Economic Impact of Tourism on Myrtle Beach

The thriving industry of tourism found in Myrtle Beach, South Carolina economically contributes to the gross domestic product, employment, foreign exchange, earning, investment, regional impacts, contribution to taxation, and impact on other industry sectors within the state of South Carolina According to the Myrtle Beach Chamber of Commerce, in 2006 the state of South Carolina spending on travel and tourism reached $16. 7 billion, growing 5% over 2005. This supported employment of 198,900, or 10. % of total state employment.

The tourism industry alone generated total wages and salaries of $5. 4 billion in 2006. Total tourism value added (direct, indirect, and induced) attested for $8. 9 billion, or 5. 9% of the state economy. The fiscal impact was $1. 1 billion in state and local tax revenues, as well as $1. 3 billion in federal revenues. Out-of-state domestic visitors spent $7. 7 billion, or 46% of all tourism sales. International visitors added another $586 million to the total. SC residents and businesses spent $4. 9 billion on travel goods and services within and outside the state.

Over $1. 1 billion was spent on tourism capital investment. The government spent $420 million in support of tourism. SC-manufactured goods consumed by the tourism industry generated $1. 9 billion in sales. Travel spending generated the core tourism industry economic impact. The direct impact of these expenditures can be compared to other sectors of the economy. Tourism-related government, investment and merchandise trade expenditures add to the core impact to give a picture of the entire tourism-generated economy—including direct, indirect, and induced impacts.

Various industries benefit significantly from direct tourism sales. Hotels and Airports depend almost entirely on Tourism. Amusement & Recreation venues depend on half of their sales from Tourism. Nearly a third of Food & Beverage business comes from Tourism.

Various industries benefit significantly as tourism industries and tourism employees purchase goods and services. $3. 6 billion in Gross State Product is generated though the tourism supply chain and tourism employee spending in the SC economy. Tourism directly generates 6. % of the state’s employment base, or 119,800 jobs with the inclusion of indirect and induced impacts generated by all of tourism spending; tourism is the catalyst for 198,900 jobs, or 10. 5% of all non-farm employment. Tourism also generates $1. 1 billion in State and Local taxes. Making the ratio of State and Local tax revenues to public operational expenditures related to travel and tourism is $2. 50 to $1. In reference Myrtle Beach, South Carolina, more than 13 million tourists visit the Grand Strand each year. Horry County leads the state in tourism, accounting for over 38% of revenues.

The traditional tourist season (the summer months) is continually expanding, resulting in a more even distribution of visitors throughout the year. The county’s rapid growth is expected to continue, in the tourist sector as well as in other business sectors. Horry County is forecasted to gross approximately $7 billion in sales this year. Retail sales rate grew at more than 150% of the national annual rate, with tourism accounting for over 50% of retail sales. Retail sales, employment and construction are all intimately tied to the tourism industry.

The Grand Strand is attracting a wider variety of tourists, both geographically and socio-economically, and this diversity helps cushion the region from any downturns in the national economy. During 2002, average lodging occupancy rate rose to slightly over 62% despite an increase in the number of rooms available with new lodgings. During that same period, admissions tax revenues rose by over 20% (based on preliminary figures). Admissions tax is paid on any recreational activity including golf and recreation parks. Golf is an important segment of the tourism economy, and has helped to bring this area international recognition.

In 2003, the Grand Strand boasted over 120 completed golf courses with challenging layouts, stunning vistas, and impeccably maintained fairways and greens. Estimates show that approximately 4. 02 million total rounds of golf were played. According to the S. C. Parks, Recreation ; Tourism Dept. , golf generates more income than any other single entertainment or recreational activity in the state. The state of South Carolina and the city of Myrtle Beach rely heavily on the economic importance of domestic and international tourism due to the fact that tourism is the state’s largest industry especially in Horry County.

Of all domestic trips in South Carolina each year, about one quarter are day trips. This also translates into about a quarter of all domestic visitors and less than one tenth of all domestic visitor-days in South Carolina annually. Their median party size is 2 people and about one quarter of all trips includes children. They spend an average of $131 per party while on their trip. Of all domestic trips in South Carolina each year, three quarters are overnight trips, with stays of one night or more.

This translates into about three quarters of all domestic visitors and over 90 percent of all domestic visitor-days in South Carolina annually. The median party size of overnight visitors is 2 people and about over one quarter of these trips includes children. They stay an average of 3. 5 nights and spend an average of $752 per party while on their trip. As for information in regards to the international appeal of South Carolina and Myrtle Beach, historical data indicates that two of South Carolina’s largest overseas visitor origin-countries are Germany and the UK.

In 2006, according to I-94 data at least 18,221 UK residents and 17,326 German residents visited South Carolina. The US Department of Commerce, Office of Travel and Tourism Industries’ In-flight Survey estimates South Carolina receives on average about 150,000 overseas visitors annually, an additional 75,000 not captured in the I-94 data. Among South Carolina’s 767,800 annual Canadian visitors, Ontario is their primary origin with Quebec in second place. Vacationers account for 77% of these visitors. Nearly 59% of all Canadian visitors to South Carolina spend the night.

Canadians report an average stay of 7. 2 nights and predominantly stay in hotels/motels with some staying with friends or relatives, in campgrounds, in cabins/condos, or in combinations of the above. These overnight visitors travel primarily by auto, followed by airplane, and other. Among overnight Canadian visitors, 37% travel between January and March, 25% from April to June, 13% from July to September, and 25% from October to December. The average travel party size of South Carolina’s overnight Canadian visitors is 2. 6 visitors.

Visitor ages include 9% under the age of 20, 4% age 20-34, 9% age 35-44, 19% age 45-54, 31% age 55-64, and 22% age 65 and over. Visitors in these overnight parties spend an average of $564 per person per trip or $78 per person per night (U. S. dollars). Only 17% of these parties report including children. As for the key inbound markets that inject tourism expenditure into Myrtle Beach, the Grand Strand leisure travelers spent an average of $118. 80 per person per day, and group business travelers spent an average of $208. 11 per person per day.

Furthermore, visitors typically use their own car as their primary transportation (89%). Most Grand Strand visitors stayed in hotels, while other preferred condos and villas. The estimated tourist population in 2006 was $14. 6 million. As for the visitor age group of that estimated population the Grand Strand attracts a wide range of travelers; approximately 93% of visitors were under the age of 65. The Grand Strand attracts middle-to high-income travelers; visitor income has steadily increased over the years. Nearly 50 percent of the visiting population is employed in professional positions in terms of visitor occupation.

This continues to affirm that our visitor base is becoming more affluent year by year. Visitors to the Myrtle Beach area average length of stay along the Grand Strand was 5. 3 days for leisure travelers and 3. 6 days for business travelers. As for the visitor origin, the following are the 2006 top 10 states of visitor inquiry origin: North Carolina, New York, Pennsylvania, Ohio, Virginia, South Carolina, Tennessee, Georgia, Illinois and Michigan. There all also many international inquiries to the Chamber, 90% of which originate in Canada, with others from the United Kingdom, Germany and Japan.

In relation to visitor activities the Grand Strand is rich with activities and amusements for leisure and business travelers alike. The most popular activity for overnight guests is visiting the beach (90 percent). Additionally, 84 percent of overnight visitors went shopping, and 20 percent played golf. At this present time the tourism industry of Myrtle Beach, South Carolina is faced with a few impediments to high economic contribution such as the leakage from tourism expenditure, foreign ownership, institutional distortions, and resource constraints to delivering tourism related services.

Many states have chosen tourism as a tool for economic development. Economic leakage is a phenomenon that always occurs in the tourism industry of every country and/or state. Economic leakage should not be underestimated because if a high level of leakage prevails in a region, it could decelerate a region moving towards economic sustainability. Although in Horry County, there is not much leakage to be found, any many of the imports and exports are at a quite low level in comparison to other tourism based economies throughout the world.

In order to discuss strategies for increasing the economic contribution of tourism Myrtle Beach, South Carolina for the future, one must know the current strengths of the tourism industry currently. Myrtle Beach is in a strong position to attract visitors. The main attraction of Myrtle Beach is having clean sandy beaches and plenty of activities for children while maintaining an affordable destination. Nearly half list Myrtle Beach among their top beach destination, 3x more than any other destination in the country.

Myrtle Beach receives excellent ratings overall, especially as a summer vacation hotspot. In a recent survey 3 in 5 travelers agree that Myrtle Beach is easy to get to when driving, even those living 300 miles away. Myrtle Beach is increasingly being seen as an affordable destination that offers good value. Distant residents, those beyond 300 miles, give Myrtle Beach high ratings for summer vacations, while those closer, those within 300 miles, praise it as a weekend getaway. Although Myrtle Beach has many strengths, there are also weaknesses and barriers to the tourism industry development.

The main weaknesses and barrier to tourism is gas prices, which continue to plague travelers. Rising fuel costs are the number one barrier to travel, and consumers only see gas prices continuing to rise in the near future. A recent survey that was conducted, stated those interested in Myrtle Beach stated $5 per gallon is the maximum threshold for many consumers and that 85% would not consider a trip of 300 or more miles at that point. However, residents closer to the Myrtle Beach area are significantly more likely to consider it as a leisure destination vs. hose living far away.

As for opportunities to enhance tourism’s economic contribution, advertising was found to be the best method in increasing traveler interest in the Myrtle Beach area. Residents exposed to the advertising cite a significantly higher interest in visiting Myrtle Beach, as 75 percent are at least moderately interested. Exposure to advertising gives travelers a significantly more positive perception of the Myrtle Beach area which makes as undoubtedly, the ad campaign has had a tremendous impact on Myrtle Beach tourism.

Myrtle Beach’s ad campaigns reinforce its position as an affordable leisure destination. Myrtle Beach has found that TV ads are most adept at getting the message out in addition to the visitor guide as well. In the same survey as above 3 in 10 say the ads made them more likely to think of Myrtle Beach as a leisure destination. In strategies for increasing the economic contribution of tourism to Myrtle Beach, South Carolina for the future, one must also take into account the threats that may need to be overcome.

Without a doubt, the economy has travelers on the defensive and many are cutting back on leisure spending. Everyone is concerned about the state of the economy, and consumers seem to be pessimistic for the future. Consumers are more concerned about costs, and many are cutting back on leisure expenses. Fewer trips, closer destinations, and decreased spending are the primary ways travelers are cutting back costs. Of the tourists surveyed by the Greater Area Chamber of Commerce 96% of are concerned about the economy, and 62% think it will only get worse in the next year.

Consumers are more cost-conscious and a sizable portion is spending less on leisure travel. As for the implications for specific strategies of industry, government and the community to enhance the economic impacts of tourism in Myrtle Beach, South Carolina I personally feel that city should use incentives to increase destination consideration. A gas card would be an incentive to attract tourists who are concerned with the economy and are trying to cut back on leisure travel. Another idea would be to give discounted travel packages or incentives such as say two nights and get one night free at area hotels.

Also increasing the amount of advertising for Myrtle Beach could help enhance the economic impact of tourism. Advertising awareness is strong for Myrtle Beach, especially among those living within 300 miles. Television ads do an exceptional job at getting the message out, as well as magazine and internet ads. With the future travel looking down, incentives need to be an integral part of the marketing strategy. Give them gas, because at this time in our economy no other incentive has as much persuasion power to travelers given today’s gas prices. Hotel special and discounted travel packages are also attractive to travelers.