Friday, August 15, 2008


DCVB has Global Insight periodically quantify the impact of visitors on Durham. In July a panel at a conference discussed an article in the Journal of Travel Research entitled, "Economic Impact Studies; Instruments for Policitical Shenanigans."

I've distilled out below some points maded in the article along with some comments by Ken McGill, an EVP for Global Insight:

Six Reasons Economic Impact Studies are Best Practice:
  • Assessing return on investment (ROI) from tourism promotion and infrastructure investment.
  • Monitoring and benchmarking performance vs. destination competitors.
  • Setting priorities for economic development and infrastructure.
  • Determining whether concession or sponsorship requests for events/attractions/meetings are worth it.
  • Informing public policy decisions including those involving tax burdens.
  • Informing and reporting to residents and other stakeholders.
Analysis like this also informs answers to these 5 questions:
  • Is the community spending enough on both tourism promotion and infrastructure and do revenues generated cover costs?
  • Which are best economic development targets and are concessions worth it?
  • What is the ROI on public tourism capital investment and government support?
  • How can we benchmark against destination competitors?
  • How is the full value of tourism communicated to policy makers, businesses and residents?

Pitfalls to Avoid:

  • Including resident spending in the impact.
  • A sponsor that shops for a study that will confirm what they want to hear.
  • Multipliers being used without netting out leakage.
  • Vendors who never tell communities what they don’t want to hear.
  • Communities or developers that hide studies supporting the other side of the story.

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