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Report Shows Nearly Flat Growth In Tourism Sales

One report shows growth in tourism sales tax revenue is not as robust as some might like. Tourism is the state’s second largest industry. Events like the Sturgis Rally are key for many business who rely on visitor spending. 

But a report from the Black Hills Knowledge Networkshows revenue from taxable tourism sales slowed in 2015 after years of significant growth. 

Eric Abrahamson analyzes data for the Black Hills Knowledge Network. He says tourism sales across the state grew by one half of one percent in 2015.  Abrahamson sourced data from the South Dakota Department of Revenue. He says this growth is modest compared to previous years.

“When we look at the taxable tourism sales, they actually represent a much bigger picture so they’re gathered all year long and they reflect what we would all think of as prime tourism activity, you know families on vacation in the summer, but they also reflect softer numbers. So they’ll include lodging all year long, those might be business visitors for examples. They also include dining all year around so some of those might actually be local transactions. But all of those get rolled into taxable tourism sales. So even though 2015 looks like it was a banner year for visitation from that summer traffic some of the numbers for some counties and some areas actually decline in 2015 when you look at the inflation adjusted dollars,” says Abrahamson.

In 2015, the tourism sales tax collected totaled $5.5 million from the Black Hills region and $11 million statewide. Abrahamson says when it comes to comparing counties, Meade County saw a jump from 34 million up to about $43 million in tourism sales while Pennington county experienced a decrease.

But some industry officials see it differently. Mark Gussiaas  is with the Black Hills Tourism Association. He says the Black Hills region showed optimistic growth in 2015 based on a different index. 

“This seemed to be a year from all indications, from everything we have been watching and from all reports too, that this was a year that more people were showing up and even beyond that they were spending more money than in the past, such as the gift shops were doing better. These certainly weren’t the reports we’ve heard in other years,” says Gussiaas.

Gussiaas says his analysis of tourism sales, is beyond taxable revenue but also includes categories such as hotel occupancy, Deadwood Gaming, and visitor numbers.