While the permanent population of the tri-city area of Foley, Gulf Shores and Orange Beach is approximately 40,000 people, the region contributes more than $90 million in retail sales and lodging tax revenue to the state of Alabama’s general fund each year. Current conditions are putting that revenue in danger and, if not addressed, could cause an economic downturn for the entire state.

The tri-city area is at least 2,000 people short of meeting peak season employment needs this year. While this has been a persistent problem for years, new challenges are also arising. The labor participation rate in the county has dropped an estimated 5,800 working-age people out of the workforce since pre-COVID, leaving employers short of candidates for full-time, year-round job openings. The combination of these factors has been devastating to the local tourism and hospitality industry, resulting in some restaurants not being able to reopen, some forced to operate at reduced capacity and many others not able to provide a positive experience to their guests. Reports from only two major restaurateurs show that the negative impact of their limited operations is more than $12 million. Similar issues are occurring in lodging and retail and even in the professional sectors.

 

The Facts

  • Tourism brings more than six million visitors to Baldwin County annually and the tri-city area of South Baldwin County (Foley, Orange Beach and Gulf Shores) collected $589 million in lodging sales and $983 million in retail sales in 2019.
  • These collections contribute more than $90 million annually in retail sales and lodging taxes to the state’s general fund.
  • In the last five years there has been a 41% increase in single family home prices, forcing the workforce to move further away from opportunity. The average home price in South Baldwin County was $385k in 2020.
  • The median household income in South Baldwin County is $58,320, making the recommended affordable cost for childcare average childcare $4,082 a year or $340 monthly. Current local rates are double that, at $675 per month.
  • Out of 21 childcare centers located in South Baldwin County, 67% are at full capacity and have waiting lists. 
  • Local survey of 250 respondents indicates that 77% of parents would use an after-hours and weekend child care program. 
  • Availability of full-time childcare would put an estimated 2,500 full-time employees back in the workforce.
  • Expanded public transit options would not only provide increased access for current and potential workers but also lessen the ever-increasing demand on the local transportation system that our economic success creates.

 

Cost of Inaction

  • Customer Service suffers, and affects the brand of our destination, putting not only these gains at risk, but the current economic impact at risk, as well. 
  • More than $90 million in tax revenues that flows annually from the tri-city tourism and hospitality economy, seeing an average growth of more than 6% in retail sales and 7% in lodging sales annually. Inaction puts not only the potential gains at risk but will result in a decrease in current revenues. 
  • Potential annual growth forfeited: 

    $113.8 million in retail sales; $4.6 million in state tax collections

    $43.6 million in lodging sales; $1.7 million in state tax collections
  • Businesses are not able or willing to expand in the current climate, which means our region’s economy will stagnate.
  • Weakened appeal for attracting new and expanding investments.
  • Social and Mental health implications.

 

Call to action! Our tri-city municipalities, business leaders, and community as a whole can advocate together to create change. Contact the Gateway Initiative for more information.