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Tourism and Economic Development: Building a Thriving Community for Business

November 12, 2024 Karen Meier

Tourism and economic development go hand-in-hand, building a thriving community for business

When you think about tourism, what comes to mind? I recently asked some friends this question, and here are a few of their answers:

Hotels
Food
Travel
Relaxation
Attractions
Exploring new places
Meeting new people
Vacations
Historical cities
Culture

They’re right — tourism is all of these things, but it’s also so much more. Tourism is also a key driver of economic growth, enhancing a region’s quality of life and attractiveness to businesses and talent.

In a recent article, I explored key organizations — like economic development agencies, Chambers of Commerce, and workforce development institutions — that work to attract, retain, and support businesses, fostering a strong local economy and vibrant community. These organizations provide the resources and infrastructure needed to ensure your community continues to be a place where people want to live, work, and play.

While tourism may not always be as directly involved in business and talent attraction, it plays a significant role in economic development. By promoting local amenities and attracting visitors, tourism serves as a powerful engine for growth. It generates revenue, supports local businesses, creates employment opportunities, improves infrastructure, and revitalizes communities.

In this article, I’ll explore how tourism contributes to a strong local economy and complements the work of other organizations in building a resilient and thriving community for residents, workers, and businesses.

How Tourism Supports Economic Development

Local tourism boards or convention and visitors bureaus (CVBs), also known as destination marketing organizations (DMOs), focus on promoting a location as a destination for tourists, conventions, and events. Their work enhances a region’s appeal, indirectly benefiting local businesses by boosting foot traffic, increasing spending, and improving the area’s overall attractiveness.

A strong tourism sector often means more customers and higher revenues for businesses, especially those in hospitality, retail, and services. While tourism is their primary focus, DMOs also help create a vibrant community environment that attracts new businesses and supports existing ones.

At the Virginia Economic Developer’s Association (VEDA) fall conference in September, a session on tourism-related economic development described the work of destination organizations as a community vitality wheel: When you build a place that people want to visit, it also creates a place where people want to live and work, and where business wants to be. That attracts more visitors, and the cycle continues — creating a place where people want to be every day.

How Tourism Supports Business and Talent Attraction

Enhancing Quality of Life: Tourism highlights amenities like parks and cultural attractions, making a region more appealing to businesses and talent looking for a vibrant, attractive place to live and work.
Improving Infrastructure: Tourism drives investments in transportation, services, and public spaces, making a region more accessible and appealing for businesses and professionals looking for a well-connected location.
Creating Networking Opportunities: Tourism events like conferences and festivals connect business leaders, entrepreneurs, and professionals from various industries, fostering collaborations that create new business ventures and attract talent.
Promoting Local Culture: Tourism showcases a region’s unique culture, heritage, and industry strengths, attracting new businesses and talent aligned with those assets (e.g., technology, creative industries, outdoor recreation).
Creating Jobs: Tourism brings in potential new workers to a region, enhancing the local pool of available labor and making the area more appealing to new businesses seeking skilled talent.

How Tourism Supports Business and Talent Retention

Generating Revenue: Tourism brings in more visitors, which increases consumer spending in local businesses, especially in retail and hospitality, helping existing businesses succeed and grow.
Enhancing Regional Branding: A strong tourism sector promotes a region’s unique identity, fostering community pride and making local residents feel more connected to their region, encouraging talent and businesses to remain in the area.
Creating a Vibrant Environment: Tourism-driven events and activities make a region more attractive, enhancing quality of life and helping businesses retain talent seeking a vibrant community with many social and recreational opportunities.
Supporting Workforce Development: Tourism-related industries offer job opportunities and skills training, ensuring existing businesses have access to the talent they need to grow and succeed.
Fostering Local Partnerships: Tourism promotes collaboration between sectors like hospitality, retail, and more, helping businesses form strategic partnerships that strengthen the local economy and support talent retention.

Real Life Impacts

Here are a few examples of the positive impact that can occur in communities when tourism supports economic development.

Richmond, VA

Investments in sports tourism, conventions, and attractions have helped the Richmond region grow as a top destination, supporting local businesses and improving the quality of life for residents.

Visitor spending reached a record $3.7 billion in 2023, creating jobs and boosting tax revenue, directly highlighting how tourism in the Richmond region has had a significant positive impact on the local economy.

Greenville, SC

The tourism industry in Greenville is booming, contributing $2.3 billion to the local economy in 2023. This growth has supported local businesses and created jobs, strengthening the city’s reputation as a top destination for both visitors and potential new residents.

Nashville, TN

Through its “Music City Next” plan, which seeks to attract a more diverse group of visitors by expanding music and entertainment offerings and increasing international flights, Nashville is combining tourism growth with economic development. The City is also focusing on improving public safety and addressing housing and workforce challenges to ensure sustainable growth and a positive impact on the community.

Detroit, MI

Detroit’s growth as a travel destination highlights how tourism and economic development work hand-in-hand to revitalize the local economy. Investments in hotels, cultural landmarks, and major events have made the city more attractive to visitors while creating jobs and strengthening the community.

Louisville, KY

Louisville’s tourism and economic development efforts worked closely in 2024 to boost the city’s economy, with record-breaking events, meetings, and visitor experiences contributing to the $3.4 billion in tourism-generated revenue, creating new opportunities for growth and community prosperity.

Oregon

Travel Oregon’s efforts to promote the state highlight how tourism supports local economies and strengthens communities across Oregon. Tourism in Oregon was strong in 2022, with visitor spending up nearly $3 billion from 2021, creating more jobs and boosting local tax revenue.

Pennsylvania

Pennsylvania’s tourism campaign, “The Great American Getaway,” is combining tourism and economic growth to attract more visitors and support local jobs. With an $18 million investment, the campaign promotes Pennsylvania’s historic sites, outdoor activities, and small businesses, aiming to bring in more tourists and boost the state’s economy.

In conclusion, tourism brings several benefits to communities:

Boosting revenue
Creating jobs
Preserving culture
Enhancing infrastructure
Improving quality of life

Promoting your region’s unique assets not only attracts visitors but also supports long-term economic growth for businesses and talent alike.

Curious about the economic impact of tourism in your state or region? Or want to ensure your tourism efforts align with local business and workforce needs? We’re here to help! Camoin Associates can help you assess your region’s tourism potential and craft strategies that complement your economic development goals.

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