Vegas, Orlando, AC Top List of Tourism-Dependent U.S. Economies

LVCVA Economic Impact Report

LVCVA study

The Las Vegas Convention and Visitors Authority (LVCVA) recently retained Vegas based firm Applied Analysis to create a series of reports analyzing the economic impact of its operations and Southern Nevada’s tourism industry.

One of these reports – The Relative Dependence on Tourism of Major U.S. Economies, is particularly interesting since it offers a treasure trove of statistics about the size and scope of 23 major tourism economies in the U.S., in terms of employment, visitation and spending. 

The report gives you a handle on how much tourism actually means to each city, relative to their overall economy. As per the data, Las Vegas, Orlando and Atlantic City top the list of the most tourism-dependent economies in the United States.

Employment:- Nationwide, 10.2 percent of the workforce was employed by the leisure and hospitality industry in September 2009. Las Vegas was way above the national average, with 29.3% of its workforce employed in leisure and hospitality.

Leisure & Hospitality Employment data

Leisure & Hospitality Employment data (Source:Applied Analysis)

Atlantic City came in second at 27.4% and Orlando ranked third with 18.9%. Honolulu and New Orleans ranked 4th and 5th with 14.0% and 12.9% of employees working in the hospitality & leisure industry.

In terms of wages (average compensation) for leisure and hospitality workers, Vegas again topped the list at $38,141, followed by Atlantic City at $37,087 and Orlando in third place at $27,930. Median compensation among the comparison areas analyzed was $22,902, nearly 50 percent less than the compensation in Las Vegas and Atlantic City.

Share of GDP:- Nationwide, leisure and hospitality accounts for 3.8 percent of GDP. Atlantic City was at the top of the list, with leisure and hospitality accounting for 23.3% of its total GDP. Vegas comes in second with 19.5% and Orlando a distant third at 10.2%.

Leisure & Hospitality GDP

Leisure & Hospitality GDP (Source:Applied Analysis)

The report suggests that a comparison of the wages and employment data against the leisure & hospitality GDP of gaming and non-gaming economies shows that the presence of gaming appears to contribute significantly to a leisure and hospitality product output at a higher rate per employee.

Visitation & Spending:- Applied Analysis looked at visitation in two ways – absolute number of annual visitors, and the ratio of the number of visitors for each permanent resident. Atlantic City gets a whopping 77.9 visitors for each resident, while Orlando and Vegas get 23.8 and 21, respectively. The only other city on the list with a double digit ratio of visitors/residents is San Diego, with 10.4.

Visitor spending, which is one of the key indicators relevant to this study, accounts for 2.8 percent of gross national product (median value). Atlantic City tops this metric, by far, with visitor spending as a share of its GDP accounting for 56.6%.  Orlando comes in second with 29.9% and Vegas is just behind with 28.9%.

Visitor Spending as share of GDP

Visitor Spending as share of GDP (Source:Applied Analysis)

The fact that the LVCVA asked for this report indicates that the beating Vegas took in 2009 has opened their eyes to the dangers of being a one-trick pony like Detroit. If they decide to do something about it, such as diverting resources towards infrastructure development for other sectors, how will it impact tourism?

Should Vegas forget about diversifying and focus on doing what they do best? After all, last year was an aberration, and Vegas has already hit bottom and started the rebound. According to the latest visitation statistics, gaming revenue for the Strip and Clark County grew year-on-year for the first time in 2009 in November, and citywide room occupancy was almost at par with the previous year.

Further reading:- Applied Analysis – http://www.appliedanalysis.com/; LVCVA – http://www.lvcva.com/

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