4,601

Retail Trade 15,983 367 4,389 20,739

Gasoline Stations 1,861 37 334 2,232

Communications - 958 417 1,375

Finance, Insurance and Real Estate 3,523 4,253 4,182 11,958

Business Services 453 8,362 2,650 11,465

Education and Health Care - 104 7,447 7,551

Recreation and Entertainment 26,318 1,505 974 28,796

Lodging 33,088 43 37 33,169

Food & Beverage 50,854 2,589 4,847 58,289

Personal Services 2,444 1,319 2,574 6,337

Government - 887 351 1,238

TOTAL 138,773 25,452 31,030 195,255

Percent Change 1.2% 0.6% 0.3% 0.9%


Tourism economy generated employment

Tourism’s impact on local

employment (2 of 2)


Food & Beverage

Lodging


Retail Trade

FIRE*

Business Services


Personal Services

Other Transport

Gasoline Stations

Air Transport

Manufacturing

Wholesale Trade


Communications

Government


0 10,000 20,000 30,000 40,000 50,000 60,000

Direct

Indirect

Induced

Tourism economy generated employment, 2017


Jobs*Finance, insurance and real estate

Tourism’s impact on local income

(1 of 2)


Tourism generated nearly $3 billion in direct

income and $5.4 billion when indirect and

induced impacts are added.

Direct Indirect Induced TotalAgriculture, Fishing, Mining - 8.2 6.9 15.1


Manufacturing - 78.9 33.1 111.9


Air Transport 86.6 0.8 1.2 88.7

Other Transport 115.8 75.4 30.4 221.6

Retail Trade 360.6 12.0 129.9 502.5



Finance, Insurance and Real Estate 70.2 153.1 157.3 380.6

Business Services 24.2 441.0 138.6 603.8


Recreation and Entertainment 452.2 28.6 16.4 497.1

Lodging 775.5 0.8 0.7 777.0

Food & Beverage 918.1 45.2 95.6 1,058.9


Government - 71.0 25.6 96.6

TOTAL 2,940.7 1,185.8 1,284.2 5,410.8

Percent Change 3.3% 2.0% 1.5% 2.6%


Tourism economy generated income, millions

Tourism’s impact on local income

(2 of 2)


Food & Beverage

Lodging

Business Services

Retail Trade



FIRE*

Personal Services

Other Transport


Wholesale Trade

Manufacturing

Government

Air Transport

Communications

Gasoline Stations


$0 $200 $400 $600 $800 $1,000 $1,200

Direct

Indirect

Induced

Tourism economy generated wages, 2017


Dollars, millions*Finance, insurance and real estate

Tourism’s impact on taxes


Visitor spending, visitor supported jobs, and

business sales generated $2.7 billion in

governmental revenues.

Tax revenue of $2.7 billion was

directly and indirectly generated

by tourism in 2017.

State and local taxes alone tallied


Each household in Wisconsin

would need to be taxed an

additional $660 per year to

replace the traveler taxes

received by state and local

governments.

Tax Type 2013 2014 2015 2016 2017

Federal Taxes Subtotal 1,011.0 1,052.3 1,102.6 1,146.4 1,191.9

Corporate 95.6 100.8 105.3 109.0 112.8

Indirect Business 122.4 129.1 134.8 139.5 144.4

Personal Income 230.7 239.2 250.9 261.2 271.9

Social Security 562.3 583.1 611.6 636.7 662.8

State and Local Taxes Subtotal 1,356.3 1,412.2 1,469.5 1,503.8 1,536.8

Corporate 132.2 139.4 145.6 150.7 155.9

Personal Income 110.6 114.7 120.3 125.2 130.4

Sales 490.4 514.8 539.9 553.1 566.7

Bed 84.6 90.7 97.3 103.0 106.5

Property 408.3 417.5 426.5 428.0 429.5

Excise and Fees 119.9 124.4 128.6 132.0 135.5

State Unemployment 10.4 10.8 11.3 11.8 12.3

TOTAL 2,367.3 2,464.5 2,572.1 2,650.2 2,728.7

Traveler Generated Taxes

(US$ Million)

Tourism tax generation – state &

local government

Of the $1.5 billion collected by state and

local governments from traveler activity,

$848 million (55.2%) accrued to state

government.

Local government revenues from visitor

activity grew to $689 million.

Tax Type 2012 2013 2014 2015 2016 2017

State Tax Subtotal 706.0 731.8 767.0 803.4 823.5 847.6

Corporate 126.6 132.2 139.4 145.6 150.7 155.9

Personal Income 107.2 110.6 114.7 120.3 125.2 130.4

Sales 438.0 453.7 476.2 499.5 511.2 523.8

Lodging 0.0 0.0 0.0 0.0 0.0 0.0

Property 0.0 0.0 0.0 0.0 0.0 0.0

Excise and Fees 24.2 25.0 25.9 26.7 24.6 25.3

State Unemployment 10.1 10.4 10.8 11.3 11.8 12.3

Local Tax Subtotal 606.3 624.5 645.2 666.0 680.2 689.2

Corporate 0.0 0.0 0.0 0.0 0.0 0.0

Personal Income 0.0 0.0 0.0 0.0 0.0 0.0

Sales 35.4 36.7 38.5 40.4 41.9 42.9

Lodging 80.9 84.6 90.7 97.3 103.0 106.5

Property 397.8 408.3 417.5 426.5 428.0 429.5

Excise and Fees 92.2 95.0 98.5 101.8 107.4 110.2

State Unemployment 0.0 0.0 0.0 0.0 0.0 0.0

(US$ Million)

Traveler Generated Taxes - State and Local

Government Revenues

About Tourism Economics


Tourism Economics is an Oxford Economics company with a singular

objective: combine an understanding of tourism dynamics with

rigorous economics in order to answer the most important questions

facing destinations, developers, and strategic planners. By combining

quantitative methods with industry knowledge, Tourism Economics

designs custom market strategies, destination recovery plans, tourism

forecasting models, tourism policy analysis, and economic impact

studies.

With over four decades of experience of our principal consultants, it is

our passion to work as partners with our clients to achieve a

destination’s full potential.

Oxford Economics is one of the world’s leading providers of economic

analysis, forecasts and consulting advice. Founded in 1981 as a joint

venture with Oxford University’s business college, Oxford Economics

enjoys a reputation for high quality, quantitative analysis and

evidence-based advice. For this, it draws on its own staff of more than

200 professional economists; a dedicated data analysis team; global

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and in the United Nations Project Link. Oxford Economics has offices

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For more information:

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