Passengers wait for the Block Island ferry Anna C. in the Old Harbor on Block Island in July 2024. The National Hotel is in the distance on the right. (Janine Weisman/Rhode Island Current)
The silver lining of inflation: Rhode Island’s tourism economy benefited from $5.6 billion in visitor spending in 2023, according to new research by a state-appointed consultant.
A presentation from international firm Tourism Economics for Rhode Island Commerce Corporation showed that visitor spending grew more than twice as fast as the increase in visitors in 2023. The 28.4 million people who traveled to the Ocean State in 2023 is 2, 2% higher than the previous year, but their total spending on travel, food, lodging and entertainment increased 4.6% year-on-year.
According to the research, this is driven by demand growth and price increases for raw materials and services.
More than a quarter of direct spending, 26%, came from the sale of food and beverages. Accommodation, including hotels, second homes and short-term rentals, was the second highest cost, contributing $1.2 billion.
Air transportation saw the largest annual increase, up 10.2%, to $328 million in 2023. Rhode Island Airport Corporation, the quasi-public entity that manages the state’s airports, gets a share of passenger revenue flights, as well as fees for the airlines to land, use hangar space and other related services.
In March 2023, Breeze Airways opened a permanent base at Rhode Island TF Green International Airport, with plans to invest $160 million and hire up to 250 employees over the next five years. The trade awarded the Utah-based airline $2.9 million in tax breaks tied to its job creation plans.
The trade has also experimented with various destination marketing tricks giant, traveling, stuffed quahogs to the $2.2 million ‘All That’ advertising campaign rolled out in February this year.
“The economic activity generated by the travel sector represents a critical component of the state’s current and future growth,” Anika Kimble-Huntley, Commerce’s chief marketing officer, said in a statement. “The Commerce team will continue to work with our great partners statewide to support tourism’s upward trajectory and record-breaking visitor numbers.”
Visitor numbers and direct spending in 2023 broke previous state records and surpassed pre-pandemic figures. However, the number of jobs tied to the state’s tourism economy remains slightly below the 2019 peak.
The 38,329 jobs directly linked to the tourism economy in 2023 remain approximately 1,000 jobs, or 2.5%, below 2019 levels. Including jobs that indirectly benefited from tourism, the activities helped sustain 86,612 jobs in 2023 , while generating $935 million in state and local tax revenue, according to the study.
“Tourism plays a critical role in Rhode Island’s economy by creating jobs, supporting our local businesses and showcasing everything that makes our state a premier destination,” Secretary of Commerce Liz Tanner said in a statement. “I applaud the dedicated efforts of Rhode Island Commerce’s tourism team and everyone else in the industry who helped achieve this achievement.”
Including direct spending, jobs and tax revenue, the visitor economy was $8.3 billion in 2023, an increase of 4.5% over the previous year.
The research reflects federal labor and jobs statistics, state and local tax revenues, short-term rental information and information from market research group Longwoods International.
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