State and local governments will often offer incentives to stimulate hotel or resort development. As a complement to the feasibility study, the economic impact study focuses on the data that attracts municipal incentives for a project or helps a developer sell his vision to local officials. A governmental entity may also use the economic impact study to determine whether to offer incentives to a developer.
An economic impact study analyzes temporary and permanent effects on the local economy from the development and operation of a new hotel or resort. Temporary impacts include jobs and revenues created during construction and future tax revenues. Permanent economic impacts are generated by permanent jobs created, ongoing revenues realized by service providers, and tax revenues once the hotel or resort is operational.
The economic impact study report will analyze the following impacts:
- Construction Impacts
- Operation and Visitor Impacts
- Employment Impacts
- Tax Revenue Impacts
- Other Impacts
Our study evaluates three types of new economic impact from a project on the city, county, and state. These will include:
- Direct-Effect Impact: jobs and spending directly created by the construction and operations of the proposed property.
- Indirect or Induced Impacts: production changes in downstream industries associated with the initial direct spending and employment at the facility. For example, a direct expenditure on a restaurant meal causes the restaurant to purchase food and other items from suppliers. These restaurant purchases are an example of indirect economic impact.
- Final Impact: overall economic impact of a change in final demand on output, earnings, and employment on a region’s economy. The final impact calculations represent the increased output, earnings, and employment that occur in an economy because of spending caused by the proposed development.