Friday, March 4, 2005
Disney parades its economic might
Resort churns out $3.6 billion annually for Southern California, report says.
By MICHELE HIMMELBERG
The Orange County Register
The Disneyland Resort will reveal information for the first time today that shows it contributes $3.6 billion a year to the Southern California economy, making it the primary driver of tourism in Southern California and a major force in the state's $80 billion tourism industry.
While it's no secret that Disney is the region's tourism magnet, the specific numbers allow Disney to set off some fireworks in its own honor as it gets ready to celebrate the 50th anniversary of Disneyland, the company's original theme park.
That party, the biggest in Disney theme park history, begins May 5.
Disney officials will release the "State of the Resort" report today in a meeting expected to draw nearly 500 political and community leaders.
One of the most telling parts of the report is how far Disney's influence extends. Orange County enjoys about 45 percent of the overall economic benefit, but Los Angeles County picks up 40 percent, and millions of dollars trickle into San Diego, Riverside, San Bernardino and Ventura counties.
Other highlights of the report show that:
The Disneyland Resort supports 65,700 jobs in Southern California. Slightly more than half of those are in Orange County.
Disney employs roughly 20,000 full- and part-time workers at the resort, which consists of two theme parks, three hotels and Downtown Disney, a shopping and entertainment district.
Another 3,800 work for other employers at Downtown Disney. Combined, those account for about one in five tourism jobs in Orange County.
Disney spends more than $500 million in annual payroll at the Resort.
Visitors to the Disneyland Resort and the surrounding Anaheim area spend enough money to generate $225 million in taxes to Southern California cities and counties.
People who visit the resort also spend $1 billion outside its walls.
That ripple effect in the region adds up to $1.9 billion in annual economic activity.
The economic report was prepared by CB Richard Ellis Consulting and Allan D. Kotin & Associates, real-estate and economic-research companies.
In a separate report prepared by the resort, officials say they contributed nearly $10 million to nonprofit organizations last year in cash, in-kind donations and 116,00 hours of volunteer service.
Matt Ouimet, Disneyland Resort president, said his team commissioned the report so that it could talk about economic benefits as part of the 50th-anniversary story.
"It shows that as we have grown, so has the community around us," he said.
"Hopefully this reminds (people) to be prideful that they have an asset like Disney in the community. And it's very likely that ... someone they know has played a role in that success."
The report's numbers appear to be in line with other tourism analyses.
The Anaheim Orange County Visitor & Convention Bureau estimates that visitors spent $7.3 billion in Orange County last year.
The Disney report's $3.6 billion figure is a combination of direct spending by visitors and indirect multipliers, including spending on hotels, restaurants, sporting events, concerts, theme-park tickets and convention expenses.
The three-month study examined 2003 data, butthe report's numbers represent an estimate of annual activity, said Thomas Jirovsky of CB Richard Ellis.
The numbers could "increase significantly" if Disney draws big crowds for the 50th anniversary.
Chapman economist Esmael Adibi said the report uses a reasonable multiplier for an entertainment study, but it doesn't consider the "substitution" factor: Would people have spent this money on other forms of entertainment in the area if Disney weren't here?
"Most economic-impact studies leave that aside," Adibi said. "It's extremely difficult to measure."
The Disney numbers align with tourism numbers tracked by the Los Angeles Economic Development Corp., said Jack Kyser, an economist with the corporation.
"To say that Disney accounts for one-third of Orange County's tourism might even be conservative," Kyser said.
"Some would raise their eyebrows at $3.6 billion, but they're operating two theme parks, hotels and an array of parking, food services and maintenance. ... People don't realize what it takes to keep all that up and running and in good shape."
The economic development corporation ranks tourism as the largest single employer in the region, supporting 7.6 million jobs.
Of the $225 million in tax revenue generated by the resort, 70 percent benefits communities in Orange County.
Anaheim is the biggest benefactor. Resort transactions produce $26.6 million - or 17 percent - of the city's annual tax revenues, including $18 million in hotel-occupancy tax and $3 million in property tax. The Resort also pays $29 million in property tax to Orange County.
"No doubt Anaheim certainly would be a lot different" without Disney, said Anaheim Mayor Curt Pringle. "I don't think anyone doubted the impact of the Disneyland Resort, but it's interesting to see the benefits to the larger community and what it provides to the state'seconomy."
Disney's 20,000 employees work in jobs that range from entertainer to carpenter to food-service manager. Thousands of students have gone to Disneyland to get their first jobs. Many of the resort's jobs are entry-level, paying $8 or $9 an hour, but employees can move their way up and into different departments.
Jim Mertz was a Cal State Fullerton student in 1971 when he started sweeping streets at Disneyland. The job helped him pay his way through college and introduced him to his wife, Carla, who also worked at the park. Thirty-four years later, he is a director in human resources, and Carla has advanced from food server to a documentation manager in human resources.
Mertz's daughter Lauren, 23, who also started as a street sweeper, has entered a management training program.
"As a long-term employee, I've been right there to ride along with the growth of the company," Jim said, "which has been good for me and my family."