I can’t tell you the number of times I’ve heard or run across some version of this pitch: The travel and tourism industry is the second- (or third-) largest industry in North Carolina, and has the potential of replacing some of the jobs we’re losing in other sectors. It’s clean, fast-growing, and progressive. If only government will step in with the right assistance, the tourism industry holds the key to our economic future.
Long ago, I realized that wherever you go in the United States, you will hear pretty much the same spiel from politicians, industry reps, and gullible media folks. It turns out that the way the “travel and tourism” industry is defined, it encompasses such a large number of disparate businesses and industries — from hotels and convention business to sports, entertainment, movies, restaurants, and transportation — that there is virtually no state in the union in which it does not constitute “one of the largest industries.”
For years, we’ve sort of made it a joke at the Locke Foundation to locate the silliest version of the “tourism will save us” story. But it’s starting to lose its ability to amuse.
I’ve just read a story today that has taken the claim to its most absurd degree. “With travel and tourism recognized as the largest industry in the state — generating some $12 billion in annual revenue and creating more than 200,000 jobs — the General Assembly is being more hospitable to its needs,” began a piece in last weekend’s Charlotte Business Journal about a bill that has passed the N.C. House, but thankfully not yet the Senate, to aid local projects that promise to attract travel and tourism. Originally intended to help Charlotte build an NBA arena for the new Charlotte Bobcats, the legislature was expanded by lawmakers in Raleigh to encompass a wide variety of costly boondoggles — I mean, wise investments in our future.
My purpose here is not to rehash the debate about this bill. Nor is it my purpose to run down the travel and tourism industry. There are lots of smart and industrious North Carolinians working in the industry. They serve their customers well. But it’s time for a reality check. North Carolina as a whole is not a national leader in the tourism industry, and isn’t likely to be anytime soon.
I’ve looked in vain for a sound economic analysis of travel and tourism in the various states. To conduct such a study, you would have to back out all the expenditures that industry boosters and flawed government datasets include under “travel and tourism” that have little to do with out-of-town or out-of-state visitors. For example, it is silly to include restaurants and movie theaters in the mix without a massive discounting. When my wife and I visit the local Indian eatery and then take in a film at the multiplex, we are, I guess, traveling through Southern Wake County and touring various interesting parking lots of the same. But this activity is far removed from the “Hi, we’re the Petersons from Chicago, and we’re looking for that museum we’ve heard so much about” picture that most of us would associate with a vibrant tourism industry.
In the absence of a comprehensive study of this, I did do some checking in the database of the Bureau of Economic Analysis, a division of the U.S. Department of Commerce. It provides data on gross domestic product and gross state product by industry. I figured that if anything can reasonably be associated with out-of-state tourism — though not solely with tourism — it would be the BEA category for “hotel and other lodging.” In 2001, hotel/lodging expenditures constituted about .87 percent of the gross domestic product of the U.S. The nature of a national average, of course, is that some states are above and some below. South Carolina (.97 percent of gross state product) and Tennessee (.93 percent) are higher than average in hotel spending. Georgia (.76 percent) and Virginia (.70 percent) are below average. And where does our state, where tourism is now the number-one industry, come out? The lowest in the region, at .53 percent.
OK, so maybe North Carolina’s tourists just aren’t hoity-toity. Perhaps we are the RV and camp-out capital of the region. I honestly don’t know. But we can sort of guess at this by looking at another BEA category, “amusement and recreational services.” This ought to capture a lot of what we associate with tourist attractions. And North Carolina does do a little better here. South Carolina (.62 percent) and Tennessee (.76 percent) are still relatively high, but North Carolina (.59 percent) does come out higher than Georgia (.53 percent) and Virginia (.43 percent). However, all of these states are apparently less amusing and less recreating than the nation as a whole (.78 percent).
Again, I’m not saying that individual North Carolina communities aren’t very reliant on travel and tourism. I’m not saying that we shouldn’t wish our travel and tourism businesses well. But if one were to divide the states into two categories, one being truly significant tourist destinations and the other being places where the natives basically like to visit buffet places and barbecue joints and go bowling or dancing on a Saturday night, North Carolina would be in the latter camp.
Of course, this won’t silence the politicians. They’ll just say that our state obviously needs more government aid to build a more significant tourism industry.
Hood is president of the John Locke Foundation and publisher of Carolina Journal.