Wednesday, December 14, 2011

Report: "Public Lands Near Grand County Play Vital Economic Role, Tourism & Recreation Businesses Account for 44% of Private Jobs", Includes Recommendations for How Leaders Can Maximize Long-Term Returns from Nearby Public Lands

A new report shows that public lands near Grand County, Utah play a major economic role in the region, with tourism and recreation businesses accounting for 44 percent of private employment in the county; and that more than one-third of local households have a member that works in a tourism and recreation business related to public lands, while nearly two-thirds of county residents indicate that public lands are “extremely important” to their vocation.

“A significant reason for the county’s economic success stems from the diversity found today within Grand County’s tourism and recreation economy,” said Ben Alexander, the report’s author. “Moving forward, public lands will continue to play an important role for the region, and finding ways to sustain and develop new activities that appeal to a wide mixture of visitors and residents is paramount to the county’s long-term economic health.”

To conduct the report, (available at Headwaters Economics, a non-profit research group based in Bozeman, examined a wide range of public lands uses, including mining and agriculture, but focused on recreation because this type of use represents the largest, most complex, and least well understood activity on public lands in the county.

The full report contains detailed analysis of Grand County employment, trends, and government revenues. For example, the study analyzed the employment impact of federal public lands, and an IMPLAN analysis shows that area BLM lands supported 2,447 direct jobs in 2007. For the National Park Service, the Money Generation Model (MGM2) shows that area national parks supported 2,181 direct jobs in 2009. (These data should not be added together.) To put this in perspective, the Bureau of Economic Analysis reports that in 2007 there were 6,724 total jobs in Grand County and in 2009 there were 6,687 total jobs.

The report was created after a local steering committee—including representatives from Trail Mix, Ride with Respect, Red Rock Four Wheelers, Moab Lodging Association, Moab Trail Alliance, Moab Chamber of Commerce, and local officials—asked the Grand County Council to support a study on the economic and fiscal role of public lands in the county that could be the basis for informed discussions about how to develop, protect, and manage nearby public lands so that they benefit businesses, the county, and diverse users into the future.
Within the wide variety of public lands uses, BLM surveys show that hiking is the most common activity on its lands, followed by biking and nature viewing. Using a tailored spending profile, IMPLAN analysis shows that hiking on BLM lands has the largest economic impact, followed by nature viewing, biking, and motor vehicle use. In addition to the economic benefits of tourism and recreation, Grand County’s picturesque and high-profile public lands and the environmental and recreational amenities they provide are closely linked to economic growth. The county, for example, has had some success attracting new residents who find the communities and surrounding public lands in the area compelling—almost a third of net population growth in the last decade resulted from in-migration. The county also has seen increases in non-labor sources of personal income, especially retirement-related income, which has boosted per capita income and added stability to the local economy.

Despite past success, future growth in Grand County cannot be taken for granted. The boom years of the 1990s when the county’s economy grew by seven percent annually have yielded to the 2000s when the economic growth rate slowed to two percent annually.

This deceleration should lead to discussion on how Grand County can best utilize public lands to remain economically competitive as its tourism and recreation economy matures. Specific issues include:

  • Whether different users are crowding each other out and diminishing one another’s experience;
  • The continued quality of the landscape and uniqueness of the outdoor offerings; and
  • The area’s ability to compete with rivals in the outdoor recreation market that have constructed new signature trail systems or are benefiting from newly created and high profile public lands protections.

The report also includes recommendations to help ensure Grand County’s future economic health:

  • Educate the public to understand better the important economic role that public lands play in Grand County, including a periodic update on the county’s economic health and trends, especially focused on tourism and recreation;
  • Partner closely with public land managers on planning and decisions that impact public lands in Grand County, including supplemental work and funding to maximize the protection and return of public lands assets;
  • Ensure the continued diversity of recreation options and the capacity for public lands to support a wide variety of user activities. In addition, make sure that recreation uses do not directly conflict and drive away visitors or create the impression that the county favors one form of recreation; and
  • Utilize the national and international visibility created by public lands recreation—such as national parks, mountain biking, jeep events, and the Colorado River—to attract visitors or retirees with the potential to relocate and bring new businesses and wealth to the region.

“Grand County enjoys many benefits from nearby public lands,” noted Alexander. “To continue to capitalize on the competitive advantage that these lands provide, the county and local groups should work collaboratively with state and federal officials to implement policies that sustain existing uses and also anticipate future development and protection needs.”

In fiscal year 2009, area national park visitor spending contributed to an estimated $44.7 million in labor income while NPS payroll contributed another $8.8 million in labor income, resulting in $53.5 million in total labor income. To put this in perspective, total labor earnings in Grand County for 2009 were $192 million.
Visitors spend money on a variety of items, including hotels, restaurants, bars, sporting goods stores, gasoline, and other goods and services. Based on responses to the survey, a “spending profile” was developed for each type of recreation user of BLM lands and the economic impact on their spending was calculated. In fiscal year 2007, the economic impact of non-local BLM visitor spending was $177 million in local output and more than $64 million in labor income for Grand County.
A number of studies have been conducted to measure the impact of mountain biking in the Moab area. One  1998 study calculated the “consumer surplus,” which is a measure of the difference between the maximum  price a consumer is willing to pay and the actual price they do pay. They concluded that the bike trails in the Moab area “produce a high consumer surplus to the users,” amounting to between $197 to $205 per trip. The consumer surplus for the Slickrock trail alone was $8,422,800 to $8,770,300 in 1998. One of the  implications of the study is that annual visitor rates are not sensitive to fees because users believe they are getting a good deal (i.e., a high “consumer “surplus”) and an entrance fee (e.g., to the Slickrock trail) is a  small part of overall trip costs.

Another 1998 study found that the average “willingness to pay” (WTP) by a mountain biker is $1,483 (WTP is the maximum amount a person would be willing to pay for a good). The total annual use value of mountain biking in the Moab area was estimated to be $1.33 million. The authors concluded: “This value suggests that this recreation has a higher value than most other activities in the area and that public lands managers should be aware of the relative value of mountain biking as they make allocation decisions.”
Following the release of this and other reports on November 30, 2011 Headwarters organized more than 100 economists and academics in related fields from across the country that sent a letter to President Obama urging him to “create jobs and support businesses by investing in our public lands infrastructure and establishing new protected areas such as parks, wilderness, and monuments.” The letter, which includes three Nobel laureates, states that federal protected public lands are essential to the West’s economic future, attracting innovative companies and workers, and contributing a vital component of the region’s competitive advantage.

Additional information:
Headwaters Economics
Press Releases dated October 31, 2011 and November 30, 2011

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