Monday, March 10, 2014

Tourism Employment in Utah

Mark Knold, Supervising Economist

Even a casual understanding of an economy will lead to the conclusion that certain industries have a bigger impact than others within certain geographic locales. Tourism is often cited as an important part of the Utah economy. Yet surprisingly, for the state as a whole, tourism is not a make-or-break industry. Nationally, leisure and hospitality accounts for 11 percent of all employment. In Utah it is only 9.3 percent. Yet for certain parts of the state, tourism is indispensable.

Click image to enlarge
Tourism within an area translates into jobs. For some Utah counties, those jobs are the foundation of the local economy.  Take the tourism away and the economy collapses—in some counties it disappears. Supporting Utah’s local tourist-dependent economies was the impetus behind Utah stepping in last October to temporarily fund Utah’s national parks during last October’s federal government shutdown.
   
The impact of tourism jobs to an area can be gauged by comparing the percentage of leisure and hospitality jobs in a local economy against a baseline percentage—in this case the United States average. Statistically this is called a location quotient (LQ). Equal percentages yield a ratio of 1. An LQ of 0.8 to 1.2 is roughly average. LQ’s higher than 1.2 raise tourism to above-average importance.
   
The graphic shows tourism’s significance for each Utah county. Many counties (light yellow) show no overt significance.  No one doubts tourism exists along the Wasatch Front, but it is easily balanced by the diversity of employment across other industries. Rural counties in this classification are largely devoid of significant natural features and national parks, or have other prominent industries.


Yellow counties are the first rung in above-average tourism employment. Most are small enough that a significant highway passing through the area brings enough tourist volume and spending to enhance the economy. Tourism thus is viewed as an “export industry.” I-15 helps Beaver, Iron, and Washington counties in this regard. U.S. 40 supports Wasatch County, and U.S. 191 is the backbone of San Juan County.
   
The red counties of Rich and Daggett have tourism employment at least double the national average. Rich has summer tourism activity centered on Bear Lake, and U.S. 89’s scenery also feeds tourists north to Jackson Hole and Yellowstone. Daggett County has Flaming Gorge Recreation Area and blue-ribbon fishing on the Green River to help support its economy.
   
Purple counties have tourism employment three times the national average. In Summit County, Park City’s “allure” and three ski resorts are the big tourism draw. In Grand County it is several national parks, river running and mountain biking in the Moab area. Wayne County is isolated but has Capitol Reef National Park. Kane County is a tourist-highway thoroughfare between Bryce and Zion national parks and the Grand Canyon.
   
Utah’s most tourist-dependent county is Garfield. Its tourism base is four times the national average. Tourism employment is 40 percent of all Garfield County employment. Bryce Canyon National Park is the major draw, but U.S. 89 running through Panguitch as the main north-south connection for traffic between Salt Lake City and Phoenix adds supplemental flows. In addition, Grand Staircase Escalante National Monument and Utah scenic byway 12 also attract tourists.

Tourism is important in Utah. Not so much because the state economy as a whole depends upon it. Instead, because certain geographic segments within the state (mostly rural) rely heavily upon tourism as the key foundation for their economies. Thank goodness for the geographic beauty and functionality of Utah’s natural resources.

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