California Travel Impacts by County,

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1 California Travel Impacts by County, Preliminary State & Regional Estimates May 2014 A Joint Marketing Venture of the California Travel & Tourism Commission and the Governor's Office of Business Development (GO-Biz)

2 PREPARED BY Dean Runyan Associates, Inc. 833 SW 11 th Avenue, Suite 920 Portland, Oregon , Fax: for California Travel & Tourism Commission 555 Capitol Avenue, Suite 1100 Sacramento, CA STATE OF CALIFORNIA Edmund G. Brown, Jr., Governor GOVERNOR S OFFICE OF BUSINESS DEVELOPMENT (GO-BIZ) Mike Rossi, Senior Advisor for Jobs and Business Development, Office of the Governor CALIFORNIA TRAVEL & TOURISM COMMISSION/DIVISION OF TOURISM Caroline Beteta, President & CEO Lynn Carpenter, Vice President of Marketing Dan Mishell, Research Director

3 EXECUTIVE SUMMARY This report provides detailed statewide and regional travel impact estimates for California from 1991 to The estimates for 2013 are preliminary. The report also provides detailed county estimates for 2012 and transient occupancy tax receipts for jurisdictions through the 2013 fiscal year CALIFORNIA TRAVEL INDUSTRY SURPASSES PRE-RECESSION LEVEL The California travel industry expanded for the fourth consecutive year following the recession. In terms of both employment and real inflation-adjusted dollars, the California travel industry exceeded its pre-recession levels in Spending. Total direct travel spending in California was $109.6 billion in 2013(preliminary). During the past year, travel spending increased by 3.2 percent in current dollars and 2.8 percent in real (inflation-adjusted) dollars. The analogous figures for the 2011 to 2012 period were 4.3 percent and 2.2 percent. The decrease in motor fuel prices in 2013 accounted for most of the difference in the changes in current and real spending. Employment. Total travel-generated employment increased by 4.4 percent during the past year. Employment growth has accelerated in each of the past four years. The level of travel-generated employment (965,800) now exceeds the pre-recession period. Tax Revenues. The growth in local tax revenues (6.4 percent) was driven by increased lodging tax receipts due both to room demand and room rates. Travelgenerated state tax revenue increased by 4.9 percent. This increase reflects the increase in the state sales tax rate of 0.25 percent. The local and state tax revenues generated by visitor spending are equivalent to $550 per resident household. Travel Activity. Room demand, as measured by Smith Travel Research, increased by 3.3 percent from 2012 to 2013, following a 3.6 percent increase the preceding year. This is the fourth consecutive year of increasing room demand. Visitor air arrivals on domestic flights were unchanged for the year, largely as a result of capacity limits. DEAN RUNYAN ASSOCIATES

4 County Total Employment THE CALIFORNIA TRAVEL INDUSTRY IS A LEADING EXPORT-ORIENTED INDUSTRY Travel and tourism is one of the most important export-oriented industries in California. Spending by visitors generates sales in lodging, food services, recreation, transportation and retail businesses the travel industry. These sales support jobs for California residents and contribute tax revenue to local and state governments. Travel is especially important in the non-metropolitan areas of the state, where manufacturing and traded services are less prevalent. Earnings of Leading California Export-Oriented Industries Agric. & Food Prod. Micro-Electronics Motion Pictures Transportion Manf. Travel $0 $10 $20 $30 $40 $ Earnings in Billions THE TRAVEL INDUSTRY BENEFITS ALL REGIONS OF CALIFORNIA Although most travel spending and related economic impacts occur within California s primary metropolitan areas, the travel industry is important throughout California. In general, the counties with less total employment have a bigger share of travel-generated employment. Travel-Generated Employment as a Percent of Total Employment 18 Smallest 31 to to to Largest 0% 5% 10% 15% Travel-Generated Employment DEAN RUNYAN ASSOCIATES

5 TABLE OF CONTENTS List of Tables and Figures ii Preface iii I State Travel Impacts 1 Impacts of Travel in California: A Summary 1 Recent Travel Trends in California 2 Gross State Product 4 II U.S. Travel 6 III Government Revenue Generated by Travel Spending 10 IV Regional Travel Impacts 18 V County Travel Impacts 32 VI Transient Occupancy Tax Receipts 99 Appendices 119 A Regional Travel Impact Model 120 B Travel Industry Accounts 124 C Travel Impact Estimation Procedures 135 D Gross State Product and Indirect Business Taxes, E California Earnings & Employment by Industry Sector, DEAN RUNYAN ASSOCIATES PAGE I

6 LIST OF TABLES AND FIGURES State Travel Impacts Direct Travel Impacts, p (summary) 2 California Travel Spending in Current and Real Dollars 3 Domestic Air Passenger Visitor Arrivals at California Airports 3 California Room Demand 3 Travel Impacts, (detail) 5 Travel Impacts, p (detail) 6 U.S. Travel Annual Direct Travel Spending in U.S., p 7 Direct Travel Spending in U.S., 2008-Q1 to 2013-Q4 7 International Direct Travel Spending in U.S., p 8 Overseas Arrivals 8 U.S. Travel Industry Employment, 2008-Q1 to 2013-Q4 9 Components of US Travel Industry Employment 9 Government Revenue Generated by Travel Spending Government Revenue Generated by Travel Spending, 2013p 10 Local and State Travel-Generated Revenues by Type of Tax, 2013p 11 Indirect Business Taxes of Selected California Export-oriented Industries 11 GDP and Indirect Business Taxes, Selected California Export-oriented Industries, Visitor-Generated Local Tax Receipts as Share of Total Receipts, Visitor-Generated Local Tax Receipts per Household, Households, Local Sales & T.O.T. Receipts by County, Total and Visitor-Generated State Sales Tax Receipts by County, Regional Travel Impacts Summary Tables 19 Detailed Tables County Travel Impacts Summary Tables Detailed Tables Transient Occupancy Tax Receipts California TOT Receipts, Fiscal Years 99 TOT Receipts by County, Fiscal Years TOT Receipts by Jurisdiction, Fiscal Years Appendix Bureau of Economic Analysis Tourism Industries Distribution of U.S. Travel-Generated Compensation, RTIM Travel Impact Industries matched to NAICS 128 Components of Industry Output 131 Gross State Product and Indirect Business Taxes, California Industries, California Earnings & Employment by Industry Sector, PAGE II DEAN RUNYAN ASSOCIATES

7 PREFACE The purpose of this study is to document the economic significance of the travel industry in California from 1992 through These findings show the level of travel spending by those traveling to and through the state, and the impact this spending has on the economy in terms of earnings, employment and tax revenue. This study was prepared for California Tourism. Special thanks are due to Dan Mishell, Research Director, Research, for his support and assistance. Dean Runyan Associates, Inc. 833 SW 11th Ave., Suite 920 Portland, OR (503) DEAN RUNYAN ASSOCIATES PAGE III

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9 I. STATE TRAVEL IMPACTS The multi-billion dollar travel industry in California is a vital part of the state and local economies. The industry is represented primarily by retail and service firms, including lodging establishments, restaurants, retail stores, gasoline service stations, and other types of businesses that sell their products and services to travelers. The money that visitors spend on various goods and services while in California produces business receipts at these firms, which in turn employ California residents and pay their wages and salaries. State and local government units benefit from travel as well. The state government collects taxes on the gross receipts of businesses operating in the state, as well as sales and use taxes levied on the sale of goods and services to travelers. Local governments also collect sales and use taxes generated from traveler purchases. IMPACTS OF TRAVEL IN CALIFORNIA: A SUMMARY Total direct travel spending in California was $109.6 billion in 2013(preliminary). During the past year, travel spending increased by 3.2 percent in current dollars and 2.8 percent in real (inflation-adjusted) dollars. The analogous figures for the 2011 to 2012 period were 4.3 percent and 2.2 percent. The decrease in motor fuel prices in 2013 accounted for most of the difference in the changes in current and real spending. Room demand, as measured by Smith Travel Research, increased by 3.3 percent from 2012 to 2013, following a 3.6 percent increase the preceding year. This is the fourth consecutive year of increasing room demand. Visitor air arrivals on domestic flights were unchanged for the year, largely as a result of capacity limits. Total travel-generated employment increased by 4.4 percent during the past year. Employment growth has accelerated in each of the past four years. The level of travel-generated employment (965,800) now exceeds the pre-recession period. The growth in local tax revenues (6.4 percent) was driven by increased lodging tax receipts due both to room demand and room rates. Travel-generated state tax revenue increased by 4.9 percent. This increase reflects the increase in the state sales tax rate of 0.25 percent. California travel industry GDP of $51.6 billion in 2013 represents approximately 2.5 percent of total California GDP. DEAN RUNYAN ASSOCIATES PAGE 1

10 RECENT TRAVEL TRENDS IN CALIFORNIA Total direct travel spending in California was $109.6 billion in 2013(preliminary). During the past year, travel spending increased by 3.2 percent in current dollars. Although this is less than the 4.3 percent increase the preceding year, in real dollars (adjusted for inflation) the recent increase in spending was greater than the prior year (2.8 percent versus 2.2 percent). The increase in employment of 4.4 percent from 2012 to 2013p also exceeded the 3.7 percent increase of the preceding year. Employment growth has accelerated in each of the past four years. Travel-generated employment (965,800) now exceeds the pre-recession level. California Direct Travel Impacts, p Spending Earnings Employment Tax Receipts ($Billion) ($Billion) ($Billion) (Thousand) Local State Federal Total p Annual Percentage Change 12-13p p Estimates for 2013 are preliminary. Earnings include payroll, other earned income and proprietor income. Employment includes payroll employees and proprietors. *Annual Change for p is the average annual percentage change. The 11 percent increase in federal tax receipts reflects the expiration of the temporary two year reduction in payroll taxes. PAGE 2 DEAN RUNYAN ASSOCIATES

11 Millions of Room Nights Sold Millions Billions $120 $110 $100 $90 $80 $70 $60 California Travel Spending in Current & Real Dollars Real Current p Domestic Air Passenger Visitor Arrivals at California Airports Inflation-adjusted (real dollar) travel spending increased by 2.8 percent from 2012 to 2013(preliminary), following a 2.2 percent increase the preceding year (see top graph, left). Sources: Real dollar travel spending was adjusted with a composite of price indices for the West Urban CPI, California room rates reported by Smith Travel, California gasoline prices reported by the Energy Information Administration, and airfares to California airports reported by the U.S. Department of Transportation Origin and Destination survey p California Room Demand Q1 Q2 Q3 Q4 Visitor air travel on domestic flights to California destinations (31 million) was essentially unchanged from This is primarily a reflection of capacity constraints within the airline industry. Sources: Dean Runyan Associates, Inc. and Bureau of Transportation Statistics (U.S. Dept. of Transportation). Note: These estimates are for visitor arrivals only. They do not include return travel of California residents or connecting flights normally reported in air passenger statistics. Room demand has increased in every quarter during the past four years. The annual rate of increase was 3.3 percent in Source: Smith Travel Research reports prepared for California Travel and Tourism Commission. DEAN RUNYAN ASSOCIATES PAGE 3

12 Billions GROSS DOMESTIC PRODUCT OF CALIFORNIA TRAVEL INDUSTRY Gross Domestic Product (GDP, also referred to as value-added) is a measure of economic activity that reflects the market value of the labor and capital used to produce goods and services. The GDP for a particular industry within a state excludes the intermediate inputs purchased by businesses from other firms in the production process. It includes payments to individuals in the form of earnings, indirect business taxes to government, and other payments to individuals and corporations. 1 The relationship between travel spending and the GDP of the California travel industry is shown below. 2 California travel industry GDP of $51.6 billion represents approximately 2.5 percent of total California GDP. Travel Spending and Gross Domestic Product of California Travel Industry, 2013p ($ Billions) $120 $100 $80 $60 $58.1 $58.1 Intermed. Inputs $17.4 Other Value-Added $34.1 Earnings $40 $20 $0 $17.4 $17.4 $34.1 $34.1 Spending ($109.6) GDP ($51.6) Source: Dean Runyan Associates, Inc., Bureau of Economic Analysis, and Minnesota Implan Group. The above estimates represent only the direct impacts of travel spending. A portion of the inputs purchased by travel businesses in California will be delivered by other California firms that are not strictly part of the travel industry. Restaurants, for example, will purchase agricultural products from other California businesses. These inputs are sometimes referred to as indirect effects. Detailed estimates for direct travel spending, earnings, employment and tax receipts are shown on the following two pages. 1 Indirect business taxes are primarily excise taxes, often paid by consumers as a sales tax. Income taxes are not included. Other payments include retained earnings, dividends, interest and rent payments. 2 The travel industry is actually a combination of parts of other industries including lodging, food services, recreation businesses, retail businesses and transportation. PAGE 4 DEAN RUNYAN ASSOCIATES

13 California Travel Impacts, Total Direct Travel Spending ($Billion) Visitor Spending at Destination Other Travel* Total Direct Spending Visitor Spending by Type of Traveler Accommodation ($Billion) Hotel, Motel Private Campground Public Campground Private Home Vacation Home Day Travel Spending at Destination Visitor Spending by Commodity Purchased ($Billion) Accommodations Food & Beverage Services Food Stores Ground Tran. & Motor Fuel Arts, Entertainment & Recreation Retail Sales Air Transportation (visitor only) Spending at Destination Industry Earnings Generated by Travel Spending ($Billion) Accommodations & Food Service Arts, Entertainment & Recreation Retail** Auto Rental & Ground Tran Air Transportation (visitor only) Other Travel* Total Direct Earnings Industry Employment Generated by Travel Spending (Thousand Jobs) Accommodations & Food Service Arts, Entertainment & Recreation Retail** Auto Rental & Ground Tran Air Transportation (visitor only) Other Travel* Total Direct Employment Tax Receipts Generated by Travel Spending ($Billion) Local Tax Receipts State Tax Receipts Federal Tax Receipts Total Direct Tax Receipts Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel agencies. **Retail includes gasoline. DEAN RUNYAN ASSOCIATES PAGE 5

14 California Travel Impacts, p p Total Direct Travel Spending ($Billion) Visitor Spending at Destination Other Travel* Total Direct Spending Visitor Spending by Type of Traveler Accommodation ($Billion) Hotel, Motel Private Campground Public Campground Private Home Vacation Home Day Travel Spending at Destination Visitor Spending by Commodity Purchased ($Billion) Accommodations Food & Beverage Services Food Stores Ground Tran. & Motor Fuel Arts, Entertainment & Recreation Retail Sales Air Transportation (visitor only) Spending at Destination Industry Earnings Generated by Travel Spending ($Billion) Accommodations & Food Service Arts, Entertainment & Recreation Retail** Auto Rental & Ground Tran Air Transportation (visitor only) Other Travel* Total Direct Earnings Industry Employment Generated by Travel Spending (Thousand Jobs) Accommodations & Food Service Arts, Entertainment & Recreation Retail** Auto Rental & Ground Tran Air Transportation (visitor only) Other Travel* Total Direct Employment Tax Receipts Generated by Travel Spending ($Billion) Local Tax Receipts State Tax Receipts Federal Tax Receipts Total Direct Tax Receipts Details may not add to totals due to rounding. *Other Travel includes resident air travel and travel agencies. **Retail includes gasoline. PAGE 6 DEAN RUNYAN ASSOCIATES

15 Real Tourism Output (Billions) Tourism Output (Billions) II. U.S. TRAVEL The national level data in this section focuses on visitor spending trends in current and real dollars, international visitation to the U.S., and trends in travel-generated employment. The following two graphs are derived from the Bureau of Economic Analysis Travel and Tourism Satellite Accounts. 1 Both graphs show direct tourism output for the United States spending by domestic and international visitors. Annual Direct Travel Spending in U.S., p $950 $900 Real $850 $800 $750 Current $700 $650 $600 $550 $ p Spending by domestic and international visitors was $900 billion in 2013 in current dollars. This represents a 4.0 percent increase over When adjusted for changes in prices (real dollars), spending increased by 3.6 percent compared to a 2.8 percent increase from 2011 to Direct Travel Spending in U.S Q1 to 2013-Q4 Annualized Seasonally Adjusted in 2005 Dollars $780 $730 $680 $630 $ Year-Quarter On a seasonally adjusted quarterly basis, real travel spending in the last quarter of 2013 almost attained the previous high recorded in the first quarter of Real travel spending has increased at a fairly constant pace over the past three years, with the exception of the last two quarters of See DEAN RUNYAN ASSOCIATES PAGE 7

16 International Share International Spending (Billion) The following three graphs are concerned with international travel to the U.S. The first graph is derived from the Bureau of Economic Analysis Travel and Tourism Satellite Accounts and International Transactions. 2 The following two graphs are derived from the monthly international arrival data released by the Office of Travel and Tourism Industries. 3 International Direct Travel Spending in U.S. Amounts in Real Dollars (Billions) International Share of U.S. Internal Travel* 20% 15% 10% 5% 0% Share Spend *Airfares for international flights on U.S. air carriers are not included. The growth and increased share of in international travel spending in the U.S. has been driven by an increase in overseas arrivals over the past four years -- an average annual increase of more than 7.5 percent. The p average annual increase for Asian countries has been almost 13 percent. (Note: December 2013 arrivals estimated by Dean Runyan Associates.) $145 $135 $125 $115 $105 $95 $85 $ Spending by international visitors in the U.S. increased by 10.0 percent from 2012 to 2013 in real dollars the fourth consecutive year of growth. This compares to a 2.4 percent rate of growth in real spending by domestic visitors. (Note: These estimates have been calculated by Dean Runyan Associates.) Overseas Arrivals (Millions) Europe Asia Other p Q1 Q2 Q3 Q4 2 See for quarterly international estimates of travel and tourism exports (travel to the U.S. by international visitors). Estimates of inflation-adjusted real spending by Dean Runyan Associates. 3 See Annual and 4th quarter 2013 estimates by Dean Runyan Associates. PAGE 8 DEAN RUNYAN ASSOCIATES

17 Period 08-Q1 = 100 Millions of Jobs The following two graphs show quarterly employment trends since 2008 for seasonally adjusted data.* The first graph shows that travel-generated employment was at its lowest level in the first quarter of 2010 and has not yet fully recovered. (Employment is typically a lagging indicator of overall economic activity.) The second graph shows the employment trends of different types of businesses within the travel industry. In general, the leisure and hospitality sector has recovered more fully than transportation, retail and other business in the travel industry. This is in part due to the cyclical patterns of these industry sectors and in part due to structural changes. (For example, air transportation now uses fewer employees to transport an equivalent number of passengers.) U.S. Travel Industry Employment Seasonally Adjusted at Annual Rates 2008-Q1 to 2013-Q Components of U.S. Travel Industry Employment Year-Quarter = 100 Travel industry employment includes the leisure and hospitality sector (arts, entertainment, recreation, accommodations and food services). This represents about two-thirds of all travel industry employment. Transportation includes all air and ground transportation goods and services, including motor fuel and travel arrangement. This comprises about onefifth of all travel industry employment. Slightly more than one-tenth of travel industry employment is in retail and other businesses Leisure & Hospitality Transportation Retail & Other Source: Bureau of Economic Analysis Travel & Tourism Satellite Accounts. *Seasonal adjustment permits quarter to quarter trend analysis. DEAN RUNYAN ASSOCIATES PAGE 9

18 III. GOVERNMENT REVENUE GENERATED BY TRAVEL SPENDING This section of the report provides an analysis of the government revenue directly generated by travel spending. Most of the major sources of government revenue, such as excise, payroll and income taxes are included. However, due to data limitations it is not possible to provide reliable estimates of property tax receipts attributable to travel, nor taxes and fees based on a variety of selective goods or activities (e.g., tobacco taxes, licenses taxes.) The distribution of all government revenues attributable to travel in California is shown below. Federal government revenues are the sum of income and payroll taxes, motor fuel excise taxes, and air ticket taxes. 1 The sources of local and state revenues are shown in the pie chart on the following page and will be analyzed in greater detail. Government Revenue Generated by Travel Spending, 2013p Federal $ % Local $ % State $ % Source: Dean Runyan Associates, Inc. Property taxes and fees, and taxes of selective goods and activities not included. See chart on next page for more detailed breakout of state and local taxes. The total of $12.5 billion in tax revenue generated by direct travel spending in California is equivalent to $970 of tax revenue for each household in the state. Local and state tax revenues ($7.1 billion) are equivalent to $550 per household. About 60 percent of this revenue is generated by the travel spending of international visitors and residents of other states. 1 California receives $0.73 from the Federal government for every $1.00 in tax payments, according to the Tax Foundation. PAGE 10 DEAN RUNYAN ASSOCIATES

19 Local and State Travel-Generated Revenues by Type of Tax, 2013p Motor Fuel $ % Income $ % Lodging $ % State Sales $ % Local Sales $ % *PFC $ % Source: Dean Runyan Associates, Inc. Property taxes and fees, and taxes of selective goods and activities not included. State income taxes include personal and corporate. State sales tax receipts reflect a 6.5 percent rate of the statewide sales tax. Local sales tax receipts reflect a 1.0 percent rate of the statewide sales tax plus applicable city, county and district taxes. *PFC refers to Passenger Facility Charges collected from visitors air passengers traveling to California airports. In contrast to the federal tax receipts generated by travel spending, the overwhelming majority (almost 90%) of local and state tax revenues attributable to travel is based on sales or excise taxes. There are two reasons for this. First, California has a very progressive individual income tax. Because many employees of the travel industry work in entry-level positions, their taxable income is lower than the statewide average. 2 Second, a relatively large share of the goods and services provided by travel businesses are taxable (e.g., rooms, car rentals, food service). This point is illustrated in the following bar chart and table. Indirect Business Taxes of Selected California Export-Oriented Industries, 2011* Agric. & Food Mfg. All Manufacturing Motion Picture/Sound Publishing & Software Travel 0% 2% 4% 6% 8% 10% 12% 14% Indirect Business Taxes (less subsidies) as % of GDP Source: Dean Runyan Associates, Inc. and Bureau of Economic Analysis. Value added is equivalent to the state gross domestic product by industry. Indirect Business Taxes include property taxes, excise taxes and fees to local, state and federal governments. Income taxes are not included. *2011 is the most recent year for which data is available for all industries. 2 Travel industry employees are, on average, younger and are more likely to work on a part-time or partial year basis than are other employees. DEAN RUNYAN ASSOCIATES PAGE 11

20 The term indirect business taxes refers to the property taxes, excise taxes and fees that businesses pay to local, state and federal governments. Income taxes are not included. In the bar chart, government subsidies to industry are subtracted from the payments of indirect businesses taxes. In the table, industry gross domestic product (GDP), indirect business taxes, and subsidies are shown separately for the same group of export-oriented industries. 3 GDP and Indirect Business Taxes Selected California Export-oriented Industries, 2011* Percent of GDP GDP Taxes less ($ Millions) Taxes Only Subsidies Agric. & Food Manfacturing 42, % 10.0% All Manufacturing Industries 194, % 5.0% Motion Picture & Sound Record. 33, % 1.2% Publishing, including Software 23, % 1.1% Travel 46, % 11.9% Source: Dean Runyan Associates, Inc. and Bureau of Economic Analysis. See notes in preceding graph. *2011 is the most recent year for which data is available for all industries. The data illustrate that the travel industry generates proportionately more tax revenue from indirect business taxes than other export-oriented industries. 4 Furthermore, international visitors and residents of other states in effect, pay about one-half of these taxes. Conversely, the travel industry places a relatively low tax burden on its employees through the state income tax, as compared to most other industries. The remainder of this section provides an analysis of the revenue impacts of the travel industry at the county level. The analysis will consider sales taxes (state and local), transient occupancy taxes, and the number of households in each county. The first bar chart on the following page illustrates the relationship between urbanization and the percentage of local tax receipts (sales and transient occupancy taxes) attributable to visitors. In general, visitors generate a higher proportion of local taxes in less urbanized counties (as measured by the average number of households per county for each of the six county groupings). For example, visitors generate 75 percent of local tax receipts in the least urbanized counties (average 6,000 households), compared to about 20 percent in the most urbanized counties (average 1 million households). 3 The notion of an export-oriented industry is one that sells most of its goods and services outside of the local or regional economy. Thus, industries such as real estate or retail trade are generally not export-oriented. The travel industry is export-oriented because it sells its services to visitors rather than local residents. Data for all California industries is provided in the appendix. 4 The method used to calculate Travel Industry Indirect Business Taxes from the BEA data probably underestimates the tax payments because the industry detail for the retail trade sector, including gasoline service stations, was not available. PAGE 12 DEAN RUNYAN ASSOCIATES

21 Households per County (Thousands) Households per County (Thousands) Visitor-Generated Local Tax Receipts as Share of Total Receipts, 2012 Local Sales Tax and Transient Occupancy Taxes 1, % 25% 50% 75% 100% Local Sales & Transient Occupancy Taxes attributable to Visitors Source: Dean Runyan Associates, Inc. See note in following graph. The second bar chart shows the amount of tax receipts generated by visitor spending for each resident household. Again, visitor impacts are the greatest (over $650 per household) for the least urbanized counties (which average 6,000 households per county). The differences among the other categories are less significant and are, in part, a reflection of different tax rates (which tend to be higher in the more urbanized counties). Visitor-Generated Local Tax Receipts per Household, 2012 Local Sales Tax and Transient Occupancy Taxes 1, $0 $200 $400 $600 $800 Average Visitor-Generated Tax Revenue per Resident Household Source: Dean Runyan Associates, Inc. Note: Households per county represent the approximate average number of households per county for each group. The largest group (1 million households per county) is the average number of households per county for the 8 largest counties. The next group (250,000 households per county) is the average for the next 10 largest counties. Each subsequent group includes 10 counties. Detailed figures for each county, including state sales tax receipts, follow. DEAN RUNYAN ASSOCIATES PAGE 13

22 Households, Local Sales and Transient Occupancy Tax Receipts by County, 2012 Total Local Tax Receipts (million) Visitor-Generated Tax Receipts & Households Transient Amount Percent Households Receipts Local Sales Occupany Total (million) of Total (000) per HH Alameda $598.1 $42.5 $640.6 $ % $147 Alpine $0.2 $0.5 $0.7 $ % 0.5 $1,238 Amador $3.6 $0.8 $4.5 $ % 14.5 $93 Butte $25.8 $2.7 $28.5 $ % 87.7 $48 Calaveras $2.8 $0.9 $3.7 $ % 18.7 $76 Colusa $3.2 $0.3 $3.5 $ % 7.1 $73 Contra Costa $271.3 $9.0 $280.3 $ % $67 Del Norte $2.2 $1.2 $3.3 $ % 9.9 $172 El Dorado $18.8 $8.5 $27.2 $ % 70.1 $164 Fresno $200.4 $12.3 $212.7 $ % $81 Glenn $3.1 $0.6 $3.7 $ % 9.8 $95 Humboldt $16.8 $4.5 $21.3 $ % 56.0 $110 Imperial $36.2 $2.2 $38.3 $ % 49.6 $99 Inyo $4.9 $5.0 $9.9 $ % 8.0 $754 Kern $139.3 $10.4 $149.7 $ % $68 Kings $13.2 $0.5 $13.6 $ % 41.4 $32 Lake $6.0 $0.9 $6.9 $ % 26.4 $67 Lassen $2.3 $0.5 $2.8 $ % 9.9 $81 Los Angeles $2,570.6 $354.7 $2,925.3 $ % 3,260.5 $170 Madera $12.9 $3.1 $16.0 $ % 43.8 $99 Marin $61.8 $12.5 $74.3 $ % $168 Mariposa $2.6 $11.7 $14.3 $ % 7.7 $1,733 Mendocino $13.0 $5.8 $18.8 $ % 34.8 $218 Merced $23.9 $1.3 $25.1 $ % 76.6 $33 Modoc $0.9 $0.2 $1.1 $ % 4.0 $73 Mono $2.2 $16.7 $18.9 $ % 5.8 $3,116 Monterey $54.9 $46.6 $101.4 $ % $454 Napa $38.7 $28.3 $67.1 $ % 49.3 $713 Nevada $12.9 $2.9 $15.8 $ % 41.5 $114 Source: Dean Runyan Associates, Inc., U.S. Bureau of the Census and California State Board of Equalization. Local sales tax receipts reflect a 1.0 percent rate of the statewide sales tax and all other applicable city, county and district taxes. PAGE 14 DEAN RUNYAN ASSOCIATES

23 Households, Local Sales and Transient Occupancy Tax Receipts by County, 2012 Total Local Tax Receipts (million) Visitor-Generated Tax Receipts & Households Transient Amount Percent Households Receipts Local Sales Occupany Total (million) of Total (000) per HH Orange $787.0 $168.7 $955.7 $ % 1,004.9 $230 Placer $67.1 $11.8 $78.9 $ % $118 Plumas $1.9 $0.9 $2.8 $ % 8.9 $157 Riverside $400.4 $66.5 $466.9 $ % $168 Sacramento $272.0 $25.6 $297.6 $ % $89 San Benito $5.1 $0.2 $5.4 $ % 17.0 $41 San Bernardino $423.6 $26.6 $450.3 $ % $96 San Diego $692.4 $185.7 $878.1 $ % 1,098.8 $249 San Francisco $341.0 $336.6 $677.6 $ % $1,229 San Joaquin $137.0 $3.4 $140.4 $ % $46 San Luis Obispo $47.7 $24.1 $71.9 $ % $297 San Mateo $264.2 $52.6 $316.9 $ % $324 Santa Barbara $86.2 $37.7 $123.9 $ % $348 Santa Clara $688.2 $63.0 $751.2 $ % $170 Santa Cruz $53.7 $9.8 $63.6 $ % 94.8 $172 Shasta $25.1 $4.9 $30.0 $ % 70.5 $98 Sierra $0.2 $0.4 $0.6 $ % 1.4 $291 Siskiyou $4.9 $2.5 $7.4 $ % 19.3 $171 Solano $64.5 $3.7 $68.3 $ % $53 Sonoma $112.2 $21.9 $134.1 $ % $182 Stanislaus $76.7 $3.0 $79.7 $ % $37 Sutter $13.0 $0.5 $13.4 $ % 31.5 $28 Tehama $7.1 $1.0 $8.1 $ % 23.8 $72 Trinity $0.8 $0.2 $1.0 $ % 6.0 $55 Tulare $57.5 $5.1 $62.5 $ % $56 Tuolumne $6.7 $2.7 $9.5 $ % 22.1 $172 Ventura $113.6 $17.1 $130.7 $ % $94 Yolo $33.0 $2.7 $35.8 $ % 71.2 $62 Yuba $7.0 $0.3 $7.3 $ % 24.4 $38 California Total $8,932.6 $1,666.3 $10,598.9 $2, % 12,691.5 $195 Source: Dean Runyan Associates, Inc., U.S. Bureau of the Census and California State Board of Equalization. Local sales tax receipts reflect a 1.0 percent rate of the statewide sales tax and all other applicable city, county and district taxes. DEAN RUNYAN ASSOCIATES PAGE 15

24 Total and Visitor-Generated State Sales Tax Receipts by County, 2012 Tax Receipts (Millions) Percent Total Visitors Visitor-Related Alameda $1,495.2 $ Alpine $1.5 $ Amador $22.6 $ Butte $161.1 $ Calaveras $17.8 $ Colusa $20.0 $ Contra Costa $831.1 $ Del Norte $13.4 $ El Dorado $103.3 $ Fresno $713.7 $ Glenn $19.4 $ Humboldt $105.0 $ Imperial $139.9 $ Inyo $20.5 $ Kern $870.8 $ Kings $82.3 $ Lake $31.2 $ Lassen $14.4 $ Los Angeles $8,033.2 $ Madera $80.5 $ Marin $257.3 $ Mariposa $10.7 $ Mendocino $72.2 $ Merced $149.2 $ Modoc $5.8 $ Mono $13.8 $ Monterey $334.7 $ Napa $161.4 $ Nevada $65.6 $ Source: Dean Runyan Associates, Inc., and California State Board of Equalization. State sales tax receipts for 2012 reflect a 6.25 percent rate of the statewide sales tax. PAGE 16 DEAN RUNYAN ASSOCIATES

25 Total and Visitor-Generated State Sales Tax Receipts by County, 2012 Tax Receipts (Millions) Percent Total Visitors Visitor-Related Orange $3,279.3 $ Placer $419.5 $ Plumas $11.7 $ Riverside $1,668.2 $ Sacramento $1,133.5 $ San Benito $31.5 $ San Bernardino $1,753.5 $ San Diego $2,846.9 $ San Francisco $947.2 $ San Joaquin $535.0 $ San Luis Obispo $298.4 $ San Mateo $825.7 $ Santa Barbara $359.3 $ Santa Clara $2,150.6 $ Santa Cruz $181.5 $ Shasta $156.9 $ Sierra $1.5 $ Siskiyou $30.9 $ Solano $358.5 $ Sonoma $438.4 $ Stanislaus $426.2 $ Sutter $81.1 $ Tehama $44.4 $ Trinity $5.1 $ Tulare $326.5 $ Tuolumne $35.1 $ Ventura $710.0 $ Yolo $206.3 $ Yuba $28.9 $ California Total $33,139.4 $2, Source: Dean Runyan Associates, Inc., and California State Board of Equalization. State sales tax receipts for 2012 reflect a 6.25 percent rate of the statewide sales tax. DEAN RUNYAN ASSOCIATES PAGE 17

26 IV. REGIONAL TRAVEL IMPACTS SHASTA CASCADES NORTH COAST GOLD COUNTRY HIGH SIERRA SAN FRANCISCO BAY AREA CENTRAL COAST CENTRAL VALLEY DESERTS LOS ANGELES COUNTY ORANGE COUNTY INLAND EMPIRE SAN DIEGO COUNTY PAGE 18 DEAN RUNYAN ASSOCIATES

27 2013p Regional Direct Travel Impacts Spending Earnings Employment Tax Receipts ($Million) Region ($Million) ($Million) (Thousand) Local State Total North Coast 3,696 1, Shasta Cascade San Francisco Bay Area 26,841 8, ,871 Central Valley 6,186 1, Gold Country 4,008 1, High Sierra 2, Central Coast 7,104 2, Los Angeles County 23,491 7, ,583 Orange County 9,808 3, San Diego County 13,495 4, The Deserts 5,987 1, Inland Empire 5,657 1, California 109,641 34, ,792 4,339 7,130 Regional Travel Spending, p ($Millions) Annual Change Region p 12-13p 92-13p North Coast 1,586 3,298 3,092 3,256 3,356 3,527 3, % 4.1% Shasta Cascade % 2.7% San Francisco Bay Area 11,192 22,295 21,147 22,719 24,467 25,643 26, % 4.3% Central Valley 3,009 5,876 5,183 5,506 5,945 6,126 6, % 3.5% Gold Country 2,076 3,785 3,400 3,553 3,781 3,883 4, % 3.2% High Sierra 1,206 2,088 2,063 2,151 2,229 2,358 2, % 3.4% Central Coast 3,413 6,264 5,794 6,082 6,486 6,831 7, % 3.6% Los Angeles County 11,534 21,775 19,133 20,394 22,024 22,952 23, % 3.4% Orange County 4,751 9,016 8,066 8,549 9,076 9,463 9, % 3.5% San Diego County 5,881 12,052 10,716 11,715 12,545 13,047 13, % 4.0% The Deserts 2,783 5,495 4,974 5,201 5,607 5,869 5, % 3.7% Inland Empire 2,499 5,301 4,846 5,118 5,426 5,599 5, % 4.0% California ($Billions) % 3.8% Regional Direct Travel-Generated Employment, p (Thousands) Annual Change Region p 12-13p 92-13p North Coast % 1.3% Shasta Cascade % -0.1% San Francisco Bay Area % 1.3% Central Valley % 0.7% Gold Country % 1.1% High Sierra % 0.6% Central Coast % 1.0% Los Angeles County % 0.5% Orange County % 1.4% San Diego County % 1.8% The Deserts % 1.1% Inland Empire % 1.3% California % 1.1% DEAN RUNYAN ASSOCIATES PAGE 19

28 p Total Direct Travel Spending ($Million) Visitor Spending at Destination 1,568 3,278 3,065 3,232 3,336 3,508 3,675 Other Travel* Total Direct Spending 1,586 3,298 3,092 3,256 3,356 3,527 3,696 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 661 1,725 1,584 1,701 1,754 1,881 2,014 Private Campground Public Campground Private Home Vacation Home Day Travel Spending at Destination 1,568 3,278 3,065 3,232 3,336 3,508 3,675 Visitor Spending by Commodity Purchased ($Million) Accommodations Food & Beverage Services ,024 Food Stores Ground Tran. & Motor Fuel Arts, Entertainment & Recreation Retail Sales Air Transportation (visitor only) Spending at Destination 1,568 3,278 3,065 3,232 3,336 3,508 3,675 Industry Earnings Generated by Travel Spending ($Million) Accommodations & Food Service Arts, Entertainment & Recreation Retail** Auto Rental & Ground Tran Air Transportation (visitor only) Other Travel* Total Direct Earnings 497 1,094 1,065 1,072 1,104 1,193 1,272 Industry Employment Generated by Travel Spending (Jobs) Accommodations & Food Service 17,470 23,420 22,860 23,070 23,210 24,410 25,360 Arts, Entertainment & Recreation 12,920 15,980 15,180 14,490 14,210 14,650 15,620 Retail** 3,500 3,640 3,430 3,450 3,410 3,470 3,560 Auto Rental & Ground Tran Air Transportation (visitor only) Other Travel* Total Direct Employment 34,360 43,380 41,850 41,340 41,140 42,890 44,920 Tax Receipts Generated by Travel Spending ($Million) Local Tax Receipts State Tax Receipts Total Direct Tax Receipts Details may not add to totals due to rounding. North Coast Travel Impacts, p *Other Travel includes resident air travel and travel agency services. **Retail includes gasoline. The North Coast includes Del Norte, Humboldt, Lake, Mendocino, Napa and Sonoma counties. PAGE 20 DEAN RUNYAN ASSOCIATES

29 p Total Direct Travel Spending ($Million) Visitor Spending at Destination Other Travel* Total Direct Spending Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel Private Campground Public Campground Private Home Vacation Home Day Travel Spending at Destination Visitor Spending by Commodity Purchased ($Million) Accommodations Food & Beverage Services Food Stores Ground Tran. & Motor Fuel Arts, Entertainment & Recreation Retail Sales Air Transportation (visitor only) Spending at Destination Industry Earnings Generated by Travel Spending ($Million) Accommodations & Food Service Arts, Entertainment & Recreation Retail** Auto Rental & Ground Tran Air Transportation (visitor only) Other Travel* Total Direct Earnings Industry Employment Generated by Travel Spending (Jobs) Accommodations & Food Service 6,850 7,960 7,500 7,310 7,070 7,240 7,410 Arts, Entertainment & Recreation 3,350 3,680 3,360 3,090 2,950 3,010 2,820 Retail** 1,350 1,290 1,190 1,150 1,130 1,170 1,150 Auto Rental & Ground Tran Air Transportation (visitor only) Other Travel* Total Direct Employment 11,750 13,050 12,110 11,590 11,200 11,500 11,460 Tax Receipts Generated by Travel Spending ($Million) Local Tax Receipts State Tax Receipts Total Direct Tax Receipts Details may not add to totals due to rounding. Shasta Cascade Travel Impacts, p *Other Travel includes resident air travel and travel agency services. **Retail includes gasoline. The Shasta Cascade includes Lassen, Modoc, Plumas, Shasta, Siskiyou, Tehama and Trinity counties. DEAN RUNYAN ASSOCIATES PAGE 21

30 p Total Direct Travel Spending ($Million) Visitor Spending at Destination 8,839 19,579 18,631 19,956 21,398 22,348 23,332 Other Travel* 2,352 2,716 2,516 2,763 3,069 3,295 3,509 Total Direct Spending 11,192 22,295 21,147 22,719 24,467 25,643 26,841 Visitor Spending by Type of Traveler Accommodation ($Million) Hotel, Motel 5,050 12,735 12,236 13,233 14,310 15,135 16,012 Private Campground Public Campground Private Home 1,489 2,323 2,140 2,219 2,335 2,354 2,377 Vacation Home Day Travel 1,988 3,935 3,772 4,015 4,240 4,334 4,411 Spending at Destination 8,839 19,579 18,631 19,956 21,398 22,348 23,332 Visitor Spending by Commodity Purchased ($Million) Accommodations 1,626 3,998 3,575 3,835 4,357 4,873 5,468 Food & Beverage Services 2,032 4,768 5,019 5,346 5,560 5,799 6,073 Food Stores Ground Tran. & Motor Fuel 1,327 3,840 3,017 3,406 3,887 3,929 3,846 Arts, Entertainment & Recreation 1,367 2,824 2,886 3,002 3,068 3,135 3,217 Retail Sales 1,733 3,123 3,207 3,395 3,487 3,556 3,635 Air Transportation (visitor only) Spending at Destination 8,839 19,579 18,631 19,956 21,398 22,348 23,332 Industry Earnings Generated by Travel Spending ($Million) Accommodations & Food Service 1,399 3,612 3,382 3,454 3,695 3,963 4,289 Arts, Entertainment & Recreation 633 1,451 1,433 1,532 1,605 1,748 1,877 Retail** Auto Rental & Ground Tran Air Transportation (visitor only) Other Travel* Total Direct Earnings 4,003 7,254 6,909 7,156 7,625 8,088 8,661 Industry Employment Generated by Travel Spending (Thousand Jobs) Accommodations & Food Service Arts, Entertainment & Recreation Retail** Auto Rental & Ground Tran Air Transportation (visitor only) Other Travel* Total Direct Employment Tax Receipts Generated by Travel Spending ($Million) Local Tax Receipts State Tax Receipts Total Direct Tax Receipts 645 1,481 1,473 1,607 1,694 1,747 1,871 Details may not add to totals due to rounding. San Francisco Bay Area Travel Impacts, p *Other Travel includes resident air travel and travel agency services. **Retail includes gasoline. The San Francisco Bay Area includes Alameda, Marin, San Franciso, San Mateo, Santa Clara, Santa Cruz, and western Contra Costa and Solano counties. PAGE 22 DEAN RUNYAN ASSOCIATES