Tourism and Rural Economic Development: An Overview

1
Tourism and Rural Economic Development An
Overview

• Murat Arik, Ph.D.
• Associate Director
• Business and Economic Research Center
• Jennings A. Jones College of Business
• Middle Tennessee State University
• Murfreesboro, TN 37132

2
What role does tourism play in rural economic
development?

• This session deals with three major tourism
  related areas that may contribute to the rural
  economic development
• Natural amenities
• Retirees
• Event-based tourism

3
How has the literature on tourism and rural
economic development linkage evolved over time?

• A keyword search using various research venues
  indicates that there is more headline news than
  academic research on the subject matter
• The research venues used are
• Google
• LexisNexis Academic Universe
• Academic Search Premier

4
Keyword Combinations

• Initial combination of keywords
• economic development, and tourism and rural
  (EDTR)
• nature
• retiree
• retirement
• heritage
• target industry
• amenities
• music

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Google Search Results
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LexisNexis Academic Universe Keyword Search
Results
7
LexisNexis Academic Universe Keyword Search
Results
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Academic Search Premier Keyword Search Results
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Academic Search Premier Keyword Search Results
10
Retirement and Tourism Connection Why is it
important?

• Extracted from Dr. Mark Fagan, Retirement as an
  Economic Development Strategy at
• www.jsu.edu/depart/sowk/Mark_Homepage.html. Dr.
  Fagan graciously allowed us to use some of his
  slides in this presentation.

• Those who are 50 years old and over
• Control 77 of Personal Assets
• 80 of Money in Savings Accounts
• 77 Own their Homes
• Do 70 of Tourism Spending

11
Where do these retirees spend? Spending by the
Mature Market

• Extracted from Dr. Mark Fagan, Retirement as an
  Economic Development Strategy at
• www.jsu.edu/depart/sowk/Mark_Homepage.html. Dr.
  Fagan graciously allowed us to use some of his
  slides in this presentation.

• 118 billion in FL or 48 of total spending
• 24 billion in LA or 38 of total spending
• 23 billion in AZ or 34 of total spending

12
Retiree Spending by Expenditure Categories

• Extracted from Dr. Mark Fagan, Retirement as an
  Economic Development Strategy at
• www.jsu.edu/depart/sowk/Mark_Homepage.html. Dr.
  Fagan graciously allowed us to use some of his
  slides in this presentation.

• 26 on Housing
• 20 on Transportation
• 16 on Food and Beverage
• 13 on Household Operations
• 7 on Healthcare
• 6 on Recreation
• 5 on Services
• 4 on Apparel
• 3 on Charity

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Size of Potential Market78 Million Baby Boomers
(1946-1964)

• Extracted from Dr. Mark Fagan, Retirement as an
  Economic Development Strategy at
• www.jsu.edu/depart/sowk/Mark_Homepage.html. Dr.
  Fagan graciously allowed us to use some of his
  slides in this presentation.

• 1/3 of U.S. population
• The oldest will begin turning age 60 in 2006
• People ages 55-75 will increase 3.5 annually
  over the next 9 years
• In 1990, 11 billion was transferred to them
• in 2015, that number will peak at 340 billion
• In less than 15 years, infrastructure (housing,
  health care, commerce, and services) to support
  them will have to more than double

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Why Rural Areas?

• Extracted from Dr. Mark Fagan, Retirement as an
  Economic Development Strategy at
• www.jsu.edu/depart/sowk/Mark_Homepage.html. Dr.
  Fagan graciously allowed us to use some of his
  slides in this presentation.

• Older interstate migrants
• Increasingly are going from metro areas to
  smaller communities and rural areas
• Increasingly are going to states with mild
  climates, natural beauty yet easy access to
  urban services

15
How can We Characterize Older Migrants?

• Extracted from Dr. Mark Fagan, Retirement as an
  Economic Development Strategy at
• www.jsu.edu/depart/sowk/Mark_Homepage.html. Dr.
  Fagan graciously allowed us to use some of his
  slides in this presentation.

• Amenity MigrantsGo to States with Amenities Such
  as Lakes, Beaches, Mountains, Deserts (healthy,
  wealthy)
• Return MigrantsReturn to States Where They Were
  Born After Earning a Pension for the Nostalgia
  (healthy, wealthy)
• Dependency MigrantsMove to State Where They Have
  Caregivers After Becoming Disabled or Losing
  Spouse

16
On Average, What do the In-migrant Retiree
Households Bring to the Local Communities?

• Extracted from Dr. Mark Fagan, Retirement as an
  Economic Development Strategy at
• www.jsu.edu/depart/sowk/Mark_Homepage.html. Dr.
  Fagan graciously allowed us to use some of his
  slides in this presentation.

• This translates into
• 2.75 jobs per new household
• Serving their communities through volunteering
  and leadership positions

• They have
• 400,000 in Total Assets
• 40,000 Annual Income
• Do 85 of Their Spending Locally
• Pay More in Taxes Than They Cost in Services

17
What are the Sectors Benefiting From Retirees?

• Extracted from Dr. Mark Fagan, Retirement as an
  Economic Development Strategy at
• www.jsu.edu/depart/sowk/Mark_Homepage.html. Dr.
  Fagan graciously allowed us to use some of his
  slides in this presentation.

• Real Estate (residential commercial)
• Finance (banks, insurance, stocks, financial
  planners, accountants)
• Healthcare (professionals facilities)
• Recreation and Entertainment
• Hospitality (lodging restaurants)
• Retail (durables non-durables)
• Utilities
• Tourism (visiting permanent tourists)

18
To summarize,

• Extracted from Dr. Mark Fagan, Retirement as an
  Economic Development Strategy at
• www.jsu.edu/depart/sowk/Mark_Homepage.html. Dr.
  Fagan graciously allowed us to use some of his
  slides in this presentation.

• Yet, affluent ones will not strain
• Social services and healthcare services
• School system
• Criminal justice system, and
• Create environmental problems

• Benefits From In-migrant Retirees are
• Job Creation and Retention
• Increasing Tax Base
• Increasing Community Deposit Base for Financing
  Infrastructure/other industry
• Increasing Retail Sales
• Increasing Number of Volunteers
• Improved Quality of Life

19
What are the Geographic Characteristics of
Retirement Counties?

• Extracted from Dr. Mark Fagan, Retirement as an
  Economic Development Strategy at
• www.jsu.edu/depart/sowk/Mark_Homepage.html. Dr.
  Fagan graciously allowed us to use some of his
  slides in this presentation.

• Moderate, 4-Season Climate
• Scenic Landscapes (mountains, lakes, beaches,
  deserts)
• Quieter and Safer
• Reasonable Cost of Living
• Outside Urban Area but Easy Access to Health
  Care, Commercial, Transportation, and Cultural
  Attractions