Michigan Tourism Economic Impact Calculator
Go directly to the on-line models
MI Statewide multipliers
Smaller metro area
This page will help you estimate the economic impacts of visitor spending on the state or local economy.
Economic impacts are estimated as:
Number of Visitors * Average Spending per Visitor * Regional economic multipliers
The model used here is a bit more complicated than this as we
- Break visitors down into segments with distinct spending patterns
- Itemize spending across a set of 12 spending categories
- Bridge spending into the sectors of the Michigan economy receiving this spending as sales
- Use a set of sector-specific economic ratios and multipliers from input-output models to translate spending into sales, income and jobs and to estimate tourism's multiplier effects.
The on-line versions of the model all use a common set of spending profiles. You may alter the overall spending average for each segment by replacing the averages on the form. Spending in 12 categories are changed in proportion to the overall spending change, leaving the distribution of spending across spending categories constant for each segment. You may choose from three sets of multipliers: (1) Michigan statewide model for statewide impacts, (2) Smaller metro areas for substate regions with moderate size economies, or (3) regions comprised of mostly rural counties. An Excel 7.0 spreadsheet version (available for downloading) lets you edit any of the input data, enter your own segments, spending information and multipliers, or export spending estimates to a local input-output model. If your knowledge of regional economic concepts and methods is limited, we recommend that you read the following bulletins to better understand how to interpret tourism economic impact estimates. Both are available in Acrobat PDF format.
of tourism. - a beginners guide
Approaches to Estimating the Economic Impacts of Tourism. - explanation of methods
VISITORS: You must provide the number and kinds of visitors for which you want economic impacts. Visitor estimates must be in party nights = one party or group in the area for one night (or one day for a day visitor). You may estimate visitor party nights by multiplying the number of trips to the area by an average length of stay ( in nights, treating day visitors as one "night"). If your visitor figures are in person days, divide by an average party size. To reliably estimate spending, visitors must be broken down into five segments:
- Day visitors
- Overnight visitors staying in motels, B&B's , rented cabins or condos
- Overnight visitors staying in campgrounds
- Overnight visitors staying with friends or relatives
- Overnight visitors staying in an owned seasonal home
SPENDING: The model uses a set of statewide average spending figures on a per party night basis for these five segments. You may modify spending average for a given segment by replacing the spending averages. Although you only see the total spending on the form, visitor spending is reported within 12 spending categories. (Inspect the default spending figures below). If you modify a spending average on the form, spending in the 12 categories are changed in proportion to the overall spending change, leaving the distribution of spending across spending categories constant for each segment. The default spending averages are based on several recent spending surveys and cover all spending in Michigan on the trip. Spending will vary somewhat within these segments across different areas of the state and special tourist subgroups (e.g. downhill skiers will incur additional expenses for lift tickets and ski rentals, visitors staying in high end resorts will pay higher lodging expenses, etc. The default spending figures apply best to a broad mix of visitors including vertical market segments with both higher than average and lower than average spending. The default spending profiles, when applied to the 1995 estimates of statewide travel activity (Bureau of Transportation Statistics American Travel Survey) , are consistent with lodging room receipts and other sources.
MULTIPLIERS: Translating visitor spending into economic impacts requires some information about the state or local economy, as well as procedures for dealing with goods that visitors purchase at retail establishments. If visitors purchase goods that are not made in Michigan, only the retail margins (and possibly wholesale and transportation margins) on these purchases accrue to the Michigan economy. To estimate statewide impacts of tourism spending, we have extracted a set of multipliers from the 1996 Michigan input-output model (estimated using IMPLAN) . Similar sets of multipliers have been developed for metro regions and rural areas of the state by taking averages across several models. The metro area multipliers are based on models for Lansing, Flint, Kalamazoo, Grand Rapids, and larger regions that include one or more large cities. The multipliers for the Detroit metro area are similar to the statewide multipliers, so statewide model should be used for regions that include the Detroit MSA. The Rural region multipliers apply to regions that consist of one or more counties not including an MSA. For very large sub-state regions in northern Michigan, the metro area multipliers should be used, e.g. the entire UP, Northwest Michigan, etc. The choice of multipliers will affect estimates of direct jobs and income and the estimates of secondary effects. You may test the sensitivity of results to the choice multipliers by applying the same spending to different multiplier selections. The aggregate IMPLAN Type SAM sales multiplier for a typical tourist spending pattern is 1.6 for the state model, about 1.45 for metro regions, and 1.3 for rural regions. The Excel version of MITEIM lets the user import multipliers for particular regions of the state. The "generic" multipliers used in the on-line version will yield reasonably accurate estimates. The multipliers for individual regions within either the metro or rural categories generally vary by less than .1 (e.g. the rural region sales multipliers range from 1.2 to 1.4 and metro area from roughly 1.35 to 1.55). Inspect the multipliers.
LOAD THE MODEL : Load one of the three models by selecting the multipliers that will best represent the region of interest.
Smaller metro area
INPUT DATA FOR THE MODEL IS DISPLAYED BELOW:
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Economic impact estimates are made by multiplying the number of visitors
by a set of visitor spending profiles. The spending profiles are on a party night basis.
We have found five lodging-based segments to be the most useful in estimating spending.
Table 1 below gives the average spending on which the economic impact estimates will be
based. We assume spending per party per day is about $170 for visitors staying in motels,
about $70 for campers, $67 for visitors in seasonal homes, day visitors and those
staying with friends and relatives.
|Table 1. Spending averages by segment ($ per party per night, 1998)|
|Motel, hotel cabin or B&B||65.00||0.00||0.00||0.00||0.00|
|Restaurants & bars||38.00||13.00||16.52||11.00||17.56|
|Groceries, take-out food/drinks||10.00||10.00||12.49||17.74||4.96|
|Gas & oil||12.67||12.00||9.33||9.76||10.24|
|Other vehicle expenses||1.37||1.67||4.08||0.20||0.39|
|Admissions & fees||8.76||4.52||3.24||3.39||8.47|
|Souvenirs and other expenses||14.32||9.07||9.27||11.24||17.42|
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