Indiana Tourism Income is Returning to Vibrancy

Tourism is big business in Indiana. In fact, it’s our thirteenth-largest industry employer. Many communities throughout the state are significantly impacted by the revenue that out-of-town dollars bring into our communities – to the tune of about $15.1 billion, collectively. And the good news is, things have been on the rise lately.

As well all know, tourism levels throughout the world took a huge dive during the initial years of the pandemic. Indiana was no exception there. Our statewide tourism industry incurred heavy losses across just about every subcategory – customers, jobs, and establishments, and much more. But over just the last few years, researchers have noted a steady return to what they’re describing as “pre-pandemic vibrancy,” which is a great thing for business in the Hoosier state.

Early this year, a new economic impact study was released by Lt. Gov. Suzanne Crouch with the Indiana Destination Development Corporation (IDDC) that reflected the growth happening in Hoosier tourism. The state commissioned Rockport Analytics to compile the findings, which incorporated data on visitor spending from multiple sources including Longwoods International, Reach Market Planning, Smith Travel Research, the U.S. Commerce Department's National Travel & Tourism Office, Bureau of Labor Statistics employment data, and Indiana Department of Revenue reported tax receipts. Together, those experts painted a very bright picture of the way things have been going.

"The success of Indiana tourism impacts all sectors of our economy, and together we are continuing to make Indiana a premier destination for visitors and creating opportunity for our residents," said Lt. Gov. Crouch, Indiana’s Secretary of Agriculture and Rural Development.

IDDC Secretary and CEO Elaine Bedel said, "As a state, we made notable strides in growing Indiana's tourism industry, and I am thrilled to witness the positive momentum. From tourism jobs, to the visitors directly benefiting businesses across the state, the positive economic impact of tourism is felt by every Hoosier and we intend to build on this impact year-over-year."

Economic Highlights

Findings in the report were based on tourism figures from 2022, which was the most recent year complete data was available. Some of the best highlights included:

• Visitor volume grew 4.5% to 80.8 million person-stays. The recovery was led by both business and international travel. Business volume grew by 26% compared to 1.6% growth in leisure. International, while representing a very small share of travel to Indiana, soared 148%, compared to 4.2% growth in the number of domestic person-stays.

• Travel spending soared 16% to $15.1 billion. The average amount spent per visitor rose by 11% in 2022. By the end of the year, domestic visitor spending had fully recovered to 112% of pre-pandemic spending levels. Spending increased across all categories with the largest increase occurring in transportation, lodging, and food and beverage (F&B).

• GDP generated by the Travel & Tourism sector accounted for 2.3% of Indiana’s Gross State Product. Tourism contributed $9.9 billion to Indiana’s economy. Value added to businesses that directly served visitors (e.g. hotels, restaurants, entertainment venues) totaled $5.9 billion, and the remaining $4 billion was generated along the tourism supply chain and other downstream businesses. For every dollar spent by visitors, the Indiana economy retained 65 cents, including 40 cents of each dollar paying the salaries of Indiana workers and another 11 cents of each dollar collected as state and local taxes.

• Tourism-supported employment eclipsed 200,000 jobs in 2022 when accounting for direct, indirect, and other downstream employment. This represents growth of 12% over 2021 levels and is just shy of its 2019 peak of 208,000 jobs. Travel & Tourism represented approximately 4% of all nonfarm jobs in Indiana.

• Tourism- generated tax revenues increased 15.8% to a total of $2.8 billion. State and local taxes increased 16% to $1.6 billion. This includes a 15.1% gain in state tax collections and a 17.2% gain in local collections. In the absence of tourism, each of Indiana’s 2.7 million households would need to contribute an additional $603 in state & local taxes to maintain the current level of collections.

Visitors Welcome

For every Hoosier resident and business, the news that tourism revenue is swinging back to nearly pre-pandemic levels should be taken as a very good sign for the health of our economy. Even if your industry isn’t related to tourism, its impact has an effect on us all. The more we can market our state as a great destination to visit, the more these out-of-town dollars will benefit all of our communities and companies.