A new economic impact report released by Lt. Gov. Sue Ellspermann and the Indiana Office of Tourism Development (IOTD) documents the significant role of tourism to the Indiana economy.
The report shows travel, tourism and hospitality is the sixth largest industry in the state (excluding government), is directly responsible for nearly 140,000 jobs and contributes $10 billion in revenue to Indiana businesses. The statewide study, the first of its kind in nearly eight years, will serve as a benchmark to measure the development of the industry in the years ahead.
“This economic impact study confirms the fact that the travel, tourism and hospitality industry is a crucial segment of the Indiana economy,” Ellspermann said. “My office is committed to promoting Indiana tourism and providing support to our partners in the industry.”
The study was commissioned by IOTD and conducted by Rockport Analytics, an independent market research and consulting company that specializes in economic impact and feasibility studies for the travel, tourism and hospitality industry. The head of the research team is Ken McGill, managing director and chief economist at Rockport Analytics.
In 2012 the travel, tourism and hospitality industry contributed approximately 1.5 percent of total Indiana gross domestic product (GDP), 4.8 percent of total jobs and 6.3 percent of state & local tax receipts. Super Bowl XLVI was a seminal event for Indiana and is responsible for roughly half of the industry’s 5.2 percent growth in 2012.
Key data points from the economic impact study include:
- Total Indiana tourism spending in 2012 of $10.1 billion (without Super Bowl XLVI, 2012 tourism spending reached $9.7 billion).
- In 2012 visitor spending translating to over $7.7 billion in Indiana GDP.
- Direct employment within the Indiana travel, tourism and hospitality industry eclipsing 139,900, making it the sixth-largest industry in the state (excluding government).
- Indiana tourism generating over $2.1 billion in tax receipts.
- $959 million in federal, $748 million in state, and $423 million in local revenues.
- Indiana visitors contributing $561 million or 8.5 percent of sales tax receipts.
- Tourism paying direct wages of over $3 billion to full and part-time industry employees.
- Indiana being a low-tax destination for visitors with a total tax rate for Indiana tourism of 21 percent versus a national tourism average of 30 percent.
- Indiana retaining approximately 76 percent of each dollar spent by visitors.
“This report illustrates the economic benefit Indiana derives from tourism and is the first such report in some time,” said Mark Newman, IOTD’s executive director. “It serves as a necessary benchmark to begin measuring the growth or decline of tourism as an economic driver for the state on a more regular basis.”
The study used data on Indiana visitor spending derived from multiple sources including Longwoods International, Reach Market Planning and U.S. Office of Travel & Tourism Industries. It was then reconciled with Bureau of Labor Statistics reported employment data, Indiana Department of Revenue reported tax receipts and secondary sources such as Smith Travel Research.
Tourism is defined as an overnight stay or a trip greater than 50 miles each way that is not part of an individual’s normal routine.
“Our research shows Indiana earns a significant positive return from a minimal investment in the tourism industry. The data demonstrates that Indiana has the potential to develop even greater economic development returns through a robust tourism economy,” said McGill.
In addition to the statewide study, Indiana’s counties had the opportunity to invest in a research cooperative that provided them a county-specific report to document the impact of tourism at the local level. The project received unprecedented support from the industry as 40 counties participated in this cooperative opportunity offered by IOTD. The methodology employed by this study is in accordance with industry best practices and, for the first time, aligns economic impact data at the state and local level with rigorous methodological standards that are recognized as the highest in the industry.
The attached infographic offers context for some key data points in the economic report. Indiana Office of Tourism Development Executive Director Mark Newman is available for media interviews and to provide a more in-depth discussion on this economic impact study.
