Although other businesses, such as manufacturing, mining, and other extractive industries, once provided the economic engines for the region, tourism and craft present the best direction for the future. No other industries offer such flexibility for growth in all levels of employment, from entry level to professional to part-time, post retirement. Tourism and craft rely on unique, indigenous resources and people to sustain local economies. They are not subject to industrial moves across borders or oceans.

Tourism in Appalachia

Tourism is one of the largest industries in the U.S. Generating $174 billion in payroll, travel and tourism directly employs 7.9 million people and accounts for one in seven U.S. jobs. There is a strong future in tourism, especially for destinations offering a consistently compelling, distinctive, and diverse experience. Despite current economic and industry challenges, domestic person-trips are expected to grow an average of 21% a year over the next three years. Travel and tourism expenditures are anticipated to grow in the United States by 4.75% a year through 2005. In comparison, GDP is projected to grow 2.5% in 2003, 3.6% in 2004, and 3.4% in 2005. (Source: TIA Travel Forecast Facts 2001.)

In Appalachia, tourist spending contributed more than $29 billion to the Region's economy in 2001. Visitors staying in hotels, resorts, and bed and breakfasts, shopping in retail centers, purchasing locally made crafts, dining in restaurants, engaging in outdoor recreation and golf, touring historic sites, and attending cultural events provided job opportunities for more than 600,000 residents of Appalachia in 2001.

The Target Market Potential

Appalachian travel and tourism takes many forms and appeals to many audiences. Packaging the appropriate collection of assets and activities into multi-state experiences will strengthen the opportunity to increase the economic affect from tourism, increase employment in tourism and craft, and increase visitation to the Region. The following audiences are those that represent the highest market potential.

Niche Markets
Specialty, niche audiences will contribute the greatest opportunity for growth in multi-state travel. TIA research shows that

• Ninety-eight million U.S. adults have taken an adventure trip in the last five years.
• Sixty-five percent of Americans include a cultural heritage component in their vacation.
• Thirty million adults have taken an education-focused trip to learn or improve a skill or activity.
• Ten million U.S. adults participated in a garden-related activity while traveling last year.
• Fifty-five million Americans embrace geotourism, travel experiences that "sustain or enhance the geographical character of the place being visited."
• Group tour or packaged tour travelers spent $99 billion in the United States in 2001.

Domestic Origin Markets
The U.S. domestic travel market can be divided into three main categories.

• Urban gateways of Atlanta, Baltimore, Chicago, Cincinnati, Cleveland, Memphis, Philadelphia, New York, and Washington are strong domestic markets (and international gateways) within a 500-mile radius of some or all of Appalachia.
  
  
• Residents living outside ARC region but in ARC states provide the greatest opportunity for Appalachia. Research indicates that most member states already market to these audiences, and that a segment of this audience already travels to the Region.
  
  
• Travelers from outside the ARC states represent potential tourism revenues. Short-haul origin markets such as the Mid-West, Southwest, New England, and long-haul (California and the Pacific Northwest) origin makets currently travel to one or more ARC states. These markets offer fly-drive, group tour, and loop tour potential for various regions of Appalachia.

International Origin Markets
Forty-five and a half million overseas travelers visited the United States in 2001. Although the number of overseas visitors to the United States has declined recently, international visitors remain significant because they stay longer and spend more. North American markets remain strong. The U.S. Department of Commerce research shows that in 2001:

• 59.6 million Canadians traveled to the United States.
• 9.6 million Mexicans visited the United States.
• 4.2 million travelers arrived from Britain.
• Over four million international arrivals were from Japan.
• The United States hosted 1.2 million German visitors.

Read more about the economic effects of tourism in Appalachia.

Craft: Appalachia's Advantage

The U.S. craft industry—a collection of small businesses with a large network of guilds, membership organizations, schools, suppliers, shops, galleries, and publications—continues to grow and is recognized as a vibrant economic sector. National craft sales are approximately $13 billion a year. And the median household income of full-time craftspeople is $50,000 a year—26 percent above the national median of $39,657, according to a 2001 national economic impact study of 80,000 craftspeople, conducted by the Craft Organization Directors Association (CODA).

A demographic profile revealed that 79 percent of craftspeople work in a studio located on or in their residential property. In addition, 64 percent of craftspeople worked alone in a studio, 18 percent with a partner or family member, and 16 percent with paid employees. Moreover, craftspeople with paid employees have three times the household income and ten times the sales and revenue of those that work alone.

Craft is a major element of Appalachia's cultural tradition and a significant community asset connecting all 13 Appalachian states. Several ARC states have begun to recognize and document the affect of this "invisible industry."

Building on CODA findings, a June 2003 Marshall University study on the Craft Industry in West Virginia reports that 2,539 craftspeople in the state generated a direct economic impact of $54 million, with a total economic impact (including the wholesale sector) of over $81 million in 2002.

A University of Kentucky study, recently released by the Commonwealth of Kentucky, estimates total annual sales of Kentucky craft producers in 2000 at $252.4 million with out-of-state sales of $148.7 million. The study also reports that the state's craft industry is responsible for 3,200 full-time and part-time jobs. A 1996 HandMade in America economic impact study found that craft contributes $122 million to Western North Carolina's economy each year.

Craft is an important motivator for visitors to Appalachia and is vitally important to the Region's tourism industry. However, craft is also an industry of its own, contributing to Appalachia's economic and social prosperity differently than tourism. Accordingly, the craft community has different development and marketing needs than the tourism community and must be addressed separately.

It is important that regional strategies complement and leverage individual state development and marketing programs, build on stakeholder activities, and meet specific tourism/craft needs. A regional approach, offering seamless experiences for traveling Appalachia, is a strategy that will pay dividends—present and future—if done right.

Who Buys Locally Made Craft?
Shopping is the number one activity of U.S. travelers today. TIA reports that 91 million people—63% of adult travelers—included shopping as a leisure activity on a trip in 2000. Packaging Appalachia's assets of natural beauty, culture, and craft creates a major draw for the tourism economy.

Research by North Carolina Central Regional Extensions Publications profiles two types of buyers of locally made crafts:

"History and Parks" tourists devote time to planning trips and enjoy exploring scenery, contemplating a sense of place, and photographing the experience. These tourists visit gardens, historic sites and museums, and state and national parks, in addition to buying crafts, postcards, collectibles, local food, and books about the area and its history.

Craft buyers in urban destinations are typically "Ethnic, Arts and People" travelers who tour ethnic communities, enjoy community festivals, attend concerts and theatre, visit art galleries and museums, and like to interact with local residents. These tourists prefer to buy ethnic crafts, folk art, designer craft, jewelry, and traditional crafts of the region—many of which can be used or displayed at home.

Business Development
Tourism Development
State Tourism Contacts
Economic Effects of Tourism in Appalachia
Key Trends Affecting Tourism
Profiles of Potential Target Markets
Growing Appalachian Economies Through Craft
Report on Tourism and Craft