Tourism-related spending in Rhode Island increased to $5.38 billion in 2006, a 0.8-percent jump from the previous fiscal year, according to preliminary results released by a research firm.
The R.I. Tourism Division and other stakeholders think they now have a better handle on the contribution of that spending to the economy thanks to a new measurement standard unveiled in the preliminary report called Tourism Satellite Accounting (TSA).
In the past they’ve relied heavily on Smith Travel Research, which provided hotel occupancy rates and revenue as a way to measure the impact of tourism on the state’s economy.
But that data doesn’t provide the clearest picture of the impact tourism dollars have, so seven stakeholders decided to split the cost of hiring Waltham, Mass.-based Global Insight to calculate more standard and comprehensive data that could be used to show how important the tourism industry is to Rhode Island, said David DePetrillo, director of tourism for the state.
“We’ve had a very difficult time articulating that importance,” said Martha Sheridan, president and CEO of the Providence Warwick Convention and Visitors Bureau, which helped pay for the $56,000 study. “We now have established a great benchmark for measuring that.”
Ken McGill, executive managing director of travel and tourism for Global Insights, presented the firm’s preliminary findings in Newport last week. A final report will be released in coming weeks.
The firm used TSA, an international standard ratified by the United Nations and World Trade Organization, for measuring the contribution of tourism to an economy, including visits, spending, economic impact, employment, wages and tax receipts.
It separated findings based on two definitions of a visitor. The standard TSA definition is anyone who travels 50 miles or more to the state or stays overnight, McGill said. But because Rhode Island is a small state that experiences a great deal of spending from day trippers, the firm added a category for those visitors traveling less than the TSA standard.
Findings for both visitor categories combined for fiscal year 2006 included:
· An economic impact of $3.2 billion, or 7.8 percent of Rhode Island’s Gross State Product (GSP).
· Total industry employment equaled 70,079 jobs, or 14.2 percent of employment in the state.
· Total number of visits equaled 17.46 million, a 2.1-percent increase from 2005.
· Wages for the industry totaled $2.04 billion.
· Tourism generated $1.33 billion in total tax revenue in 2006.
· Tourism is the fourth-largest industry in Rhode Island.
The numbers showed a 1.8-percent increase in wages and a 1.5-percent increase in economic impact, or percentage of the state’s GSP.
Total tax revenue declined 0.6 percent from 2005 to 2006, but even with the decline the report concludes that if tourism didn’t exist, each household would pay an additional $1,140 in taxes to maintain current tax receipts.
The report also states Rhode Island retains 61 percent of each tourism dollar spent in the state, which is high compared with other places using the TSA system, McGill said.
Much of the increases in spending and economic impact are a result of increased leisure travel to the state, McGill said. From 2005 to 2006 leisure travel increased 4.2 percent. Business travel, on the other hand, declined by 6 percent.
“This is a trend that is not unique to Rhode Island,” he said.
Other stakeholders who split the study’s cost: Newport County Convention & Visitors Bureau; the Warwick Tourism, Culture and Development Department; the Blackstone Valley Tourism Council; South County Tourism Council; Block Island Tourism Council; and East Bay Tourism Council. ·
