Tourism Matters to Montana’s Economy 

2015 category spend

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) preliminary report, non-residents spent over $3.5 billion in Montana in 2016. 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 directly supports 54,865 jobs in Montana. The indirect & induced economic benefits of tourism support another 15,000 jobs in Montana. Taken together, this means one in every 9 Montana workers is supported by out-of-state travel. 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 last 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 fiscal year 2016, the Legislative Fiscal Division estimates that lodging taxes will add more than $20 million to state coffers.

lodging taxes deposited to general fund (2007-2017)
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 over $193 million in state and local taxes.   It also means the average tax burden on every Montana household is reduced by an average of over $474 each, according to the Montana Office of Tourism and Business Development.

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, MTOTBD, 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 over 12 million, and tourism has become a leading state industry over the past three decades.

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 $146 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.

Total Lodging Tax Distribution (FY 2014)About fifty percent of the total lodging & accommodations tax revenues each year is used to fund the Montana Office of Tourism and Business Development, Montana’s six tourism regions & 18 local visitor bureaus and economic research from the University of Montana.  Almost 7 percent of these total revenues is distributed among Montana State Parks, the Montana Historical Society and the Montana Heritage Commission. About 43 percent of these funds are allocated directly to Montana’s general fund for the benefit of all Montanans.