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The Economic Impact of a Rocket Launch from America’s Premier Multi-User Spaceport
The Economic Impact of a Rocket Launch
The Economic Impact of a
THE ECONOMIC IMPACT OF A ROCKET LAUNCH
FROM AMERICA’S PREMIER MULTI-USER SPACEPORT
BY MIKE SLOTKIN, Ph.D.
1.0 Introduction
It’s been 70 years since the first rocket was launched from the sands of Cape Canaveral, and what was true then will still be true tomorrow: as long as there have been rocket launches, there have been rocket launch watchers. Almost two decades after that July day in 1950, the majestic Saturn V rocket, launched to carry Apollo 11’s Armstrong, Aldin, and Collins to their lunar rendezvous, left an indelible imprint on our national memory. Among the iconic images from that era – of ignition, lift-off, descent, and the incredible Earthrise – the photos of the multitudes, standing transfixed along shoreline looking skyward, testify to our love affair with spaceflight. For Brevard County, whose moniker, the “Space Coast,” is proudly displayed and widely utilized, space exploration is our past, present, and widely anticipated future. In this issue of the Space Coast Tourism Journal, we celebrate that heritage by examining rocket launches from a touristic perspective; that is, those non-local visitors amongst the sky-gazing multitudes, and their expenditures on lodging accommodations, restaurant meals, recreational and retail purchases, and other ancillary items associated with their space-related trip.
To explore the spaceflight-tourism nexus, context is vital, for the NASA Kennedy Space Center (NASA KSC) first experienced by Baby Boomers and Gen Xers is a far different place than the spaceport of today’s millennials. Through the Apollo and Space Shuttle eras, NASA KSC functioned as a government-only launch complex, ably manned by a dedicated and professional civil service and complemented by prime contractors. With the retirement of the Shuttle Program and transition to both government and commercial missions, NASA KSC is now a multi-user spaceport embodying a public-private ethos. About 1,800 workers, close to the size of NASA KSC’s Civil Service, are now employed with commercial launch providers at the spaceport. These companies – SpaceX, Blue Origin, Boeing, Northrop-Grumman, ULA, and others – participate in the Launch Services and Commercial Crew Programs. Thus, the seeds that were planted a decade ago with the retirement of the Shuttle Program have fully ripened, with the stage set for the most significant decade for spaceflight since the 1960s.
So where does tourism fit within this story? The connection between spaceflight and tourism is evidenced by many factors, from visitation figures at the Kennedy Space Center Visitors Center (KSCVC), one of the region’s premier tourism destinations, to bed tax collections at Space Coast accommodations. Take the latter for consideration. As NASA KSC has matured into the nation’s premier multi-user spaceport, the pace and importance of rocket launches has increased. Concomitant with this resurgence in space activity has been the heightened volume of business and leisure travel associated with the spaceport. Between FY2016 and FY2019, bed tax collections in the Titusville area, the city nearest to NASA KSC, increased by about 40 percent. Even more stunning than that, when examining the first four months of FY2020 in relation to FY2019 (pre COVID-19), Titusville-area bed tax collections were up by over a third.
The proof, as they say, is in the pudding, and for the tourism pudding, Delaware North, the commercial operator of KSCVC, is a market-shaper. They’re so confident in the space-tourism upside that they’ve invested in a new, 152-room Courtyard by Marriott to be built about 6-7 miles away from NASA KSC on the old Astronaut Hall of Fame site. Given its proximity, and the fact that it will have a roof-side deck and bar, this locale will effectively earn the Johnnie Walker Blue Label for rocket launch viewing. Further room capacity expansion is in the works for Cape Canaveral and northern Brevard County, and while space-related tourism activity isn’t the sole driver, it is definitely part of the mix. Though getting a little ahead of ourselves, it sort of makes you wonder about the expected revenue bonanza when launch operations involve a return to the Moon, the so-called “First Woman, Next Man” mission, and eventually, a landing on Mars.
Well, until the outbreak of the coronavirus, both NASA and local tourism officials thought they had the ideal benchmark for
the economic impact of a next-generation rocket launch with the May 2020 lift-off of astronauts from NASA KSC. That mission to the International Space Station, a NASASpaceX venture, ended a nine-year drought for crewed space flight from NASA KSC. Unfortunately, with travel and visitation patterns muted by Covid-19 and its collateral economic damage, a benchmark with more normality was sought after and utilized for this report.
In the spring and early summer of 2019, Florida’s Space Office of Tourism (FSCOT) facilitated data collection from observers of the second and third Falcon Heavy missions. Manufactured by SpaceX, the Falcon Heavy rocket is renowned for its payload capacity and reuseability, and launched to early acclaim on its February 2018 maiden voyage carrying Elon Musk’s Tesla Roadster. The Space Coast Tourism Journal presents these Falcon Heavy missions as an initial baseline of tourism expenditures from the latest rocket launches. These economic impacts will undoubtedly be surpassed as the next-generation lunar and inter-planetary travel actualizes, in an era hopefully and thankfully free from a global pandemic. Along that front we also include excerpts from an interview with Scott Socha, President of Delaware North’s Resorts Division, for a status report on KSCVC as well as their in-construction Courtyard by Marriott adjoining NASA KSC.
2.0 The Falcon Launches & Study Methodology
At 6:35pm on the evening of April 11, 2019, the SpaceX Falcon Heavy’s first commercial payload lifted-off from legendary launch pad 39-A with throngs of spectators huddled in surrounding parks, beaches, and causeways. The mission transferred into orbit the Arabsat-6A communications satellite, a Lockheed Martin product, delivering internet and television broadcasting capability to European, African, and Asian customers. The Falcon Heavy’s immense power facilitated the transport of a satellite payload weighing in excess of 14,000 pounds, and the fact that Falcon Heavy is the most powerful rocket in current operation was a major draw for tourists.
About 10 weeks later, in the early morning (2:30am) of June 25, the Falcon Heavy STP-2 mission commenced with a payload of 24 satellites weighing in excess of 8,000 pounds. Highlighting the reusability of modern rocket technology, the side boosters on this flight were the same ones used on the earlier Arabsat-6A mission. The STP program is affiliated with the Department of Defense, and the payload aboard STP-2, conducted on behalf of the United States Air Force, delivered research and weather satellites into orbit. From an operational perspective, the mission was also noteworthy for a sequence of maneuvers conducted while in orbit, benchmarking the capability of the rocket.
FIGURE 1. PREVIOUS TIMES VISITED FIGURE 1. PREVIOUS TIMES VISITED SPACE COAST FOR A ROCKET LAUNCH - SPACE COAST FOR A ROCKET LAUNCH - APRIL COHORT APRIL COHORT 0.0%0.0% 16.0%16.0% 32.0%32.0% 48.0%48.0% 64.0%64.0% 80.0%80.0% 10 or10 or 17.2%17.2% moremore 3.8%3.8% 99 0.0% 0.0% 0.0% 0.0% 88 0.0% 0.0% 0.0% 0.0% 77 0.0% 1.9% 0.0% 1.9% 66 1.6% 3.8% 1.6% 3.8% 55 9.4% 5.7% 9.4% 5.7% 44 4.7% 3.8% 4.7% 3.8% 33 12.5% 1.9% 12.5% 1.9% 22 7.8% 5.7% 7.8% 5.7% 11 10.9% 5.7% 10.9% 5.7% 1st Time 1st Time 35.9%35.9% 67.9%67.9%
Daytrippers Daytrippers Overnighters Overnighters FIGURE 2. PREVIOUS TIMES VISITED FIGURE 2. PREVIOUS TIMES VISITED SPACE COAST FOR A ROCKET LAUNCH - SPACE COAST FOR A ROCKET LAUNCH - JUNE COHORT JUNE COHORT 0.0%0.0% 16.0%16.0% 32.0%32.0% 48.0%48.0% 64.0%64.0% 80.0%80.0% 10 or10 or 5.6%5.6% moremore 4.9%4.9% 99 0.0% 0.0% 0.0% 0.0% 88 0.0% 1.2% 0.0% 1.2% 77 0.0% 1.2% 0.0% 1.2% 66 0.0% 1.8% 0.0% 1.8% 55 5.6% 1.8% 5.6% 1.8% 44 5.6% 1.8% 5.6% 1.8% 33 5.6% 6.7% 5.6% 6.7% 22 9.3% 3.7% 9.3% 3.7% 11 13.0% 6.1% 13.0% 6.1% 1st Time 1st Time 55.6%55.6% 70.7%70.7%
Daytrippers Daytrippers Overnighters Overnighters
For FSCOT, the nature of these two FIGURE 3. ACCOMMODATION TYPE - FIGURE 3. ACCOMMODATION TYPE - launches – the first commercial and APRIL & JUNE 2019 FALCON LAUNCHES APRIL & JUNE 2019 FALCON LAUNCHES Department of Defense payloads – in 0.0% 15.0% 30.0% 45.0% 60.0%0.0% 15.0% 30.0% 45.0% 60.0% conjunction with the use of the Falcon Heavy rocket made them suitable candidates for Did Not Pay for Lodging 26.4% 23.2% Did Not Pay for Lodging 26.4% 23.2% a tourism-based impact assessment. The Falcon Heavy, which had received favorCampground/ 3.8%Campground/ 3.8% able press in the previous year due to the RV Park 3.7%RV Park 3.7% success of its maiden voyage, was noted for Bed & Breakfast 1.9% 3.7% Bed & Breakfast 1.9% 3.7% its power. In fact, it trails only the Saturn V in terms of its orbital capacity. Combined Condo 5.7% 6.1%Condo 5.7% 6.1% with the ubiquitous coverage of the dummy payload consisting of a Tesla Roadster with Short-term Rental/AirBnB 11.3% 18.3% Short-term Rental/AirBnB 11.3% 18.3% its “Starman” driver, the 2nd and 3rd iterations of Falcon Heavy were ripe with signature appeal.
Hotel/Motel 50.9% 45.1%Hotel/Motel 50.9% 45.1% Accordingly, under the direction of FSCOT’s April JuneApril June Research Director, and in collaboration with Facebook, individuals who observed these launches were served with online inducements to complete a short questionnaire FIGURE 4. ACCOMMODATION LOCALE - APRIL & JUNE 2019 FALCON LAUNCHES FIGURE 4. ACCOMMODATION LOCALE - APRIL & JUNE 2019 FALCON LAUNCHES dealing with visitation type, accommodations, party expenditures, and prior travel to the Space Coast. In total, approxi0.0% 15.0% 30.0% 45.0% 60.0%0.0% 15.0% 30.0% 45.0% 60.0% mately 1,970 surveys were collected for the Palm Bay 0.0% 1.8%Palm Bay 0.0% 1.8% two launches, and data on party spending profiles, accommodation choice, and Melbourne 0.0% 2.6%Melbourne 0.0% 2.6% previous attendance at Space Coast launches are detailed in the section which follows. Cocoa 2.8% 2.6%Cocoa 2.8% 2.6% 3.0 Previous Visitation, Accommodations and Spending
Merritt Island 0.0% 3.5%Merritt Island 0.0% 3.5% Economic impacts are typically associSatellite Bch/ Indian Harbour Bch/ Indialantic 8.3% 8.8% Satellite Bch/ Indian Harbour Bch/ Indialantic 8.3% 8.8% ated with “fresh” dollars injected into a geographic region, and thus the profiling presented in this section focuses on the Titusville 22.2% 14.9%Titusville 22.2% 14.9% tourist segments – daytrippers and overnight guests – who in an initial screening Capa Canaveral 16.7% 14.9%Capa Canaveral 16.7% 14.9% check indicated that they had watched the launch in question. In addition, for economic
Cocoa Beach Cocoa Beach 50.0% 50.9% 50.0% 50.9%
AprilApril
FIGURE 3. ACCOMMODATION TYPE - APRIL & JUNE 2019 FALCON LAUNCHES FIGURE 3. ACCOMMODATION TYPE - APRIL & JUNE 2019 FALCON LAUNCHES 0.0%0.0% 15.0%15.0% 30.0%30.0% 45.0%45.0% 60.0%60.0%
Did Not Pay for Lodging Did Not Pay for Lodging 26.4% 23.2% 26.4% 23.2% Campground/ RV Park Campground/ RV Park 3.8% 3.7% 3.8% 3.7%
Bed & Breakfast Bed & Breakfast 1.9% 3.7% 1.9% 3.7% CondoCondo 5.7% 6.1% 5.7% 6.1% Short-term Rental/AirBnB Short-term Rental/AirBnB 11.3% 18.3% 11.3% 18.3%
Hotel/Motel Hotel/Motel 50.9% 45.1% 50.9% 45.1%
AprilApril JuneJune
impact purposes, only those tourists who asserted that the launch was the primary purpose for their visit are considered. Accordingly, of the 1,970 surveys collected, approximately 53 primary overnighter and 64 primary daytripper respondents inform the April launch, while 164 primary overnighter FIGURE 5. FALCON LAUNCH OVERNIGHTER PARTY EXPENDITURES FIGURE 5. FALCON LAUNCH OVERNIGHTER PARTY EXPENDITURES and 54 primary daytripper survey responses were derived from the June launch. As can $0.00 $400.00 $800.00 $1,200.00$0.00 $400.00 $800.00 $1,200.00 be inferred from these figures, local and seasonal respondents along with non-priTotal $1,051 $1,082 Total $1,051 $1,082 mary overnighters (i.e., those vacationing guests who just happened to be visiting the Other $39.72 $26.19 Other $39.72 $26.19 area during the launch and decided to watch) comprise the vast bulk of survey responses Local Transporation $13.58 $11.56 Local Transporation $13.58 $11.56 (about 79%). This is oftentimes the norm for open-access recreational events. Gas $63.98 $46.62 Gas $63.98 $46.62 Figures 1 and 2 highlight the number of previous times that primary daytripper and overnighter respondents indicated they had observed a rocket lift-off, by respecRetail Recreation $125.77 $131.76 $178.98 $166.30 Retail Recreation $125.77 $131.76 $178.98 $166.30 tive launch events. Not surprisingly, firsttime launch viewers comprised the modal Restaurants $218.91 $257.12 Restaurants $218.91 $257.12 responses, with overnighter percentages clearly outpacing daytrippers. Due to their Lodging $409.92 $442.16Lodging $409.92 $442.16 proximity and drive market status, daytrippers typically reveal a greater history with April JuneApril June respect to launch viewing, although it FIGURE 4. ACCOMMODATION LOCALE - APRIL & JUNE 2019 FALCON LAUNCHES FIGURE 4. ACCOMMODATION LOCALE - APRIL & JUNE 2019 FALCON LAUNCHES 0.0%0.0% 15.0%15.0% 30.0%30.0% 45.0%45.0% 60.0%60.0%
Palm Bay Palm Bay 0.0% 1.8% 0.0% 1.8%
Melbourne Melbourne 0.0% 2.6% 0.0% 2.6% CocoaCocoa 2.8% 2.6% 2.8% 2.6% Merritt Island Merritt Island 0.0% 3.5% 0.0% 3.5% Satellite Bch/ Indian Harbour Bch/ Indialantic Satellite Bch/ Indian Harbour Bch/ Indialantic 8.3% 8.8% 8.3% 8.8% Titusville Titusville 22.2% 14.9% 22.2% 14.9% Capa Canaveral Capa Canaveral 16.7% 14.9% 16.7% 14.9%
Cocoa Beach Cocoa Beach 50.0% 50.9% 50.0% 50.9%
AprilApril JuneJune
should be noted that small percentages of overnighters do indicate a strong commitment to launch viewing (i.e., > 10 launches witnessed). FIGURE 6. FALCON LAUNCH OVERNIGHTER PER PERSON EXPENDITURES FIGURE 6. FALCON LAUNCH OVERNIGHTER PER PERSON EXPENDITURES Turning our attention to the accommodations procured by overnight primaries, Figure 3 details the lodging type solicited for both the April and June 2019 Falcon Heavy launches. Approximately 73.6 percent (April) and 76.8 percent (June) of overnighter parties rented room nights from lodging Total Other Local Transporation $0.00 $100.00 $200.00 $300.00 $400.00 $345.93 $356.23 $13.07 $8.62 $4.47 $3.81 Total Other Local Transporation $0.00 $100.00 $200.00 $300.00 $400.00 $345.93 $356.23 $13.07 $8.62 $4.47 $3.81 vendors, with around two-thirds of those rentals (e.g., 50.9% of 73.6% for April) Gas $21.06 $15.35 Gas $21.06 $15.35 occurring in the hotel/motel segment. In the neighborhood of 25 percent of overnighters Retail $41.40 $43.39 Retail $41.40 $43.39 did not pay for lodging, presumably spending the night with friends or family members. The Recreation $58.92 $54.77 Recreation $58.92 $54.77 emergent Short-term Rental/AirBnB segment is evidenced by its capture of about 15.4 Restaurants $72.06 $84.67 Restaurants $72.06 $84.67 percent of the April launch rentals (11.3% of 73.6%) and 23.8 percent of the June launch rentals (18.3% of 76.8%). Lodging $134.94 $145.61Lodging $134.94 $145.61 AprilApril JuneJune VisitSpaceCoast.com | 49
FIGURE 5. FALCON LAUNCH
OVERNIGHTER PARTY EXPENDITURES
FIGURE 5. FALCON LAUNCH $0.00 $400.00 $800.00 $1,200.00 OVERNIGHTER PARTY EXPENDITURES $0.00 $400.00 $800.00 $1,200.00 Total $1,051 $1,082 Total Other $39.72 $26.19 $1,051 $1,082 Other Local Transporation $39.72 $26.19 $13.58 $11.56 Local Transporation Gas $13.58 $11.56 $63.98 $46.62 Gas Retail $63.98 $46.62 $125.77 $131.76
Retail Recreation $125.77 $131.76 $178.98 $166.30
Recreation Restaurants $178.98 $166.30 $218.91 $257.12 Restaurants Lodging $218.91 $257.12 $409.92 $442.16
Lodging April June $409.92 $442.16
April June
Figure 4 reveals the locale of procured accommodations, specifically rooms rented under the hotel/motel, short-term rental/ AirBnB, and condo categories. As would be expected for an activity occurring in northern Brevard County, about 89 percent of the April launch bookings and 81 percent of the June launch bookings occurred in Cocoa Beach/Cape Canaveral/Titusville. Even more revelatory are the Titusville figures when compared to non-primary overnighters. While 22.2 percent (April) and 14.9 percent (June) of primary overnighters booking rooms utilized Titusville lodging establishments, internal data estimates suggest that only 5.8 percent (April) and 2.4 percent (June) of non-primary overnighters lodgers stayed in Space City USA. This supports the long-held view of space as a tourism driver for Titusville and the profound increase in bed tax receipts articulated earlier in the report.
While certainly a key determinant of overnighter party expenditures, lodging is one of
FIGURE 6. FALCON LAUNCH OVER-$0.00 $100.00 $200.00 $300.00 $400.00
NIGHTER PER PERSON EXPENDITURES $0.00 $100.00 $200.00 $300.00 $400.00 Total $345.93 $356.23 Total Other $13.07 $8.62 $345.93 $356.23
Other Local Transporation $13.07 $8.62 $4.47 $3.81
Local Transporation Gas $4.47 $3.81 $21.06 $15.35 Gas Retail $21.06 $15.35 $41.40 $43.39
Retail Recreation $41.40 $43.39 $58.92 $54.77
Recreation Restaurants $58.92 $54.77 $72.06 $84.67
Restaurants Lodging $72.06 $84.67 $134.94 $145.61 LodgingApril June $134.94 $145.61 several categories of spending that typically comprise the tourist experience and drive its April June impact. Figure 5 showcases the spectrum of categorical expenditures, revealing strong similarities between the April and June figures. Overall results suggest a party expenditure of between $1,050 and $1,080 per trip, with around 60 to 65 percent of excursion dollars spent on lodging and restaurants. Another 28 to 30 percent of trip payments are expended on recreational and retail purchases, with the balance of spending comprised of transportation, fuel, and other service buys.
Figures 6 and 7 provide a holistic view of the overnighter experience by demarcating trip expenditures on a per-person basis as well as per-person, per-day. The average, primary overnighter spent in the neighborhood of $350 (see Figure 6) during his/her Space Coast visit to witness the April or June 2019 Falcon Heavy launches, generating lodging revenues and associated bed tax receipts as well as boosting restaurant, recreational, and retail sales.
1st 55.6%
Time 70.7%
FIGURE 7. FALCON LAUNCHDaytrippers Overnighters
OVERNIGHTER AVERAGE DAILY EXPENDITURES $0.00 $40.00 $80.00 $120.00 FIGURE 4. ACCOMMODATION LOCALE -
Total $90.65 $107.14 APRIL & JUNE 2019 FALCON LAUNCHES 0.0% 15.0% 30.0% 45.0% 60.0%
Other Palm Bay $3.43 $2.590.0% 1.8%
Local Transporation Melbourne $1.17 $1.150.0% 2.6% Gas Cocoa $5.52 $4.62 2.8% 2.6% Retail Merritt Island $10.85 $13.050.0% 3.5% Recreation Restaurants Satellite Bch/ Indian Harbour Bch/ Indialantic $15.44 $16.47 $18.88 $25.47 8.3% 8.8% Lodging Titusville $35.36 $43.79 22.2% 14.9% April Capa Canaveral June 16.7% 14.9%
Cocoa Beach 50.0% 50.9%
FIGURE 8. FALCON LAUNCHApril June
DAYTRIPPER PARTY EXPENDITURES $0.00 $75.00 $150.00 $225.00
Total $115.67 $171.76FIGURE 6. FALCON LAUNCH OVEROther $6.64 $9.20 NIGHTER PER PERSON EXPENDITURES $0.00 $100.00 $200.00 $300.00 $400.00
Local Transporation Total $2.27 $3.98 $345.93 $356.23 Gas Other $15.97 $22.76$13.07 $8.62 Retail Local Transporation $28.28 $47.67$4.47 $3.81
Recreation Gas $15.31 $37.96$21.06 $15.35
Restaurants Retail $47.20 $50.19$41.40 $43.39
LodgingRecreation $0.00 $0.00$58.92 $54.77 April Restaurants June $72.06 $84.67 $134.94 $145.61 Also see Table 1 for interview. FIGURE 8. FALCON LAUNCH
DAYTRIPPER PARTY EXPENDITURES $0.00 $75.00 $150.00 $225.00 Total $115.67 $171.76 FIGURE 10. ECONOMIC IMPACT OF FALCON LAUNCH BY RANGE OF CROWD ESTIMATES Other $6.64 $9.20 3,600,000 Local Transporation $2.27 $3.98 2,700,000 Gas $15.97 $22.76 57.3% 57.3% 1,800,000 Retail 900,000’
Recreation
0.0%
Restaurants
$28.28 $47.67 $15.31 1.2% $37.962.8% 75,000 85,000$47.20 $50.19
9.8% 28.9%
95,000 105,000 115,000 125,000
Lodging $0.00 $0.00 April June
FIGURE 9. FALCON LAUNCH
DAYTRIPPER PER PERSON
EXPENDITURES $0.00
Total
$25.00
Other $2.28 $3.17 Local $.078 Transporation $1.37 Gas $5.49 $7.83 Retail $9.73 $16.39
Recreation $5.27 $13.06 Restaurants $16.24 $17.26
Lodging $0.00 $0.00 $50.00 $75.00 $39.80 $59.08
FIGURE 9. FALCON LAUNCH
DAYTRIPPER PER PERSON
EXPENDITURES $0.00
Total
$25.00
Recreation $5.27 $13.06 Restaurants $16.24 $17.26
Lodging $0.00 $0.00
April June $50.00 $75.00 $39.80 $59.08
By factoring in average length of stays, trip expenditures per person can be further defined to any average daily expenditure or burn (see Figure 7). Primary overnighters observing the April launch expended about $91 per day during their visit, while June launch overnighters burned about $107 per day. The difference can be attributable to longer stays for the April overnighters, where economizing on spending occurs as trips lengthen, as well as a slightly larger segment in the April cohort that did not pay for lodging. And in fact, if this segment stayed with friends or family, it is likely that some food expenses were also mitigated.
The remaining tourist population driving economic impact involves primary daytrippers, who venture into and back out of Brevard County to watch a launch without remaining overnight. Figures 8 and 9 provide a snapshot of daytripper spending, both at the party level as well as per person. Please note that daytripper spending per person, since it corresponds to a solo day, is also an average daily burn. The average, primary daytripper party spent about $116 and $172 (see Figure 8), respectively, during the April and June 2019 launches. Factoring in party size, the typical primary daytripper expended around $40 (April) and $59 (June), respectively (see Figure 9). This differential can be explained by the fact that the June 25, 2019 launch occurred at 2:30am, and thus, daytrippers observing that mission likely had a longer evening to spend in Brevard County prior to launch than those daytrippers who attended the 6:35pm mission on April 11, 2019. The timing of the June launch also altered the typical distribution of the population sample, as locals and seasonals in their usual numbers appear to have skipped the viewing due to the lateness of the hour.
The spending profile of tourist parties constitutes one vital prerequisite for economic impact analysis, but its companion, the estimated number of parties or crowd size, is equally important and oftentimes inflated. Before this report turns its attention to the audience and its magnitude, the Space Coast Tourism Journal had an opportunity to interview Scott Socha, President of Delaware North Resorts Division, for a current status report on KSCVC in the age of Covid-19 as well as a new hotel property in progress on the Space Coast. We turn to that interview next.
In January 2020, Scott Socha (SS) was named group leader for Delaware North’s parks & resorts and travel divisions. Delaware North is a global leader in the hospitality and entertainment sector and operates Kennedy Space Center Visitor Complex (KSCVC) for NASA. In his leadership role, Mr. Socha is also responsible for the development of a new Courtyard by Marriott hotel to be located near Kennedy Space Center (KSC).
Interviewer: Michael Slotkin, Space Coast Tourism Journal and Florida Tech (MS) (Mike Slotkin -MS) Hi Scott! Thanks for speaking with us today. As someone with a leading position in the hospitality and entertainment sectors, spring 2020 must have been a surreal experience. Can you tell us what it was like for you and your staff and how you’re holding up?
(SS) It has been an extremely difficult time for the worldwide travel and hospitality sector with COVID-19 significantly limiting travel of almost all kinds. Orlando and the Space Coast certainly have been a part of that. Delaware North owns and operates destination lodging and restaurants, regional casinos and TD Garden in Boston, as well as restaurants and concessions in airports and sports stadiums across the United States, Australia and the United Kingdom – so it’s been especially challenging for the company. We’ve been able to reopen some of our locations in Florida, including Kennedy Space Center Visitor Complex and Morimoto Asia and a few other restaurants in Disney Springs.
(MS) Well KSCVC is back … open for business in time for the first crewed launch from KSC in about 9 years. How’s it going so far and what new protocols do you have in place?
(SS) In collaboration with NASA and state and local government officials, we reopened Kennedy Space Center Visitor Complex in late May with reduced admission price, attendance limits and a limited number of attractions open. We encouraged advance daily admission purchases and required face coverings and temperature screenings for employees and guests. We accommodated social distancing in queues, restaurants, and other facilities throughout the visitor complex and implemented increased frequency of sanitization and disinfection. This was part of a “Safe Space” program aligned to U.S. Centers for Disease Control and Prevention guidelines, all aimed at helping ensure the health and safety of our guests and employees. On July 6 we launched the “Explore More” package at our normal admission price but with a complimentary ticket for 2021. It entails an expanded number of open attractions, including pre-shows for Space Shuttle Atlantis® and Heroes & Legends featuring the U.S. Astronaut Hall of Fame. (MS) Long after this pandemic is over with, either by vaccine or running its course, do you envision some of the changes necessity forced you to implement actually becoming a permanent feature of KSCVC, either in planning or operations? If so, what are they?
(SS) Since the pandemic began, Delaware North’s approach for our various hospitality sectors has been to leverage our own subject-matter experts and also the knowledge of our various partners, including the National Restaurant Association, the FreedomPay commerce platform, and a number of global brands – all to ensure we are implementing best practices and preparing for the new normal in hospitality, food service and destination operations. For example, with the support of PepsiCo Foodservice Insights, we commissioned a team of scientists and mathematicians to determine best practices for fans to return to sports and entertainment venues. We’re also launching checkout-free convenience stores at some of our locations that use advanced frictionless technologies. Ahead of that we are looking at more-flexible designs for new retail, lodging and food & beverage outlets and facilities. So we will continue to look at how we can operate Kennedy Space Center Visitor Complex to provide the best possible guest experience that is also protective of health and safety.
(MS) So let’s turn to the future. The next ten years look to be the most significant decade for spaceflight since the 1960s, which means it’s probably going to be a game-changer for KSCVC. What’s in store for you in terms of programming, capital acquisitions, etc.? How do you see the decade playing out? (SS) For the visitor complex, we work with NASA to create multiyear strategic plans that look ahead at what new attractions, interactive exhibits and historic artifacts we can add to continue to tell the NASA story. We are always trying to highlight current and future space programs, and in recent years we’ve begun showcasing NASA’s private space company partners and their initiatives. It’s really become a must-see destination for visitors to Orlando and the region. On the heels of opening Heroes & Legends a few years ago and the new Astronaut Training Experience in 2018, we’re in the construction phase of several new attractions at the visitor complex to open in the next few years.
(MS) The hard but unfortunate reality is that Titusville, and Brevard County overall, were having wonderful years in terms of bed tax collections prior to Covid-19. And KSCVC was and is a key destination for us. Any thoughts on when KSCVC will hit its pre-COVID-19 peak?
(SS) There are just too many factors to determine that, but it’s going to take some time given that a large portion of visitors are international. When international travel can restart, that will be a big boost. We’re encouraged that people returned to the visitor complex in May for the limited reopening and are hopeful the expanded number of open attractions and return of travel to Orlando will continue to increase our attendance through the summer and fall.
(MS) Great. I’d like to transition now and discuss another part of your portfolio that’s directly relevant to Brevard County … hotel development. With all the noise of the past few months it’s easy to forget that there’s a really cool project underway adjacent to KSCVC. Let’s pretend we’re way back at the beginning. Tell us about the proposed Courtyard-Marriott and why you think it’s a winner.
(SS) Delaware North began thinking about a hotel project near Kennedy Space Center a number of years ago as we embarked on a new strategy to build a portfolio of owned lodging properties rather than just operating lodging in national and state parks. The visitor complex’s increasing attendance in the years after Space Shuttle Atlantis opened and the more-recent rocket launches being driven by NASA partners such as Space X and Boeing have helped create increased hotel demand in the market. Another factor is the private space companies – Space X, Lockheed Martin and Blue Origin – locating offices and technology facilities in the area. The hotel will be just 6.4 miles from Kennedy Space Center Visitor Complex, making it the closest to the popular attraction and to Kennedy Space Center’s launch complexes.
(MS) What’s the expected price-point for your menu of rooms? (SS) We really think the
increased interest and activity in the space program makes this the ideal time to open a new, family-friendly hotel near Kennedy Space Center and the visitor complex. We looked at a number of hotel options and are proud to partner with Marriott to provide Space Coast visitors a level of convenience and comfort that will allow them to prolong their stay at the visitor complex and experience the once-in-a-lifetime opportunity to have a front-row seat to a rocket launch. The Courtyard by Marriott really is the right fit, and we envision price points that will be a great value for families on vacation or just visiting and business travelers alike.
(MS) And where are we now in terms of its completion. (SS) We had been targeting opening the hotel by year’s end, but with the current business conditions we’ve paused construction and will continue to reassess the timing for resuming work. We’re certainly hopeful it can open sometime in 2022.
(MS) Do you envision combo-pricing packages - hotel and KSCVC?
(SS) We’ll be very careful to separate our operation and marketing of the visitor complex from what we will do to operate and market the hotel. We will certainly promote the visitor complex ticket packages to hotel guests that are available to the public. (MS) Finally, I have to ask about the roof-side deck and bar. What will the amenities be like and is it open to the public or just guests?
(SS) The five-floor hotel will have 152 rooms, including 14 extended and one-bedroom guest suites, and a large outdoor pool. The rooftop deck will feature a bar for an elevated evening experience and for viewing launches. It will be open to guests and sometimes to the public. The hotel’s Bistro will serve full breakfast and dinner menus and feature Starbucks products. The property will also have 800 square feet of meeting space for conferences and special events. It’s going to be a great addition to the Titusville area!
Scott, thanks again for your time, and be safe! n
5.0 The Crowd and its Apportionment
In previous issues, the Space Coast Tourism Journal has reported on the economic impact of registration or ticketed-based attractions such as the Cocoa Beach Half-Marathon, the Melbourne Air & Space Show, and the Space Coast Birding & Wildlife Festival. With these types of events, two points of clarity are provided to the investigator. First, a firm count on the number of participating patrons is generally known. Second, the distribution of locals and non-locals, males and females, participant age, and other demographic identifiers is typically available. This affords the researcher the ability to corroborate the population sample surveyed to known demographic and visitor-type metrics.
By way of contrast, with open-access, non-ticketed/registration based events – Surfing Santas, Thunder on Cocoa Beach, NASA KSC rocket launches – the survey population sample establishes the distribution of primary and non-primary overnighters, daytrippers, and locals/seasonals, the actual tourism segments which drive economic impact analyses. Additionally, the crowd size is typically estimated by event organizers, and prone to hyperbole. It is possible to make good faith estimates of crowd size, and in fact, with some open-access events emergent technologies have made the effort much more tractable.
For example, both Surfing Santas and Thunder on Cocoa Beach are beachfront related attractions occurring in defined areas of Cocoa Beach. Aerial views made more accessible by drone shots can micro target beach regions which can then be mocked upward for a proxy count. Digital counts can also be obtained for cellular devices in similarly defined areas. While not perfect, the ability to corroborate a benchmark count is seemingly more accessible.
With rocket launches, however, the horizontal sphere of influence is so large that viewing can straddle several counties. Estimates of crowds in the hundreds of thousands are routine but can easily include people outside the bounds of Brevard County. It is important to understand that with economic impact analysis the frame of reference is essential. For FSCOT, the frame of reference is Brevard County, and so all primary visitors from outside Brevard County constitute the source of “fresh” dollars. On the other hand, from NASA KSC’s perspective, the frame of reference is the state of Florida, and thus it is non-Floridians venturing into the Sunshine State to see the launch that drive economic impact.
While premier vistas – causeways, beachfronts, parks, NASA KSC designated areas – exist and are commonly known, the sheer volume of plausible locales makes any estimate problematic. To illustrate this point, crowd size estimates ranging upwards from 50,000 to as high as more than a half a million have been bandied about through the years, depending on the notoriety of the particular launch. But when attempting to sleuth out the how, when, and where of a particular estimate’s formulation, the result is usually not well-defined.
Notwithstanding this uncertainty, it is important to note that survey responses can be used to at minimum rule-out implausible crowd size counts, and by doing so, significantly narrow the estimate range. Take, for example, the Arabsat-6A mission on April 11, 2019. The NASA KSC Public Affairs Office offers a non-official crowd size estimate of 100,000. Other known data points include the following: 1) there are about 4,500 hotel rooms in northern Brevard County, and; 2) on the night of April 11, 2019, the occupancy rate was 81.2 percent. This yields a total procurement of about 3,650 rooms.
Suppose, for argument’s sake, that an estimated crowd size of 100,000 was forwarded. With an average party size
of 2.94 (i.e., the actual weighted sample population average), that estimate implies approximately 34,037 parties observed the launch. And given that the survey sample reveals primary overnighter and daytripper segments of 4.6 and 6.5 percent, respectively, that crowd size estimate also implies 1,566 primary overnighter parties as well as 2,212 primary daytripper parties. These parties, multiplied by their average expenditures as detailed in Figures 5 & 8, are the spending inputs which drive economic impact analysis.
But these party estimates also tell us a little more, for if we know what percent of primary overnighter parties (and non-primary overnighters) actually rent hotel rooms (see Figure 3), and additionally, what percent of those rooms are booked in northern Brevard County (see Figure 4), then we can discern what the absorption rate is by primary and non-primary overnighters of the 3,650 rooms that were occupied. With a crowd size of 100,000, about 708 northern Brevard hotel rooms would have been rented for the night of the launch by primary overnighters, and another 1,235 would have been procured by non-primary overnighters. The residual, about 46.8 percent of the occupied rooms, would have been booked by parties unaffiliated with the launch (i.e., they did not watch).
Given the population sample results, a crowd size in excess of 188,000 would entail an occupancy demand in northern Brevard beyond reported measures. But even that benchmark is implausible, for it implies zero percent as non-affiliates. If the latest Super Bowl is an indicator, where viewership was about 100 million (out of 330 million Americans), it is hard to rationalize that every party staying in a northern Brevard hotel on the night of April 11, 2019 necessarily saw the launch, either as a primary or non-primary tourist. One must also keep in mind that this launch had already been postponed three times.
Accordingly, in the economic impact section which follows, we provide both a specific crowd size estimate as well as a range of magnitudes and their associated impacts. The crowd size estimates imply an unaffiliated occupancy ranging from a low of one-third to a high of two-thirds of the actual rooms procured in northern Brevard. It should be noted, however, that economic impact analysis has linear properties, so if an individual reader believes he/she has a more informed basis for a specific count, actual economic impacts for that count can be ascertained by adjustment using the appropriate percentage change.
6.0 Economic Impact of the April 11, 2019 Falcon Heavy Launch
The economic impact of the Arabsat-6A Falcon Heavy Launch is an estimate of the flows of spending associated with the event and their identified changes in sales, income, and employment within Brevard County. Impacts are estimated via input-output modeling, where an input-output model describes the flows of economic activity between production sectors, capturing what industries must purchase from one another in order to produce goods and services.
An input-output model for the economy of Brevard County was constructed using IMPLANTM (www.implan.com), an integrated software and data package used by more than 1,300 academic institutions, federal and state government agencies, and private consulting firms. Expenditures associated with Falcon Heavy tourist spending were then applied to IMPLANTM’s social accounting model which factors in commuting, tax, and saving behavior by households in establishing multiplier effects.
Due to forward and backward linkages within an economy, a multiplier process unfolds whereby an initial round of spending (the direct effect) generates secondary effects (both indirect and induced).
Indirect effects are changes in production that occur along the supply-chain; for example, an increase in restaurant meal purchases triggers production responses from food and beverage vendors that supply eating and drinking establishments. In contrast, induced effects represent changes in economic activity resulting from income changes, or in other words, workers supported by tourist related purchases expend their earnings on an array of consumer goods and services, much of which occurs locally.
Leakages out of the local economy occur in the form of taxes, savings, profits to out-of-area residents, and payments for goods and services from outside the study region (i.e., imports). These leakages are the foundational reason why the multiplier process, rather than working in perpetuity, exhausts itself and terminates. Economic impacts are stated in terms of sales, income, and employment. Income or value-added describes the payments made by industry to wages, interest, profits, and indirect business taxes. It is analogous to the gross domestic product estimates frequently cited in business/macroeconomic reports.
For our baseline estimate based on a crowd size of 95,000, approximately 2,102 daytripper and 1,487 overnighter parties visited the visited the Space Coast for the primary purpose of observing the Falcon Heavy launch. Their party spending, detailed in Figures 5 and 8 and aggregated in total, inform the IMPLANTM model. No other spending is included in this analysis other than the purchasing behavior of these primary tourists. As such, it does not include spending by NASA KSC in supporting and promoting the launch.
Table 1 provides a synopsis the 2019 Falcon Heavy economic impacts. All told, the tourism expenditure flows associated with the launch generated a total output (sales) effect of about $2.42 million, and a total income effect (i.e., value-added) of about $1.30 million. Because some sales are actually inputs in the production of other final goods, income created is always a subset of the sales impact. Income includes both labor and non-labor compensation (i.e., dividends, interest, and rents); for convenience, the subset of total income generated that would accrue solely to labor is also provided (i.e., $0.85 million). Finally, the level of tourism sales activity produced by the launch would support 30 full and part-time jobs.
Earlier in this section a discussion of the multiplier process was provided which explained what the indirect and induced effects were and how they led to a final total effect that was a factor greater than the initial change in expenditure (i.e., the direct effect). The last column in Table 1 presents the employment, income, and sales multipliers for this study, which are based on the composition of spending by industrial category. Focusing on sales, in aggregate each dollar of tourism expenditure precipitated by the launch generated an additional 59 cents of sales.
IMPLANTM also affords the ability to detail impacts by industry so that it is possible to
Employment Labor Income Value Added Output TABLE 1: THE ECONOMICS IMPACT OF A FALCON HEAVY LAUNCH
Direct Effect 22.6 $566,352 $801,422 $1,522,789 Indirect Effect 3.5 $134,974 $227,650 $426,726 Induced Effect 3.9 $148,886 $267,887 $469,896
Total Effect 3.0 $850,212 $1,296,959 $2,419,411
The Multiplier 1.33 1.50 1.62 1.59
3,600,000
2,700,000
FIGURE 10. ECONOMIC IMPACT OF FALCON LAUNCH BY RANGE OF CROWD ESTIMATES 1,910,070 1,800,000
900,000
0.0% 2,165,530 2,419,410 2,674,730 2,930,050
75000 85000 95000 105000 115000 3,183,940
125000
ascertain the total sales effect of launch visitors on overnight lodging. About $614,850 is the aggregated output effect, which when combined with an assumed daily room rate of $122.60, implies an equivalency of about 5,015 room nights rented throughout Brevard County. It likewise entails a bed tax collection of about $30,745 (i.e., $614,850 x 0.05).
Finally, and in the spirit of what was discussed in the previous section, economic impacts for a range of plausible crowd sizes are presented in Figure 10, offering a sensitivity analysis of sorts to those readers whose backgrounds or contacts better inform their perception of the magnitude of launch watchers. From lowest to highest, these levels correspond to an assumed level of non-affiliates ranging from a high of two-thirds of the occupied rooms (i.e., a crowd size of 65,000) in northern Brevard to a low of one-third of those rooms (i.e., a crowd size of 125,000). By simply taking note of the percentage increase or decrease, the interested reader can discern the eco–nomic impact for any alternative crowd size.
7.0 Final Perspectives
On the afternoon of May 30, 2020, Bob Behnken and Doug Hurley, the first astronauts to launch from NASA KSC since the Space Shuttle’s retirement flight in July 2011, embarked on a SpaceX Crew Dragon for the International Space Station. As part of NASA’s Commercial Crew Program, the mission was further noteworthy for the fact that it represented the first voyage of NASA astronauts aboard a commercially developed space vehicle. That the launch would occur during a global pandemic could not have been foreseen when the mission was originally scheduled years before, and yet somehow in the launch itself a feeling of perseverance was conveyed, of life moving onwards and upwards.
In dealing with the coronavirus NASA had been especially vigilant, keeping Behnken and Hurley in an extended quarantine prior to launch and encouraging space fans to watch the launch remotely. Nevertheless, local tourism officials were cautiously optimistic on receiving some of the better occupancy news they had seen in two months, providing a much needed boost in morale for the hard-hit leisure and hospitality industry.
They were not disappointed. Hotel/motel data compiled by STR for the week ending May 30 revealed year over year increases in occupancy for both the Cocoa Beach-Titusville area as well as Melbourne-Palm Bay, two anchors of the Space Coast market. These were 2 of only 3 increases recorded for the entire U.S. hotel industry. But this really should not be surprising, for what Behnken and Hurley remind us of is the enduring romance Americans have with spaceflight, their space program, and the next unforgettable journey. While this mission was a first, the decade to come will be filled with firsts on the launching pads of NASA KSC, with millions gazing skywards towards the Moon and then Mars. For the Space Coast Tourism Journal, we’ll see you there on the Cape. n
