A discussion of how economic development and tourism are related, areas of conflict and how economic development and tourism practitioners can support each other from my presentation to the Economic Developers Association of Canada.

1. Economic Development
and Tourism
Challenging Perceptions
EDAC 2016 October 23, 2016
Photo: http://blog.vegas.com/wp-content/uploads/2010/10/tacky.jpg http://www.businessnewsdaily.com/

2. Aileen Murray
25+ years helping businesses and communities grow
15 years hands on economic development & tourism
experience
7 years leading Mellor Murray Consulting
2

3. The Challenge
Tourism’s contribution to jobs and
investment is undervalued
 Many tourism claims aren’t
supported by data
EDOs and DMOs fail to collaborate
3

4. Tourism is a Basic Industry
Basic Industry – industries that
produce goods and services sold to
consumers outside the region
Non-basic industry – industries that
produce goods and services consumed
locally
Photo: http://www.sfl2000.com/wp-content/uploads/2011/03/Export-box.jpg
4

5. $90.3
BILLION
Source: TIAC Travel and Tourism Fast Facts, National Travel Indicators, Statistics Canada (2015Q2)
5
Total Tourism Spending in
Canada

6. Tourism Fighting for Attention
6

7. Source: TIAC Travel and Tourism Fast Facts, National Travel Indicators, Statistics Canada (2015Q2)
7
Tourism Employment in Canada
1.7 million jobs 2015
3.5% or 627,000 directly tied to tourism

8. Tourism in Canada
1 in 11 jobs in Canada
8% of Total Employment
8
Source: TIAC Travel and Tourism Fast Facts, National Travel Indicators, Statistics Canada (2015Q2)

9. Jobs in the Tourism Sector
9

10. Tourism Businesses in Canada
Food & Beverage
42%
Accommodation
10%
Transportation
21%
Recreation &
entertainment
23%
Travel services
4%
10
Source: Tourism Industry Association of Canada
192,000 Tourism Businesses (2014)
99.9% of Travel Establishments are SMEs

11. Travel Businesses in Canada
11

12. Destination Promotion: An Engine of Economic Development, Oxford Economics http://www.oxfordeconomics.com/engine
12
Impact of Destination Promotion

13. What’s the ROI?
13

14. Why Measure Economic Impact?
Accountability
Sponsorship
Funding Programs
Government support
Community support
Compare performance
To previous years
To other regions
14
http://www.omnicareersearch.com/

15. The Economic Impact Statement
Tourism brought ______ visitors to the
community.
These tourists generated $_______ in
economic impact, ______ jobs for the
community and added $______ to the local
taxes.
Photo: http://allareoneplus.blogspot.ca/2012/03/quote-58-pride-megaphone.html
15

16. Tourism Economic Impact Model
Sector
Transportation
Entertainment
Recreation
Retail
Food & Beverage
Accommodation
Impact
Direct
Indirect
Induced
Effect
Production
Jobs
Wages
Taxes
Tourist
Spending
16

17. Economic Impact
17
Direct Indirect Induced

18. Direct
impact
• The impact generated in businesses that provide goods
and services directly to travelers
• ie. restaurants and accommodations
Source: www.mtc.gov.on.ca/en/research/treim/treim.shtml

19. Indirect
impact
• The impact resulting from the expansion of demand from
businesses that directly provide goods and services to
travelers to other businesses or sectors
• ie. Food suppliers
Source: www.mtc.gov.on.ca/en/research/treim/treim.shtml

20. Induced
impact
• The impact associated with the re-spending of labour
income and/or profits earned that serve travelers directly
and indirectly
• ie. shelter, food, clothing, recreation
Source: www.mtc.gov.on.ca/en/research/treim/treim.shtml

21. Bad Math
 Little evidence for claims
 Haven’t defined a tourist
 40km for a day visitor
 100km for overnight visitor
 Significant errors in survey methodology
 Sampling bias
 Researcher bias
 Etc.
 Interpreting results
(correlation vs. causation)
 Volume drives economic impact analysis
21

22. Ontario’s Tourism Region
Economic Impact Model (TREIM)
22
• Direct, Indirect &
Induced impacts
• Gross Domestic
Product
• Labour Income
• Employment
• Tax Impacts

23. Survey Resources*
Gated Events Ungated Events
Economic Impact
Estimate
Guidelines: Survey Procedures for
Tourism Economic Impact Assessment
of Gated Events and Festivals
Guidelines: Survey Procedures for
Tourism Economic Impact Assessment
of Ungated or Open Access Events and
Festivals
On-site spending
estimate
Guidelines: Survey Procedures for
Assessment of On-site Spending at
Gated Events and Festivals
Guidelines: Survey Procedures for
Assessment of On-site Spending at
Ungated or Open Access Events and
Festivals
Research Resolutions & Consulting, 2005
Canadian Tourism Commission & 8 other partners
23

24. Tourism Economic Impact Study Components
24
Attendee
Counts
Tallying
Attendees
Attendee
Survey
Analysis
Plan
Rource: Guidelines: Survey Procedures for Tourism Economic Impact assessment of Ungated or Open Access Events and Festivals

25. Average Visitor Spending
Chatham-Kent, ON
$102
per overnight visitor
$ 45
per same day visitor
Source:Ontario Ministry of Tourism, Culture and Sport from Statistics Canada Travel Survey of Residents of Canada and the International Travel
Survey, 10 June 2016
25
Retro Suites, Chatham, ON

26. Average Visitor Spending
Saskatoon, SK
$294
per overnight visitor
$109
per same day visitor
26
http://wpmedia.thestarphoenix.com/2016/04/garth-brooks2.jpeg1

27. Reporting on Results
27
http://wpmedia.thestarphoenix.com/2016/04/garth-brooks2.jpeg1
“A person visiting the city for
the day spends an average of
$109, while a typical overnight
visitor spends $294, and every
dollar spent on entertainment
and the performing arts
generates $1.58 in economic
impact for the city.”
$16 Million

28. Beyond Economic Impact
$$$
 Export $s contributes to the
community’s economy
 Tourism $s drive business
growth in community
Other Benefits
 Independent/
solo-entrepreneurs
 Workforce Development
 Resident Attraction
 Youth Employment
 Cultural Diversity
 Transportation Infrastructure
 Increased resident pride
28

29. Challenges
 Don’t speak the same language:
jobs, investment, taxes
 Tourism benefits not easy to see
 Difficult to gather data
 Fuzzy benefits
 Quality of place
 Lack of collaboration between
ec dev and tourism practitioners
29

30. What can economic developers do?
 Work with tourism stakeholders
 Shared metrics
 Establish measurement tools and
techniques
 Define a tourist
 Provide training on measurement
 Provide tools/ resources to measure
economic activity, economic impact
 Use established tools and multipliers
 Measure volume & marketing efforts
30

31.  Encourage tourism stakeholder
collaboration
 Product development
 Product bundling
 Marketing
 Define tourism events
 Have to advertise to tourists to be
a tourist event
 Align economic development and
tourism messages
 Co-op economic development and
tourism marketing
31
What can economic developers do?

32. • More Tourists
• Higher spend per tourist
• Greater local share
32
Common Goals

33. Higher Spend per Tourist
Greater length of stay
Serve and target high
spending tourists
Tourists need help to spend
money
Increased availability of
goods & services
33
Photo: http://vancouverisland.travel/

34. Greater Local Share
Links between food,
accommodation and retail
businesses
SME support
Entrepreneurship
training
Customer service
Tourism education
34
Photo: http://wpmedia.ottawacitizen.com/

35. Boost Local Inputs in the Supply Chain
Networking: accommodations,
attractions, retailers, restaurants
& producers
Regular communication
Encourage established
businesses to mentor start ups
35
Photo: http://media2.fdncms.com/

36. Why?
Export business
Benefits local service/
commercial businesses
Quality of place
Additional retail, services,
amenities benefit existing
population base
36

37. It’s time to change perceptions
37

38. Thank you
Aileen Murray Ec.D. (F)
Mellor Murray Consulting
mellormurray@gmail.com
www.mellormurray.ca
519-784-7944
mellormurray