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Definition of Tourist: New Tourist Spending Studies are $2.6 billion Apart

By Seth Tupper, The Daily Republic, Mitchell, S.D.McClatchy-Tribune Regional News

Jan. 23, 2010--Two new estimates of spending by tourists in South Dakota are $2.6 billion apart, purportedly because of a difference in the definition of a tourist.

Both studies were commissioned by the state Office of Tourism, which released the results this week. The study by former University of South Dakota professor Michael K. Madden says spending in 2009 was $963 million, but the study by IHS Global Insight, of Lexington, Mass., says it was $3.6 billion.

Madden, of Buffalo, Wyo., said the difference can be explained by his narrower definition of a tourist. He defines a tourist as a "bona fide" vacation traveler, he said, but studies such as the one from IHS Global Insight use a broader definition that might include, for example, people who travel from Brookings to shop at Cabela's in Mitchell.

"I have always maintained that if you want to measure travel spending, you better catch travelers and not just everybody else," Madden said.

Madden acknowledged that perhaps the Office of Tourism is moving toward a "new philosophy," after relying solely upon his annual study for the past 20 years. This was the first year that the office published a study from IHS Global Insight.

Melissa Bump, director of the Office of Tourism, said the office is indeed adopting a new philosophy and will not work with Madden after next year. The office will stay with Madden through 2010, but only to provide a consistent measuring stick for tourism-related goals in Gov. Mike Rounds' 2010 Initiative. Starting in 2011, the office will get its annual study exclusively from IHS Global Insight.

The global company's broader definition of tourists is more in line with the Office of Tourism's own definition, Bump said. The office considers in-state travelers to be tourists, even if those travelers are just driving from Sioux Falls to Rapid City for a weekend.

"Especially in these economic times," Bump said, "people are staying closer to home."

The office's switch from Madden to IHS Global Insight brings with it a higher price tag.

The Web site Open SD, which displays state government financial information, says Madden was paid a combined $46,694.34 last fiscal year and so far this year, while IHS Global Insight has been paid $127,433.11 during that same period.

Until Tourism officials drop Madden for IHS Global Insight in 2011, they'll have to suffer the awkward juxtaposition of the two studies.

Besides being $2.6 billion apart on their estimates of total spending, the studies also differ on the change in spending from 2008 to 2009. Madden's study says spending declined by only 0.4 percent, or actually grew by 1.7 percent when adjusted to account for the negative inflation rate that occurred during the study period. The IHS Global Insight study says spending declined by 4.3 percent.

At the county level, the differences are similarly striking. Madden's study says that 2009 visitor spending in Davison County grew by 7.3 percent to a total of $34.7 million.

The IHS Global Insight study says tourism revenue in the county declined by 5.8 percent to a total of $100.3 million.

Statistics from the city of Mitchell, meanwhile, show that visits to the Corn Palace (which is in Davison County) increased by 13 percent in 2009.

Madden said the Corn Palace numbers support his methodology, because they show that visits by actual tourists increased. Madden said the IHS Global Insight study gives the false impression that tourism declined, because the study includes instate travelers who were suffering from an economic recession and, therefore, cut down on their discretionary trips.

"True, bona fide tourist spending did not go down," Madden said. "I guarantee it."

The Daily Republic sought comment from IHS Global Insight for this story, but the company did not respond prior to Friday's deadline.


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Copyright (c) 2010, The Daily Republic, Mitchell, S.D.

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