Tourism Matters to Montana’s Economy
The tourism industry’s ability to attract visitors is meaningful because out-of-state spending has a significant effect on Montana’s economy. According to the Institute for Tourism and Recreation Research (ITRR), non-residents spent approximately $3.3 billion in Montana in 2012. Traveler spending directly supports gas stations, restaurants, retail stores, hotels, state parks, outfitters and many other businesses. In turn, tourism businesses circulate traveler dollars through Montana’s economy each time they purchase local products and services ― creating a positive ripple effect throughout the state.
Tourism Creates Jobs
Non-resident travel supports 43,000 jobs in Montana. As one of the state’s largest employers, non-resident tourism makes up 6.2 percent of Montana’s total employment. The industry provides fertile ground for entrepreneurship and independent small business, and creates opportunities for people in every category of the socioeconomic spectrum. Indirect and induced jobs in professional services, real estate, agriculture, finance, insurance, construction and other sectors of the economy account for more than 30 percent of visitor-supported jobs.
As an industry that has experienced relatively steady growth over time, tourism has helped provide a hedge against boom and bust industries and has contributed to Montana’s economic diversity which is cited as a leading factor in the state’s ability to weather the recent recession.
Tourism Lowers the Tax Burden on All Montanans
Some parts of Montana see more visitors than others, but Montanans everywhere benefit from the taxes paid by non-residents. For the 2013 fiscal year, it is estimated that lodging taxes will add more than $17 million to state coffers according to MTOT.
Along with lodging taxes, visitors directly contribute to Montana’s tax base by paying excise taxes on gasoline, alcohol and other goods, and indirectly contribute to income, property and corporate taxes by supporting local jobs and patronizing Montana businesses. According to ITRR estimates, non-resident visitors generated $306 million in state and local taxes in 2012. That equals 8.1 percent of total local and state tax collections.
Tourism Supports Montana Communities
The tourism industry works to promote and preserve the qualities that make Montana a great place to live, visit and work. Travelers add to the lifestyle many Montanans enjoy by allowing more air service, restaurants, shops, special events, ski runs, state parks and historical sites to exist than the state’s population could support on its own.
The Importance of Destination Promotion
In a competitive marketplace where travelers have many options, MTOT, state tourism regions and local visitor bureaus use lodging tax funds to provide strong representation for Montana. Before the lodging tax statute was created in 1987, Montana ranked towards the bottom in the nation for tourism marketing, and fewer than 3 million travelers came to the state each year. With a stable source of promotion funding, the number of annual travelers has grown to 10.7 million, and tourism has become a leading state industry over the past 25 years.
While many factors influence travel trends, there is no question that Montana would lose market share to competing destinations without promotion ― giving up portions of the revenues, taxes and jobs we enjoy to Colorado, Utah, Wyoming, Idaho and other states. A study by Leisure Trends Group found that each dollar spent on advertising Montana results in $157 in visitor spending. Ongoing brand awareness studies show that awareness notably grows once Montana advertises in a market. Those who have seen Montana’s advertising are significantly more likely to plan travel here compared to those who are unaware of the advertising.
In addition to funding tourism promotion, lodging taxes benefit Montana State Parks, the Montana Historical Society and the Montana Heritage Commission. Fifty-seven percent of the lodging tax is allocated for tourism promotion and tourism infrastructure, and 43 percent is deposited in the state general fund for the benefit of all Montanans.