An Overview Economic Factors Related to the Demand for Accommodations in Downtown Macon
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Center for Economic Analysis Middle Georgia State College – School of Business An Overview Economic Factors Related to the Demand for Accommodations in Downtown Macon. Conducted by: Dr. Greg George, Director Center for Economic Analysis School of Business Middle Georgia State College June 5, 2015 Forward: This report is extracted from a larger report being complied for MMI Capital on economic factors of Macon with particular emphasis on downtown Macon. The purpose of this report is to present an independent and unbiased description of downtown Macon. This report serves as an assessment of the local and regional economic factors which are relevant to hotel accommodations in downtown Macon. This report is not intended as an assessment of financial viability for a hotel. Specialized reports specific to the accommodation industry are available through other sources. This report does not necessarily reflect the opinion of the School of Business, Middle Georgia State College, nor the University System of Georgia. Any errors or omissions are the strict responsibility of the author. Additionally, any errors or questions should be addressed to Greg George at [email protected]. The assessment is based on a review of available information at the time of publication. - 2 - Summary of Findings - The City of Macon serves as the region’s center for population, employment, entertainment and culture. - Macon is the largest accessible city to approximately 400,000 people in Central Georgia. - The unemployment rate in the Macon MSA has fallen to 6.6% since the Great Recession, which hit the area particularly hard. - Macon’s service economy is focused on Healthcare, Education, Financial Services and Retail. - Over 36% of workers in Macon commute from surrounding counties. - Macon has eleven key entertainment venues that collectively serve over 360,000 attendees every year. - Macon hosts 11 major events and festivals every year that draw regional, national and international crowds. - There are no hotels which serve the urban core and allow pedestrian access to the industries and venues located in the core. The downtown urban core of Macon is a focal point of several key economic industries/drivers and the geographic and transportation center of all of the economic drivers. - Appropriate accommodations are an essential component to economic development and continued growth of the community. - 3 - Qualifications – About the Author As founder and director of the Center for Economic Analysis, HG Research Associates, and through private consulting under Greg George, LLC, Dr. Greg George has extensive experience in applied economic research. Additionally, Dr. George has conducted damage assessments and has generated numerous economic reports, studies and lost earnings calculations used in litigation, mediation and by government agencies in the US and Canada. Furthermore, the author has produced work for private firms, non-profit groups and the Federal Reserve Bank of Atlanta. Dr. George has published peer reviewed articles in edited trade books and economic journals and has extensive litigation experience. He earned his Bachelor of Science degree from the University of North Carolina at Chapel Hill (1990), and his Masters (Resource Management, 1997) and Ph.D. (Economics, 2002) from the University of South Carolina. He has taught courses in Applied Microeconomics, Principles of Micro- and Macroeconomics, Game Theory, Managerial Economics, International Economics and Quantitative Methods/Business Statistics. His Curriculum Vitae is available as an attachment. - 4 - I. Overview The Center for Economic Analysis (the Center) was asked to conduct an independent and unbiased summary of current market conditions in the Macon area. The purpose of the present report is to provide the Middle Georgia community and other interested parties with accurate, timely and thorough information regarding the distribution and magnitude of events, venues, festivals and businesses that comprise the general demand for hotel accommodations. In pursuit of this task, the Center has conducted independent research, consulted with key personnel, and gathered data available to the general public from a variety of sources. The current report presents a survey of Central Georgia’s demographics, economy, industry mix, entertainment, and venues relevant to the demand to downtown hotel accommodations in Macon. Whenever assumptions or estimates were necessary, the author erred on the side of presenting conservative results. The impacts and summary statistics reported herein should therefore be considered a baseline study to inform key decision-making personnel interested in such findings. The following section contains a brief description of Central Georgia’s demographics. Section III describes the local economic conditions, and Section IV paints a picture of the local entertainment offerings. The final section offers some concluding remarks. The Center for Economic Analysis is housed in the School of Business at Middle Georgia State College. The mission of the Center is to provide Middle Georgia with a variety of analytical services to local businesses, non-profits, and governmental agencies. The Center strives to be a center of excellence and is the leading provider of economic, market and business research in the Middle Georgia region. We are pleased to present the current study to interested parties and feel it will serve as a valuable tool for making informed decisions going forward. - 5 - II. Central Georgia Demographics In order to describe and present demographic/economic characteristics in a useful manner, it is first necessary to describe the region of interest. In many cases, this is a straight forward exercise; i.e. the population of the United States, or the total economic output of the state of Montana. When considering an economic investment in Macon, GA, describing local conditions can be significantly more intricate. Macon presents a host of demographic and economic characteristics that are unique to the Central Georgia region. For example, while the population of the city of Macon is under 90,000 residents, the Macon MSA is host to over 230,000 people, many of whom consider themselves “Maconites.” Adding to the complexity, Macon and Bibb County have recently consolidated under a unified government which represents slightly more than 150,000 individuals. Consequently, Macon, despite its official size, has the feel of a substantially larger city. Furthermore, due to the relatively low population density of much of the surrounding areas (with the exception of Macon and Warner Robins), approximately 400,000 residents living within 40 miles of Macon, regard Macon as a center for shopping, entertainment and employment. For the purposes of this report, I will concentrate primarily on the Macon MSA and Macon/Bibb County designation and will take care to properly document when data pertain to the City of Macon or any of the other designations listed above. Figure 1: Census Bureau Data for Macon/Bibb County and the Macon MSA. - 6 - Prior to consolidation, the general trend was a shrinking population within Macon city limits and slight growth in the surrounding unincorporated county areas. Consolidation may have caused a small decrease in the overall Bibb County population, but this trend has slowed and, according to the US Census Bureau, is expected to reverse over the next 10 years (see Figure 1 above). - 7 - III. The Local Economy Unemployment The state of Georgia was hit particularly hard by the 2008-2009 recession. Overinvestment in the real estate sector and a dependence on numerous failed community banks created a deep and prolonged economic contraction with unemployment rates well above the national average. Through 2013, the local economy languished, but started to turn around early in 2014. Today, the unemployment rate for the Macon MSA has fallen to 6.6% from 7.9%, where it sat in March of 2014. The following figure shows the most recent county by county unemployment rates in Georgia. - 8 - Industry Mix Table 1 shows the number of establishments, employees and wages for the different industries currently located in the Macon MSA. By far, the largest sector by employees is Healthcare and Social Assistance, followed by Retail Trade, Accommodation and Food Service, Education Services, and Finance and Insurance. Table 1: 2014 Industry Mix Sector Establishments Employees Total Wages Average Weekly Wage Total, All Industries 5,682 95,869 $3,675,466,956 $737 Accommodation and 482 8,802 $120,588,490 $263 Food Services Administrative and 302 5,739 $138,094,066 $462 Support and Waste Management Agriculture, Forestry, 54 493 $17,126,844 $677 Fishing and Hunting Arts, Entertainment, 56 628 $12,331,632 $377 and Recreation Construction 429 2,965 $121,219,568 $784 Educational Services 167 8,689 $330,605,401 $731 Finance and 343 7,712 $368,541,778 $919 Insurance Health Care and 671 17,346 $816,821,693 $903 Social Assistance Information 82 1,311 $66,737,808 $983 Management of 44 2,272 $159,560,218 $1,350 Companies and Enterprises Manufacturing 179 5,442 $281,235,388 $993 Mining, Quarrying, 9 404 $25,923,826 $1,235 and Oil and Gas Extraction Other Services 501 1,948 $61,147,837 $603 (except Public Administration) Professional, 485 3,335 $195,084,312 $1,124 Scientific, and Technical Services Public Administration 101 6,363 $237,840,410 $718 Real Estate and 223 1,431 $52,954,273 $711 Rental and Leasing Retail Trade 949 13,889 $321,224,118 $445 Transportation and 171 3,386 $135,705,207