Study shows WV tourism is more profitable than ever

HUNTINGTON — The state of West Virginia has long prided itself on the unique opportunities it holds within its borders as it relates to tourism. Just two years after Gov. Jim Justice took office, the tourism industry is growing faster and larger than it ever has.

A recent study prepared by Dean Runyan and Associates, a leading national firm for tourism economic research, reveals that West Virginia’s tourism industry grew for the second consecutive year in 2018, climbing 6.5% and creating a $4.55 billion industry in 2018. Justice claims this two-year growth trend reverses years of decline and outpaces national growth by 58%.

The purpose of this specific study was to document the economic significance of the travel industry in West Virginia from 2000 to 2018. These findings show the level of travel spending by visitors traveling to and within the state and the impact this spending had on the economy in terms of earnings, employment and tax revenue.

“It’s an incredible time to be a West Virginian. This state is on the move, and so is our tourism industry,” Justice said. “When I took office, I made tourism a top priority because I knew it had all the potential in the world. All we had to do is find a way to tell our story, and we’re finally doing it.”

The study shows that travel impacts, in absolute terms, are highest in the state’s Eastern Panhandle (Berkeley, Jefferson and Morgan counties), just a short distance from Washington, D.C., and Baltimore. The area offers visitors a variety of historic sites and attractions, including Harpers Ferry National Historical Park, Berkeley Springs State Park and Hollywood Casino at Charles Town Races. That particular region brings in around $1 billion in total direct travel spending — nearly a half-million more than any other region in the state.

According to the study, traveler spending in West Virginia has grown 9.9% in just two years under the Justice administration. Other key industry markers, including state and local tax revenue and tourism-supported jobs, were also up in 2018.

Travel spending by all overnight and day visitors in West Virginia grew for the second consecutive year after four years of decline, increasing by nearly 10% since Justice took office two years ago. In the 2018 calendar year, travel spending was $4.6 billion, compared to $4.3 billion in 2017.

Twenty-two percent of that spending ($1,025,600,000) occurred in the Eastern Panhandle region of the state. The next wealthiest region was the Northern Panhandle, where just over 700 million travel-related dollars were spent.

It is also notable that the size of the travel industry in relation to the total economy of a locale is significant in a number of smaller communities and rural areas of the state, which tend to be more oriented to scenic and outdoor recreational opportunities. The success of outdoor tourism in those areas isn’t reflected accurately in the results of the study, however.

Tourism Commissioner Chelsea Ruby said because this was a tax-based study, things like gaming and lodging show up as successes, but since outdoor tourism doesn’t have a tax tag attached to it, those numbers won’t show how well that aspect of the industry is actually doing.

“What they did for this study was go to each county and survey each area about where money was being spent in relation to tourism. The reason the report shows gaming numbers and doesn’t reflect the success of our outdoor tourism is because gaming has a tax associated with it,” Ruby said.

Approximately two-thirds of all travel-generated government revenue accrues to state government in West Virginia. State taxes include the 6% state sales tax, the motor fuel tax, income taxes on travel-generated earnings and travel-related business income, and state revenue generated through racetrack video lottery and wagering. Local taxes consist of the Hotel/Motel Occupancy Tax and the Business & Occupation Tax, levied by municipal governments in West Virginia.

“The study results detail the overall economic impact of tourism but doesn’t show you what people are doing while they’re here,” Ruby said. “These results are based solely on tax data. We’ve done other studies about why people are coming to our state, and those clearly show that outdoor recreation is the No. 2 reason people are coming in.”

She said the top reason people visit the state is “general tourism,” which simply means people are coming to explore an area they didn’t know much about before, but regardless of why they’re coming in, they’re still spending money. Ruby added that the administration truly believes that outdoor recreation is a strong part of the overall industry in the state.

In response to the study results touted by Justice, Republican candidate for governor Woody Thrasher contends the Dean Runyan and Associates study doesn’t tell the whole story.

“Things may look rosy at The Greenbrier, but one of our four major ski resorts closed this year. That doesn’t indicate a strong, thriving industry,” Thrasher said. “A full-time governor would be looking at all the available data and indicators to make proactive decisions with long-term, positive effects.”

Thrasher pointed to a second study conducted by the U.S. Department of Commerce Bureau of Economic Analysis, claiming it told the real story about the state of tourism in West Virginia, in that both the arts, entertainment and recreation and the accommodations and food sectors showed declines as contributors to West Virginia’s GDP (Gross Domestic Product) from the fourth quarter of 2018 to the first quarter of 2019.

The findings identify those two categories as having a negative impact (minus 0.02% and minus 0.13%, respectively) on the state’s earnings, albeit minute in the larger economic picture.

The agriculture, forestry, fishing and hunting category was also highlighted as having one of the largest declines in relation to the GDP at minus 0.18%. Retail trade was listed as a major contributor for growth, with nearly a 1% increase (.9%) from the final quarter of 2018 to the first quarter of 2019.

The findings from Dean Runyan and Associates also reveal that only four of the state’s 55 counties had greater than 5% of their total earnings come from travel-related spending, while 35 counties saw that number drop at or below 2%.

Travel-generated earnings in Boone, Jackson, Marshall, Pleasants and Putnam counties accounted for less than a percent of each county’s total earnings for 2018. The state’s most successful counties are Pocahontas (18.9%), Jefferson (18.9%) and Greenbrier (14.2%).

There’s still quite a bit of room for growth for the tourism industry in the Mountain State, and Ruby said the Tourism office hopes to keep thinking of new ways to change the way people see West Virginia from the outside. Oftentimes that means going back to the same mentality they began with in 2016.

“People aren’t coming to West Virginia because they aren’t thinking of us as a tourism destination. If we want even more growth, it’s important that we change that,” Ruby said. “But what we do know right now is that not only are we seeing growth within (West Virginia), but we’re coming in stronger than states that surround us.”