Rhode Island news
Tourism adds money, jobs to state’s economy
11:43 AM EST on Wednesday, January 9, 2008
Kenneth J. McGill of Global Insight reports yesterday at the Marriott Hotel in Newport on the state’s tourism industry.
The Providence Journal / Frieda Squires
NEWPORT — Tourist-related spending generated $5.4 billion in economic activity in Rhode Island last year, accounted for 10 percent of state and local tax revenues and supported jobs for one in 10 Rhode Islanders, according to a study released yesterday by market researcher Global Insight.
Members of the state’s tourism industry gathered yesterday in a hotel to hear the results of a study intended as a benchmark for the way the industry measures its economic impact on the state. The study was financed by the Rhode Island Tourism Division and six regional tourism districts in the state.
“We want to look at tourism as an industry the same way we would look at pharmaceuticals,” Kenneth J. McGill, a Global Insight director, told an audience of about 100 people.
Visitors who come to Rhode Island from farther than 50 miles away and who stay overnight, as well as day-trippers, create an “iceberg” effect as they spend money that “cascades” beyond hotels, restaurants and tourist spots, McGill said. For example, $12 million of the money spent on legal services in the state last year was attributable to tourists.
Hotels and restaurants also spend money on other professional services and supplies that can be tied to the number of visitors they serve, he said.
“You can see how tourism goes out and touches the many industries” in the state, McGill said.
Global Insight employed “tourism satellite accounting,” a calculation method adopted by the United Nations as a way to measure the diffuse effects of spending by travelers in a particular locale. Among other areas using the measurement method are Alaska, North Carolina, North Dakota and New Jersey, as well as the countries of Dubai and Israel.
The studies are typically limited to spending tied to people who travel more than 50 miles to a business or tourist destination.
Nearly 8 million visitors who fit that definition came to Rhode Island state last year, Global Insight found.
The state, however, also benefits from people who travel to its beaches, restaurants and slot parlors from within 50 miles, Global Insight found.
Quantifying the economic effect of those latter travelers can be “dicey,” McGill noted.
Still, such travelers spent about $100 each last year when they moved about Rhode Island. By contrast, people who traveled greater distances spent more — more than $400 on average last year.
Rhode Island agencies and businesses do a good job of hanging on to the spending that people generate by traveling, keeping 61 cents of every $1. The remainder “leaks” away to vendors that supply businesses here or that help travelers get to and from the state, such as a travel agent who books flights for someone vacationing in Newport, the study found.
All that spending generates jobs, nearly 59,000 when visitors from within 50 miles are taken into account, Global Insight determined.
The jobs total is down slightly from previous years, McGill said, and may be sliced again as businesses curtail travel spending further this year amid a waffling national economy.
Business travel to Rhode Island fell 6 percent last year from 2005. “Businesses are struggling with travel inflation,” McGill said. “This is a trend that is not unique to Rhode Island.”
The state would do well to promote visits by international leisure travelers who are more willing than Americans to travel great distances and happy to take advantage of the weak dollar, he said.
“If this year is any indication, international travel is a wonderful thing,” McGill said. “If you were thinking about going out and attracting international visitors, now is the time to do it.”
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