Tourism boom fuels increase in taxable sales

After declines in five consecutive quarters, total taxable sales in the state expanded 12.1% in the second quarter of 2021 compared with 2020, largely due to the record-breaking boom in tourism at Wyoming’s national parks, according to a year-by-year comparison recently released by the Wyoming Department of Revenue.

Teton and Park counties experienced the greatest percent increase in taxable sales, at 87.2% and 34.4%, respectively. Ninety-six percent of Yellowstone National Park is spread over Teton and Park counties.

Teton County also contains Grand Teton National Park, which contributed to the growth.

Visitation to Yellowstone increased 138.8% from the previous year, while visitation to Grand Teton National Park showed an increase of 103.3%, making 2021 the highest visitation numbers in second quarter history.

The trend can “mostly [be] attributed to visitors’ outdoor sightseeing preference and the general booming travel & tourism activities from the pent up demand,” said Dr. Wenlin Liu, chief economist with Wyoming Division of Economic Analysis.

More park visitors means more people looking for a place to eat and sleep, too.

Wyoming’s leisure and hospitality sector (mostly restaurants and lodging) grew significantly— by 82.8%. Second quarter lodging sales were 249.4% higher this year than in 2020 in Teton County, and were up 158% statewide.

The rise in state park visits brought on by the pandemic contributed to the growth, but so did inflation, which meant higher hotel and restaurant prices.

As the tourism industry booms in Wyoming, the mineral extraction industry is also improving, but not as quickly.

Taxes on mineral extraction rose significantly over last year, driven by rapidly recovering oil and gas demand and correspondingly high prices, according to the report.

“Severance taxes almost came back to pre-COVID levels,” Liu said.

The counties with the greatest decline in taxable sales in quarter two of this year had some of the most significant increases in taxable sales in 2020, so in a year-by-year comparison, they exhibited a large drop proportional to the previous year. Carbon County suffered the greatest decline at 39.8%, followed by Weston County, which experienced a 31.1% decrease.

Carbon County suffered the greatest decline due to the “fading activities in wind energy construction,” which thrived in 2020.

It was similar for Weston County. The small, eastern Wyoming county was one of the few in the state to enjoy an increase in 2020, meaning that the year-by-year comparison results in a proportional decline.

“Despite the substantial weakness in taxable sales of the mineral extraction industry, the total taxable sales in the second quarter of 2021 nearly recovered to the pre-COVID (the second quarter of 2019) level, thanks to the strong performance in leisure & hospitality services as well as motor vehicle & retail sales,” Liu said.

Statewide, 19 out of 23 counties experienced growth in taxable sales in the year-by-year comparison, as increases occurred in most economic sectors, the report states. None of the trends or numbers were particularly shocking, he said.

“The overall takeaway from the second quarter is our pace of improvement is not as quick as the U.S. average,” Liu said.