THE 2001 ECONOMIC IMPACT OF EXPENDITURES
BY TRAVELERS ON WISCONSIN

• Introduction

• 2001 Traveler Expenditures

• 2001 Economic Impact

• 2000 (revised) v. 2001 comparison study

• 2001 County Traveler Expenditures and Economic Impact

INTRODUCTION

This is the 13th annual report of the Economic Impact of Traveler Expenditures on Wisconsin prepared by Davidson-Peterson Associates. This report covers traveler expenditures made in Wisconsin from December 2000 through November 2001.

The purpose of this study is to measure the economic benefits Wisconsin residents and governments derive from the dollars spent by travelers.

These economic benefits include:

• Total expenditures made by visitors; 

• Number of full-time equivalent jobs supported by these expenditures; 

• Wages, salaries and proprietary income earned by area residents; and 

• State and local government revenues generated.

The economic impact estimates in this report may be used to document the importance of tourism as a key segment of Wisconsin's economy; to underscore the need to continue to support the expenditure of time, effort and dollars to promote tourism growth; and to track the results of Wisconsin's tourism marketing efforts.

Revised Numbers

As data is collected for the current year's study, new information about the previous year's data is often discovered. The new information is then incorporated into the previous year's figures, adjusting it either up or down. This revised figure increases the accuracy of the estimates. There are several reasons new information affecting prior year's estimate is disclosed: 

• Changes in the lodging inventory that were unidentifiable during the previous year (such as property expansion, closed properties, increased number of rooms) are discovered etc.; 

• A lodging manager was unable to participate or could not be reached after multiple attempts during the previous year; or 

• A lodging manager provides more complete or more accurate information for the prior year.

Seasonal Waves 

The seasons are defined as follows: 

• Wave 1 -- Winter/Spring: December - April 

• Wave 2 -- Summer: May - August 

• Wave 3 -- Fall: September - November

Inclusion of Second Homeowners 

For the first time, 2001 and revised 2000 expenditures include recreational trip expenditures of second homeowners and their guests. This information was made possible with updated and more accurate information available from the 2000 U.S. Census on the number of seasonal housing units in Wisconsin. The estimates include trip expenditures for non-routine visits only (once a month or less). Costs of ownership and capital improvements are not included in these estimates.

2001 ESTIMATED TRAVELER EXPENDITURES:  $11,376,341,755* 

1. Seasonal Differences in Traveler Expenditures

Travelers spent $5.3 billion, or 47% of all traveler expenditures, in the summer season (May through August). They spent $3.4 billion, or 30% of all traveler expenditures, in the winter season (December through April) and $2.7 billion, or 24% of total traveler expenditures, in the fall season (September through November).

2. By Category of Expenditure

More than half of Wisconsin's total estimated travel expenditures came from shopping and food expenditures ($3.2 billion and $3.0 billion, respectively).

Recreation expenditures represent 25% of traveler expenditures ($2.8 billion), and lodging expenses represent 13% of the total estimated traveler expenditures ($1.5 billion). Seven percent of Wisconsin traveler expenditures ($847 million) were spent on transportation within the state.

3. By Accommodation Type

More than half of the total estimated traveler expenditures, $6.28 billion (55%), was spent by travelers staying overnight in Wisconsin at hotels/motels/resorts/B&Bs.

Those staying in cabins/cottages/condominiums in Wisconsin spent $607.01 million (5%), and those camping spent $604.55 million (5%).

Visitors with no lodging expenses spent $3.89 billion, or 43% of Wisconsin's 2001 traveler expenditures.

• Travelers who stayed at the homes of family and/or friends spent $3.10 billion (27%) while visiting Wisconsin.

• Travelers who visited second homes in Wisconsin spent $510 million (4.5%) in expenditures related to their trip. These expenditures are included in the expenditures reported for those visiting friends and relatives. 2001 is the first year that expenditures of second homeowners are included in this category. *

• Those visiting just for the day or passing through Wisconsin spent $787.85 million (7%).

*This new category was made possible due to updated and more accurate estimates on second homes in Wisconsin from the 2000 U.S. Census. Only recreational trip expenditures from non-routine visits (once a month or less) are included in these estimates. Costs of ownership and capital improvements are not included in these estimates.

2001 ECONOMIC IMPACT 

2001 INDUSTRY HIGHLIGHTS

	Hotels/Motels Resorts/B&Bs	Cabins/Cottages Condos	Campgrounds
Number of properties	1,902	1,097	735
Number of rooms/units/sites	79,029	9,138	61,596
Total available room nights/site-nights (millions)	26.8	2.18	8.95
Total occupied room nights/site-nights (millions)	15.55	1.23	3.99
Average occupancy rate	58%	56%	45%
Average daily rate	$76.82	-	-
Average unit rate	-	$107.21	-
Average site rate	-	-	$19.18

Guest Origin

Trip Purpose¹

¹These statistics not collected for campers

Note: Length of stay as noted throughout this document represents the average number of nights spent in a hotel/motel/resort/B&B. It does not necessarily reflect the total number of nights spent in Wisconsin.

WISCONSIN COMPARISON SUMMARY 2000 (Revised) vs. 2001

WISCONSIN TOTAL ESTIMATED TRAVELER EXPENDITURES BY SEASON

2000 (Revised*) vs. 2001

*Part of the research process involves refining and revising the prior year's data. As additional data is collected during the course of each year's work and new information is uncovered which was not available when the original estimates were made, revisions are made to the prior year's estimates. Previous year's data is updated if:

• Changes in the lodging inventory that were unidentifiable during the previous year (such as property expansion, closed properties, increased number of rooms) are discovered; or

• A lodging manager was unable to participate or could not be reached after multiple attempts during the previous year; or

• A lodging manager provides more complete or more accurate information for the prior year.

Research Procedures

Introduction

The basic procedure employed in this project is the T-MAP-I economic impact model. Davidson-Peterson Associates first employed this procedure in 1985 for the State of Georgia. Since then, it has been used to estimate traveler expenditures in states and local areas throughout the United States.

A. What is Economic Impact?

Economic impact begins when a visitor to an area spends any amount of money on any product or service in that area. The direct recipients of visitor expenditures use these dollars to earn income, pay wages, and pay taxes thus creating a direct impact on the local economy. But the benefits to the local economy extend beyond the direct impact of these dollars. Visitor expenditures create a chain effect. When businesses and their employees spend their income in the state, they create an indirect impact by supporting additional jobs, wages, salaries, proprietary income and tax revenues. The sum of the direct and indirect impact equals the total economic impact of traveler expenditures.

B. What is a Traveler?

For purposes of this study, a traveler is anyone who visits an area while traveling outside of his or her normal routine and spends money. They may be motivated to travel by pleasure, personal, or business reasons or some combination of reasons. If they remain in the area for more than 30 days, they cease being a traveler. If they are staying in accommodations contracted for more than a 30-day period (construction workers or truck drivers, for example), they are not classified as travelers.

C. What is Being Measured?

This report and the T-MAP-I procedure are based on the premise that economic impact begins with the expenditure of dollars by travelers (bottom-up measurement) rather than receipts of selected businesses (top-down measurement) - a more traditional tool of economic analysis.

Davidson-Peterson Associates does not use the traditional top-down or industry receipts-based measures. In this study:

• Sales tax data or industry receipts are not employed;

• Measurements begin with every dollar travelers spend;

• Standard Industry Classification (SIC) codes are not used;

• Travelers define where they spend money.

Additional Explanations

• Top-down or industry receipts-based measures assume that an industry is composed of a set of businesses that are clearly designated by customary SIC codes. For most industries this works well. However, when applied to tourism, this method tends to underestimate the economic impact, in part because businesses are not able to separate traveler expenditures from resident expenditures.

• Tourism is not a typical industry, and cannot be represented in its entirety by a few SIC-classified businesses. Tourism is the movement of people into an area for a brief period of time. Its economic impact begins with the sum of every dollar visitors spend on lodging, retail purchases, gas, food, entertainment or any other goods or services people buy.

• When travelers spend dollars, they spend them in many of the same "traditional industries" as local residents. While these businesses (such as retail stores, restaurants and gas stations) are identified by SIC codes, there is simply no way to separate the purchases of travelers from those of local residents. The bottom-up procedure employed by Davidson-Peterson Associates is based on all traveler expenditures in all industries.

This procedure for assessing economic impact provides accurate estimates of current numbers as well as measurements of change from year to year. Methods and numbers are constantly being reviewed to generate the most accurate measures of change as possible.

D. The Basic Research Steps for the 2001 Wisconsin Effort

What follows is a brief description of the procedures for estimating economic impact as they were completed in 2001.

1. Inventory Update

At the beginning of 2001, the 2000 inventory of lodging properties maintained by Davidson-Peterson Associates was compared to the latest brochures available from state, county, and regional tourism offices. In addition, several convention and visitor bureaus provided updated inventories. This produced the initial 2001 lodging inventory.

Next, the list of all licensed lodging properties from the Wisconsin Division of Public Health (DPH) was compared to the initial 2001 lodging inventory.

Any new information, additions, deletions, or size changes gathered from the comparison of the initial 2001 lodging inventory and the DPH list was incorporated into a final inventory. In addition, the seasonal surveys of lodging business activity (see #2) allowed for further clarification.

The final inventory is used to select properties that will be surveyed for the economic impact report.

2. Seasonal Surveys of paid lodging business activity

Every state property included in the survey sample was contacted and asked to complete a survey questionnaire by phone. Those who did not participate by phone were asked to complete the survey via mail or fax. A total of 4,477 seasonal surveys were conducted:

3. Resident Visiting Friends and Relatives (VFR) Survey

To determine the incidence of visiting friends and relatives (VFR) in the state, telephone interviews were conducted with a random sample of Wisconsin households. Data from these surveys was projected to the total state household population.

A total of 1,002 VFR surveys were completed in 2001. The surveys were analyzed in comparison with previous VFR surveys from 1997 through 2000.

4. Visitor Expenditure Survey/Modeling

To represent the proportion of traveler expenditures spent on specific types of goods and services, visitors were surveyed on-site while on vacation.

5. Economic Impact Data Calculations

Room and campsite rates, occupancy, and travel party size, were used to estimate the total expenditures at accommodation facilities. The visitor expenditure ratios are applied to this figure to derive the total traveler expenditures by those staying in each accommodation category.

6. Input/Output (I/O) Modeling

A special inter-industry model constructed for Wisconsin utilizes the total tourism expenditures to determine estimates of employment, income, and government revenue impacts of expenditures on the state.

E. A Note on Revisions

Part of the research process involves refining and revising the prior year's data. As additional data is collected during the course of each year's work and new information that was not available when the original estimates were made is uncovered, revisions are made to the prior year's estimates. Previous year's data is updated if:

• Changes in the lodging inventory that were unidentifiable during the previous year (such as property expansion, closed properties, increased number of rooms) are discovered;
• A lodging manager was unable to participate or could not be reached after multiple attempts during the previous year; or
• A lodging manager provides more complete or more accurate information for the prior year.