Report: Gateway’s economic impact tabbed at $1.3B - Ahwatukee Foothills News: Money

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Report: Gateway’s economic impact tabbed at $1.3B

ASU study says airport’s effect on region’s growth, economy up 79 percent since 2010

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Posted: Thursday, October 3, 2013 7:45 am

A report conducted by Arizona State University’s W.P. Carey School of Business indicates the combined direct and indirect impacts from Phoenix-Mesa Gateway Airport brought in more than $1 billion to the regional economy in fiscal year 2013. That’s 79 percent more than what was reported in the last study, three years ago.

Using Federal Aviation Administration methodology used for other airports like Phoenix Sky Harbor and LaGuardia Airport in New York, the report — researched by Director of the JPMorgan Chase Economic Outlook Center Lee McPheters — analyzed the airport’s economic benefits to the area via multiple factors. Some were tied directly to the airport itself, for example revenue generated through purchases at Gateway and employment, while others were linked to secondary impacts like restaurants and hotels.

Researchers used data compiled by the Mesa Convention and Visitors Bureau — now known as Visit Mesa — which conducted surveys at the airport, and McPheters said the organization gathered enough to create a significant sample size to use for the project.

The final tally listed in the report states Gateway contributed more than $1.3 billion to the regional economy in fiscal year 2013. The figure is notable on its own, but the true effect of the total is reflected in the comparison between previous studies conducted, the most recent of which was conducted in 2010. In that year, the airport brought in slightly less than $734 million to the region when adjusted for inflation, and the 2013 numbers are more than double the $580 million impact — the total was adjusted to account for inflation as well — the airport had in 2008.

The explanation for the 79 percent jump over the course of three years offered by McPheters and Gateway Executive Director Jane Morris covers a few different areas, with the simplest being an increase in the number of people flying in and out of Gateway.

“The huge difference between now and 2010 is that there are twice as many of these visitors,” McPheters said.

To put it into numbers, more than 1.45 million passengers flew through Gateway in the 2013 fiscal year, which represents a 113 percent increase from the 682,771 who used the airport for travel in 2010. Of the total enplanements, which adds up to a bit more than 728,000 people, 60 percent were visitors to the area, and 58 percent of those travelers came to visit friends and family, according to the report.

One of the reasons mentioned by Morris for the increase in visitors is the relatively inexpensive airfare offered by couriers Allegiant Air and Spirit Airlines — the latter of which announced it will leave Gateway for Sky Harbor late next month, although Spirit accounts for only 8 percent of Gateway’s traffic.

— that provide direct connections from smaller cities across the west.

That reason is tied to a broader cause for the bump in total passengers: a more favorable economic climate for travel. As Morris pointed out, the last two studies came from the beginning and the middle of the recession, which curbed many people’s travel plans.

“In the middle of a recession, people are going to be much more cautious,” McPheters said.

With the improved economic conditions, Morris said more people are taking advantage of the aforementioned cheap flights to and from Gateway.

But it’s not just the number of travelers that has increased — the people who visit the region are also opting to spend more time out here as well.

“People are staying longer; they’re staying six days on average,” she said.

An increase in passengers coming through the airport and the average length of stay both have a direct effect on the secondary impacts. Start with the increase in the number of passengers, which both leads to more people going out and purchasing items like food, drink and lodging, and requires Gateway to increase its staffing level in order to accommodate the extra guests. The report indicates on-air activity employment has increased from an employment figure of 1,145 in 2010 to 2,042 in 2013.

The increase in employees serving the airport also increases the amount of money spent in the region, as McPheters said the employees working at the airport use some of their paychecks to purchase necessary items like food or paper towels at local grocery stores, or go out to dinner on date night.

The effect on the employment increase fits in with the length of stay, as people who stay in the region longer will spend more money on food, lodging and entertainment.

“It just explains the fact that when you have jobs, you create other jobs,” he said.

To put it another way, McPheters said the average departure from Gateway contains 144 passengers, 86 of whom came to Mesa and the surrounding region as visitors, and the average visitor spends approximately $1,000 during their stay.

“In a sense, every time you have an airplane leave from Gateway, that’s $80,000 spent in the area,” he said.

None of the previous factors contributing to the snowball effect encompasses other revenue generators like capital projects and construction around the airport, which create jobs that feed into the local economy and contribute to the airport’s expansion.

A copy of the complete report is available at http://evtnow.com/5ux.

• Contact writer: (480) 898-5647 or emungenast@evtrib.com

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