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Tennessee tourism may lose $10 billion over COVID-19 in 2020

Sandy Mazza
Nashville Tennessean

Published 11:00 PM EDT Aug 25, 2020

Tennessee’s booming tourism industry hit its 10th consecutive year of record-high growth in 2019, according to newly released data.

It was off to an even stronger start in 2020 until the COVID-19 pandemic created the largest crisis ever for the leisure, hospitality and tourism sectors.

The Volunteer State attracted $23 billion in domestic and international travel spending last year, data from the U.S. Travel Association show. 

Tourism spending is defined by percentages of hotel, restaurant, entertainment, transportation, retail and recreation income, based on how much those businesses generally serve out-of-towners. 

Tourism dollars were only surpassed by the agricultural industry in Tennessee’s economy last year. 

“Tourism is our state’s second largest industry,” said Gov. Bill Lee. “We oftentimes take for granted the beauty of our state. People who come to visit here for the first time come back. And those tourists are very important to the bottom line in our state.”

The U.S. Travel Association forecasts a loss of up to 45% of the tourism revenue in 2019 this year, or roughly $10 billion statewide, because of COVID-19 business closures and stay-at-home orders.

Meanwhile, the areas that usually have the most tourism — Nashville and Memphis — are now experiencing the biggest economic losses. 

East Tennessee now outpacing metros

Tennessee’s ability to draw tax revenue and create new jobs through its tourism channels outpaced the nation last year, led by Nashville and Memphis.

Leisure and hospitality sectors produced the largest number of jobs among all industries, the U.S. Travel Association said. 

Other findings include:

Tennessee visitors spent about $64 million per day in 2019. Tourism boosted state and local tax coffers by $1.9 billion. Nearly 200,000 jobs were created by the travel industry.

The bottom line for Tennesseans, according to state leaders, is that tourists are creating jobs, contributing funding to services and saving residents money by paying taxes for schools, public safety and health and human services. 

In fact, the report asserts that tourism revenue saved each Tennessean household $748 in taxes, on average, which they otherwise would have had to pay last year. That represents an increased tax savings of nearly $40 over 2018. 

Tourism in and around Nashville drew the largest influx of tourism dollars, and brought the largest tax savings to residents. 

Tourists spent $7.5 billion in Davidson County and sustained 74,440 jobs by shelling out more than $20 million a day in the county. As a result, households saved $2,038 in state and local taxes, according to the analysis. 

But since March, East Tennessee has attracted a lot of the state’s tourism spending. 

“Occupancy rates (for lodging) in East Tennessee are out-performing Nashville, Memphis and the state as a whole,” said Jill Kilgore, spokesperson for the state Department of Tourist Development. “We expect part of the reason for returning more quickly largely because of outdoor alternatives.”

Tourism taxes bring savings

Mark Ezell, commissioner of the Tennessee Department of Tourist Development, said the agency is actively promoting safe travel options to help turn the tide as quickly as possible. 

Lee announced budget cuts in June and reduced spending to prevent tax increases. But the full economic loss is not yet clear and could yet be ameliorated with business reopenings and increased travel. 

“We think we’re going to beat those travel estimates. We’re going to work on getting tourism to do the best it can,” Ezell said. “Tax increases is not a topic we consider at all. Let’s work on getting revenues back where we can in a safe way.”

The Tennessee Department of Tourist Development is embarking an a safe tourism campaign to encourage people to travel while wearing masks, social distancing and practicing good hygiene. 

“Coming into tourism from private business, I had no idea the tax revenues generated through hospitality and tourism literally deliver over $1 billion a year to tax revenue in the state,” Ezell said. “We love it because it means visitors spend money that then comes in to take care of our 6.8 million residents.”

Households statewide enjoyed tax savings last year as a result of tourism dollars, the study found. 

On average, household state and local savings were: 

$529.42 in Williamson County$212.88 in Sumner County$350.70 in Maury County$152.51 in Cheatham County$289.77 in Rutherford County $838.87 in Shelby County$505.25 in Knox County$2,038 in Davidson County

Sandy Mazza can be reached via email at smazza@tennessean.com, by calling 615-726-5962, or on Twitter @SandyMazza.


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