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Article history: The coastal economy is highly sensitive to natural and human disasters and changes in economic con-
Received 13 October 2016 ditions. This study analyzes the local and regional economic impacts of Mississippi and Alabama Gulf
Received in revised form Coast visitor spending in 2013, aiming to provide guidance on future regional planning and management.
17 May 2017
IMPLAN input-output models were constructed which capture the connections among the Gulf Coast
Accepted 19 May 2017
region and the two states' economies. Economic impacts of visitor spending were calculated with the
IMPLAN software. An internet survey of tourists was conducted by Survey Sampling International (SSI) to
a nationally representative population. Overall, 2891 individuals responded, for a response rate of 26.2%.
Keywords:
Economic impact
Based on the survey data, it was estimated that approximately 16.4 million travelers visited Alabama and
Gulf Coast tourism Mississippi Gulf Coast in 2013 and the average per visitor spending was $730.11. In total, visitor spending
IMPLAN yielded $17.6 billion in sales revenue, $9.4 billion in value added, $5.9 billion in labor income, and about
Regional management 200,000 full and part-time jobs in the five coastal counties. Comparatively, the leakage of the visitor
Visitor spending spending out of the regional economy is small. Coastal tourism also contributed to the economy of inland
areas of the two states. But the spillover effect on inland areas and feedback effects on coastal counties
were not large. This analysis examined how tourism industry impacted other working waterfront in-
dustries as well as the rest of the regional economy. Findings help decision makers look beyond the direct
impacts generated by the Gulf Coast tourist spending and contribute to sustainable community planning
and management.
© 2017 Elsevier Ltd. All rights reserved.
http://dx.doi.org/10.1016/j.ocecoaman.2017.05.006
0964-5691/© 2017 Elsevier Ltd. All rights reserved.
Z. Guo et al. / Ocean & Coastal Management 145 (2017) 52e61 53
due to hurricanes in 2004 and 2005 (Zhang et al., 2015). The loss in
tourism revenues caused by the Deepwater Horizon oil spill in 2010
was estimated to be $0.3 - $0.8 billion in coastal Alabama.
Other impact studies that examined effects to tourism from
these shocks looked at all coastal areas in all the Gulf Coast states
and found that negative economic impacts persisted for up to three
years (Oxford Economics, 2010). Aldy (2014)'s study associated
direct employment losses in tourism related sectors with declines
in visits. Larkin et al. (2013) discussed indirect effects of oil spills
that damaged the value of intrinsic locational place-brands (i.e.,
reputation) and consequently resulted in regional economic losses.
This negative externality needs to be accounted for when looking at
economic impacts of oil spills and suing for compensations for local
residents. Therefore, a baseline is necessary to understand how
coastal tourism in the GCR impacts the economies of the two states,
and to better estimate GCR place-brand value for the future.
Tourism affects nearly all facets of the Gulf Coast as well as the
Fig. 1. Employment and real GDP changes in the tourism and recreation sector of the
Alabama Gulf Coast (2009 dollars), 2005e2013 (Data source: ENOW, 2016). regional economy. It also has ripple effects across the Gulf Coast
counties and beyond and is one of the most important sources of
regional economic growth (Zhang et al., 2015). This industry,
combined with notable events such as disturbances and threats,
can cause significant socioeconomic structural change across all
sectors of the working waterfront economy. First of all, some
working waterfront industries directly and indirectly supply goods
and services to tourism industries. Second, employees in the
tourism industry and all its supplying industries spending their
income (on housing, utilities, etc.) also affect other working
waterfront industries. In the same way, other working waterfront
industries affect tourism industry and rest of the working water-
front economy. Therefore, the interplay between coastal tourism
and other working waterfront industries is very important for
economic development and to increase community resilience.
Resilience in the GCR is characterized in the area's capacity to
maintain social, economic, physical, human and natural capital
during times of crisis (Mayunga, 2007).
This study analyzes the local and regional economic impacts of
Mississippi and Alabama Gulf Coast visitor spending in 2013, aim-
Fig. 2. Employment and real GDP changes in the tourism and recreation sector of the
Mississippi Gulf Coast (2009 dollars), 2005e2013 (Data source: ENOW, 2016; 2008
ing to provide guidance on future regional planning and policy-
data were not reported due to data confidentiality laws.). making. It is useful for understanding the resiliency of GCR
communities that are heavily dependent on tourism, and the pos-
itive impacts of industry specific development. Following the re-
In addition, labor income and tourism tax revenues also sults, the leakage of the visitor spending out of the regional
increased in Alabama and Mississippi Gulf Coast counties. From economy is discussed. We also compare direct and indirect job
2005 to 2013, labor income grew 71.7% and 47.6% in the tourism and creation in the Gulf Coast and non-coastal areas, as well as the
recreation sector in the coastal counties of Alabama and Mis- economic multipliers with other coastal regions.
sissippi, respectively (ENOW, 2016, Fig. 4). There was a 32% increase
in tourism tax revenues in 2011 compared with the 2005e2009
average in Baldwin and Mobile, AL (SOG, 2014). Mississippi's Gulf
Coast also saw a 5% increase in tourism tax revenues in 2011
compared to the 2007e2009 average (SOG, 2014). 1.1. Study area
Coastal tourism is greatly dependent on working waterfronts,
i.e., the real property (including waterfront lands and infrastructure The GCR, consisting solely of the coastal counties of Alabama
and waterways) that are used for water-dependent commercial (Baldwin & Mobile) & Mississippi (Jackson, Hancock, Harrison), was
activities (Zhang et al., 2015). Water-dependent and water-related used as the study area for this analysis. Fig. 5 provides a
industries are referred to as working waterfront industries in this geographical reference of the GCR. Throughout the five Gulf Coast
paper. Previous working waterfront economic impact studies con- states (including Texas, Louisiana, Mississippi, Alabama, and Flor-
ducted in the GCR focused solely on the welfare of commercial and ida), tourism is estimated to be a $20 billion industry (GMPO, 2010).
recreational fishing sectors (Posadas, 2015; Posadas and Posadas, In Alabama alone, it is valued at over $3.2 billion annually (Alabama
2013; Upton, 2011). While these studies found that the seafood Tourism Department, 2014). Fig. 6 show that GCR tourists' primary
industry took about two years on average to recover to pre-shock reasons for visiting was accessing the beach, retail shopping, eating
condition, additional losses from diminished branding value were seafood, and gambling (MASGC, 2013). Therefore, it is important for
predicted for up to seven years after an event (Sumaila et al., 2012). GCR tourism development to focus on supporting these types of
Likewise, coastal tourism is vulnerable to threats and disturbances tourism resources supplied. Tourism resource supply of the area is
by natural and human disasters. For instance, the Alabama tourism characterized by the availability of activities for visitors at a desti-
and recreation sector declined over 30% in GDP and employment nation, the GCR.
54 Z. Guo et al. / Ocean & Coastal Management 145 (2017) 52e61
Fig. 3. Employment and real GDP percentage changes in the tourism and recreation sector of the GCR (2009 dollars), 2005e2013. (Data source: ENOW, 2016).
Fig. 5. Map of Gulf Coast Region, by County/State Produced using: ESRI, ArcGIS Business Analyst 2014.
Fig. 6. Percentage of GCR tourists reporting listed activity as non-discrete reason for visiting area, listed by frequency of visitation. Frequent Visitor (>two visits), Casual Visitor
(<three visits) (Data source: MASGC, 2013.
2.1. Data collection residents. Overall, 2891 individuals responded, for a response rate
of 26.2% and an average response time of 11 min. According to
An internet survey of tourists was conducted during the sum- Fig. 7(aed), the GCR tourist is generally between the ages of 19e34,
mer of 2013. The purpose of the survey was to understand house- with household incomes between $25,000e100,000.
holds' recreational usage of coastal resources and expenditures In the survey the respondents were also asked about travel
used to visit the GCR. The survey was created and distributed using destination choices, attributes consumed during travel and asso-
Qualtrics survey software (Snow and Mann, 2012). Survey Sampling ciated expenditures, and questions relating to their seafood con-
International (SSI), a third party survey distributor, was used to sumption when visiting the GCR. Number of individuals in a
access a nationally representative population. Directions for the traveling party was also included, as well as days spent at the
survey along with an access link were distributed to SSI panels. The destination (see Table 1).
survey was distributed until the sample population distribution We grouped the survey expenditure data into the following
across demographics matched national population statistics based industry categories: Retail Stores; Scenic and Sightseeing Trans-
on 2010 Decennial Census data. A total of 11,015 people from all 50 portation; Independent Artists, Writers and Performers; Amuse-
states and the District of Columbia were invited to participate, ment Parks, Arcades and Gambling Industries; Other Amusement
including 10,967 who lived outside of the GCR and 48 local and Recreation Industries; Hotels and Motels including Casino
56 Z. Guo et al. / Ocean & Coastal Management 145 (2017) 52e61
Fig. 7. GCR Tourist Survey 2013 Demographics of GCR visitors. (a) GCR Gender; (b) GCR Age; (c) GCR Race; (d) GCR Household Income.
Table 1 Table 2
GCR tourists' average characteristics. The estimated average spending of Alabama and Mississippi Gulf Coast visitors on
each industry category in 2013.
Size of Travel Party (person) 4
Length of Visit (days) 4 Sector Per Visitor
Distance Traveled to GCR (miles) 452 Spending
Fig. 8. Comparison of GCR/U.S. demographics for racial/gender self identification; 2013 GCR Tourists Survey.
Table 3
Economic impacts and multipliers of visitor spending ($11.9 billion) on the Alabama and Mississippi Gulf Coast economy (in 2013 dollars).
Direct Effect Indirect Effect Induced Effect Total Effects Type SAM Multiplier
Table 7
Total economic impacts of Gulf Coast tourism on inland areas and the overall economy of the two states (in 2013 dollars).
AL MS Total % of Coastal
feedback effects from the inland areas. Comparing the results of and transport by truck, warehousing and storage. Nonetheless, this
MRIO and the single model, the feedback effects were very small. spillover effect was minimal compared with the effect on the
For instance, the output impact estimated using the single model coastal economy. Tourism created 2324 jobs in inland areas, merely
was $17,610 million, only $4 million smaller than the MRIO esti- about 1.2% of those generated in the five coastal counties.
mate. This suggests that the feedback effect was only 0.02% of the
MRIO result. The feedback effects of the other economic measures 4.3. Multipliers
(value-added, income, and employment) were all less than 0.02%.
The relatively small spillover effects on the inland economy (less This study used the IMPLAN software to build input-output
than 2.5% of economic impacts on Gulf Coast) could explain why models and calculate the multipliers. The multipliers indicated
feedback effects were minor. Both the spillover effects and feedback the strength of backward linkages between tourism industry in the
effects indicate that the interdependence of tourism related in- GCR and the rest of regional economy. Social accounts included for
dustries between Gulf Coast and inland areas of the two states was the model construction were industries and households. If more
not large. social accounts were included such as state and local government
education and non-education, induced effects would become larger
4.2. Employment due to the cross-sector interplay as a result of income spending.
Consequently, estimated multipliers and contributions to the
The top jobs created in the five coastal counties were in the regional economy would be greater. Withholding these accounts
accommodation industry followed by food services and drinking limits possible overestimation of multipliers and contribution.
places, similar to other studies (Lacher and Oh, 2012). Tourism Comparing the multipliers of Alabama and Mississippi Gulf
generated the most jobs in the non-hotel/motel accommodations Coast tourism to other coastal tourism impact studies reveals
sector, about three times the number of jobs created in the second comparable multipliers. In general, models constructed for larger
largest sector food services and drinking places. This can be economic zones have higher multipliers because of more industry
explained by tourists' spending pattern during their stay at Ala- transactions and reduced leakage. The Grand Strand study included
bama and Mississippi Gulf Coast. Expenditures on non-hotel/motel two coastal counties in South Carolina (Salvino, 2012). Its multi-
accommodations accounted for about 45.9% of tourists' total pliers are the same (employment multiplier of 1.4) or slightly lower
spending. Including expenditures on hotels and motels, visitors (both output and labor income multipliers of 1.5) than those
spent over 60% on accommodations in the GCR. Jobs created in calculated in this study (1.6). California coastal tourism and recre-
accommodation sector consisted of over 41% of all jobs generated. ation has a slightly higher multiplier of 1.8 for both the value-added
Previous studies argue that tourism generates entry-level or and labor income effects. Its employment multiplier of 1.3 is
low-paying jobs (Goos and Manning, 2003; Lacher and Oh, 2012). In slightly lower than this study (Kildow and Colgan, 2005).
this regard, it is interesting to compare the type of jobs created in Like any other models, the input-output models constructed by
different tourism sectors. The ratio of labor income impact to the IMPLAN software incorporated a few important assumptions
employment impact allows us to compare the jobs created in including constant returns to scale, linear and homogenous pro-
direct-related industries (i.e., industries directly provide goods and duction functions, perfectly elastic factor supplies, and constant
services to visitors) with those in other industries in the regional technology. For example, constant returns to scale means that if
economy. For direct-related industries, the ratio (of direct effect) output of a tourism industry or supplying industry increases by
was $26,750/job, indicating that, on average, the full- and part-time 10%, inputs required will also increase by 10%. These assumptions,
jobs directly created by tourism had an annual wage of $26,750. The to some extent, determined how industries link to one another in a
ratio of indirect effect suggests that jobs created in supplying in- region and the estimation of multipliers. Consequently, they
dustries had an average annual wage of $35,683. The ratio of affected the calculation of indirect and induced effects of the
induced effect suggests that jobs created through spending the coastal tourism on the regional economy. In the case that output of
income earned in direct-related and supplying industries had an a tourism industry increase by 10%, input requirements only in-
average annual wage of $34,575. Jobs indirectly created by tourism crease by 9% due to economies of scale; the spillover effects will be
had a higher wage in the coastal counties. One reason for this may smaller.
be that higher percentage of seasonal and part-time jobs generated
in direct-related industries than in indirectly-related industries. In 5. Conclusion
total, there were 61,798 full- and part-time jobs indirectly created
by supplying industries and spending of income. These jobs Many coastal communities have shifted from traditional mari-
accounted for about 30% of total jobs created in the coastal time industrial operations, such as shipbuilding, to service and
counties, or 16.6% of all employment in this region. Jobs created in tourism oriented economies (Jones and Mangun, 2001). With these
this region had an average lower wage than the annual average economies, local stakeholders should consider environmental and
wages per employee of the five coastal counties ($40,198.44) in cultural characteristics of the area when forming development
2013 (BLS, 2013), which is consistent with previous studies (Goos strategies. The GCR has these characteristics, as well as other types
and Manning, 2003; Lacher and Oh, 2012). of leisure tourism resources, both natural and cultural. Local policy
Comparatively, jobs indirectly created in inland areas of Ala- makers and developers need to find effective strategies towards
bama and Mississippi had a much higher average annual wage of sustainable management GCR's coastal tourism and recreational
$45,310. It was higher than the annual average wages per employee resources.
of the inland areas of the two states ($40,096.99) in 2013 (BLS, Moreover, the GCR economy is highly sensitive to natural and
2013). This suggests that tourism affects different industries and human disasters and changes in economic conditions. In addition
creates comparatively higher-wage jobs in inland areas. In the GCR, to the impacts of hurricanes, Deepwater Horizon oil spill also
jobs were mainly created in industries such as accommodation, demonstrated how human disasters negatively affect Gulf Coast
food and drinking, amusement and recreation, and retail services. tourism as well as the whole regional economy (Ritchie et al., 2013).
In the inland areas, larger percentage of jobs were generated in Disturbances such as expanding population and subsequent land
electricity, telecommunications, poultry processing, insurance use competition has increased land values and altered land use
carriers, mining coal, state and local government electric utilities, patterns (AWASC, 2011). A confluence of notable events has
60 Z. Guo et al. / Ocean & Coastal Management 145 (2017) 52e61
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Alabama Tourism Department, 2014. Sweet Home Alabama e Travel Economic
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