April 2012

The Economic Impact of Tourism in Wisconsin

State Overview

3

Key themes for 2011

The Wisconsin tourism recovery accelerated in 2011 with a

7.6% rise in visitor spending after a 7.9% increase in 2010.

■ Visitor volumes rose for a second straight year, 95.4 million

people visited Wisconsin in 2011.

■ Growth in overnight visitation remains strong. Domestic overnight

visitation grew 3.7% buoyed by strong room demand growth of

3.6% in 2011.

■ Per trip spending rose as gas prices rose and other tourism

providers start to recoup recessionary price cuts.

Visitor spending of $10 billion generated $16 billion in total

business sales in 2011 as tourism dollars flowed through the

Wisconsin economy.

4

Key results

The visitor economy represents a significant source of

business sales, employment, and taxes in Wisconsin.

Total tourism business sales of $16.0 billion in 2011

sustained 181,000 jobs, both directly and indirectly.

These jobs represent 7.8% of total employment in Wisconsin;

1 in every 13 jobs in the state is sustained by tourism activity.

Including indirect and induced impacts, tourism in Wisconsin

generated $1.3 billion in state and local taxes and $950

million in Federal taxes last year.

In the absence of the state and local taxes generated by

tourism, each Wisconsin household would need to pay $565

to maintain the current level of government services.

Visitor Spending

6

A recovery in visitor spending

Wisconsin visitor

spending reached

$10 billion in 2011,

posting 7.6%

growth after a 7.9%

increase in 2010.

More overnight

stays along with

higher prices

pushed

accommodations

spending up 7.8%

in 2011.

Sector 2009 2010 2011 % Change

Lodging $2,147 $2,380 $2,564 7.8%

Other Transport $834 $957 $1,057 10.4%

Air $384 $388 $405 4.3%

Food & bev. $2,146 $2,252 $2,447 8.7%

Retail $1,850 $2,065 $2,200 6.5%

Recreation $1,162 $1,155 $1,225 6.1%

TOTAL $8,522 $9,197 $9,898 7.6%

Visitor Spending (US$ Million)

$8.5

$9.2

$9.9

$7.5

$8.0

$8.5

$9.0

$9.5

$10.0

$10.5

2009 2010 2011

Visitor Spending

US$ Billions

7

Visitor spending by sector

Visitors spent $2.4 billion

on food & beverages and

$1.9 billion in the lodging

sector last year. The retail

sector received $2.2 billion

from visitors.

In 2011, visitor spending

increased 8.7% on food

and beverage, 6.5% on

shopping, and 7.8% on

lodging.

2,447

2,200

1,184

1,461

569

1,995

0

500

1,000

1,500

2,000

2,500

3,000

Lodgin

g

2nd H

om

e

Renta

l

Food &

bev.

Reta

il

Recre

ation

Tra

nsport

ation

2010 2011

$ Million, 2011 values shown

8

Visitor spending by sector

Strong growth in overnight

stays along with increasing

room rates increased the

share of spending on

accommodations to 26%.

Food & beverage spending

ranks second, capturing a

quarter of visitor spending.,

followed by retail at 22%.

Higher gas prices in 2011

increased the transportation

share of tourism spending

up to 11%.

Other

Transport

11%

Air

4%

Retail

22%

Recreation

12%

Food & bev.

25%

Lodging

26%

Visitor Spending by Sector

9

Visitor spending by sector

$2.1 $2.4 $2.6

$0.8$1.0 $1.1$0.4$0.4

$0.4$2.1

$2.3$2.4

$1.8$2.1

$2.2$1.2

$1.2$1.2

$0

$2

$4

$6

$8

$10

$12

2009 2010 2011

Recreation

Retail

Food & bev.

Air

Other Transport

Lodging

Wisconsin's Visitor Spending by Year, Billions of $

Wisconsin’s

robust recovery

continued in 2011

across all tourism

sub-sectors.

Lodging sales

have increased

18% from the low

seen in 2009.

10

Visitor spending by market segment

Leisure tourism represents 88% of visitor spending in Wisconsin.

Overnight visitors spend $6.9 billion in Wisconsin, 70% of the total.

International visitors to Wisconsin spent $0.6 billion in 2011, 6% of all visitor

spending.

Business $1.2 Day $3.0 Domestic $9.3

Leisure $8.7 Overnight $6.9 Overseas $0.5

Canada $0.1

Total $9.9 Total $9.9 Total $9.9

Business 12.1% Day 30.1% Domestic 94.1%

Leisure 87.9% Overnight 69.9% Overseas 5.2%

Canada 0.7%

Stay Market

Share

Purpose Stay Market

Visitor Spending in 2011(US$ Billion)

Purpose

11

Visitor spending by market segment

30.1%

94.1%

87.9%

69.9%

5.2%

12.1%

0.7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Purpose Stay Market

Pe

rce

nta

ge

dis

trib

utio

n

Leisure

Day

Overnight

Overseas

Domestic

Business

Canada

Source : Tourism Economics

State Tourism Impacts

13

How visitor spending generates impact

• Lastly, the induced impact is

generated when employees

whose incomes are generated

either directly or indirectly by

tourism, spend those incomes

in the state economy.

• 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.

14

Tourism sales by industry

Business Day

Direct Indirect Induced Total

Agriculture, Fishing, Mining - 29.6 22.6 52.2

Construction and Utilities - 244.4 91.1 335.5

Manufacturing - 419.2 222.0 641.3

Wholesale Trade - 92.5 139.2 231.6

Air Transport 404.6 3.5 5.7 413.7

Other Transport 367.6 133 54 554.3

Retail Trade 2,200.0 14.0 258.7 2,472.7

Gasoline Stations 689.3 1.2 17.8 708.2

Communications - 227.6 112.1 339.7

Finance, Insurance and Real Estate 569.3 628.3 1,004.3 2,201.8

Business Services 61.3 666.0 208.1 935.3

Education and Health Care - 5.3 643.2 648.5

Recreation and Entertainment 1,004.5 54.8 36.1 1,095.4

Lodging 1,995.0 2.4 2.0 1,999.4

Food & Beverage 2,447.2 112.6 211.0 2,770.8

Personal Services 159.3 106.5 153.3 419.1

Government - 128.4 73.2 201.6

TOTAL 9,897.8 2,869.5 3,253.9 16,021.2

Tourism Sales

(US$ Million)

15

All business

sectors of the

Wisconsin

economy benefit

from tourism

activity directly

and/or indirectly.

Sectors that serve

the tourism

industry, like

business services,

gain as suppliers

to a dynamic

industry.

Tourism sales by industry

0

500

1,000

1,500

2,000

2,500

3,000

F&

B

Reta

il T

rade

FIR

E

Lodgin

g

Recre

ation

Bus. S

erv

ices

Gas

Education

Manu

Oth

er

Tra

nsp

Pers

onal S

erv

.

Air T

ransport

Induced

Indirect

Direct

Tourism Sales by Industry$ million

16

Total tourism employment

The tourism sector directly and indirectly supported 181,374 jobs, or 7.8% of all

employment in Wisconsin last year.

Direct Indirect Induced Total

Agriculture, Fishing, Mining - 283 198 481

Construction and Utilities - 921 311 1,233

Manufacturing - 1,247 522 1,769

Wholesale Trade - 592 892 1,484

Air Transport 1,812 16 26 1,855

Other Transport 2,194 1,485 611 4,290

Retail Trade 15,473 226 4,249 19,947

Gasoline Stations 1,591 20 292 1,903

Communications - 1,013 422 1,435

Finance, Insurance and Real Estate 3,392 4,135 4,008 11,536

Business Services 436 7,758 2,511 10,705

Education and Health Care - 82 6,962 7,044

Recreation and Entertainment 23,532 1,234 881 25,648

Lodging 31,865 43 37 31,945

Food & Beverage 45,946 2,375 4,423 52,743

Personal Services 2,353 1,316 2,397 6,066

Government - 925 366 1,291

TOTAL 128,594 23,672 29,108 181,374

Tourism Employment

17

Total tourism employment

Tourism is an

employment

intensive industry

with particularly

high job creation

in the restaurant,

hotel, and

recreation sectors.

Secondary

benefits are

realized across

the entire

economy through

the supply chain

and incomes as

they are spent.

Day 0

10

20

30

40

50

60

F&

B

Lodgin

g

Recre

ation

Reta

il T

rade

FIR

E

Bus. S

erv

ices

Education

Pers

onal S

erv

.

Oth

er

Tra

nsp

Gas

Air T

ransport

Manu

Th

ou

san

ds

Induced

Indirect

Direct

Tourism Employment by Industry

Significant indirect and induced benefits

18

Tourism employment intensity

Business Day

Tourism is a significant part of several industries – 92% of lodging, 35% of

recreation, and 22% of food & beverage employment is supported by tourism

spending.

22%

10%

35%

15%

4%

92%

0% 20% 40% 60% 80% 100%

Total

Food & bev.

Retail

Recreation

Transportation

Lodging

Tourism Employment Intensity by Industry

19

Tourism personal income

Business Day

Direct Indirect Induced Total

Agriculture, Fishing, Mining - 3.6 3.1 6.7

Construction and Utilities - 66.1 23.7 89.7

Manufacturing - 71.0 30.0 101.0

Wholesale Trade - 39.8 59.9 99.7

Air Transport 91.2 0.8 1.3 93.4

Other Transport 104.8 69.1 27.2 201.1

Retail Trade 322.7 6.2 112.6 441.5

Gasoline Stations 38.9 0.5 7.2 46.6

Communications - 51.1 23.2 74.2

Finance, Insurance and Real Estate 58.2 138.1 137.8 334.1

Business Services 19.4 342.5 110.8 472.8

Education and Health Care - 2.8 349.1 352.0

Recreation and Entertainment 400.1 22.9 14.7 437.7

Lodging 560.8 0.6 0.5 562.0

Food & Beverage 698.0 35.9 75.5 809.4

Personal Services 74.9 55.3 68.7 198.8

Government - 72.0 25.7 97.7

TOTAL 2,369.1 978.4 1,071.1 4,418.5

Tourism Labor Income (Compensation)

(US$ Million)

20

Tourism personal income

The larger

employment

numbers in F&B and

recreations support

significant labor

income in those

industries.

Business services

and the FIRE

(finance, insurance

and real estate)

sectors depend on

tourism activity as

suppliers to tourism

companies and their

employees.

Day 0

100

200

300

400

500

600

700

800

900

F&

B

Lo

dg

ing

Bu

s.

Se

rvic

es

Re

tail

Tra

de

Re

cre

atio

n

Ed

uca

tio

n

FIR

E

Oth

er

Tra

nsp

Pe

rso

na

l S

erv

.

Ma

nu

Wh

ole

sa

le T

r.

Go

v.

Induced

Indirect

Direct

Tourism Labor Income by Industry$ million

Significant indirect and induced benefits

21

Tourism tax generation

Taxes of $2.2 billion were

directly and indirectly

generated by tourism in

2011.

State and local taxes

alone tallied $1.3 billion.

Each household in

Wisconsin would need to

be taxed an additional

$565 per year to replace

the tourism taxes received

by state and local

governments.

Business Day

Tax Type 2010 2011

Federal Taxes Subtotal 917.6 951.7

Corporate 81.9 87.4

Indirect Business 104.8 112.0

Personal Income 212.6 218.9

Social Security 518.2 533.5

State and Local Taxes Subtotal 1,202.1 1,270.9

Corporate 113.2 120.9

Personal Income 101.9 104.9

Sales 425.3 453.1

Bed 72.7 77.3

Property 370.9 391.7

Excise and Fees 108.5 113.1

State Unemployment 9.6 9.9

TOTAL 2,119.6 2,222.6

Traveler Generated Taxes

(US$ Million)

Methodology and Background

23

By monitoring tourism’s economic impact, policy makers

can make informed decisions regarding the funding and

prioritization of tourism development.

It can also carefully monitor its successes and future

needs.

In order to do this, tourism must be measured in the

same categories as other economic sectors – i.e. tax

generation, employment, wages, and gross domestic

product.

Why quantify the tourism economy?

24

Why is this a challenge?

Most economic sectors such as financial services,

insurance, or construction are easily defined within a

country’s national accounts statistics.

Tourism is not so easily measured because it is not a

single industry. It is a demand-side activity which affects

multiple sectors to various degrees.

Tourism spans nearly a dozen sectors including lodging,

recreation, retail, real estate, air passenger transport, food

& beverage, car rental, taxi services, travel agents…

25

• Domestic visitor expenditure estimates are provided by Longwoods International’s

representative survey of US travelers. These are broken out by sectors (lodging,

transport at destination, food & beverage, retail, and recreation), by purpose

(business and leisure), and by length of stay (day and overnight).

• Tourism Economics then adjusts these levels of spending based on a range of

known measures of tourism activity:

• Overseas visitor spending (source: OTTI, TE)

• Canada visitor spending (source: Statistics Canada, TE)

• Bed tax receipts

• Spending on air travel which accrues to all airports and locally-based airlines

• Gasoline purchases by visitors (source: TE calculation)

• Smith Travel Research data on hotel revenues

• Construction Value by McGraw-Hill Construction

• Industry data on employment, wages, GDP, and sales (source: BEA, BLS,

Census)

Methods and data sources

26

• An IMPLAN model was compiled for the State of Wisconsin. This traces

the flow of visitor-related expenditures through the local economy and

their effects on employment, wages, and taxes. IMPLAN also quantifies

the indirect (supplier) and induced (income) impacts of tourism.

• All results are benchmarked and cross-checked and adjusted based on

the following:

• US Bureau of Labor Statistics and Bureau of Economic Analysis

(employment and wages by industry)

• US Census (business sales by industry)

• The source of the employment and wage data is the Regional Economic

Information System (REIS), Bureau of Economic Analysis, U.S.

Department of Commerce. All employment rankings are based on Bureau

of Labor Statistics (ES202/QCEW) data.

Methods and data sources

27

Selected recent economic impact clients

Cities

Baltimore, MD

Columbus, OH

Kansas City, MO

London, United Kingdom

New York City

Omaha, NE

Orlando, FL

Philadelphia, PA

Pittsburgh, PA

Rockford, IL

Countries / Provinces

Bahamas

Bermuda

Cayman Islands

Dubai

Ontario Canada

St. Lucia

United Kingdom

Associations / Companies

Center for Exhibition Industry

Research (Economic Impact

of Visa Restrictions)

DMAI (Event Impact

Calculator for 80 CVBs)

US Travel Association (Impact

of travel promotion)

InterContinental Hotels

States

California

Georgia

Maryland

New York

North Carolina

Ohio

Pennsylvania

Wisconsin

28

About Tourism Economics

Tourism Economics, headquartered in Philadelphia, is an Oxford Economics

company dedicated to providing high value, robust, and relevant analyses of the

tourism sector that reflects the dynamics of local and global economies. By

combining quantitative methods with industry knowledge, Tourism Economics

designs custom market strategies, project feasibility analysis, tourism forecasting

models, tourism policy analysis, and economic impact studies.

Our staff have worked with over 100 destinations to quantify the economic value

of tourism, forecast demand, guide strategy, or evaluate tourism policies.

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 is founded on a reputation for

high quality, quantitative analysis and evidence-based advice. For this, it draws

on its own staff of 40 highly-experienced professional economists; a dedicated

data analysis team; global modeling tools; close links with Oxford University, and

a range of partner institutions in Europe, the US and in the United Nations

Project Link.

For more information: info@tourismeconomics.com.

29

For more information:

Adam Sacks, President

adam@tourismeconomics.com

Christopher Pike, Senior Economist

cpike@tourismeconomics.com