Congratulations! You have been hired by Pineapple Pete Consulting to prepare an economic impact analysis by estimating the impact of tourists expenditures at the destination in which you visited in your last assignment (Tourism Expenditures Assignment). Utilizing that data and the following information, you are to prepare a report, 4 pages in length, which describes the economic impact of visitors to this destination. In addition to the 4 pages of the report, you are to include appendices which list the calculations and tables (these are NOT included in the 4 pages).
Pineapple Pete Consulting has been hired to estimate the economic impact of tourists traveling to your particular destination. Assume the expenditures from your trip (previous assignment) are the resulting mean of 1,000 visitors to the destination during the month of October 2024. Thus, the area of impact is the city/town to which you traveled. Assume the primary tourists to this destination are individuals similar to yourself.
Table 1 of this report (your tourism expenditures assignment), lists the average expenditures for a typical tourist traveling to this destination. (Table 1 should be included as Appendix 1.) Utilizing this information, prepare a report that will address the following issues and provide the total economic impact of tourists to this destination. All tables must have a title and be labeled.
Introduction
Discuss what you are attempting to do and why. Define who the tourists are, and define the area in which you are conducting the impact analysis.
Direct Impacts
Create a table (Table 2) for the appendix that shows the direct expenditures for one tourist to the destination (modified from Table 1 and included as Appendix 2).
Define direct impacts, calculate and state/discuss the direct impact and how you derived the total that you will be using (utilizing Table 1). Assume that direct expenditures equals direct impacts.
Indirect Impacts
Assume that only 8% of the money that was brought into the impacted area was re-circulated. Explain what this means.
Calculate the indirect impacts for one tourist to the destination.
Define indirect impacts, and state/discuss the derived indirect impact and how it was calculated.
Explain what leakage is and discuss how much of the direct impacts were leaked out of the destination.
Induced Impacts
Assume that direct impacts equal the salaries paid to employees in the destination (just play along, for the purposes of this assignment). In a real economic impact analysis, salary and wage information would need to be gathered, but for simplicity, we will assume salaries paid equal the direct impact amount.
Assume that only 18% of the money generated in direct impacts was re-circulated as induced impacts. Explain what this means.
Calculate the induced impacts for one tourist to the destination.
Define induced impacts and state/discuss the induced impact and how it was calculated.
Explain what happened to the money that did not re-circulate (and calculate how much).
Multiplier 1 and Total Economic Impact (TEI)
Explain what a multiplier is.
For the purpose of this assignment, assume that the multiplier is equal to the sum of the direct impact + indirect impact + induced impact divided by the direct impact.
Thus, the formula is (Direct Impact + Indirect Impact + Induced Impact)/Direct Impact.
Calculate the multiplier and explain how it was calculated.
Assume you had 1,000 tourists (non-local), who all spent, on average, the amount you calculated as total expenditures.
Calculate the TEI for these 1,000 tourists to the destination and explain how your answer was derived.
Multiplier 2 and Total Economic Impact (TEI)
Another economic firm conducted a national study of all destinations and found the average multiplier to be 0.80.
Calculate the TEI of the 1,000 tourists to the destination using this multiplier and explain how your answer was derived.
Justification of Best Multiplier
Using your knowledge of the concepts of leakage and their effect on multipliers, justify which of the two multipliers you believe is more accurate. This argument should be based on how much leakage you believe your destination would have. Explain your answer fully.
Conclusion
Briefly, in two or three sentences, provide an overview of your findings.