AAWE, Economics Dept, New York University, 19 W 4th St, 6Fl., New York NY 10012aawe@wine-economics.org

AAWE Working Paper No. 18


The Economic Impact of the Wine Industry
on Hotels and Restaurants in Walla Walla 

Karl Storchmann


Walla Walla enjoys the fastest growing wine industry in the State of Washington, if not in the whole U.S. This paper examines the impact of this extraordinary growth on the revenue of regional hotels and restaurants. Employing a dynamic quarterly panel model at the county level we show that the regional reputation as high quality wine county, as expressed by critical wine points in the national wine press, has a significant effect on the tourism industry. Less than 17% of all restaurant and approximately 40% of all hotel revenue is tied to the wine cluster (2007). However, regional reputation is short-living and needs to be constantly re-earned.

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