Tennessee’s tourism industry reached unprecedented heights in 2023, with the state welcoming 144 million visitors and generating a staggering $30.6 billion in direct visitor spending.
This record-breaking achievement, highlighted in a recent report by Tourism Economics and the Tennessee Department of Tourist Development, marks a significant milestone in the state’s economic recovery and growth post-pandemic.
In 2023, Tennessee saw a 6.2% increase in direct visitor spending, continuing a trend of robust growth over the past two years. This surge has driven the state’s tourism industry to recover 125% of its pre-pandemic levels, firmly positioning Tennessee as a premier destination for both domestic and international travelers.
Governor Bill Lee expressed his enthusiasm for the industry’s success, noting the broader impact on the state’s economy. “When tourism grows, Tennessee reaps the benefit with increased sales tax revenue. Tourism boosts local economies, supports businesses and jobs, funds public services, and creates a better quality of life for all Tennesseans. We welcome visitors from around the world to experience Tennessee’s music, scenic outdoor beauty, culture, and food from Mountain City to Memphis,” he said.
Economic Impact of Tourism
The impact of this tourism boom extends beyond just visitor spending. The influx of tourists generated $3.2 billion in direct state and local tax revenues in 2023. These revenues are critical in funding essential public services and infrastructure, effectively reducing the tax burden on Tennessee residents. Without this revenue from tourism, each Tennessee household would need to pay an additional $1,160 in taxes annually.
The state government alone collected $1.9 billion in tax revenues from tourism, while city and county governments added $1.25 billion to their coffers. This financial windfall is a testament to the vital role that tourism plays in sustaining the state’s economy.
Mark Ezell, Commissioner of the Tennessee Department of Tourist Development, praised the collaborative efforts that led to this success. “Tennessee tourism is soaring, leading to benefits for Tennesseans. Thanks to our destination marketing organizations across the state, in addition to our leisure and hospitality businesses, this amazing accomplishment was made possible. The record growth is a testament to the strength, resilience, determination, and efforts of our people and the work of our industry in bringing visitors to enjoy why Tennessee Sounds Perfect,” he said.
Employment and Visitor Dynamics
Tourism has also been a significant driver of employment in Tennessee. In 2023, visitor spending supported 191,522 direct jobs, meaning that one in every 24 jobs in the state is sustained by the tourism industry. Employment related to visitor activity grew by 3% last year, nearing full recovery to pre-pandemic levels at 98%.
Domestic tourism continues to be the backbone of Tennessee’s visitor economy, with domestic visitor spending reaching 127% of pre-pandemic levels. While international tourism has yet to fully recover, it is on an upward trajectory, with spending from international visitors rebounding to 81.6% of 2019 levels.
The sheer volume of visitors in 2023, which saw an increase of three million from the previous year, was fueled by a mix of longer stays and a surge in day visits. This trend highlights Tennessee’s appeal not only as a vacation destination but also as a go-to spot for shorter, spontaneous trips.
The Tennessee Department of Tourist Development (TDTD) is set to release the full 2023 Economic Impact on Travel Report, along with detailed visitor spending data for all 95 counties, in August 2024. This report is expected to provide deeper insights into the regional distribution of tourism’s economic benefits and guide future strategies for sustaining and enhancing the industry’s growth.
Tennessee’s success in tourism is the result of coordinated efforts across various sectors, including local convention and visitors’ bureaus, chambers of commerce, city and county leaders, tourism attractions, and the hospitality industry. Together, these stakeholders continue to work tirelessly to showcase Tennessee as a top destination, ensuring that the state remains at the forefront of the global tourism landscape.
As the state looks to the future, Tennessee remains committed to fostering growth in its tourism sector, building on the momentum of 2023, and continuing to attract visitors from around the globe to experience all that it has to offer.
Photo Credit: Jeff Adkins
