Tourism Boosters

As the nation’s fifth largest metropolitan area in terms of the size of its travel and tourism industry, Atlanta is behind only New York, Las Vegas, Chicago, and Los Angeles. The metro area also ranks fifth in terms of total tourism employment, with about 160,000 jobs in tourism-related industries.

Both the Georgia World Congress Center (GWCC) and the Georgia Dome are vital to the overall health of the 28-county area’s tourism industry: The GWCC and Georgia Dome’s total economic impact on the state’s economy was $2 billion in fiscal year 2005. They should do even better in 2006.

The Dome’s year began with the relocated Sugar Bowl. The GWCC will pick up a number of large national conventions, trade shows and many smaller meetings. Some 21,000 golfers will come this month to attend the Golf Course Superintendents Association’s annual convention.

In October, the facility will host 25,000 members of the Society of Neuroscience. All these events had been slated to go to New Orleans. Because major conventions and trade shows often are scheduled years in advance, the GWCC could benefit from displaced bookings for several years.

Of the $2 billion impact figure, $1.3 billion (64 percent) results from spending by out-of-state attendees, $585 million (29 percent) from spending by exhibitors, and $141 million (7 percent) from spending by sponsoring organizations. Of that total, $1.23 billion is initial spending by attendees, exhibitors and organizations sponsoring the events; $772 million represents the multiplier impact. (Dividing the total impact by the figure for initial spending yields an average multiplier value of 1.63: On average, every dollar of initial spending generates an additional 63 cents for the state’s economy.)

The GWCC and the Georgia Dome together add $774 million in labor income to Georgia’s economy and 27,124 jobs. They generated $84 million in additional tax revenue for state government, $38 million in additional sales tax revenue for local governments, and $38 million in additional bed (hotel/motel) tax revenue.

The actual impact is much higher, because these amounts do not consider the GWCC and Georgia Dome’s long-term benefits to the state’s overall economic development. Nor do they consider the benefits of capturing spending by in-state event attendees. If they weren’t available, it’s likely a substantial portion of spending related to in-state attendees would not have taken place in Georgia.

An enduring reason why the GWCC prospects are so good is downtown Atlanta’s new and improved attractions. November saw the opening of the Georgia Aquarium, and soon we will have an expanded World of Coca-Cola. The AmericasMart’s planned 2 million-square-foot expansion will help ensure that this wholesale trade complex continues to fuel the growth of Atlanta’s hospitality industry.

In Midtown, the expanded High Museum will bring more visitors; and the proposed Atlanta Symphony Center will eventually be an important additional consideration for those who plan meetings and events.

To reach its full potential Atlanta must connect its abundance of far-flung attractions – either physically via visitor-friendly transportation (e.g., shuttles) or emotionally via more effective marketing. The payoff will be substantial.

Historic/cultural travelers spend much more aggressively than the average visitor, and their trips tend to be relatively long. Meeting and convention planners increasingly will select future sites based on cultural and historical appeal. Atlanta already is a “must see” cultural destination for African-American households.

Consequently, the city is the nation’s premier destination for African-American meetings and conventions.

Georgia can expand upon that accomplishment. If the success the metro area has earned in the African-American travel market can be replicated in the overall travel market, our hospitality industry will move onto a higher and much more prosperous growth trajectory.

On a more cautionary note: It’s possible that Delta Air Lines’ 2005 bankruptcy filing will adversely impact air travel to Atlanta in 2006, but negative effects, if any, primarily would be on connecting traffic rather than origin and destination traffic. The loss of some connecting traffic would not greatly impact the GWCC or the Georgia Dome.

Dr. Jeffrey M. Humphreys is director of the Selig Center for Economic Growth at the University of Georgia’s Terry College of Business. E-mail him at jhumphreys@terry.uga.edu.