HomeMy WebLinkAbout001BENEFITS OF DESTINATION RESORTS
TO DESCHI]TES COUNTT
A REPORT TO
SUNzuVERRESORT
BY
ELESCO, LTD.
P.O. Box 3539
Sunriver, OR 97707
FEBRUARY zoog
POSSITIVE IMPACTS OF DESTINATION RESORTS ON DESCHUTES COUNTY
. 2,500,000 annual visitors to Central Oregon.
. $470,000,000 direct visitor spending (2007).
. $189,000,000 additional indirect related spending (2007)
. 5,440 direct visitor industry jobs (2007).
. 1,088 additional indirect jobs (2007).
r $164,000,000 totalwages attributed to the visitor industry (2007).
. 1,469 Resort lobs in CentralOregon (2007).
. $40,500,000 Resort payroll (average wsge= $27,566/yr or $13.25/hr. in 2007).
. $7,700,000 transient room taxes collected (2007/08).
. $20,000,000 paid in property taxes (county and cities only 200712008).
. Primarily transient owners (only 13% of Sunriver owners are year round residents).
. $72,000,000 payrollfor Resort construction and support services (2007).
. $2.5 BILLION Resort current Real Market Value created by construction.
. Stimulates economic development of nearby communities (La Pine, Sisters, Redmond).
. $2.5 BILLION Resort current Real Market Value fuels supporting industries.
. Promotes and exposes Central Oregon to national markets.
. Funds and support local charities with money and volunteer time.
. Provides markets leading to expanded commercialair service.
. Attraction for business recruitment to region.
. Enhances awareness of Central Oregon as a great place to live.
. Attracts home based business professionals.
. Active promotion of environmental protection and education (Sunriver Nature Center).
o Protects and promotes the region's history and culture.
. Provides direct funding for regional transportation improvements (Hwy 97, S. Century).
. Expands regional fire and police services and facilities (Sunriver, Black Butte service districts)
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BENEFITS OF DESTINATION RESORTS TO DESCHUTES COUNTY
DETAIL REPORT
Destination Resorts provide important benefits to Deschutes County, both as a major
component of its economy as well as enhancing quality of life for all its residents. This paper
describes those benefits and how they contribute to making Deschutes County a better place to
live, work, and do business.
A DtRrcr Ecottoltc Brrurrrrs
Destination Resorts are a "primary" sector of the local economy. That means they pulloutside
money into the region, which then gets circulated throughout the economy as secondary
spending. Without new money coming in, the local economy would shrink as dollars flow out
to purchase goods and services from other regions. Primary sectors have higher economic
multipliers than the secondary industries that circulate money that is already here.
7. Deschutes County is a major beneficiary of the Oregon visitor industry
Deschutes County's Gross Domestic Product (GDP) in 2005 was measured at 56.011 billion by
the U. S. Bureau of Economic Analysis according to a report released on September 25, 2008.
That was an increase of 17.5% from the GDP figure for 2005 in current dollars. By comparison,
the increase for all U.S. Metropolitan Areas was only 6.35% over that one-year period.
The Leisure and Hospitality sector of the economy, which includes Destination Resorts,
contributed 5% of that year-to-year growth in Deschutes County while nationally it contributed
only 3.4%.
The Central Oregon Visitors Association (COVA) estimates in their 2008 Annual Report that
approximately 2.5 million people visited Central Oregon in 2006. That was about t2% of the
roughly 21.2 million people who visited the whole state of Oregon. About 60% of those who
visited Central Oregon, or 1.5 million people, indicated the reason for their visits was
destination-oriented vacation travel rather than family or business related. That component
was 760/o higher than the state norm of 44%.
Total direct visitor spending in Deschutes County was 5+70.2 million in 2OO7 according to
preliminary figures from Dean Runyan Associates for the Oregon Tourism Commission. These
expenditures went for a wide variety of products and services:
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Table t:2007 Travel lm cts in Central O n Commod Purchased, 2007
2. Multiplier effect increases visitor spending in Deschutes County
Direct spending by visitors is increased by the "multiplier effect" as those dollars are circulated
throughout the economy. According to the IMPLAN model from the Minnesota lmplan Group,
lnc., the total output multiplier for this sector is approximately 1.4x, which means every direct
dollar spent has a total value to the economy of L.4 dollars. Under that formula, the $qlO.l
million spent directly by visitors in Deschutes County in 2007 had a total value of $6SS million.
3. Visitor spending creates employment in Deschutes County
The 2007 Travel lmpacts report showed that 5,440 direct jobs in Deschutes County were
attributed to the visitor industry that year. This figure includes both full- and part-time
positions of wage and salary workers and proprietors. Because of the seasonal and part-time
nature of this sector, the number of full-time equivalent workers would be less. For that
reason, the multiplier is also less. A multiplier of L.2x results in total employment of about
6,528workers in2OO7.
Direct employment in this sector was nearly equalto the entire Manufacturing sector in
Deschutes County in 2007, which totaled 5,651 workers. [t was larger than the Financial
Services sector (3,859) or the Professional, Scientific & Technical Services sector (2,737).
4. Travel spending generates industry earnings (wages & salaries) in Deschutes County
An estimated S121.6 million of direct visitor spending in 2OO7 was classified as industry
earnings, which includes all wages, salaries, and proprietor incomes after the costs of sales are
taken out. These were distributed as shown below:
Table 2:2OA7 hd Generated Travel en
Accommodations S116.1 million Arts, Entertainment, Recreation S 59.7 million
Food & Beverage Services 5122.4 million Retail Sales S 56.0 million
Food Stores S 46.9 million Air Transportation (visitor only)S g.+ million
Ground Transport & Motor Fuel S oo.z million Total Spending at Destination $470.7 million
Accommodations & Food Service S 85.9 million Arts, Entertainment, Recreation S 17.8 million
Retail (includes gasoline)S 14.1 million Auto Rental, other ground trans.S o.s million
Air Transportation (visitor only)S o.z million Other Travel S z.s mittion
Total Direct Earnings S121.6 million
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These dollars stay in Deschutes County and enable local workers to pay their bills. They are
supplemented by the share of vender sales from local firms that are also used to pay wages,
salaries and proprietor incomes. The IMPLAN wage multiplier is about 1.35 in Deschutes
County, so the total impact of the direct visitor spending on industry earnings was about $164
million in 2007.
5. Destination Resorts attract visitors to Central Oregon; they are not "sagebrush subdivisions"
lnquiries to the Sunriver Owners Association revealed that there are 4,206 home sites in the
resort community with a current buildout of 94Yo, which translates to about 3,954 residential
units. Of these, the Sunriver Owners Association estimates that about 500 homes , or 72.6%o of
the total, are occupied full-time by about 1,000 permanent residents. That is down from an
estimated 700 homes in the year 2000. Another Ll3'd ol the homes, or roughly L,32O units,
have non-resident owners who come to Sunriver for vacations and do not rent their homes to
visitors. The remaining2,t34 units, or54%o, are on the rental market and are used bytourists
vacationing in Sunriver. These statistics show that Sunriver is primarily a visitor-oriented resort
community rather than a residential subdivision. lt is believed that other Destination Resorts in
Deschutes County follow a similar pattern.
6. Destination Resorts provide the highest economic benefits in Deschutes County's visitor
industry
Statewide, both the original study and the updated 2007 numbers cover eight Destination
Resorts in Oregon, of which five are in Central Oregon. The statewide trends for these eight
resorts are shown for both employment and payrolls from 2001 to2OA7 in Table 3:
Table 3: Avera Annual Em nt, O n
2001 2002 2003 2004 2005 2006 2007
Destination Resorts 7842 1859 1895 1939 2078 2208 2348
Leisure & Hospitality 149600 L49700 151600 155100 159100 164900 172300
Accommodations 21700 21300 21300 21400 2L200 21300 21400
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Exclusively for this report, data were obtained from the Oregon Employment Department to
update a 2OO7 study comparing the economic impacts of Destination Resorts in Central Oregon
versus the overall Leisure & Hospitality industry. That study gave figures for 2005 that have
been updated to 2007 in this report. Both the 2005 figures and those for 2OO7 show that
Destination Resorts pay significantly higher wages than the overall industry of which they are a
part.
Sector Average Pavroll DR as %
Destination Resorts (Central Oregon)
Agriculture & Forestry Support
Food Manufacturing
Retail (Total)
Air Transportation
Real Estate
Arts, Entertainment & Recreation
Accommodation & Food Services
Other Services
527,566
s28,048
5z5,qtz
526,4z4
522,799
$29,4t6
Stg,tgs
S1G,314
524,3L8
LOO.O%
98.3o/o
LO8.5%
7043%
720.9%
93.7o/o
151.5%
169.O%
173.4%o
Converted to a full-time work year of 2p80 hours (52 weeks X 40 hrs/week)the average annual
payroll at Destination Resorts in Central Oregon of 527,566in2007 translated to an average
hourly wage of S13.25. This was notably higher than the equivalent minimum wage and does
not include the value of benefits such as health insurance, sick leave, Social Security and
Medicare taxes, and other employer contributions.
An obvious conclusion is that, on average, the average annual payrolls at Destination Resorts in
Central Oregon are significantly higher than the lower wages paid in some other sectors, plus
benefits.
7. Destination Resorts generate employment in construction and other service industries
Construction workers and their payrolls are also benefits of Destination Resort development, as
are the workers and payrolls associated with private businesses located on or near the
Destination Resorts. Figures for construction trades associated with Destination Resorts are
not broken out in the data but it is assumed thatthey represent a significant percentage of the
total because of the residential housing component of Destination Resorts along with the
construction of resort hotel units. ln 2007 there were 2,040 workers employed in the
construction of buildings in Deschutes County, plus another 5,034 specialty trade contractors.
Total annual payrolls of these two groups were $266 ,264,4L7 and average annual payrolls per
worker were 537,640. Estimating that 75% of those jobs were in Destination Resorts, their
share of total payrolls would have been right at S4O million in2OO7.
The 2007 OED study also showed there were 219 firms in 14 industry sectors supporting just
over 1,300 jobs in 2005 within a two-mile radius of seven of Oregon's Destination Resorts and
within a three-mile radius of Sunriver Resort. Sectors included construction, real estate, health
care services, recreation services, restaurants, retail trade, and more. Those firms supplied
more than Sgf .S million in payroll to their workers during 2005.
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Employment in Destination Resorts increased 275% statewide from 2001 to 2007, while it
increased by only 15.2o/o in the whole Leisure & Hospitality sector. ln the subsector of
accommodations, the growth rate was a negative 1.4%.
Table 4:Annual P s, Ore dollars
These figures show that the average annual payroll per worker in Destination Resorts statewide
in2OO7 was64.7% higherthan the average payroll in the overall Leisure & Hospitalitysector.
While it was only 571% of the average payroll for all industries, that was due largely to the
seasonal employment factor.
It is also significant that the average annual payrolls at Destination Resorts increased by 28.6%
from 2001 to 2007, while it increased only L8.1% in the overall Leisure & Hospitality sector and
by 79.2% in the All lndustries total. These figures indicate that workers at Destination Resorts
have been able to keep pace with inflation better than workers in other sectors of the
economy.
Central Oregon shows even better results for Destination Resorts than the rest of Oregon. The
numbers from the Oregon Employment Department show that the five Destination Resorts in
Central Oregon employed 1,469 workers in 2OO7 with an annual payroll of $40,494.370. That
equates to an average annual payroll per worker of 527,566.
Table 5: Destination Resort ent in O n:2007
The three Destination Resorts in the rest of Oregon employed 879 workers in 2007 with an
annual payroll of 527,790,787for an average payroll per worker of 524,790. That put the
Central Oregon Destination Resorts atLL.2o/o higherthan the resorts in the rest of the state.
The list below shows average annual payrolls for several industry sectors in Deschutes County
in 2OO7 for comparison:
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2002 2003 2004 2005 20062001 2007
Leisure & Hospitality 13633 14063 74206 14535 15099 15555 15104
22586 23420 23093 26t34 27132 26527Destination Resorts 20632
TotalAll lndustries 33202 33685 34446 35621 36591 38070 39564
Location Resorts Employment Payroll Ave. Pay
Central Oregon 5 7,469 54o,494,370 527,s66
Rest of Oregon 3 879 52L,790,78r 524,790
Tota!8 2,348 S02,285,1s1 526,527
Adding together the direct Destination Resort jobs, direct construction jobs, and jobs in
supporting industries produces an approximate total direct impact of about 9,800 jobs in
Deschutes County in 2OO7 and payrolls of about 5112,000,000 based on the assumption of L5%
of total construction employment.
8. Destination Resorts provide significant transient room tax revenues to local governments
According to COVA's 2008 Annual Report, transient room taxes paid from all sources have
added millions of dollars per year to County and City budgets.
Table 6: Transient Room Tax Revenues in Deschutes Co
These payments totaled 528,46O,L48 over the four-year periods shown above. An additional
52,108,575 of transient room taxes were paid to the City of Prineville and Jefferson County over
thatperiod. TheshareofthesetransientroomtaxespaidbytheDestinationResortsisnot
available because information on specific properties is not disclosed.
These transient room taxes are used to benefit allof the citizens of Deschutes County by paying
directly for essential services. ln particular, the Deschutes County Sheriff's office has been a
major beneficiary of funding from transient room taxes. The Sheriffs Department has been
receiving about 5Z.6 million annually from the County's general fund and transient room taxes.
Transient room taxes are also a major funding source for COVA and are used to promote
tourism marketing that benefits Central Oregon. A portion of the County's general fund, which
includes room taxes, is used to support the Deschutes County Fair & Expo Center.
9. Destination Resorts provide significant property tax revenues to local governments
According to an analysis of propertytax revenues in the IOOS/OG tax year, three Destination
ResortsownersinDeschutesCountypaidSl,STl,L2Linpropertytaxesthatyear. Thesewere:
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FY O4lOs FY 0sl06 FY 06107 FY 07108
Deschutes County 53,o34,742 53,273,272 S3,310,502 S3,535,309
City of Bend 52,776,324 53,o94,s42 S3,295,810 53,4L7,231
City of Redmond S406,115 5463,267 5486,721 S509,031
City of Sisters S183,786 52t2,9s7 5222,3so S238,789
Total $6,40o,967 S7,044,038 57,3].4,189 $7,700,350
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Destination Resort Real Market Value Taxes
Pronghorn 57L,778,720 5 6l\zq'
Eagle crest 5 6L,686,942 S 548,477
Sunriver 542,720240 S 451,399
5t76,L85,902 5L,671,L2L
These figures from the Deschutes County Assessor's Office only include taxes paid directly by
the resort owners and do not include the taxes paid by individual property owners in those
resorts. Totaltax contributions from o// properties including private residences located in
Destination Resorts are shown below:
Destination Resort Real Market Value Taxes
Su n river/Crosswater
Eagle Crest Resort
Pronghorn Resort
S1,765,o60,gos
$ 449,779,280
s 142.894.880
5L4,L74,96L
$ 4,og6,4s8
S 1,384,64e
52,3s7,735,06s S19,G56,068
These three resorts in Deschutes County contributed almost S20 million in property taxes to the
County in the 2OOSIOG tax year alone. Those figures only represent what the individual cities
and the County assessed; they do not include other assessments from other government
agencies or special districts. That means the total property tax impact of the Destination
Resorts in Deschutes County was significantly higher.
Property taxes paid by the resorts and on-site property owners were used to fund school
districts, public safety services, roads, health and welfare services, and a wide range of other
public services. However, the resort visitors and property owners generally place lower levels
of demand on those services than do property owners outside of the Destination Resorts, in
part because of the transient use of their properties as well as generally having older
permanent residents.
That means these property taxes not only pay for the services required to support the
Destination Resorts, but they also are used to subsidize the services required by the population
outside of the resorts.
These property taxes are increasing as additional lots are sold and homes are built. For
example, real market values and property taxes at Sunriver will increase rapidly as the recently-
developed Caldera Springs is built out. Caldera Springs will ultimately have 320 lots with
privately-owned own homes plus 45 cabins. The total real market value for all residential units
is expected to be about 5450 million in current dollars at full build-out. At the time this report
was written, Caldera Springs was built out to about 30% - 35% of its potential.
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B SecoNDARY Ecolo M tc Brrurrrrs
Destination Resorts in Deschutes County provide other economic benefits that are not directly
measured but are also important.
7. Destination Resorts provide an economic stimulus for nearby communities
Destination Resorts in Deschutes County are in sub-urban or rural areas near communities that
have depressed economies because of the decline in timber and other resource industries. The
Destination Resorts provide a much larger market for businesses in La Pine, Sisters, and
Prineville than would otherwise be available without them.
2. Destination Resorts make nearby communities more viable for economic development
Smaller rural communities such as La Pine lack the modern housing and other amenities to
compete effectively for new businesses and their management staff. Destination Resorts such
as Sunriver/Crosswater/Caldera Springs provide the upscale support facilities that make those
communities more competitive.
3. Destination Resorts promote Deschutes County and Central Oregon to national markets
Events such as the Tradition golf tournament on the Champions Tour are heavily promoted in
golf magazines and other media before and during the events. Most of those national events
take place at Destination Resorts. The markets for those promotions are people who are
attracted to Central Oregon for those events and spend their discretionary dollars with local
businesses.
4. Destination Resorts' events help fund local charities
Most of the major events hosted at Destination Resorts contribute financially to local charities.
For example, the Pacific Amateur Golf Tournament in 2008 raised more than S12,000 for the
Boys and Girls Clubs of Central Oregon. ln addition, the resorts themselves help to fund non-
profit and charitable organizations. At Sunriver, these have included the Sunriver Music Festival
and Wonderland Express, Care for Kids, Helping Hands, and numerous others. Property owners
at these resorts also support local arts and charities, schools, environmental enrichment
programs, and other worthwhile activities and organizations.
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5. Destination Resorts help provide the markets to expand local air services
Passenger boardings at Redmond Municipal Airport have risen steadily as new flights and new
airline services have been added. Destination Resorts attract visitors who fly into the area from
throughout the country in addition to those who drive in from Northwest cities. As a result,
Central Oregonians now enjoy direct jet service to/from Salt Lake City and all points east as well
as direct service to Los Angeles, Las Vegas, Phoenix and Eugene, complementing historical
service to Portland, Seattle, and San Francisco.
6. Destination Resorts support economic development through business recruitment
Destination Resorts expose executives to business opportunities available in Central Oregon by
providing venues for conventions, conferences, seminars, and other business meetings. The
resort image is a strong attraction for catching the attention of companies being recruited to
locate facilities in Deschutes County.
7. Destination Resorts create awareness of Central Oregon as a great place to live
ln 2005, about 6t% of vacant lot sales in Deschutes County were valued at 5200,000 or more.
ln Destination Resorts, however, the percentage was 78%. The difference shows that
Destination Resorts are effectively attracting residents with higher financial resources. That
means greater spending in the Deschutes County economy.
8. Destination Resorts provide a home base for business professionals
A major trend in the U.S. economy is the growth of "lone eagles", defined as business
professionals who provide services in wide markets by operating from a home base that
represents where they want to live. Many of the residents of Destination Resorts fit that
description. A survey in Sunriver found that about 400 residences had a home office that
served either a full time or part time business. These professional businesses bring outside
money into the local economy without requiring the services needed for on-site employees,
customers or vendors.
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C QuRlrrv or Lrre Be rue rrrs
ln addition to direct and secondary economic benefits, Destination Resorts make significant
contributions to enhancing the quality of life in Deschutes County and Central Oregon.
7. Destination Resorts have been leaders in developing healthy forest initiatives, wildland fire
protection plans, noxious weed removal, habitat protection and restoration, and other
environmental initiatives. Destination Resorts have environmental managers and staffto
ensure these programs are adequately supported and effective.
2. Destination Resorts create greater awareness of environmental needs and issues through
education and proactive programs. The Sunriver Nature Center and Observatory is an
example of how an activity in a Destination Resort practices outreach to the community in
support of environmental awareness. ln addition to its member and visitor services, it
hosts school groups and provides community education and information.
3. Destination Resorts protect the region's history and culture. Unlike some residential
subdivisions, Destination Resorts focus on the amenities that attract visitors as well as
residents. They develop their properties in ways that protect and enhance the historical
and cultural features of the region as natural amenities.
4. Destination Resorts provide community resources for local residents in the surrounding
areas. These include restaurants, hotels, and other resort-type facilities but some also
include a library, post office, and public recreation and entertainment venues.
5. Destination Resorts contribute to improved transportation systems. When the Oregon
Department of Transportation has required local participation in funding important
highway and road improvements, Destination Resorts have stepped up to meet those
requirements. Without the participation of Destination Resorts, some of those projects
might have been shelved because of lack of local funding. For example, Sunriver and
Crosswater contributed seed money to enable ODOT to proceed with the construction of
the Highway 97 interchange at S. Century Drive, and Caldera Springs paid 100% of the costs
to construct a new roundabout on S. Century and Abbot Drive at the entrance to Sunriver
(the first in Central Oregon).
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6. Destination Resorts provide essential public safety support services and facilities. For
example, the airport at Sunriver is used as a base for forest fire air support, Air Link
ambulance access, and even as a reliever airport for the Bend and Redmond airports when
they experience below-minimums weather conditions. Those services are not limited to
the resort but are provided to residents throughout southern Deschutes County.
These are some of the benefits of Destination Resorts in Deschutes County and Central Oregon
that highlight their importance to the economy, the region's economic development, and the
quality of life for local residents. There is no question that Destination Resorts have put
Deschutes County "on the map" for attracting new capital investment and new businesses that
have enhanced economic opportunities and generated substantial revenues for local
governments.
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