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TOURISM AND THE ROOMS AND MEALS TAX

TOURISM AND THE ROOMS AND MEALS TAX. Laurence E. Goss, PhD Institute for New Hampshire Studies Plymouth State University January 10, 2011. Rooms and Meals Taxes Collected During Fiscal Year 2010. Meals and Food $179.0 million 80% Lodging 42.5 million 18%

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TOURISM AND THE ROOMS AND MEALS TAX

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  1. TOURISM AND THEROOMS AND MEALS TAX Laurence E. Goss, PhD Institute for New Hampshire Studies Plymouth State University January 10, 2011

  2. Rooms and Meals Taxes Collected During Fiscal Year 2010 Meals and Food $179.0 million 80% Lodging 42.5 million 18% Vehicle Rentals 3.5 million 2% Total $225.0 million Non-resident Tourists $117.5 million 52% NH Resident Tourists 15.9 million 7% NH Resident Non-tourists 91.6 million 41%

  3. Total Tourist and Business Traveler Spending – FY 2010 Meals, Lodging, Vehicle Rentals $1,679 million Recreation, Attractions, Events 579 million Retail Trade 1,231 million Other (transp., services, govt.) 422 million Total $3,911 million 38% of total spending is in categories subject to the rooms and meals tax

  4. The Importance of Tourist Spending • Tourist spending is 6.7 % of the state’s Gross Domestic Product • New Hampshire ranks 8th in tourism’s share of GDP • New Hampshire ranked 9th in the total number of alpine skiers during the winter of 2009-10 • Tourism spending supported an estimated 58,700 jobs during fiscal year 2010, with another 32,600 jobs due to the multiplier effect. This is 10.9 % of all jobs in the state. • The Rooms and Meals Tax is state government’s second largest revenue source.

  5. Tourist Spending and State Government Revenues – Fiscal Year 2010 Rooms and Meals Tax $133 million State Liquor Stores 50 million Gasoline Tax/Tolls 40 million Business Profits/Ent. Tax 36 million State Parks, Fish & Game 25 million State Lottery 8 million Tobacco/Beer Tax 6 million

  6. New Hampshire’s Economic Base During Fiscal Year 2008 Employment by Industry Due to Out-of-state Revenues: Manufacturing 77,174 Tourism 51,709 Services 34,683 Retail Trade 26,843 Government 24,975 Colleges/Hospitals 22,448 Other* 63,258 Total 301,090 *includes agriculture, mining, construction, wholesale trade, utilities, information, transportation

  7. Long Term Trends in Rooms and Meals Taxesand Tourist Spending • New Hampshire’s and New England’s tourism industry is growing more slowly than the United States • New Hampshire’s resident non-tourist spending is growing faster than tourist spending due to the increase in eating meals out • The spending pattern has become less seasonal over time, in contrast with Maine and Vermont • Jobs in the industry are increasingly full time, year round and have fringe benefits

  8. Short Term Trends in Rooms and Meals Taxes and Tourist Spending • New Hampshire did not see as large a drop in the number of visits or visitor spending as most of the rest of the United States during the current recession • Only Connecticut out-performed New Hampshire of the six New England states during the current recession • Tourism is a lagging economic sector in both entering and coming out of a downturn. The spring of 2010 was the first solidly positive seasonal quarter since 2008. • Higher rooms and meals tax receipts during fiscal year 2010 in comparison with 2009 was due to the increase in the tax rate

  9. Factors That Affect Rooms and Meals Tax Receipt Levels 1) The tax rate 2) The weather 3) National/regional economic cycles 4) The level of DTTD promotional spending 5) The cost of gasoline

  10. The Importance of DTTD Promotional Activities • About 8 % of tourist trips and 10 % of tourist spending are a result of DTTD promotional activities • This is 2.7 million out of 34 million trips and $400 million out of $4 billion in tourist spending • About 35 % of all tourists make use of DTTD funded promotional materials and information before and/or during their trip • The DTTD promotional budget during fiscal year 2010 was $5.6 million • Over $72 was spent by tourists in the state as a result of each dollar spent by DTTD on promotional activities

  11. The Impact of DTTDPromotional Activities • State government receives almost $7 directly or indirectly for each DTTD dollar spent • State government receives $2.50 in rooms and meals taxes for each DTTD dollar spent, a profit of $1.50 • State government receives a total profit of $2.46 for each DTTD dollar spent from Rooms and Meals, BPT/BET, etc. • State government also receives $4.54 in other revenues for each DTTD dollar and uses these funds to provide goods and services to tourists plus repay the original DTTD dollar • Local governments receive about $1 in revenue for each DTTD promotional dollar • For each $1 million that DTTD spends on promotion, the $72 million in visitor spending results in 1,100 jobs across a range of industries

  12. Institute for New Hampshire Studies Research for DTTD Along with DTTD and all of its consultant team members, the goal of our research is to maximize rooms and meals tax receipts. Research products include: visitor surveys, inquirer conversion surveys, seasonal barometers and forecasts, analysis of US regional and international markets, media trends, return on investment reports, and the tourism satellite account report. While some reports are intended only for the internal use of DTTD, most are intended for use by the industry and the public and are available on the INHS website at Plymouth State.

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