Kayla Holzhauer
Mrs. Straub
AP Economics
22 March 2016
Economics of Spring Break
After 4 months of snow shoveling, ice scraping, parka wearing and Netflix watching, the majority of us are ready to pack our bags and leave Wisconsin. When spring break rolls around in March or April an overwhelming number of us have already booked flights with warm weather on our minds. During the weeks of spring break many of us will leave our homes in search of a warmer climate, travelling everywhere from New York, to Myrtle Beach, to Cancun, to the Florida Keys. While the majority of us consider spring break to be little more than a holiday, it is the economic force for many seasonal businesses and a vital player in the macroeconomy.
So, just how big is spring break? Police Chief Drew Whitman of Panama City Beach, Florida estimates that the city’s population increases from about 12,000 to up to 250,000 during the spring break months of March and April (“Spring”). This is an overwhelmingly huge number of travellers, but the money generated is what really matters to the businesses of the popular spring break destinations. During spring break, “stores, hotels and restaurants in Panama City Beach saw over $170 million in economic benefit” (“Sea”). However, although these numbers appear great on paper, they don’t come without an opportunity cost.
The most obvious inconvenience to residents of vacation destinations is the overcrowding of beaches, hotels and restaurants created by travellers. The overcrowding also leads to other problems such as littering and pollution. The large amounts of excessive drinking often lead to minor crimes, accidents and arrests. In order to deal with these problems, the cities have to plan for cleanup costs and increased safety precautions. Of course, the costs barely create a dent in the benefits as “the spring break season accounts for 30 to 35 percent of some local businesses’ yearly income” (“Spring”).
The smaller economic benefits on local businesses are basic and obvious; but, when looking further into the economics of the spring break holiday, vacation spending is a significant player in the macroeconomy. Breaking it down, people generally save up their money for bigger vacations. After months of spending they are willing to splurge on their vacations, on everything from a beach condo to a new bathing suit and pre-vacation tan. This money that is moved from the consumer’s savings account back into the economy has an increasing impact via the spending multiplier. The tourist spending creates a flow of money that drives the economy. Furthermore, the nature of spring break can be used as a tool to determine how the economy is doing. In bad economic times less people are likely to splurge on extravagant vacations, especially college students. “If students are going on Spring Break and spending money that is a qualitative indicator that the economy is doing well” (Yakabe).
It is clear that the economy would fall behind without the push of Spring Break; and, while many of us prefer to view Spring Break as a chance to get away from real life, our search for paradise has significant real world application.
"Sea, Sun, Sand... and Revenue." Msnbc.com. 2004. Web. 21 Mar. 2016. <http://www.nbcnews.com/id/4428577/ns/business-us_business/t/sea-sun-sand-revenue/#.VvCVHFQrJdg>.
"Spring Break! How Cities Prepare for an Increase in Tourists." Spring Break! How Cities Prepare for an Increase in Tourists. Web. 21 Mar. 2016. <http://www.governing.com/blogs/view/spring-break-how-cities-prepare-increase-tourists.html>.
Yakabe, Selena. "Spring Break Spending Boosts Economy." Sdsucollegian.com. The Collegian, 4 Mar. 2016. Web. 21 Mar. 2016. <http://www.sdsucollegian.com/news/article_0221f9a4-e08a-11e5-aea6-0752133eed07.html>.
Yes it may be inconvenient for the residents who live in the communities, but they need to realize that these tourists bring in a majority of the income each year. Plus each year when these tourists come, there is opportunity for new jobs during these few weeks such as security and other jobs that would be needed. We need the tourists because they boost our gdp by spending their money, most of the time I guarantee these college kids and families are not spending a lot of money, so when spring break comes around there is a huge increase in these things.
ReplyDeleteI like what you said about boosting the GDP through increased spending. Most families, especially college students, are saving up their money after the holiday season in anticipation of summer activities. Spring Break creates pressure to spend this saved money, allowing it to circulate back into the economy and increase the money supply. The increased job opportunities is also a plus that I didn't elaborate on much in the post.
DeleteThis a really interesting look at the ways that spring break affects the economy in Panama City. I would have to agree, having the boost in income is nice, but it does come with a significant opportunity cost because of the negative things that the tourists come to the city. Also the police force has much more stress on them due to the crime and negative things that happen. I have heard that the city might be placing some restrictions on these events to help calm the situation. Overall this topic is really interesting because it brings good and bad to the city, similar to some of the things that happen when monetary or fiscal policy is implemented.
ReplyDeleteIt's really interesting and coincidental that you chose to write about spring break. I knew that Florida had a large amount of tourists during spring break but I didn't know that the population increased by more than 100,000 people. There are a lot of negatives that go into play as well especially if you live in the state of Florida. It was interesting reading your blog post and nice job!
ReplyDeleteThe information you have really helps clarify the scope of the tourist influx created by spring break. Overall I agree with you that the societal benefit massively outweighs the marginal societal costs, it has a net positive impact on the Florida communities the tourists visit in large numbers.
ReplyDeleteIt has been interesting to see in recent years how the US Gov. has used American tourism (which is largely contributed to by spring break) as a tool of diplomacy when working with Caribbean nations. I would be interested to learn how large of an economic impact American tourism has on the economies of these nations and if threatening to bar tourism to a country could indeed be an effective diplomatic tool.
Your post was very insightful and really opened up to the economic benefits of "spring break" for businesses, especially seasonal ones. However, there are many non-economic downsides to this influx of tourists, namely college students. As you mentioned with the arrests and misdemeanor charges, these can be very disruptive to residents and other families who are trying to enjoy their vacations as well.
ReplyDeleteI love spring break. Your fact is crazy, 12,000 people to 250,000. What does Panama city do for the rest of the year? It would have been interesting if you looked into a couple of countries who are dependent on tourist revenue. Overall, nice post.
ReplyDeleteIt was crazy to see that number of people in Panama City increases greatly during spring break. Even though the residents there might be annoyed with crowded places all the time, but it definitely helps businesses and the nation's GDP. Places that that receive a massive amount of people during spring break or during summer would benefit greatly by bringing up their prices than what they typically are because like you mentioned, people saved up all this money and are willing to spend it on goods, even if it's a bit pricey. Not only airports can benefit by rising their plane tickets during this time, but also many restaurants, businesses, and hotels can too.
ReplyDeleteThis piece made some very good points on Spring Break. Panama City over spring break is a total zoo. College kids from everywhere transport themselves down there to party for a whole week. The city wants change though so they have implemented rules to cut back on spring breakers. The main rule was no more open alcohol on the beaches. That is a huge change and hopefully will change Panama City like they want it to.
ReplyDeleteI thought your article was very relevant to today since spring break is only two days away! I found it very surprising that that the population of Panama City increases from 12,000 people to 250,000 when spring break comes around. I always thought of all the positive effects of spring break on the economy but never considered all of the negative effects. Overcrowding is an inconvenience for people who want to enjoy their time on the beach. Also, as you mentioned, the result from all of these people crowding the beaches is pollution and clean up costs. Despite these costs, spring break destinations will still be making a profit. Great article!
ReplyDeleteI found your article to be insightful and very relevant with spring break so close. I have never really thought of the positive effects of spring break all that much as the general view of spring break is that it's a time for college students to go somewhere warm and excessively drink. So it is nice to know that there is actually a lot of benefits to having spring break. Also the fact that Panama City's population grows by such a large amount during this time of year was shocking.
ReplyDeleteI thought your article was very relevant, and you had some significant points in it. How do the hotels stay in business throughout the year? One short season would not keep a business up and running, too many costs through human and material. I think that could also be an interesting angle to go about Spring Break. Overall, good connections between the economy and Spring Break, and good facts that shocked readers, such as the population difference in Panama City.
ReplyDeleteI feel as though in order for any of these cities to get rid of the negative from spring brake, would be to raise the prices. You talked about there being an escalation in pollution, damage to property/litter, and crimes. Well when looking at it from someone who has yet to see one of these places "before" and "after" spring break, I know how bad it can get sometimes. And I can only see something like this changing for those who live in these vacation spots all year round is to charge those wanting to come in with higher fees to pay for the soon to come damage, and if crime does come into play, those who are not registered to that area, have a higher criminal charge and fee's.
ReplyDeleteSince spring break just ended, it's interesting to see the economic impacts. Personally, I went to Panama City Beach over spring break during the month of March in which they banned alcohol from the beaches. While talking to someone who works there, they told us they normally make $300 million in the month of March alone but ever since they went dry they only made $80 million because all the people who used to go there for a fun spring break went elsewhere. They originally went dry for safety purposes and to make the city more enjoyable for others, but now they are losing ridiculous amounts of money and a lot of local businesses are going out of business because of the change.
ReplyDelete