Texas Border Business
Get ready for a big show (where you literally see nothing) with a huge audience! On Monday, April 8, a total solar eclipse will cross North America, passing over Mexico, the United States, and Canada. The path of totality (where the sun is fully hidden) enters Texas around Eagle Pass and crosses to the northeast, exiting near the northeast corner. About 12 million Texans reside in the path of totality, which includes the major metropolitan areas along the I-35 corridor.
Although there was a total eclipse in August 2017, this one is much more impressive. In particular, the moon will be closer as it passes between the sun and earth, thus causing totality to be longer in duration and occur across a wider path. The sky will darken as if it were dawn or dusk for several minutes. In addition, the next total solar eclipse that will be visible in the United States will not occur until August 2044.
Because of the unique nature of the upcoming eclipse, more than one million people are expected to visit Texas to witness the phenomenon. From small towns to large population centers, the numbers of visitors are projected to be unusually large. These travelers will spend money locally for accommodations, meals, gasoline, and retail items. The result will be a substantial economic stimulus.
We estimated the potential economic benefits associated with the eclipse and found that Texas is likely to see an increase in direct expenditures by visitors of about $427.7 million. When the downstream/multiplier effects through the economy are considered, expected impacts rise to almost $1.4 billion in spending, with a gain of $749.5 million in gross product and $453.6 million in personal income to Texas residents. Of these amounts, the total expenditures (including downstream/ multiplier effects) in the restaurant industry group are expected to be $179.8 million, with $280.6 million in retail and $221.8 million in short-term rentals and hotels.
Benefits will be concentrated in the largest metropolitan areas within the path of totality due to availability of hotel rooms and other needed infrastructure. However, smaller areas are also likely to see notable benefits. (Effects on each county and population center along the route are included in the full brief available at www.perrymangroup.com.)
While the eclipse is a one-day event, many cities are hoping that the influx of visitors from across the nation and beyond will bring lasting benefits. Areas which rarely receive much in the way of national media coverage are likely to be featured, enhancing the prospects for future tourism and other developmental benefits. It will bring crowds and traffic, but it will also lead to substantial economic benefits. Prepare for the darkness! It won’t last long. Stay safe!
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Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com), which has served the needs of over 3,000 clients over the past four decades.
