Overview

Tourism is of great interest to many regions of the country. In impact analysis, tourism is unique among export activities. Exports are typically thought of as goods or services shipped by local businesses to purchasers located outside the region. Tourism, on the other hand, involves purchasers traveling into the region to acquire goods and services from local businesses. Tourism is most often classified by the activities in which non-locals participate: film festivals, fall colors, professional sporting events, historical sites, conventions, and so forth. Lodging, restaurants, retail, and recreational services typically rely upon this kind of export as key to their success. Because tourism comprises a wide variety of activities and types of businesses, there is no single "Tourism" sector for modeling impacts.

Why do we only include non-local tourists in the analysis? Sales to final demand are the classic activities modeled by input-output analysis. These sales (direct effects) result in new production of goods and services that initiate a chain of economic events in the region (indirect and induced effects). While local residents may spend money at these tourist attractions, their expenditures are not typically counted in tourist studies because if those tourist attractions did not exist, the residents would likely still spend that money locally, just on other activities (e.g., bowling, movies). That said, a case can sometimes be made for including resident spending on tourist attractions if the study area is very small and has few alternatives for recreation, such that the existing tourist attractions keep residents' money from leaking to other places (i.e., they keep residents from traveling elsewhere for their recreational pursuits). 

In this case study, we will analyze the impact of wildlife-based tourism (hunting, fishing, and wildlife viewing) on Washington County, Minnesota.

Framing the Problem

As with all impact analyses, our objective is to identify the production of goods and services which meet a specified demand. In tourism, we must know total expenditures by non-local parties engaged in the activities of interest for goods and services in our region. One of the most common ways to estimate total expenditures is by determining per-person or per-party spending and then multiplying by the number of persons or parties. Statistically-valid surveys can provide credible estimates of both visitation and spending.

In this case study, we have been asked by the Washington County Department of Natural Resources to estimate the economic impact of visitors who come to hunt, fish, or view wildlife.  The Department has already conducted a survey of recreationists that provides us with spending and participation estimates for 2007.

CS-12: Impacts of visiting hunters, anglers, and wildlife viewers

Objectives

Analyze the impact of non-residents engaged in wildlife-based activities. Show impacts on Washington County employment, Labor Income and GDP. In addition, provide the number of industries with at least one job affected by these visitors and identify the top five industries affected in terms of employment.

Framing the Problem

In this session, we will look at the impacts of spending by non-resident hunters, anglers, and wildlife viewers. We are given a report prepared by a state university that estimated visitation and spending for all of 2007. The report was based on a survey designed and implemented by a state university to intercept 5 percent of all parties engaged in these activities county-wide. From the completed surveys, the university estimated that total annual participation was 125,000 party-trips with total spending of $22,775,000 in the county. A party-trip is defined as one vehicle of visitors engaging in wildlife-based activities for an unspecified period of time. Some trips include overnight stays, while others are only a single day. Most important for our task, the spending and visitation estimates are divided by residents and non-residents, and by day trips and overnight trips. The appendix of the report provides us with details shown in Table 12-1.

Table 12-1: Party-trip Spending & Visitation by Trip Type for Non-Resident Visitors

Measure	Day Trip	Overnight Trip	IMPLAN Industry
Visits	100,000	25,000
Spending
Motels	--	$55	411
Campgrounds	--	$12	412
Restaurants	$7	$37	413
Recreation/entertainment services	$3	$14	410
Groceries	$9	$36	324
Sporting goods	$9	$14	328
Souvenirs & other retail	$1	$7	329
Gas & Oil	$28	$40	115
TOTAL	$57	$215

It is necessary to bridge the survey spending categories with IMPLAN sectors. You will notice that for most of the items that are purchased at retail stores, we used the IMPLAN retail sectors. Yet for gasoline and oil we will use the producing sector (Sector 115 - Petroleum refineries) even though there is a retail gas station sector in IMPLAN. The reason for this is that we know exactly what was purchased from the retailer in this case (gasoline and oil) and can thus identify the producing sector (Petroleum refineries), whereas in the other retail spending categories we don't know exactly what was purchased and thus cannot identify the producing sector. For example, we don't know what the groceries consisted of and therefore do not know how to choose between the various food manufacturing sectors (ice cream and frozen dessert manufacturing, bread and bakery product manufacturing, snack food manufacturing, etc.). Thus, in this latter case the best we can do is capture the retail margin portion of the purchase, whereas in the case of gas and oil we can also capture some of the producer value (if there is a local producer), as well as the transportation and wholesale margins, in addition to the retail margin. While you could use the retail gas station sector (Sector 326), you would only capture the retail margin. See this article for more on the two ways of margining. Our bridging scheme is also shown in Table 12-1.

Table 12-2 summarizes the problem frame and Table 12-3 summarizes the settings for User Preferences used in this example.

 

Table 12-2: Problem Frame for Impacts of Total Visitor Spending

Case Study Problem	Impacts of non-resident wildlife-based recreation visitors on the economy of Washington County, MN
Sectors	Industry 411, Hotels and motels Industry 412, Other lodging Industry 413, Food services & drinking places Industry 410, Other amusement & recreation industries Industry 324, Retail food & beverage Industry 115, Petroleum refining Industry 328, Retail sporting goods Industry 329, Retail general merchandise
Visitor Spending	$11,075,000 in 2007
Analysis Protocol	For day-trip non-resident visitors, create an Industry Change Activity with a set of Events that capture non-resident spending categories bridged to industries.  For overnight-trip non-resident visitors, create a similar Activity with their respective spending amounts. Create one Scenario consisting of both Activities. Analyze using the Washington County, MN single region model.
Resources Used	Washington County, MN model built using 2007 data using the default Trade Flow estimation method
Desired Outcome	To summarize the impacts of non-resident wildlife-based visitor spending on the Washington County economy in terms of total effects on Employment, Labor income, and Gross Regional Product. Identify the number of sectors with at least 1 job affected and list the top five industries in terms of employment.

 

Table 12-3: User Preferences Settings

Default Event Year: 2007	User Preferences, Analysis tab
Advanced Modeling: Checked Enable Accounts Explorer: Checked	User Preferences, Analysis tab

 

Tasks for CS-12

	Tasks	Hints & Comments
1.	Create your own Washington County, MN model	Create your own model using data for Washington County, MN, 2007.
2.	Create an Industry Change Activity for non-resident visitors only staying the day: CS12 Act1 NonRes Day	Click Set Up Activities from the left menu. In the top menu, click NewActivity, (Industry Change is the default), then enter CS12 - Act1 NonRes Day as the name.  Enter 100,000 (party-trips) for the Activity Level.  Click Save.
3.	Create 6 Events for Activity CS12 Act2 NonRes Day	Click New Event. The sector field is already highlighted, so enter 413. The Food services & drinking places sector will appear. Hit Tab or click on the Industry Sales field. Enter 7, then hit Enter. Repeat the sequence creating a new event for industry 410 for $3.00. Click New Event.  The sector field is already highlighted, so enter 324.  The Retail Food & beverage sector will appear.  Hit Tab or click on the Industry Sales field.  Enter 9, then hit Enter.  Accept the default selection of "Gross Retail Sales" - what this does is tell IMPLAN that this is the amount the customer paid (i.e., purchaser value) and signals IMPLAN to give just the retail margin portion of this value to sector 324.  Repeat the sequence creating a new event for sectors 328 and 329 and their respective dollar amounts from Table 12a-1 above.  Click New Event.  The sector field is already highlighted, so enter 115.  You will get a message box informing you that this sector does not exist in the region.  We can still use this sector since we'll be applying margins, so click OK.  Enter 28 into the Industry Sales field, then hit Enter.  Because the gas and oil were purchased from a retail gas station rather than directly from sector 115, this Event must be margined.  To do this, click Event Options, then Edit Event Properties, then Margins, and select Yes.  This gives the appropriate proportions of the $28 to the producer, transporters, wholesaler, and retailer.
4.	Create an Industry Change Activity for non-resident visitors staying overnight called CS12 Act2 NonRes Night	Click Set Up Activities from the left menu.  In the top menu, click NewActivity, then enter CS12 Act2 NonRes Night as the name.  Enter 25,000 (party-trips) for the Activity Level of each.  Click Save.
5.	Create 8 Events for Activity CS12 Act2 NonRes Night	Click New Event.  The sector field is already highlighted, so enter 411.  The Hotel and motels sector will appear.  Hit Tab or click on the Industry Sales field.  Enter 55, then hit Enter.  Repeat the sequence creating a new event for each industry (412, 413, 410) and respective dollar amount from Table 12-1 above. Click New Event.  The sector field is already highlighted, so enter 324.  The Retail Food & beverage sector will appear.  Hit Tab or click on the Industry Sales field.  Enter 36, then hit Enter.  Accept the default selection of "Gross Retail Sales" - what this does is tell IMPLAN that this is the amount the customer paid (i.e., purchaser value) and signals IMPLAN to give just the retail margin portion of this value to sector 324.  Repeat the sequence creating a new event for sectors 328 and 329 and their respective dollar amounts from Table 12-1 above.  Click New Event.  The sector field is already highlighted, so enter 115.  You will get a message box informing you that this sector does not exist in the region.  We can still use this sector since we'll be applying margins, so click OK.  Enter 40 into the Industry Sales field, then hit Enter.  Because the gas and oil were purchased from a retail gas station rather than directly from sector 115, this Event must be margined.  To do this, click Event Options, then Edit Event Properties, then Margins, and select Yes.  This gives the appropriate proportions of the $40 to the producer, transporters, wholesaler, and retailer.
6.	Create a new Scenario called CS12 NonRes Visitors consisting of the two Activities just created, and run the analysis.	From the Set Up Activities window, click Next at the lower right or click AnalyzeScenarios in the menu at the far left. Click New and change the default name to CS12 NonRes Visitors.  Leave the Scenario Level at 1.00.  Add the two Activities to the Scenario by moving them from the Available Activities box to the Selected Activities box.  This may be done by one of three ways: double-clicking each Activity name, highlighting each  Activity and clicking the Select button, or highlighting both Activities at once (use the shift or control keys on your keyboard) and then clicking the Select button.  Click Analyze Single Region.  When the analysis is done, respond with Yes to the popup message Analysis complete. Do you want to view the impact results?
7.	Summarize the total impacts of the Scenario. Find the following for non-resident wildlife-based visitors: The total jobs:___________;   The total labor income:________________;   The total gross regional product:______________;	The Total Impact Summary is a convenient view. The number of jobs are 144. The total labor income is $3.7 million The total gross regional product (identical to Total Value Added) is $6.2 million
8.	Top 5 affected Industries are: ________________________   ________________________   ________________________   ________________________   ________________________   In terms of employment, the number of Industries with at least 1 job is ________.	In the Scenario Results screen, the Top Ten Industries Affected is a convenient view.   In terms of Employment, the top five industries are 413 Food services and drinking places 411 Hotels and motels, including casino hotels 326 Retail Stores - Gasoline stations 328 Retail Stores - Sporting goods, hobby, book and music 324 Retail Stores - Food and beverage In the Scenario Results screen, click on the Detail Results tab.  Click View by: Employment, then click again on the Total column header.  Total employment results by industry is now sorted from high to low.   Since we are looking for at least one job per industry, we will count all jobs showing at least 0.6.  We can  export this grid to MS Excel and sum them their, which yields 130.

 

Solutions

• Tasks 2 and 3:.  Activity CS12 - Act1 NonRes Day

 

•  Tasks 4 and 5:  Activity CS12 Act2 NonRes Night

 

Tasks 6:  Creating the Scenario CS12 NonRes Visitors

 

• Task 7:.  Detailed employment results for ScenarioCS12 NonRes Visitors, sorted by Total