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Tourist Trap That's a Sales-Revenue Sap
by David Stanowski
12 December 2007


This article originally appeared in the Galveston County Daily News on 12 December 2007. The text version of the article appears below. 

Tourist Trap That's a Sales-Revenue Sap!


In 1984, Retail Sales Per Capita (RSPC), in Galveston, exceeded the national average, but by 1987, they had slipped below that bench mark, and have been falling further behind ever since!

National Retail Sales in 2006 exceeded sales in 2005, but that was not the case in Galveston. When adjusted for inflation, using the CPI, local Retail Sales peaked in 2000, BELOW their 1984 level, but on a national basis, they didn't peak until 2004.

This under performance of the retail sector is even more incredible because Galveston is a major tourist destination! Legend has it that somewhere between 4 and 6 million tourists visit The Island each year, which would bring in 70-100 times more people, than the local population base, as potential shoppers!

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When Galveston was compared to other small tourist towns in Texas and Florida, all of these cities had much higher RSPC than our local retail sector. It was clear that all of these towns were doing a much better job of converting tourist visits into dollars!

This initial analysis raised three additional questions. How much did the higher Median Household Incomes (MHI) in Kemah and South Padre Island help them to generate more Retail Sales, how did Galveston compare to some nearby non-tourist towns, and is the problem simply that it is so easy for Galveston residents to go to Houston where more shopping choices are available?

Seven nearby Texas cites have higher RSPC than Galveston!! Texas City, La Marque, Dickinson, and Kemah all offer closer proximity to shopping in Houston, but they are not suffering enough defections to push their RSPC below those in Galveston!

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Location              2006 RSPC    2005 MHI
 
U.S.                        $14,550         $46,242
Texas                     $13,159         $42,139
Kemah                   $50,106          $54,400
Beaumont              $21,111          $32,183
Dickinson              $20,954          $44,300
South Padre          $18,255          $42,900
La Marque             $14,730          $36,700
Port Arthur            $13,332          $27,400
Texas City               $9,673          $37,900
Galveston                $9,535          $30,500
League City             $7,226           $71,500
Friendswood           $6,501           $73,200
Santa Fe                  $6,188           $50,100


Galveston trails all of the small tourist towns in Florida. Fort Myers has RSPC that are 517% higher than this city! (Table not shown)

The Galveston retail sector is under performing almost every conceivable bench mark on a nationwide and statewide basis, and when it is compared to other cities. The two most likely reasons for this are a lack of support for local businesses, by the City and County governments, and the lack of a coherent marketing plan. This is why it is imperative to develop a comprehensive blueprint of the problems that the local governments are creating for Galveston businesses, using some sort of survey; and it is essential to create, and fully fund, a new marketing plan.

The national economy is reaching a critical juncture where is it is likely to slip into a serious recession, at any time. In fact, Merrill Lynch says that the recession "is already here". If Galveston does not recognize, and acknowledge that its economy is in peril, it will enter a recessionary period without the strength to survive it intact!



Also see Retail Sales Per Capita


For more information on the Galveston Economy:
 
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