How Important is Tourism in Guam?
The Economic Impact
p
& Tourism
Satellite Account Perspective
Guam Tourism in 2005
Tourism Reporting, the Next Generation
June 2007
June,
What’s at Stake – 5-year plan version
Potential impact
p
of 1% shift in Market Share
Country
Visitors
Average
Spend
Total
Japan
174,036
$666
$115,944,524
Korea
108,000
$396
$42,768,000
Taiwan
,
82,100
$490
$
$40,229,000
$
,
,
Source: Global Insight, Inc.
Copyright © 2007 Global Insight, Inc.
2
Guam Tourism: The Next Generation
Agenda
• Global Insight and Tourism
Satellite Accounting
• Guam Economic Impact
• Guam Core Tourism
• Guam Total Tourism Results
• What Do Visitors Mean to Guam?
Copyright © 2007 Global Insight, Inc.
3
Global Insight
•
Premier country intelligence, economic analysis & forecasting,
and
d consulting
lti
organization
i ti globally
l b ll
•
Most comprehensive coverage of countries, regions, and
industries available from any single source
•
Common analytical framework and a consistent set of
assumptions
•
Broad range of capabilities include:
ƒ Strategic and Tactical Planning Tools ƒ Tourism Economic Impact
ƒ Market Risk Assessment
ƒ Project Feasibilit
Feasibility Studies
St dies
ƒ Tourism Forecasts
ƒ Performance Benchmarking
•
Global Insight consistently has the best track record among
commercial forecasters. See www.globalinsight.com/accolades
Copyright © 2007 Global Insight, Inc.
4
Benefits of a TSA
•
•
•
•
•
Compares government support of the tourism
sector with government revenue generated by
tourism.
Allows policy-makers
policy makers to compare the size
& growth of tourism to other
industrial sectors.
Enables analysts to assess long
long-term
term
health of the tourism sector via
capital investment and
government support.
support
Provides an accepted
international standard for benchmarking.
Quantifies how other industry sectors
benefit from tourism.
Copyright © 2007 Global Insight, Inc.
Copyright 2006 © Global Insight, Inc.
5 5
How Important
p
is Guam Tourism…
Really?
Guam TSA: Definitions
•
•
•
•
•
•
•
•
•
•
Visitor: off-island visitor
Resident Tourism: Only outbound purchases made in advance of a trip
are included.
i l d d N
No resident
id t usage off G
Guam ttourism
i
assets.
t
Jurisdiction: Guam
Tourism Spending:
p
g A TSA concept,
p , includes all spending
p
g by
y all
constituents on travel made in the jurisdiction (Guam)
Visitor Spending: Spending in the jurisdiction by visitors
(accommodations, food & beverage, shopping, transportation,
entertainment, other)
Total Economic Impact: “GDP” definition…spending less value of supply
chain purchases made elsewhere. The amount truly retained in jurisdiction.
Import Leakages: The value of supply chain purchases made outside of
the jurisdiction.
Direct Spending/Jobs/Wages/Taxes: Industries that “touch” the visitor
(e.g. hotels, restaurants, museums,…)
Indirect Spending/Jobs/Wages/Taxes: Industries that supply those that
touch the visitor
Induced Spending/Jobs/Wages/Taxes: Workers of industries that touch
or supply will spend wages locally
Copyright © 2007 Global Insight, Inc.
7
G
Guam
Tourism:
T
i
2005 iin Review
R i
2005 Bottom Line:
Measurement
Guam Visitation
ƒ Total
p
ƒ Japan
Economic Value
ƒ Economic Impact
ƒ Core Tourism
ƒ Total Impact
Wages & Salaries
ƒ Economic Impact
ƒCore Tourism
ƒ Total Impact
Employment
ƒ Economic Impact
ƒ Core Tourism
ƒ Total Impact
Taxes –Total Impact
Copyright © 2007 Global Insight, Inc.
2005
Perspective
1.18 M
955,000
,
• Total visits’ highest since 2000!
• Japan visitors are 80.6% of all visitors to
Guam
$393.9 M
$404.8 M
$429.3 M
• Core Tourism contributes 19.4% to GIP.
• Tourism ranked as the 2nd largest private
industry in the island.
$202.6 M
$202.8 M
$222 4 M
$222.4
10,412
10,419
10 737
10,737
$148.9 M
• Average annual tourism wages are $19,468.
• 1 out of every 4 Guam workers is directly
employed by the tourism sector.
• Ignoring Social Security receipts, if tourism
didn’t exist, each household would pay an
additional $2,710 in taxes to maintain the
current level of tax receipts.
8
Visitors to Guam
In 2005, Japanese visitors grew 5.6% over 2004,
compared with Korean visitation, which grew 21.6%.
1,400
J
Japan
Civilian Air
Vis
sitors (Thous
sands)
1,200
30.6%
5.9%
-0.1%
2005
2006
Air and Sea
-8.8%*
1 000
1,000
-16.7%
800
600
400
200
0
2001
2002
* Year to year change in Civilian Air visitors
Copyright © 2007 Global Insight, Inc.
2003
2004
Source: Guam Visitors Bureau
9
B
Breaking
ki D
Down T
Tourism
i
Expenditures
E
dit
•
Resident & Business On-island – In-island travel
expenditures of Guam residents
•
Government Spending – Guam Tourism Office Budget
Budget,
transportation functions related to tourism, publicly funded
attractions and funding for security in tourism-intensive areas
•
Investment – Construction of hotels, attractions, tourism
infrastructure, operating and transportation equipment
•
Domestic & International Out-of-island
Out of island – Spending
of all visitors to Guam coming from other parts of the world
(Key Category)
Copyright © 2007 Global Insight, Inc.
Copyright 2006 © Global Insight, Inc.
10 10
Breaking Down Tourism Expenditures – 1.2 Billion
Visitors represent the largest portion of tourism expenditures on
Guam Investment in Guam’s tourism base represents just under
Guam.
2% of the total.
$ Millions
Visitor
Spending
$1,149.4
Share
$23.1
1.9%
Government
$13.8
1.2%
Guam travel
Spending on
Guam
$14.0
1.2%
Total *
,
$1,200.3
Government
1 2%
1.2%
95.8%
Investment
* Numbers may differ due to rounding
Guam Personal
and Business
1.2%
Investment
1.9%
Visitors
95.8%
100%
Source: Guam Visitors Bureau, Guam Budget and Global
Insight, Inc.
Copyright © 2007 Global Insight, Inc.
11
Category Distribution of Expenditures
Retail expenditures account for the largest share of tourism expenditure
on Guam.
Guam Combined with accommodation,
accommodation these components represent
over 70% of visitor expenditures.
Travel & Tourism Spending: Guam
2005
$ Milli
Millions
Entertainment
$161.1
A
Accommodation
d ti
$353 7
$353.7
Transportation
Shopping
42.9%
Transportation
0.8%
$27.1
Food
$132.2
Retail
$492.9
Total *
Entertainment
14.0%
$1,167.0
Food & Beverage
11.5%
Lodging
30 8%
30.8%
* Numbers may differ due to rounding
Source: Guam Visitors Bureau and Global Insight, Inc.
Copyright © 2007 Global Insight, Inc.
12
Tourism Impacts & Expenditures
$1,400
Tourism expenditures tallied
$1 2 billion in 2005
$1.2
$1 200
$1,200
$1,200
Millions
$1,000
$800
$664
$715
$676
$600
Economic Impact
Core Impact
p
Total Impact
Tourism Spending
$400
$
$200
$0
2005
Source: Guam Visitors Bureau and Global Insight, Inc.
Copyright © 2007 Global Insight, Inc.
13
Economic Impact
• Answers the question “What
is the impact of visitors on
Guam?”
• This is GVB’s market.
• For every $76,000 in additional
visitor spending,
spending one job on
Guam is created.
• GVB returns $82 in spending
for e
every
er $1 in their b
budget.
dget
• GVB returns $10 in taxes for
every $1 in their budget.
Copyright © 2007 Global Insight, Inc.
Copyright 2006 © Global Insight, Inc.
14 14
Economic Impacts
The impacts of Visitors represent about a third of the private
economy of Guam.
Tourism Share of Economy
40%
30%
Induced
20%
I di
Indirect
t
Direct
10%
0%
GIP
Wages
Employment
Source: Global Insight, Inc.
Copyright © 2007 Global Insight, Inc.
15
Economic Impacts - Taxes
Ignoring Social Security taxes, if tourism did not exist
each of the 38,769
38 769 households on Guam would have to
pay an additional $2,577 in taxes in order to maintain
the current level of tax receipts.
Corporate Income
Personal Income
Social Security & Other Taxes
Hotel Tax
Gross Receipts Tax
Excise & Fees
Sales Taxes
Guam Total
14,440,530
26,439,541
40,559,615
18,946,882
36,325,549
3,770,886
0
140,483,002
Source: Global Insight, Inc.
Copyright © 2007 Global Insight, Inc.
16
Industry Structure:
S
Definitions
f
Core Tourism
Expenditures
$1.17 billion
All visitor-related spending
Core Spending
Impact
$539 5 million
$539.5
Import Leakage
$609.9 million
Economic Value to
Guam
Industries directly
providing goods &
services to the
visitor.
Core Tourism
(Direct)
Non-Core Tourism
(Indirect)
$404.8 million
$134.6 million
e.g.: Restaurants.
Tourism goods &
services from
outside the
island.
e.g.: Imported
Retail goods to
Guam
Industries directly providing
goods & services to core
tourism providers.
e.g.: Food Distribution
Copyright © 2007 Global Insight, Inc.
17
Core Tourism
•
•
•
•
Copyright © 2007 Global Insight, Inc.
Answers the question “How does
tourism compare with other industries?”
Core Tourism measures the size of the
industry
y directly
yp
providing
g goods
g
&
services to the visitor.
Therefore, all indirect effects are
excluded – these are part of other
supplier industries such as wholesalers.
wholesalers
The impact of capital investment is also
excluded.
Core Tourism generated $404.8 million
in economic value
al e in 2005.
2005 This ranks
core tourism as the 2nd largest private
industry on Guam in terms of gross
island product.
Copyright 2006 © Global Insight, Inc.
18 18
Core Tourism – Gross Island Product
Core Tourism contributed $404.8 million in economic value in 2005.
As an industry,
industry Tourism would rank as the 2th largest private industry on
Guam
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
Industry
FIRE
Accomodations & Food Services
Professional, Business Services
Retail
Trans.
a s And
d Sto
Storage
age Se
Services
ces
Rental, Leasing and Other
Health Care and Social Assist.
Wholesale
Manufacturing
Construction
Information
Other Services
Agriculture
Private Total
Tourism
Thousand $
% of Guam
446,262
446
262
343,614
235,514
232,222
149,585
9,585
116,125
106,617
87,935
84,374
77,575
57,045
46,809
3,414
21.4%
21
4%
16.5%
11.3%
11.1%
7.2%
%
5.6%
5.1%
4.2%
4.0%
3.7%
2.7%
2.2%
0.2%
2,084,669
2
084 669
404,825
100.0%
100
0%
19.4%
Core Travel &
Tourism is
19.4% of
Guam’s GIP
Source: Census Bureau and Global Insight, Inc.
Copyright © 2007 Global Insight, Inc.
19
Core Tourism Impact – Composition
The TSA model measures how spending of visitors touches
diverse sectors to create the aggregate Core Tourism
Tourism.
Industry (NAICS)
Lodging
Direct
% of Total
190.6
47.1%
Retail Trade
79.5
19.6%
Air Transportation
68.1
16.8%
Food & Beverage
52.0
12.9%
Entertainment
0.5
0.1%
Non-Air Transportation
7.3
1.8%
Finance, Insurance & Real Estate (FIRE)
6.5
1.6%
Public Administration
0.2
0.1%
404.8
100.0%
Total
S
Source:
Global
Gl b l Insight,
I i ht IInc.
* Numbers may differ due to rounding
Copyright © 2007 Global Insight, Inc.
20
Core Tourism - Employment
• Core Tourism is the 3rd largest private sector
employer on island with 10,419 direct fulltime equivalent jobs in 2005.
2005
• Core Tourism g
generated 24.3% of nongovernment island employment in 2005.
• Core Tourism jobs provided $202.8 million in
g & salaries in 2005.
wages
Copyright © 2007 Global Insight, Inc.
21
Core Tourism Impact – Employment
Travel & tourism is Guam’s third largest private-sector employer
with 26.6% of total private employment. Tourism rivals the total
employment by the Government of Guam!!
Rank
1
2
3
4
5
6
7
8
Industry
Services
Retail Trade
Trans. & Public Utilities
Construction
FIRE
Wholesale Trade
Manufacturing
Agriculture
Total Private
Tourism
Federal Government
Guam Government
Total Public
Total Guam
Jobs
% of Guam
15,100
12,050
4,810
4,570
2 460
2,460
1,870
1,690
240
35.3%
28.2%
11.2%
10.7%
5 7%
5.7%
4.4%
3.9%
0.6%
42,790
10,419
100.0%
24.3%
C
Core
T
Tourism
i
represented
10,419 jobs in
2005.
3,300
11,650
14,950
57,740
Source: Department of Labor, Guam and Global Insight, Inc.
Copyright © 2007 Global Insight, Inc.
22
Total Impact of Tourism
• In 2005, the total impact of travel & tourism (direct
and
d indirect)
i di
t) was $539.5
$539 5 million.
illi
ƒ 25.9% of Gross Island Product
• The ratio of the total impact to total expenditures
reveals that 47% of each tourism dollar spent in
Guam is retained on Guam. The remainder represents
import leakages.
• 15,198 jobs – direct, indirect and induced – were
created by travel & tourism economic activity.
ƒ 35.5%
35 5% of total private employment on Guam
• Approximately $380 million in wages & salaries
was generated by travel & tourism in 2005.
Copyright © 2007 Global Insight, Inc.
Copyright 2006 © Global Insight, Inc.
2323
23
Non-Core Tourism – Indirect Benefits
Many industries not thought of as “tourism” but that supply
goods and services to the tourism industry are beneficiaries of tourism.
Rank
Industry (NAICS)
$ Value
% of Total
(Millions)
1
2
3
4
5
6
7
8
9
10
11
12
14
13
15
Prof. & Business Services
Finance, Insurance & Real Estate (FIRE)
Wholesale Trade & Utilities
Other Services
Public Administration
Information
Retail Trade
Construction
Manufacturing
Food & Beverage
Entertainment
Agriculture, Forestry & Fishing
Lodging
Non-Air Transportation
Education & Health Services
Total
42.7
30.5
15.2
10.6
10.5
84
8.4
6.2
4.3
3.6
2.5
1.3
1.1
0.9
0.9
04
0.4
139.0
30.7%
21.9%
11.0%
7.6%
7.6%
6 0%
6.0%
4.5%
3.1%
2.6%
1.8%
0.9%
0.8%
0.6%
0.7%
0 3%
0.3%
100.0%
* Numbers may differ due to rounding
Source: Global Insight, Inc.
Copyright © 2007 Global Insight, Inc.
24
Tax Revenue
•
•
•
Tourism Generated $148.9 m in Island Tax Revenue
Tourism activity generated an estimated $37.9 m in Gross
Receipts Tax in 2005.
Ignoring Social Security receipts, if tourism didn’t exist, each
household would pay an additional $2,710 in taxes to maintain
the current level of tax receipts
receipts.
Tax Revenues from
Tourism
2005 ($)
Guam
Corporate Income
15,614,623
Personal Income
28,592,599
Social Security & Other Taxes
43,839,483
H t l Tax
Hotel
T
18,946,882
Gross Receipts Tax
37,911,747
Excise & Fees
4,003,375
Sales Taxes
0
Guam Total
148,908,709
Source: Global Insight, Inc. and the Government of Guam
Copyright © 2007 Global Insight, Inc.
25
Construction
Total Construction
450
400
T t l
Total
Construction
spending in
the 2000s is
about
b t half
h lf off
the mid1990s level
M
Millions
350
300
250
200
150
100
50
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Source: Census Bureau and Global Insight, Inc.
Copyright © 2007 Global Insight, Inc.
26
Millions
Hotel Construction
40
35
Hotel
Commercial
30
Hotel and
Commercial
Construction
depressed.
25
With the
Military
buildup
coming, will
Guam be able
to increase
tourism
infrastructure
if it needs
to???
20
15
10
5
0
2000
2001
2002
2003
2004
2005
Source: Census Bureau and Global Insight, Inc.
Copyright © 2007 Global Insight, Inc.
27
How Important?
Gross Island Product:
$429 million
21% of GIP
Tourism
related
spending
di
off
$1.2 billion
Total Employment:
10,737 jobs
25.1% of Employment
$404.8 million
Core GIP:
19.4% of GIP
Core Employment:
10,419 jobs
24.3% of Employment
3rd largest private sector employer
Copyright © 2007 Global Insight, Inc.
28
Talking Points: What Do Visitors Mean to Guam?
G
9 Each Japanese visitor/traveler generates about $966
in expenditures, $113 of which goes to Guam
businesses that do not directly “touch” that visitor
9 Every 78 Japanese visitors or 126 Korean visitors
creates a new Guam job
9 Each Japanese visitor creates about $120 in tax
receipts
9 Each Japanese visitor generates $170 in direct
wages paid to Guam workers
9 Each Japanese visitor directly adds about $340 to
Guam’s Gross Island Product
Copyright © 2007 Global Insight, Inc.
29
What’s at Stake – 5-year plan version
Potential impact
p
of 1% shift in Market Share
Country
Visitors
Average
Spend
Total
Japan
174,036
$666
$115,944,524
Korea
108,000
$396
$42,768,000
Taiwan
,
82,100
$490
$
$40,229,000
$
,
,
* Numbers may differ due to rounding
Source: Global Insight, Inc.
Copyright © 2007 Global Insight, Inc.
30
What’s at Stake – New Version
Potential impact
p
of 1% shift in Market Share
Visitors
Average
Spend
Total
Japan
174,036
$666
$115,944,524
1,035
1,510
Korea
108,000
$396
$42,768,000
382
557
$24,760,237 $13,878,587
$5,305,849
Taiwan
82,100
$490
$40,229,000
359
524
$23,290,301 $13,054,660
$4,990,858
Country
Direct
Jobs
Total
Jobs
Gross Island
Product
Wages
Taxes
$67,125,279 $37,625,004 $14,384,216
* Numbers may differ due to rounding
Source: Global Insight, Inc.
Copyright © 2007 Global Insight, Inc.
31
Bibliography
•
•
•
•
Guam Visitors Bureau
Guam Statistical Yearbook
Bank of Hawaii
Global Insight US Business Demographics
Database
• Guam Budget, FY2005
• Office of Travel and Tourism Industries
• Bureau of Economic Analysis
Copyright © 2007 Global Insight, Inc.
32
Kenneth McGill
Executive Managing Direct
Travel & Tourism Consulting
[email protected]
Christopher Pike
Senior Consultant
Travel & Tourism Consulting
[email protected]