What's In It For Me?

The advancement of passenger rail travel in the early 1850s ushered in the true beginnings of what is recognized as modern “tourism”. Then with automobiles, in the 1920s, and air travel starting in the 1930's, tourism continued to advance exponentially. Today, worldwide tourism is a $200 billion per year industry! When standard economic multipliers are applied, this number is much higher.

In the United States, the average tourist spends roughly $88 per person, per day during a trip that includes an over night stay. This figure includes every man woman and child and includes every purchase made while traveling.

Increasing tourist expenditures will create an increased number of sales transactions in a given community. Not just the direct spending by the tourists, but the re-spending of those same funds too. Clearly, certain businesses will initially receiving the bulk of the tourist dollar. Hotels, motels, restaurants, retail stores, tourist attractions, gasoline stations and transportation companies are among the businesses where the tourist actually hands the money to the business operator. These transactions introduce “new money” into the community. Then, the money starts circulating and will end up getting spent three more times before it leaves the community.

Every time a customer pays for a meal at a restaurant, the restaurateur divides up the money. Part of it pays for goods needed to make more meals, part of it pays for rent, part of it pays for basic services such as electricity, phone, garbage, sewer and water, part of it pays for professional services such as accountants and insurance, and part of it helps pay the wages for his employees, who turn around and pay for gasoline, rent and groceries. The gas station owner collects money from the restaurant employees and pays wages to his own employees. This goes on and on until the money pays for out-of-town goods or services and leaves the community. It is a very healthy cycle.

The more often the dollar “changes hands” without leaving the community, the more economically beneficial it is to the community. Thus, the more goods and services provided for the traveler, the greater the economic benefit for the community. So, the longer the traveler stays in a community, the greater the impact.

Each round of new expenditure brings resources into use, creating new services and employment.

In addition to the regular sales tax that is generated from tourist spending, local, state and federal government will also benefit from use taxes, gas taxes, tobacco, liquor, and entertainment taxes. As a consumer, the tourist helps pay real estate, business, and income taxes since these are paid by the businesses from the customer-generated revenues.