Economic impacts of the hotel industry in Texas: An input-output analysis

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2012-08

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By identifying the economic structure of relations between the hotel industry and other industries within the State of Texas, this study examined data from 2009 from the Minnesota Implan Group to determine whether or not the hotel industry was a contributing industry to the State of Texas. Unlike a simple and straightforward ad-hoc multiplier focusing on an understanding of temporary economic impacts at a specific time, the input-output analysis created by Leontief comprehensively and systematically identifies a picture of producing and purchasing goods and services between entire industrial sectors in an economic system of a regional or national level. Therefore, the input-output analysis model, which provides quantified reliable data for policymakers, was applied to this study. The findings of this study were as follows: 1) Even though the hotel industry was helpful to the Texas economy, it made a small contribution to the state compared to manufacturing and other industries according to multipliers of output, labor income, value-added, and employment from the input-output analysis. 2) After aggregation into 21 and 20-related sectors based on the ISIC and NAICS, the hotel-related industry became somehow less interdependent when compared with other-related industries, such as manufacturing-related, construction, or finance and insurance-related sectors. However, it is more interdependent on the rest of the Texas economy than the wholesale and retail trade sectors. 3) Interestingly, while the hotel industry generated more labor income and employment than did the other accommodation industries, the other accommodation sectors created more output and value-added than did the hotel industry. With this quantified economic information from the results, it is anticipated to be helpful to future plans or policies associated with the hotel industry.

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