The North Alabama tourism and travel industry achieved a record $2.92 billion economic impact on the region in 2018 according a study released recently by the Alabama Tourism Department. The figure of $2,926,299,074 represents an 8.5% growth over 2017’s $2,696,922,502.
“We’re seeing dramatic increases in all categories of the industry across the region,” said Tami Reist, AMLA President and CEO.
“Throughout the year our members are reporting increases in the number of travelers at traditional destinations, as well as travelers for new emerging markets such as flea markets and thrift shops, wedding venues, heritage sites, and parks,” she said.
In another key segement, the state study showed some 35,084 residents in the region are employed directly and in-directly in the tourism industry, a 5.9% rise over 2017’s 33,116 employment figure.
These jobs were created in direct response to services demanded by travelers in the state. The biggest beneficiaries of travel-related employment were eating and drinking establishments. This sector accounted for 53 percent of all the travel-related jobs created in the state in 2018. Other industries that benefited strongly were lodging facilities and entertainment.
A breakdown of percentage of employment by segement shows:
20% Lodging Facilities 53% Eating and Drinking Establishments
6% General Retail 13% Entertainment
3% Public Transportation 5% Auto Transportation
The job creation process, however, does not end with direct employment. Each job created by travel provided income for those employed in the above sub-sectors of the economy. This income generated expenditures, which in turn, created additional demand for goods and services and thus, more jobs in the state. This indirect job creation is known as the multiplier effect or economic impact.
Travel related earnings in North Alabama was $910,654,764, up 8.1% over 2017.
Quarterly lodging tax collections were used to gain insight into the seasonal travel-related activities in each county and at the state level. According to the study, the combined second and third quarter period (April through September) appears to be the strongest travel-related season, with 60.4 percent of all state lodging taxes collected during this period.
This study also indicates that the first quarter (January through March) and the fourth quarter (October through December) were the least active travel and tourism periods, with 20.1 percent and 20.7 percent. respectively, of state lodging taxes being collected for each of these periods.
Over the 16-year period 2003 to 2018, tourism expenditures in Alabama have increased 128%. An exeutive summary of the statewide report by Alabama Tourism Department Director Lee Sentell reported:
• Travelers are estimated to have spent more than $15.5 billion in Alabama. This represents an increase of 8.5 percent as compared to 2017 spending.
• Based on the primary and secondary data, it is estimated that more than 27.7 million people visited the State of Alabama during 2018.
• In 2018, more than $954 million of state and local tax revenues were generated by travel and tourism activities. Without those taxes, each household in Alabama would have had to pay $507 in additional taxes to maintain current service levels.
• Travel industry expenditures represent 7.3 percent of Alabama’s Gross Domestic Product – overall production – in 2018.
• An estimated 198,891 jobs – 9.7 percent of non-agricultural employment in Alabama – were directly or indirectly attributable to the travel and tourism industry.
• The total impact of the travel and tourism industry on Alabama’s earnings in 2018 is estimated to be $5.4 billion.
• Every $116,120 of travel-related expenditures creates one direct job in Alabama.
• For every $1 in Alabama’s travel-related expenditures, the state retains a total of $0.34.
• The most visited counties in the state were Baldwin, Jefferson, Madison, Mobile, and Montgomery, accounting for 67 percent of the total number of visitors to the state.
ABOUT THE STUDY
According to the state report, the purpose of this study is to estimate the economic impact of the travel and tourism industry in Alabama for 2018. Information sources used to prepare this report included primary data, detailed monthly lodging tax data, copies of previously commissioned economic impact studies, and other relevant information and publications. State lodging tax data analyzed for this report was on a “by month of expenditure” basis. The data was provided by the Alabama Department of Revenue. This study also used information obtained from selected issues of “Impact of Travel on State Economies” (The Research Department of the U.S. Travel Association [USTA]). Any, and all, revisions in travel industry multipliers or adjustments in primary data by USTA have been incorporated into the Alabama 2018 report.
Additional sources of information were used in preparing the 2018 economic impact study. Information on hotel occupancy rates and lodging revenue generation was obtained from Smith Travel Research. The results of field-intercept surveys that were conducted in previous years at locations and events throughout the state were also utilized.
Economic impact analysis was performed using a model developed by Dr. Keivan Deravi, President of Economics Research Services, Inc., an Alabama based consulting firm, and a retired professor of economics. This model, designed for the Alabama Tourism Department and the State of Alabama, uses Alabama industry multipliers developed by the Regional Input-Output Modeling System, United States Department of Commerce, Economic and Statistical Division, Bureau of Economic Analysis, Regional Economic Analysis Division.
A pdf version of the full state report may be downloaded at