Economic Impact of Tourism in Kansas, 2017 September 2018

1) Key findings

Key facts about Kansas’s tourism sector Growth continues in 2017 as economic conditions support higher trip spend on travel to Kansas Key facts about Kansas’s tourism sector 35.5 million travelers visited Kansas in 2017 Visitor spending rose 1.5% in 2017 to $6.8 billion Tourism spending supports 5.0% of all jobs in Kansas Tourism in Kansas generated $617 million in state and local taxes in 2017 Key indicators in Kansas 2017 Dollar figures in millions   Tourism spending $6,788 Total business sales $10,965 Employment sustained by tourism 96,037 Income sustained by tourism $3,121 Taxes sustained by tourism $1,061 Federal $444 State $283 Local $334 Source: Tourism Economics | Tourism Economics

One out of every 20 workers in Kansas is supported by tourism $545 in tax revenue per household in Kansas was supported by tourism in 2017 One out of every 20 workers in Kansas is supported by tourism | Tourism Economics

2) Visitation and Spending

Trends in Kansas tourism Overnight visitation growth supports… 1 Kansas saw 35.5 million visitors in 2017 as overnight visitation grew. …visitor spending increases in 2017 2 2017 marks the eighth straight year of visitor spending growth with spending increasing 1.5%. Continued increases of visitor spending over time add up 3 Having grown for eight straight years, visitor spending is now 44% higher than levels seen in 2009 – growth of more than $2 billion. | Tourism Economics

2017 Trends 35.5 million visitors traveled to Kansas in 2017, spending $6.8 billion in the state. The steady climb of visitor spending continued in 2017 as higher per-trip spending supported more spending in a very low inflationary period. Visitor spending has increased by more than $2 billion since 2009 – from $4.7 billion in 2009 to $6.8 billion in 2017. This is an increase of 44%. | Tourism Economics

Visitation 35.5 million travelers visited Kansas in 2017. Overnight visitation continued to grow while day visits had a slight decline. | Tourism Economics

Visitor spending With minimal price inflation, spending gains were driven by increases in spending per trip. | Tourism Economics

Visitor spending in Kansas Visitors to Kansas spent $6.8 billion in 2017 with 72% spent on non-transportation activities. A quarter of the visitor dollar is spent on restaurants and grocery stores. | Tourism Economics

Tourism spending reached $6.8 billion in 2017 Spending grew 1.5% in 2017, led by increases in spending on recreational activities and dining out. Spending on recreational activities and food & beverages increased by 4.2% and 3.2%, respectively. Both supported overall spending growth of 1.5%. Visitor spending at lodging businesses grew 1.0% to reach $1.1 billion in 2017. Food & beverage spending has increased by nearly $250 million since 2013. Visitor spending has increased by more than $750 million since 2013. | Tourism Economics

Tourism spending by sector With transportation spending plateauing, spending increases in 2017 came from food & beverages, and the recreational sector. Recreational spending neared $1.1 billion in 2017, increasing by $37 million. Lodging spending, including spending on 2nd homes, rose to $1.1 billion in 2017. Visitor spending on food & beverages has risen to $1.7 billion in 2017. | Tourism Economics

Tourism spending shares by sector The share of the visitor dollar going to transportation is decreasing while the recreation and food & beverages shares are increasing. The decline in gasoline prices in 2015 and 2016 has reduced the share of spending on transportation to its current 28.3% of the visitor dollar, down from more than 29% in 2014. Increases in lodging spending have raised the share of the visitor dollar going to lodging costs by 0.4 percentage points since 2013, registering 16.2% in 2017. Recreational spending has rebounded in recent years to reach 16%. | Tourism Economics

Travel sectors Overnight visitation and overnight visitor spending supported overall tourism growth in Kansas. Overnight visitors grew by 200,000 million to reach 14.4 million in 2017. Gas prices increased, especially in the latter part of 2017, affecting day travel. Spending per traveler increased to $191, $3 more than in 2016. | Tourism Economics

Travel sectors Visitor spending in Kansas is led by domestic, leisure, and overnight sectors. Leisure spending growth is supporting overall state growth. With the growth in overnight visitation, spending by overnight visitors led overall state visitor spending expansion. Domestic visitor spending reached $6.6 billion in 2017, growing 1.5% and encompassing 98% of all visitor spending in Kansas. | Tourism Economics

Travel sectors Visitor spending in Kansas is led by domestic, leisure, and overnight sectors. Leisure spending makes up 63% of all visitor spending in the state. Despite being a smaller portion of overall visitation, overnight visitor spending is more than three-quarters of all visitor spending. International visitor spending comprises about 2.3% of all visitor spending in Kansas in 2017. | Tourism Economics

3) Tourism Economy

Construction in support of tourism $587 million was spent on construction costs in support of the tourism industry in Kansas. Capital expenditures in support of tourism remained around the post-recession high set in 2016. As Kansas businesses continue to value capital spending, it will in turn support the continued expansion of the visitor economy, supporting future visitor spending growth. $250 million of new construction in support of tourism occurred in Kansas in 2017, only slightly down from the levels set by the strong growth seen in 2016 | Tourism Economics

Visitor economy in Kansas Visitor economy spending in Kansas reached $7.5 billion in 2017, dominated by domestic visitor spending. | Tourism Economics

Tourism economy sales The Tourism Satellite Account looks at a broader range of tourism-related expenditures, tallying $7.5 billion. Non-visitor private consumption expenditures (PCE) represent tourism consumer durables such as an RV, boat, or furniture for a vacation home. Government support for tourism includes the budgets for destination marketing and other budget items in broad support of tourism. Capital investment (CAPEX) includes construction of hotels and attractions, as well as tourism equipment and infrastructure. | Tourism Economics

4) The Economic Impact of Tourism – Direct Tourism Industry

How tourism generates impact Tourism spending flows through the economy and generates economic benefit through multiple channels. Our analysis of tourism’s impact on Kansas starts with actual spending by tourists, but also considers the downstream effects of this injection of spending into the local economy. To determine the total economic impact of tourism in Kansas, we input tourism spending into a model of the Kansas’s economy created in IMPLAN. This model calculates three distinct types of impact: direct, indirect, and induced. How tourism spending flows through the economy and generates economic benefits Travelers create direct economic value within a discreet group of sectors (e.g. recreation, transportation). This supports a relative proportion of jobs, wages, taxes, and GDP within each sector. Each directly affected sector also purchases goods and services as inputs (e.g. food wholesalers, utilities) into production. These impacts are called indirect impacts. Lastly, the induced impact is generated when employees whose wages are generated either directly or indirectly by tourism, spend those wages in the local economy. The impacts on business sales, jobs, wages, and taxes are calculated for all three levels of impact. | Tourism Economics

Tourism impact summary - GDP The tourism industry directly generated $2.9 billion of Kansas GDP in 2017. The tourism economy, including direct, indirect, and induced impacts of all tourism sales, generated GDP of $5.2 billion. This is 3.3% of the state economy. | Tourism Economics

Tourism impact summary - jobs Tourism spending directly supported 64,701 jobs in Kansas in 2017. The tourism economy, including direct, indirect, and induced impacts, supported 96,037 jobs. This is 5.0% of all jobs in the state. | Tourism Economics

Tourism industry impacts Visitor spending in Kansas supported 64,701 jobs and $2.9 billion in state GDP in 2017. Tourism GDP is the value added of those sectors directly interacting with visitors. The narrow definition of the tourism industry counts only tourism consumption, which excludes capital investment and general government support of tourism. This definition is consistent with economic accounts. On this basis, tourism industry GDP was $2.9 billion in 2017, accounting for 1.9% of total Kansas GDP. | Tourism Economics

Tourism employment intensity Tourism employment is a significant part of several industries – 98% of lodging, 35% of recreation, and nearly 23% of food & beverages employment is supported by tourism spending. | Tourism Economics

Tourism employment growth With spending growth concentrated in key tourism sectors, tourism businesses hired 1,000 more employees in 2017. | Tourism Economics

The tourism sector is a major contributor to Kansas’s economy Tourism is the 9th largest employer in Kansas. | Tourism Economics

5) The Economic Impact of Tourism – Total Tourism Economy

Tourism’s impact on business sales (1 of 2) Visitors and tourism businesses spent $7.5 billion in Kansas in 2017. This supported a total of $11.0 billion in business sales when indirect and induced impacts are considered. | Tourism Economics

Tourism’s impact on business sales (2 of 2) While the majority of sales are in industries directly serving visitors, nearly $500 million in Business Services industry sales is happening as a result of selling to tourism businesses. | Tourism Economics

Tourism’s impact on GDP (Value Added) (1 of 2) Travel generated $5.2 billion in state GDP in 2017, or 3.3% of the Kansas economy. This excludes all import leakages to arrive at the economic value generated by travel. | Tourism Economics

Tourism’s impact on GDP (Value Added) (2 of 2) The restaurant industry has the second largest economic contribution from traveler spending, surpassed only by finance, insurance, and real estate (FIRE). | Tourism Economics

Tourism’s impact on local employment (1 of 2) Tourism supported a total of 96,037 jobs when indirect and induced impacts are considered. | Tourism Economics

Tourism’s impact on local employment (2 of 2) Most of the job impacts are the direct result of visitor spending, compared to other impact results. | Tourism Economics

Tourism’s impact on local income (1 of 2) Tourism generated nearly $2.0 billion in direct income and $3.1 billion when indirect and induced impacts are considered. | Tourism Economics

Tourism’s impact on local income (2 of 2) | Tourism Economics

Tourism’s impact on taxes Visitor spending, visitor supported jobs, and business sales generated $1.1 billion in governmental revenues. Taxes of nearly $1.1 billion were directly and indirectly generated by tourism in 2017. State and local taxes alone tallied $616 million in 2017. Each household in Kansas would need to be taxed an additional $545 per year to replace the traveler taxes received by state and local governments. | Tourism Economics

6) Economic Impact in Context

Tourism Supported Sales Figures in context Stacking 6.8 billion $1 bills would reach over 460 miles high – longer than the distance of I-70 in Kansas (424 miles). Tourism Spending The $11.0 billion in total impact in 2017 is equal in size to the entire U.S. domestic box office ($11 billion). Tourism Supported Sales | Tourism Economics

Employment Visitation Figures in context The 64,700 jobs directly supported by visitor spending would be nearly enough for every resident of the City of Shawnee (population 65,800). Employment Kansas saw nearly 35 million person-trips in 2017 which is nearly 2X more than the attendance at ALL NFL games for the 2017 season. Visitation | Tourism Economics

Figures in context Sales tax revenue collected from tourism activity reached $1.1 billion in 2017 – enough to cover the entire capital budget of the state ($1.1 billion). Taxes To make up for the $616 million in state and local taxes generated by visitor activity, each household in the state would need to contribute $545 to maintain the current level of government. The average American family of four spent $550 on back to school shopping. Thankfully, Kansas residents have their tourism tax revenue to fall back on. . Taxes | Tourism Economics

About Tourism Economics Tourism Economics is an Oxford Economics company with a singular objective: combine an understanding of tourism dynamics with rigorous economics in order to answer the most important questions facing destinations, developers, and strategic planners. By combining quantitative methods with industry knowledge, Tourism Economics designs custom market strategies, destination recovery plans, tourism forecasting models, tourism policy analysis, and economic impact studies. With over four decades of experience of our principal consultants, it is our passion to work as partners with our clients to achieve a destination’s full potential. Oxford Economics is one of the world’s leading providers of economic analysis, forecasts and consulting advice. Founded in 1981 as a joint venture with Oxford University’s business college, Oxford Economics enjoys a reputation for high quality, quantitative analysis and evidence-based advice. For this, it draws on its own staff of more than 120 professional economists; a dedicated data analysis team; global modeling tools, and a range of partner institutions in Europe, the US and in the United Nations Project Link. Oxford Economics has offices in London, Oxford, Dubai, Philadelphia, and Belfast. For more information: info@tourismeconomics.com | Tourism Economics