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Tourism impact recalculated due to flaws in formula

A flaw in the economic model that calculates tourism  impact in the mountains has been uncovered, resulting in a major adjustment to tourism spending in Jackson and Swain counties.

Every year, the N.C. Department of Commerce releases the economic impact of tourism by county. For years, Swain was heads and shoulders above Jackson. But not anymore.


Under the old model, travel and tourism for the Cherokee Reservation was being credited almost entirely to Swain, skewing Swain’s numbers higher than they actually were. The tourism impact of Cherokee-bound travelers has now been reallocated.

The retooled formula has winners and losers. Swain saw a big drop. Jackson saw a big increase. Haywood also saw a slight increase as a result.

But of course, it was all just on paper — a shell game of sorts to bring the numbers in line with the real-life tourism spending in each county.

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The tourism economic impact numbers had been a pet peeve for Jackson County Manager Chuck Wooten for a few years.

SEE ALSO: Hashing out bragging rights

“When we started to look at our numbers in comparison to Swain, we saw Swain was five to six times that of Jackson,” Wooten said. “We also looked at the jobs associated with tourism and we believed that was significantly understated.”

But economic modelers don’t usually move the chips around the board just because someone, somewhere doesn’t like what the numbers show. Jackson County pushed back for nearly two years to convince the tourism economists to hear them out.

“We kind of got brushed off, but kept asking and kept asking and finally got the people at the Department of Commerce to agree to at least take a look at what we thought was disproportional,” said Wooten.

In fairness, the economic modelers probably chalked the complaint up to yet another case of sour grapes: shoot the messenger if the economic numbers don’t say what you wish they said.

But Jackson’s squeaky wheel posturing eventually worked.

Wooten, along with Jackson County Chamber of Commerce Director Julie Spiro, eventually convinced representatives with the research arm of the N.C. Tourism Division to come meet with them and hear Jackson’s case.

“I explained what I thought was happening, which was either all of visitor spending for Cherokee or for the casino was being attributed to just one county,” Spiro said. “At the end of the day, five years later, it turned out to be the case. We are pleased they were willing to take a second look.”

As a result of the retooled model, Jackson saw a 124 percent increase in its economic impact of tourism. The number of tourism-related jobs in Jackson County leapt from 570 to 1,570.

“We didn’t make a big deal about it but did celebrate that we finally got the credit for that impact of that tourism in Jackson,” Wooten said.

Meanwhile, Swain saw a 37 percent drop as a result of tourism expenditures once assigned to Swain being reapportioned to Jackson and Haywood.

Swain doesn’t begrudge Jackson over the retooled tourism impact formula. In fact, Karen Wilmot, the director of the Swain County Chamber of Commerce and Tourism Authority, welcomes the adjustment that more accurately distributes the spending of Cherokee-bound travelers.

“It didn’t seem fair I suppose for all of that to be allocated for Swain. And we would honestly rather have accurate numbers represented,” Wilmot said. Wilmot said she was always a little suspicious the numbers were over-inflated for Swain.

“I think honestly in the long run it is more beneficial,” Wilmot said.

Besides, it’s hard for Swain to be too torn up. It’s still in the catbird seat when it comes to the economic impact of the tourism industry. It clocks in $20 million ahead of Jackson and $30 million ahead of Haywood.

However, shortly after the adjusted numbers were released this fall, Wilmot had to field an inquiry from a state business reporter wondering why Swain was the only county in the state that saw a decline in tourism over the past five years.

“It looked like ‘Oh my gosh, the bottom dropped out of the world,’” Wilmot said.

Wilmot had to explain the whole spiel of how Cherokee travel spending had been disproportionately assigned to Swain in the past, and was simply being adjusted on paper.

“While this might make it look as if visitor spending was down for Swain County, this is not the case at all,” she told the reporter, citing the year-over-year increase in room tax revenue, a measure of overnight stays. “It will just take a year or so for the numbers to sort themselves out into a pattern that is a true representation of Swain County’s visitor spending index.”

Steve Morse, the director of the Hospitality & Tourism Program at Western Carolina University, said the economic impact numbers for tourism are more than just bragging points. It’s important to the regional economic discussion.

“It shows how important tourism is to all of these Western North Carolina counties,” Morse said.

Morse said the hiccup in the formula here is a rarity. The same formula is used in more than 30 states without a hitch.

“That methodology in 99 percent of counties is fine. But in this example, that methodology doesn’t work when you have the Qualla Boundary in between all of it,” Morse said.

Exactly how the formula was changed remains a secret. In fact, the whole formula is a secret.

Data for the modeling is provided by the state to the U.S. Travel Association, which then plugs the data into its formula to come up with the economic impact analysis.

“We provide all the data that goes into the model, but the formula and metrics are proprietary,” said Marlise Taylor, the director of research for the N.C. Division of Tourism.



Out in the wash

Here’s how the counties fared after the tourism economic impact model was retooled to more accurately spread around tourism impact of Cherokee. Granted the increase or decease was only on paper.

Worth noting: Swain still holds more bragging points over Jackson and Haywood when it comes to the tourism impact on the economy, including more tourism-based employment and more visitor spending. But the Cherokee adjustment did even the scales some.

Swain: 37% drop

Jackson: 124% increase

Haywood: 17% increase

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