Contents - Michael H Shuman

Contents
Preface, 1
Summary, 2
Background, 2
Approach, 2
1
Direct Economic Impacts of the Biltmore Companies, 5
Jobs, 5
Income, 5
Expenditures, 6
Taxes, 7
Strategic Philanthropy, 8
Direct Economic Impacts of Biltmore - Related Tourism, 8
Total Visitors to the Estate, 8
Visitor Motivations, 8
Visitor Spending Patterns, 10
2
Overall Impacts on the Local Economy, 14
IMPLAN Methodology, 14
Asheville Area Economy, 14
Impact of Tourist Spending, 14
Impact of Bi ltmore Companies, 16
ii
Preface
We are pleased to present The Biltmore Companies 2012 Economic Study: Measuring Local Impacts. The
study was conducted during the spring and summer of 2013 and the findings herein are the result of
extensive data collection and transparent reporting provided by the Biltmore companies. Independent
impact analysis was conducted by Michael H. Shuman, a leading expert on community economics. The
final report was edited and produced by Burns & Hammond. The success of this project would not have
been possible without the efforts of Peggy Dalman, Biltmore Market Research Manager, who attentively
and diligently gathered data and shepherded the process from start to finish.
The study provides both summarized and detailed reporting utilizing the most current available local,
state and regional external economic data from third party sources. Whenever necessary, all assumptions
that are integrated into the findings are documented and explained. Further data analysis was generated
through the use of IMPLAN – a widely used economic impact modeling system.
The report provides three primary areas of focus. The first is the direct economic impacts of the Biltmore
companies. The second section examines the direct economic impacts of Biltmore via related tourism.
The final section details Biltmore’s overall impact on the local economy, including indirect and induced
multiplier effects.
The Biltmore Company leadership is to be commended for pursuing this level of self-examination
and disclosure to determine its economic, enviromental and social contribution to the greater
Asheville region. The positive impacts of the companies and its employees are consistent with the
legacy of community engagement that the Biltmore and its respective generations have thoughtfully
demonstrated for more than 100 years.
Heather Burns & Doug Hammond
August 1, 2013
1
Summary
The Biltmore companies have had a significant and measurable economic impact on the four counties
surrounding Asheville, North Carolina: Buncombe, Haywood, Henderson, and Madison. This study
quantifies the most important of these impacts during the period of July 1, 2011, through June 30, 2012,
and includes the following highlights:
The Biltmore companies:
• Attracted 1,089,386 visitors to the Biltmore estate. Together, these individuals annually spent an
estimated $140 million in the local economy.
• With annual sales of $134 million, re-circulated $64 million into the Asheville-area economy.
• Employed 1,854 people – or 1,265 full-time equivalents – and distributed $48 million in associated
payroll.
• Generated an additional 2,400 local jobs, $87 million in wages, $150 million in value added (the local
equivalent of GDP), and $27 million in state and local taxes when the indirect and induced effects of
local spending are considered.
• Generated approximately 2,040 jobs, $52 million in wages, $88 million in value added and $11
million in state and local taxes when indirect and induced effects of Biltmore tourists and Inn
guests are included.
• Infused a total of $3.4 million in sales, property and occupancy taxes directly into the greater
Asheville public sector.
• Contributed nearly $60,000 directly to charities in Asheville and the surrounding area and $188,000
indirectly through in-kind donations.
• Overall are responsible for the presence of 4,440 jobs in the Asheville area, paying $139 million in
wages, generating $238 million in value added, and remitting $27 million in state and local taxes.
Background
The creation of Biltmore in Asheville, North Carolina, dates back to 1887, when George Washington
Vanderbilt commissioned Richard Morris Hunt and Frederick Law Olmsted to create a magnificent estate
modeled on the Chateaux of the Loire Valley in France. After enjoying their home for several decades
with family and friends, and at the urging of the Asheville Chamber of Commerce to stimulate the
2
local economy during the Great Depression, the Vanderbilts opened the to the public in 1930. In 1960,
Vanderbilt’s grandson, William Amherst Vanderbilt Cecil, began restoring the estate and transforming
the Biltmore Company into a diversified set of self-sustaining enterprises.
Today, Biltmore annually attracts more than one million visitors. Overseeing these tours and related
events is The Biltmore Company (TBC). Additional Biltmore businesses have been strategically added over
the past thirty years, including:
• The Biltmore Building (TBB), a management company for the Estate’s building in downtown
Asheville;
• Biltmore Estate Wine Company (BEWC), a winery and wine distribution company;
• Biltmore Estate Reproductions Inc. (BERI), a licensing company working with partner businesses to
develop, manufacture, and distribute Biltmore-branded products;
• Inn on Biltmore Estate (IOBE), a four-star, 210-room hotel complete with a restaurant and events
service;
• Biltmore Inspired Designs (BIDS), an in-home party business selling Biltmore branded home
accessories and gourmet foods.
Each of the six businesses was developed to support the overall company mission while designed to
operate self-sufficiently on its respective income streams. Most recently, the Biltmore Coffee Company*
was launched in the fall of 2012, with careful consideration to local sourcing and community impacts.
Subsequent business development opportunities are under consideration that will further enhance the
region’s economic, environmental and social performance.
*Was not operational during FY 2012 reporting period.
Approach
Owing to its long-standing commitment to maximize and measure the economic benefits of its
businesses on the Greater Asheville area, the Biltmore Company has periodically commissioned an
economic impact study. The most recent study was performed in 2004.1 This report updates and expands
that analysis.
Specifically, the report addresses three questions:
• W hat are the Biltmore companies’ direct economic impacts on the region?
• W hat is the direct economic impact of tourists coming to visit Biltmore or staying at the Inn on
Biltmore Estate?
1 Tammy Ross Huffman, “The Impact of the Biltmore Company on Asheville/Buncombe County and the Western
North Carolina Region” (monograph) (Asheville, NC: University of North Carolina, Department of Management and
Accountancy, 2004).
3
• W hat is the total impact, including so-called “multiplier effects,” of the above factors on the regional
economy?
For the purposes of this study, the four counties most associated with the greater Asheville area:
Buncombe, Haywood, Henderson and Madison were studied.
All the data in this study, unless noted otherwise, is from fiscal year (FY) 2012 and is expressed in U.S.
dollars. FY2012 for the Biltmore companies begins July 1, 2011, and ends June 30, 2012. Raw data for this
report came from the accounting offices of the six Biltmore companies.
4
Direct Economic Impacts of the Biltmore Companies
This section examines the Biltmore companies’ local contributions in terms of jobs, income, expenditures,
taxes, and charitable donations. It is worth noting that for some of the calculations, such as calculating
income, the examination of all six companies as a group is more accurate than considering each
individually. This is due to the fact that there are shared services and inter-company transfers.
Jobs
The six Biltmore companies collectively employed 1,854 people and are classified as follows:
• 789 Full Time Employees
• 301 Flex Time Employees (1,000 to 1,559 annual hours)
• 733 Reserve Status Employees (40 to 999 annual hours)
The estimated total full-time equivalent (FTE) of these positions is 1,265 jobs.
When comparing the zip code of each employee’s residence with the zip codes within the four county
region, it was determined that 1,753 – or nearly 95 percent - of these employees reside locally.
Income
Revenues for the six Biltmore companies during FY2012 totaled more than $134 million. This amount
has grown steadily, despite the nationwide economic downturn that began in 2008. By far, the most
significant revenue driver is the estate, which grossed more than $70 million of revenue. The next largest
revenue driver is the Inn on Biltmore Estate, which had nearly $29 million in gross revenue in FY2012. The
Biltmore Estate Wine Company was nearly as large with $28 million. Biltmore Inspired Designs had more
than $4 million in revenue. Significantly smaller are Biltmore Estate Reproductions ($1.8 million) and the
Biltmore Building Administration ($1.5 million).
Each company is held by different shareholders and operates independently and net gains are generally
retained by the company for the following year’s operations. As a result, much of the net income of the
companies is typically reinvested in the Asheville economy.
Chart 1
Revenue for the Biltmore Companies
The Biltmore Estate Wine Company
Biltmore Estate Wine Company
Inn on Biltmore Estate
Biltmore Estate Reproductions
Biltmore Building Administrator
Consolidated BI & BIDS
Total
FY10
FY11
FY12
$68,316,255
$69,032,160
$70,200,047
$26,279,344
$27,611,179
$28,742,729
$22,164,897
$1,601,615
$27,173,492
$1,719,362
$1,459,637
$1,256,815
$119,821,748
$126,905,529
$0
$112,522
$27,834,581
$1,806,568
$1,415,364
$4,178,748
$134,178,038
5
Expenditures
The total expenditures for all six Biltmore companies were just over $128 million. For simplicity, and
to respect confidential personnel information, Chart 2 presents four top-level line items: salaries and
benefits; accounts payable (AP) expenses (i.e. expenses to outside vendors, excluding taxes); other
expenses (most of which are internal); and taxes, detailed in Charts 4 and 5.
Note: The Biltmore Company has a negative non-AP expense, which is reflected by the internal practice
that it charges other Biltmore companies for its management services.
Since local expenditures multiply as they flow through other local businesses, they have a multiplying
effect and an increasing level of positive impact on the area’s income, wealth, and jobs. Expenditures
made elsewhere have little or no effect locally, and are commonly called “leakages.”
With just over 5 percent of employees residing outside of the Asheville region, an estimated 95 percent of
salaries and benefits are injected into the local economy – or about $46 million.
To calculate the impact of other expenses, the accounting department of the Biltmore Company
carefully reviewed the receipts for both internal and non-internal expenses. Total local expenditures in
the Asheville region, including salaries and benefits, are just over $64 million – roughly half of all the
expenditures made.
Chart 2
Expenditures for the Biltmore Companies (FY 2012)
Salaries & Benefits
AP Expenses
Other Expenses
Taxes
Total
BEWC
$5,961,350
$10,090,697
TBC
$32,773,733
$36,540,172
BERI
$362,887
$260,523
$7,940,447
$7,464,612
$1,150,386
$23,896,661
$270,454
$25,584,602
$68,677,226
$1,448,451
$2,853,668
$3,037,740
$2,444
$642,849
IOBE
$7,505,275
$2,696,935
($3,490,347)
TBB
$222,588
$440,272
$8,065,307
$1,467,249
BIDS
$1,459,482
$574,303
$92,972
$5,627,325
$2,823,614
Total
$48,285,315
$55,969,704
$16,456,519
$7,510,400
$128,221,938
Chart 3
Local Expenditures for the Biltmore Companies (FY-2012)
Salaries & Benefits
AP Expenses
Other Expenses
Taxes
Total
BEWC
$5,663,283
$793,907
$67,360
$393,397
$6,917,947
TBC
$31,135,046
$9,454,522
$0
$1,270,369
$41,859,937
BERI
BIDS
$344,742
$1,386,508
$0
$546,331
$386,082
$2,220,691
$41,282
$57
TBB
$211,459
IOBE
$7,130,011
Total
$45,871,049
$207,717
$273,583
$3,718,413
$14,489,424
$80,135
$92,972
$1,529,754
$3,366,684
$16,149
$594,162
$0
$12,378,178
$629,840
$64,356,997
6
Taxes
As a result of operating under a for-profit corporate structure, the Biltmore companies pay extensive taxes
to federal, state, and local governments. Most federal and state taxes do not directly benefit the Asheville
area community, and are not considered when determining local economic impact. Nevertheless, they
are worth noting. In addition to payroll taxes, the Biltmore companies paid excise taxes of $216,421 to the
federal government and $132,569 to the state government. They also paid $180,244 in business taxes to
North Carolina.
One state tax that directly benefits the Asheville area is sales tax, which is split between the state and
county governments. Chart 4 below shows the total sales taxes paid in FY2010 through FY2012.
Mid-way through FY2012, North Carolina reduced its share of sales taxes from 5.75 percent to 4.75 percent,
yielding an average rate of 5.25 percent. Three of the four counties in the Asheville region – Buncombe,
Henderson, and Madison – added an additional 2 percent for local purposes, while Haywood added
2.25 percent. Assuming that an average of 2 percent benefits the four-county region, the total sales tax
contribution to the area was $1,521,887.
Additionally, property tax and occupancy tax reach local government. Summarized in Chart 5, the total
paid of these taxes was approximately $2 million. Together, the total amount of taxes – sales, property,
and occupancy combined - paid to local government was approximately $3.4 million.
Note: Other taxes such as payrolls taxes (included in the “salaries and benefits” line item) and excise
taxes are not included here because they are paid to state or federal governments.
Chart 4
Sales Taxes Paid
FY10
FY11
FY12
The Biltmore Company
$2,275,049
$2,263,345
$2,089,908
Inn on Biltmore Estate
$1,848,809
$1,976,145
$1,789,475
n/a
n/a
Biltmore Estate Wine Company
Biltmore Estate Reproductions
$793,295
$440
Biltmore Building Administration
Consolidated BI & BIDS
Total
$1,052,546
$315
n/a
$0
$4,917,594
$1,657
$5,294,008
$986,338
$194
$270,454
$5,136,369
Chart 5
Other Local Taxes Paid by the Biltmore Companies
The Biltmore Company
Biltmore Estate Wine Company
Inn on Biltmore Estate
Biltmore Estate Reproductions
Biltmore Building Administration
Consolidated BI & BIDS
Total
Property Taxes
$651,137
$101,149
$254,865
Occupancy Tax
$744,674
$92,972
$1,100,123
$744,674
7
Strategic Philanthropy
A final area where the Biltmore companies are supporting the community is through charitable giving.
Chart 6 shows that in FY2012, the companies contributed $59,674. The companies provided $187,950 of
in-kind donations and facilitated the additional flow of more than $100,000 in external contributions
through its annually hosted Gala to a local community based organization.
Chart 6
Charitable Giving
FY10
FY11
FY12
The Biltmore Company
$48,905
$42,105
$49,674
Inn on Biltmore Estate
$258
$0
$0
Biltmore Estate Wine Company
Biltmore Estate Reproductions
Biltmore Building Administration
Consolidated BI & BIDS
Total
$0
$0
$200
$1,379
$0
$0
$0
$49,363
$0
$43,484
$0
$0
$0
$10,000
$59,674
Direct Economic Impacts of Biltmore - Related Tourism
The impacts from tourists who come to visit Biltmore and stay at the Inn are equally important as the
direct economic benefits from the Biltmore companies. These tourists spend money not only at Biltmore
companies (with their expenditures already accounted for in the revenues of the Biltmore companies)
but also at a broad array of businesses in the Asheville area. This section provides analysis of how many
visitors came to Asheville in FY2012, how many tourists came to Asheville primarily to visit Biltmore, and
how much money they spent in the region.
Total Visitors to the Estate
The total number of guests passing through the gates of the Biltmore was 1,107,624. Of these people, 18,238
returned for a second day, resulting in 1,089,386 unique visits. Not all of these visitors necessarily bought
a full-price ticket, and some were part of a group. Some individuals were provided complementary or
discounted tickets, and some used a twelve-month pass that allows purchasers to enjoy an unlimited
number of daytime visits.
Visitor Motivations
Not all of the visitors to the estate came exclusively because of Biltmore, and therefore not all their
local spending would be lost if Biltmore did not exist. In 2012, TNS Global performed a “Biltmore Market
Segmentation Study,” which surveyed visitors and analyzed their reasons for coming to Asheville.
8
Chart 7
Role of the Biltmore Estate in Drawing Visitors to Asheville
Guest Segment
Not a Deciding Factor
21.8%
Among Several Reasons
18.8%
Minor Consideration
One of Main Reasons
Main Reason
4.0%
17.84%
37.6%
100.0%
For more than half the guests surveyed, the estate was the “main” reason or “one of the main” reasons.
For a quarter of the guests, it was “not a deciding factor” or a “minor consideration.” The remainder
indicated it was “among several reasons” for coming to Asheville.
To analyze the economic impact of Biltmore on the greater Asheville region, it is important to consider
how many Asheville visits would not have occurred if the estate or the Inn on Biltmore Estate did not
exist. This question is answered by providing weightings to each segment, as shown in Chart 8.
Chart 8
Estimate of Asheville Visitors Lost if Biltmore Did Not Exist
Guest Segment
Not a Deciding Factor
Minor Consideration
Total Visitors
237,292
43,144
%Lost
0%
25%
Biltmore Visitors
Potentially Lost
0
10,786
Among Several Reasons
204,934
50%
102,467
Main Reason
409,868
100%
409,868
One of Main Reasons
194,148
1,089,386
75%
145,611
668,732
The chart breaks down the 1,089,386 unique visitors in FY2012, and then weights the likelihood that
they would no longer visit Asheville if the estate did not exist. For example, when considering the
237,292 visitors who said the estate was not a deciding factor for their traveling to Asheville – perhaps
they came for a wedding or for another arts attraction – the assumption is that all of them (100 percent)
would still visit the area, even if the estate did not exist. For those who said the estate was the main
factor, the assumption is that none of them would had visited without the presence of the estate. The
other segments fall in between. The conclusion is that a total of 668,732 visitors to Asheville, and their
combined economic impact, would have been lost if the estate or the Inn on Biltmore Estate did not exist.
9
Visitor Spending Patterns
When calculating how much money 668,732 Biltmore-linked visitors spent in the local economy, two
publications by The Division of Tourism, Film, and Sport Development in the North Carolina Department
of Commerce were helpful, including “2012 North Carolina Visitor Profile” (published April 2013), and
“2012 North Carolina Regional Travel Summary” (published May 2013). Only the latter contains regionally
specific data.
Chart 9 depicts the types and amounts of expenditures for overnight guests in the “Mountain Region,”
where Asheville is located.
Chart 9
Spending Patterns for Overnight Guests to the Mountain Region
Expenses
Amenities (golf fees, spa)
Shopping (gifts, souvenirs)
Per Party
$9.00
Per Person
$4.50
$57.00
$28.50
$45.00
$22.50
Gaming
$65.00
Gasoline
$100.00
$50.00
$115.00
$57.50
Entertainment/Admissions
Groceries
Food/Beverage/Dining
Lodging
Parking/Tolls
Transportation
Other
TOTAL
$27.00
$32.50
$13.50
$197.00
$98.50
$33.00
$16.50
$664.00
$332.00
$7.00
$9.00
$3.50
$4.50
It breaks down the total trip expenditures by traveling party, and per person. A typical trip to the region
lasts 2.8 days. According to the “Visitor Profile”, the average size of a visiting party to the region, was 2.0
people, so the chart adjusts the expenditures per party to those per person.
The “Regional Travel Summary” does not contain data about “day-trippers.” Therefore, it is necessary to
reference the statewide “Visitor Profile.” Chart 10 reflects North Carolina’s estimate of the expenditure
pattern for day-trippers in the state.
To calculate the spending patterns of the 668,732 Biltmore-linked visitors in FY2012, it is necessary
to further dissect the character of their trips. Another survey conducted by CSM for Biltmore in 2012
examined specifically where a party stayed before or after visiting the estate. Chart 11 presents the
10
findings and shows that more than half of all visitors stayed at paid accommodations in Asheville.
Chart 10
Spending Patterns for Day-Trippers in North Carolina
Expenses
Per Party
Per Person
Shopping (gifts, souvenirs)
$22.00
$11.58
Entertainment/Admissions
$12.00
$6.32
Amenities (golf fees, spa)
Gaming
Gasoline
Groceries
Food/Beverage/Dining
Lodging
Parking/Tolls
Transportation
Other
TOTAL
$3.00
$6.00
$1.58
$3.16
$52.00
$27.37
$46.00
$24.21
$22.00
$0.00
$2.00
$16.00
$5.00
$186.00
$11.58
$0.00
$1.05
$8.42
$2.63
$97.89
Chart 11
Potentially Local Visitors, By Trip Character
Trip Character
Stayed at the Inn
Breakdown
2%
Paid Accommodations in Asheville
59%
Overnight Outside Asheville
16%
Day Trip
Stayed with Friends & Family
Other (Camp, RV, Cabin)
15%
5%
3%
100%
Potentially Lost Visitors
13,375
394,552
100,310
106,997
33,437
20,062
668,732
The spending patterns of each segment differ slightly. The following assumptions are made in
calculating the spending by visitors in each segment:
• Those who stayed overnight at the Inn comport with the Overnight Guest profile,2 except for their
lodging expenditures at the Inn itself, which are already captured in revenues presented in the first
2 G uests at the Inn t y pically stay two nights, whereas the average overnight par t y repor ted by the
“Regional Travel Summar y” stayed 2.8 nights. We note, however, that the price of lodging at the Inn
is relatively high for the region, which means that guests probably spent more than average in all
categories. We assume that these two fac tors balance each other out, and consequently we apply
Nor th Carolina’s Overnight Guest prof ile for ever y person stay ing at the Inn.
11
section of this report. Therefore, to prevent double counting, these expenditures are zeroed-out.
• Those who had overnight accommodations in Asheville comport with the Overnight Guest profile.
Their expenditures, in this case, were made in the Asheville region.
• Day-tripper expenditures comport fully with the Day-Tripper profile, and all of their expenditures
have been made in the Asheville region.
• Those who stayed overnight but fell into the final three categories – staying overnight outside
Asheville; with friends or family; or in campgrounds or RV parks – comport with the Day-Tripper
profile.
• Zero dollars were spent on “gaming,” since there are no casinos in the four-county area.
• Finally, three-quarters of all “entertainment/admissions” revenues are for Biltmore. The remaining
expenditures might have been to pay for movies, theater, events, or other attractions in the Asheville area.
The resulting spending patterns – that is, tourist dollars that might be lost if Biltmore did not exist – are
shown in Chart 12. The contribution of Biltmore to tourism in the Asheville area is $137 million. The two
largest categories of local tourist spending are lodging ($39 million) and “food/beverage/dining” ($30
million).
Chart 12
Potentially Lost Visitor Spending (2012)
Expenditures
Amenities (golf fees, spa)
Shopping (gift souvenirs)
Gaming
Entertainment/Admissions*
Inn Stayers
Paid
Accommodations
Daytrippers
Hotels Outside
Asheville
$381,177
$11,244,729
$1,161,482
$1,238,914
$387,161
$232,296
$14,645,759
$75,232
$2,219,354
$158,384
$168,943
$52,795
$31,677
$2,706,385
$60,186
$0
$1,775,483
$0
Gasoline
$668,732
$19,727,594
Food/Beverage/Dining
$769,042
Groceries
Lodging
Parking/Tolls
Transportation
Other
$180,558
$0
$52,795
$0
$31,677
$0
Total
Spending
$2,247,467
$0
$2,928,342
$915,107
$549,064
$27,534,160
$22,686,733
$2,428,553
$2,590,457
$809,518
$485,711
$29,770,013
$1,380,932
$105,589
$112,629
$35,196
$38,863,360
$220,682
$6,510,106
$2,462,606
$111,510,225
$60,186
$0
$168,943
Camping
$2,745,321
$5,326,450
$0
$46,811
$158,384
Friends&
Family
$1,775,483
$1,161,482
$0
$1,238,914
$0
$387,161
$0
$232,296
$0
$38,863,360
$8,927,014
$21,118
$844,714
$901,028
$281,571
$168,943
$9,027,882
$9,629,741
$3,009,294
$1,805,576
$263,973
$281,571
$87,991
$8,526,861
$52,795
$1,702,275
$2,522,000
$137,445,324
12
However, if the Inn on Biltmore Estate did not exist, some of the people staying at the Inn who came for
some other reason also might not be spending money in Asheville. Recall the estimate of the number of
Inn guests who came primarily to the estate – and whose tourist dollars would be lost if Biltmore did not
exist – was 13,375. In fact, the total number of Inn guests, including those coming for group functions, was
36,109. What would happen to the other 22,734 guests if the Inn did not operate? The assumption is that
half of these guests, 11,367, and their tourist dollars would be lost.
Indicated here are the Inn on Biltmore Estate guests who would no longer come to Asheville if the Inn
on Biltmore Estate were not operating. This absence would take another $2.3 million out of the local
economy.
Chart 13
Adjusting Visitor Spending to Include Inn on Biltmore Estate Guests Who Do Not Visit Biltmore Estate (2012)
Amenities (golf fees, spa)
Shopping (gift souvenirs)
Gaming
Entertainment/Admissions
Estate Tourists
$2,247,467
Other Inn Guests Adjusted Total
$51,152
$2,298,619
$14,645,759
$323,960
$14,969,718
$2,706,385
$255,758
$2,962,142
$0
$0
$0
Gasoline
$27,534,160
$568,350
$28,102,510
Food/Beverage/Dining
$29,770,013
$653,603
$30,423,615
$1,702,275
$39,785
Groceries
Lodging
Parking/Tolls
Transportation
Other
$8,526,861
$38,863,360
$153,455
$8,680,315
$0
$38,863,360
$8,927,044
$187,556
$9,114,600
$137,445,324
$2,284,767
$139,730,091
$2,522,000
$51,152
$1,742,059
$2,573,151
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Overall Impacts on the Local Economy
The calculations thus far have captured the direct impacts of the Biltmore companies. To summarize:
• The Biltmore companies employ 1,753 people locally (1,265 FTE), generate $134 million in income,
pump $64 million back into the local economy, and pay $3.4 million in local taxes.
• If Biltmore did not exist, the area would lose 668,000 tourists per year. And if the Inn on Biltmore
Estate did not exist, Asheville would lose another 11,367 visitors. Together, these visitors spent an
estimated $140 million in the local economy.
In the following section, the full impacts the Biltmore companies are calculated – not just the direct
effects but their local multiplier effects throughout the Asheville economy.
IMPLAN Methodology
The tool used to measure the multiplier effects was IMPLAN, an input-output model relied upon by
economic developers across the United States. IMPLAN draws from state and national economic patterns
to model where every dollar of spending goes, and how every dollar is in turn re-spent. IMPLAN can
model how a change in demand can lead to direct new jobs, as well as indicate how the new spending
by business expansion creates new jobs (indirect effects from businesses’ supply chains). It also
demonstrates how the new spending by new employees in all of these businesses (both expanding
businesses and supply-chain businesses) create even more new jobs (induced effects).
The following methodology “shocks” the existing economic system of the Asheville area and measures
the loss of the direct effects of the Biltmore companies and Biltmore visitors.
• First, a region within IMPLAN reflective of the four counties in the Asheville area is created.
• Next, to measure the local impact of Biltmore tourists in the region, a scenario was created in which
spending was removed that was associated with all those people who would not have come to the
Asheville region if Biltmore did not exist.
• Then, to measure the local impact of the Biltmore companies, a scenario was created in which all of
the companies’ employment was removed from the model.
• Finally, all of these various effects were then aggragated.
Asheville Area Economy
The first step of the analysis was to put together the four counties of the Asheville area into a unified
model. Chart 14 shows the top page of the model. The four-county area has 232,570 employees and a gross
regional product of $14.7 billion. The average household income is nearly $80,000. The largest sector is
“food services,” which illustrates the degree to which the area is tourist-dependent.
Impact of Tourist Spending
To analyze the full economic impact of tourism spending, the Asheville area is then “shocked” by
14
Chart 14
The Asheville Area Economy in IMPLAN
Chart 15
Inputs into IMPLAN
Spending Category
Amenities (golf fees, Spa)
Change Modeled
$2,298,619
Shopping( gifts, souvenirs)
$14,969,718
Entertainment/Admissions
$2,969,142
Gasoline
$28,102,510
Gaming
Services
Groceries
Food/Beverage/Dining
Lodging
Parking/Tolls
Enterprises
Transportation
Services
Other
$0
IMPLAN Category
Other Amusements and Recreation
Retail-General Merchandise
Museum, Heritage, Zoo, and Recreational
Retail - Gasoline Stations
$8,680,315
Retail - Food and Beverage
$38,863,360
Hotels and Motels Services
$30,423,615
$1,742,059
$9,114,600
$2,573,151
$139,730,091
Restaurant,Bar, and Drinking Places
Products and Services of Sate & Local
Scenic and Sightseeing Transportation
Other Personal Services
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removing the totals of tourism spending (Chart 13) from local demand. Chart 15 outlines the inputs made
into the model. Since the IMPLAN categories do not map exactly to North Carolina’s categories for tourist
spending, judgments were provided as to which model categories made best sense.
The results of removing $140 million of tourist spending from the Asheville economy are summarized below.
An estimated 2,039 jobs would be lost from the economy. Additionally, Asheville would lose $52 million
each year in labor income and $88 million in value added (local equivalent of Gross Domestic Product).
In addition, North Carolina and local governments in the Asheville area would lose $11 million in taxes.3
Impact of Biltmore Companies
The direct impact of the companies – how many people they employ, how much income they earn, how
much they spend locally – is already known. To see the multiplier impacts of the companies, however,
only the indirect and induced effects of removing Biltmore company jobs from the Asheville economy
are traced.
Chart 16
Local Impacts of Asheville Losing Biltmore Tourists
Impact Type
Direct Effect
Indirect Effect
Induced Effect
Total Effect
Employment
(1,376)
(371)
(293)
(2,039)
Labor Income
($31,286,138)
Total Value Added
($49,116,425)
($101,229,971)
($18,952,434)
($31,781,553)
($11,231,425)
($19,629,884)
($52,453,344)
($87,698,743)
($9,935,782)
Output
($36,613,695)
($169,625,219)
Chart 17
State and Local Tax Impacts of Asheville Losing Biltmore Tourists
Taxes on Production & Imports
Taxes on Households
Taxes on Businesses
($9,630,664)
($1,377,809)
($189,006)
($11,197,479)
Chart 18 converts the 1,854 employees into 1,265 full-time equivalents (FTEs), and shows which IMPLAN
categories are adjusted to remove Biltmore from the Asheville economy. The IMPLAN categories are
derived from the NAICS codes that the Biltmore Company uses to file taxes for each company.
Chart 19 presents the impacts on the Asheville economy if the Biltmore companies no longer existed. All
the effects come directly from the model, except wages, which are a known quantity. The analysis shows
that the Biltmore companies are directly and indirectly responsible in the area for 2,400 jobs, $87 million
in wages, and $150 million in value added.
3 Taxes on Production and Imports include most property and sales taxes. Taxes on Households include personal income,
sales, and motor vehicle taxes. Taxes on Businesses include most profit taxes.
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Chart 20 shows that state and local governments would lose $15 million per year as a result.
Chart 21 presents an overall picture by combining the direct and indirect effects of the companies
themselves as well as that of the tourists of the estate and Inn on Biltmore Estate. Therefore, Biltmore
companies are responsible for approximately 4,400 jobs in the Asheville economy, $139 million in wages,
$238 in value added, and nearly $27 million in state and local taxes (excluding employee tax payments). 4
Chart 18
IMPLAN Scenario to Remove Biltmore from Asheville Economy
Company
FTE Removed
The Biltmore Company
Biltmore Estate Wine Company
(830)
Museums
(223)
Hotels and Motel Services
(190)
Inn on Biltmore Estate
Biltmore Estate Reproductions
Biltmore Building Administration
Total
Wineries
(5)
Advertising and Related Services
(3)
Business Support Services
(14)
Consolidated BI&BIDS
IMPLAN Category
(1,266)
Management of Companies
Chart 19
Local Impacts from Asheville Losing the Biltmore Companies
Impact Type
Direct Effect
Indirect Effect
Induced Effect
Total Effect
Employment
Labor Income
Total Value Added
(689)
($23,470,261)
($40,993,053)
(2,400)
($86,918,318)
($150,498,517)
(1,265)
(447)
($48,285,315)
($15,162,742)
($80,584,101)
($28,921,364)
Chart 20
State & Local Tax Effects from Asheville Losing Biltmore Companies
Taxes on Production & Imports
Taxes on Households
Taxes on Businesses
($12,887,863)
($2,095,377)
($436,004)
Chart 21
($15,419,244)
All Economic Impacts of the Biltmore Companies on Asheville Economy
Tourism - Direct & Indirect
Biltmore Companies-Direct
Jobs(FTE)
Wages
Value Added
State & Local Taxes
$86,918,318
$150,498,517
$15,419,244
2039
$52,453,344
4,439
$139,371,662
2,400
$87,698,743
$238,197,260
$11,197,479
$26,616,723
4Note that this total includes state and local business taxes, but not payroll taxes. The numbers for the direct effects of the
Biltmore companies and all effects of Biltmore tourism come from IMPLAN runs discussed above. The number for the indirect
effects of the Biltmore companies is an estimate, based on interpolation of the other results. An estimate is necessary, because
the IMPLAN data runs on the indirect effects only yielded a tax result of both direct and indirect effects.
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The findings represented in this report confirm the continuing and significant economic impacts, and
in turn, the contributing influence that the Biltmore companies have on the long-term vitality and
sustainability of the greater Asheville region. The study also surfaces the important interrelationships
that exist between the Biltmore companies, local business, government and the community. It is this
array of stakeholders that in demonstrated partnership are collectively responsible for ensuring the
region’s future economic, environmental and social wellbeing.
About the analyst
Michael H. Shuman is an economist, attorney, author, and entrepreneur, and one of the world’s leading
experts on community economics. He has authored, co-authored, or edited eight books. His most recent
book, published by Chelsea Green, Local Dollars, Local Sense: How to Move Your Money from Wall Street to
Main Street and Achieve Real Prosperity. His previous book, T he Small Mar t Re volut ion : How L o c al
Busines ses Are B eat ing the Glob al Comp e t it ion (Berrett-Koehler, 2006), received a bronze prize
from the Independent Publishers Association for best business book of 2006.
About Burns & Hammond
Burns & Hammond is an integrative sustainability consultancy with 30 years’ experience providing
customized sustainability intelligence, business evolution strategies and market positioning for
companies, organizations and associations seeking to maximize the return on their sustainability
commitment and investments. The company is particularly adept at working with companies and
organizations seeking to design, develop and implement new business models that leverage core
competencies and resources into successful and sustainable enterprises.
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