The Power of Visitors to Small Towns

During a recent Marketing Action Planning development assignment in a city with roughly 16,000 residents, it was abundantly clear (to us) how much tourism and travel was impacting the overall economy of this small town. However, while also contributing significantly to their quality of life, most residents and even many city officials had no idea of the contributions of visitors to their community. 

If you take away the population total noted above, does this sound like we are talking about your community? If you are nodding your head “yes”, take heed, this lack of awareness is not unique. It is almost the rule in virtually every community we work in. 

For those working day-to-day in tourism and travel, most of us have a pretty solid grasp of the economic impact of travel and tourism. But average residents, local officials and surprisingly many individuals employed in hospitality-related positions often have no idea how much of an economic and quality-of-life contributor overnight visitors are to their community.

In this particular example, this town is located at the crossroads of a major north/south interstate and an east/west highway with combined daily traffic counts approaching 70,000 vehicles. With 12 hotels (roughly 600 available rooms) spread across 3 major interstate interchanges, less than 1% of the travelers in those vehicles need to decide to spend one night to generate conservatively over $20 million per year in hospitality-related revenue. In addition to this direct economic input, this spending contributes at least another $3,000,000 in direct local sales and lodging tax revenue. And the entire ecosystem that has grown up to serve this local hospitality “industry” would directly employ roughly 160 people. These economic impact calculations can be arrived at based on reputable and readily available data sources and can lead to determining another important benefit to the local community that is often promoted – estimated annual local tax savings of $400 to $600 per household. 

However, what is much more difficult to quantify are the many “soft” benefits of a community’s hospitality ecosystem that visitors expect but that residents get to enjoy. Think dog parks, major chain restaurants, coffee shops, more shopping options, multiple gas stations offering more competitive fuel prices, electric car charging stations, etc. Don’t forget that street lights, sidewalks and newly paved roads wouldn’t be updated as often if it were not for the impact of tourism and the sales tax money collected from visitors. And visitors occupying rooms located in proximity to interstate exits can even help tip the scales of a community’s downtown district from vacant to vibrant.

The proof is undeniable — visitors overnighting in your community will creates jobs, increasing every resident’s quality of life while reducing their cost of living. And if you can get this message out to residents, city officials and even those employed in the hospitality industry, you will go a long way toward encouraging overnight stays in your community. Most DMOs understand the benefit of having local officials aware of the economic impact of tourism because those officials usually influence the money that makes up the majority of DMO’s budgets. If you can drill the message that visitors improve the economy AND the quality of life into the heads of those actually serving visitors, your community can begin to be known for its inviting and accommodating nature. With that kind of reputation, you will begin to see an increase in the number of overnights (the number of people spending the night in your community). 

HINT If you have not run the numbers for your own destination and are curious about how to demonstrate the economic validity of visitors to your community, you will find some simple formulas and a number of resources located here.

As more visitors choose to spend the night in your community, more hotel, restaurant and shopping options will be added, improving the quality of life of residents and visitors alike. And when everyone takes advantage of all that a healthy hospitality ecosystem provides, it also contributes to a city’s economy.

Posted in DMO Collaboration, Insights Tags