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August 2019
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Tourism up, but can you trust the numbers?




On May 9th, 2017 the Georgia Department of Economic Development announced that Georgia’s tourism industry generated a record-breaking $61.1 billion in business sales in 2016, up 3.5 percent over the previous year and 34 percent higher than its pre-recession level in 2008.

Visitor spending was estimated at $3.2 billion in state and local tax revenues. 

The state department gets its data from the U.S. Travel Association, which they pay to conduct annual Travel Economic Impact studies for Georgia. This study presents estimates of travel and its economic impact on Georgia at the state, region and county levels. 

Pickens County’s data was briefly presented at a government meeting earlier this year. According to the state’s 2015 report, Pickens  saw $29.31 million spent here by travelers in 2015; $4.4 million in travel generated payroll at local businesses and 230 travel-generated jobs; $1.12 million was generated in state tax; and $810,000 in local tax, all because of the travelers in the county.

The same 2015 report showed Fannin County, a  bustling tourist destination, with $39.59 million in expenditures generated locally from travel in 2015; $7.84 million in payroll; 350 jobs; $1.53 million in state tax revenues; and $1.15 million in local sales tax. 

Nearly $30 million in travel expenditures in Pickens County, (not to mention 230 jobs) in one year seemed unlikely. Regardless of the total, it also seemed unlikely Fannin County’s tourism revenue was just 33 percent more than Pickens. In other categories, Pickens and Fannin were also surprisingly close. Anyone who travels to  Blue Ridge on the weekend knows that tourism is a prime driver of their economy, where locally tourism has a modest visible impact. 

The Fannin County Chamber of Commerce President, Jan Hackett, said for them the state’s economic impact information is low, which may help explain why Pickens and Fannin numbers are so close. 

“They don't count cabin rentals and that is the basis of our business,” Hackett said in an email interview.  “In 2016, our visitors spent $34 million on lodging alone.  That's not counting gasoline, groceries, restaurants, shops and entertainment (train, drive-in etc.).” 

Rather than use the state of Georgia figures, Hackett uses a model that Pigeon Forge adopted, which estimates lodging to be about 26 percent of the total amount spent by a visitor. 

“If that is true, then the impact of tourism here was more than $130 million [rather than the $39.59 presented in the Georgia figures],” she said. “Tourism, including second homes and retirement is the primary economic driver for our community. We have more than 4,000 vacation homes here (out of 16,000 total homes).  Of those, more than 1,000 are rentals for weekend getaways and vacations.”

Daniel Teodorescu, Ph.D., Director of Institutional Research & Effectiveness at Reinhardt University who specializes in surveys, was asked by the Progress to look over the report and its methodology. He feels the data, derived from the Travel Economic Impact Model (TEIM) used by the U.S. Travel Association, “does not perform well” at the county level.

“As I understand, the TEIM model was primarily designed for estimating the overall economic impact of tourism at national or state levels,” he said. “It does not perform well in estimating economic impacts at the local level.”

Dr. Teodorescu said the model relies on national travel surveys to estimate trip volume and spending on a state-by-state basis, but the national survey data is not used in calculating impact estimates at the county level due to small sample size.  Instead, estimates of impacts are obtained using allocation formulas to distribute statewide impacts to counties and cities within the state. 

“These local estimates do not account very well for the distinct types of tourism activity or spending patterns in different counties of a state,” he said. “If the allocation formula is based on household income or consumer spending then the proportion that is applied to state tourism expenditures to derive total tourism expenditures for Pickens might be overestimated due to Big Canoe and other gated communities.  Since the methodology is not described in sufficient detail, we just do not know how that allocation is made.”

Dr. Teodorescu also pointed out a footnote in the Travel Economic Impact report that cautions “individual state estimates should not necessarily be viewed as substitutes for major state research projects on the impact of travel and tourism. The U.S. Travel Association cautions the user to compare the methodologies and results, and “draw his/her own conclusions regarding the validity of differing approaches and estimates.”

According to Hackett, the Fannin Chamber president, they have plans to do a “real economic impact study” in their county sometime this year.

Senior Communication Specialist Emily Murray with the Georgia Department of Economic Development said these travel impact reports have been developed for the last several years, and stands behind their value to local communities. When the data is released, Murray said it trickles down through the GDOED’s regional employees to community liaisons, local chambers of commerce, elected officials and community leaders. When it comes out in the counties and press releases are sent out it “gets legs pretty quickly and you begin to see it in news stories,” she said. 

When asked if she feels the reports are widely used and respected by community leaders in the decision-making process she said, “I feel like they definitely do. They look to us to provide this data because it’s expensive and communities can’t afford to buy it themselves. The U.S. Travel Association is the top, the best regarded research firm. The USTA does the study every year and states have to buy the research.”