Passengers wait on the Block Island ferryboat Anna C. in Old Harbor on Block Island in July 2024. The National Hotel is in the distance on the right. (Janine Weisman/Rhode Island Current)
The silver lining of inflation: Rhode Island’s tourism economy benefited from $5.6 billion in visitor spending in 2023, according to new research by a state commissioned consultant.
A presentation by international firm Tourism Economics for Rhode Island Commerce Corporation showed visitor spending grew more than twice as fast as the increase in the number of visitors in 2023. The 28.4 million people who traveled to the Ocean State in 2023 is 2.2% higher than the prior year, but their total spending on travel, food, lodging and entertainment grew 4.6% year-over-year.
That’s driven by demand growth as well as price hikes for commodities and services, according to the research.
More than one-quarter of the direct spending, 26%, stemmed from food and beverage sales. Lodging, including hotels, second houses and short-term rentals, was the second-highest expense, contributing $1.2 billion.
Air transportation saw the biggest annual increase, up 10.2%, to $328 million in 2023. Rhode Island Airport Corporation, the quasi-public entity that manages the state’s airports, gets a share of revenue from passengers on flights, as well as fees for the airlines to land, use hangar space, and other related services.
In March 2023, Breeze Airways opened a permanent base at Rhode Island T.F. Green International Airport, with plans to invest $160 million and hire up to 250 employees over the next five years. Commerce awarded the Utah-based airline $2.9 million in tax credits tied to the job creation plans.
Commerce has also experimented with various destination marketing ploys, from giant, traveling stuffed quahogs to the $2.2 million “All That” ad campaign rolled out in February of this year.
“The economic activity generated from the travel sector represents a critical component of the state’s current and future growth,” Anika Kimble-Huntley, Commerce’s chief marketing officer, said in a statement. “The Commerce team will continue to work with our great partners, statewide, to support the upward trajectory of tourism and record-breaking visitation.”
Visitor count and direct spending in 2023 broke prior state records, exceeding pre-pandemic numbers. However, the number of jobs tied to the state’s tourism economy remains slightly below its 2019 peak.
The 38,329 jobs directly tied to the tourism economy in 2023 remains about 1,000 jobs, or 2.5%, below 2019 levels. Including jobs that indirectly benefited from tourism, 2023 activity helped to sustain 86,612 jobs, while generating $935 million in state and local tax revenues, according to the research.
“Tourism plays a vital role in Rhode Island’s economy by creating jobs, supporting our local businesses, and showcasing everything that makes our state a premier destination,” Commerce Secretary Liz Tanner said in a statement. “I applaud the dedicated efforts of the tourism team at Rhode Island Commerce and all others in the industry that helped reach this accomplishment.”
Including direct spending, jobs and tax revenue, the visitor economy totaled $8.3 billion in 2023, a 4.5% increase over the prior year.
The research reflects federal labor and jobs statistics, state and local tax revenues, short-term rental information and information from market research group Longwoods International.
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