Introduction
The Wyoming loop tour program, as evaluated in this study, involved two components. One component dealt with the location criteria and an evaluation of the existing loop tours which is contained in a companion MPC report (MPC 94-29). Included herein is a discussion of models used in determining economic benefit and the results of an evaluation of the economic effects associated with two scenic loop tours, the Cheyenne and Oregon Loop Tour and the Bighorn Basin Loop Tour.
This loop tour originates from the state capital, Cheyenne, and passes through Douglas, Glendo State Park, Guernsey, Guernsey State Park, Fort Laramie and Torrington. Much of the exciting period in the old west lives on at several museums in Cheyenne. These museums give glimpses of historical objects, Indian artifacts, gems, and other materials of interest which help in understanding the lives of the people of the past. Wildlife is also an attractive feature of this loop tour. In addition, this tour follows the historic Oregon Trail as it makes its way along the North Platte River. Register Cliff is located south of Guernsey where pioneers inscribed their names, places of origin, intended destination and the dates. The total length of this loop tour is approximately 180 miles (15).
This loop tour is located in the northern part of Wyoming. As shown, the major attractions in this loop tour are Sheridan, Ucross, Buffalo, Lake De Smet, Fort Phil Kearny, Story and Big Horn. The visitor center and museum at Fort Phil Kearny provide an overall view of what has been termed by historians as the scene of some of the most dramatic incidents in the history of the Indian Wars in the west. The presence of the majestic Big Horn Mountains provide tourists with spectacular mountain scenery and a variety of wildlife. Many songbirds like Western Meadowlarks, Common Flickers, Lark Bunting, Mountain Bluebirds and several species of Warblers can be found. The total length of this loop tour is approximately 89 miles (15).
The genesis for determining the economic effects of Wyoming's Loop Tours is based on experience gained over the years where a plethora of studies have evidenced the potential for and/or actual positive impact of tourism on the economic health of communities or a geographical area. Since Outdoor Recreation for America: The Report of the Outdoor Recreation Resources Review Commission to the President and to the Congress (9) was submitted, virtually every economist has supported the concept that tourism and recreation could mean the difference between the economic success or failure of a geographical area. The states in the mountain-plains consortium (MPC) area are no different from any other geographical area in this country. All states are largely interested in and enjoy the benefits from an expanding tourism industry. For example, most communities in Wyoming are affected by tourism. Some communities such as Cody and Jackson have developed an economy around tourism activities and the associated needs of the traveling public. Others, such as Laramie and Riverton have the potential of developing an expanded tourism industry. Some individuals in each community are already profiting from tourists through selling gasoline, food, lodging, and souvenirs, to name but a few items.
Within the MPC region, effort is extensive at most local and certainly at the state level, to expand the economic benefits from tourism. Defining a tourist is sometimes the first and most difficult step in discovering the economic benefits associated with attracting them. A tourist may better be defined through the activity of "tourism." Tourism, in the context of this study, is possibly best represented by understanding that someone uses a public or private transportation system to come to an area or community from some other location, not planning to stay permanently. A tourist, then, is someone:
- on vacation
- on a business trip
- visiting local attractions
- visiting friends or relatives
- attending a convention
- attending a special event such as a rodeo, musical event, etc.
- sight-seeing
- participating in a sport such as skiing, boating, etc.
- passing through enroute to another location, or numerous other reasons
Regardless of the motivation, tourists spend money; usually lots of money. In 1989, the United States Travel Data Center calculated that U.S. travelers spent $316 billion within the United States on trips involving an overnight stay away from home and day trips to locations of 100 miles or more. This activity, in turn, generated $73.5 billion in wage and salary income and an additional $42.9 billion in federal, state and local tax revenues. This same study also revealed that forty-two states received more than $1 billion from travelers in 1989 while sixteen states received more than $3.8 billion in travel spending (13).
Although direct economic benefit is often the factor motivating communities' involvement in tourism, other related but indirect factors contribute to communities' well-being:
- employment benefits
- increased income
- diversification of the economic base
- tax revenues
- visibility
- cultural diversification, etc.
Many rural communities have turned to tourism development in times of economic hardship to diversify their economic base. A reliable tourism development plan requires significant public and private investment to provide all necessary facilities and to advertise new destinations. Hence, the question arises whether spending money for tourism development is a wise choice and if the returns from tourism can generate enough revenue to significantly increase local income. Studying the economic impacts of tourism has been given increasing attention through the years. Some projects have yielded valuable estimates of what local communities can gain from tourism activities.
Two basic components need to be quantified to estimate the economic impact of tourism: 1) the number of visitors , and 2) the average expenditures per visitor. Then, these direct expenditures can be entered in an input/output model to derive indirect and induced effects on the local economy.
Estimating Visitor Use
In a study of this type, it is possible to estimate the number of people visiting specific areas for tourism purposes by interviewing lodging providers (public and private campgrounds, motels and hotels) in order to determine occupancy rates and types of visitors, i.e., business, tourism, etc. When this method is used, it is necessary to distinguish between tourists and commercial travelers (4). Visitors who do not use commercial lodging, staying with friends or relatives, would not likely be included in such a data base. However, the overall user data are best obtained by combing on-site visitor survey information with the estimated number of visitors using commercial lodging. It is worth noting that Taylor, Fletcher, and Clabaugh checked the accuracy of their survey results and implications with secondary data from sales tax collection and the U.S. censuses of retail trade and services (12).
Estimating Visitor Expenditures
When we consider the economic impacts of tourism, the first task is to evaluate visitor expenditures. All the economic benefits a community derives from tourism flow from the dollars visitors spend during their measurable experience.
Because the tourism industry is not individually identified in the Standard Industrial Classification adopted by the U.S. Bureau of the Census, it is not possible to use secondary data from Federal agencies for tourism expenditures. Moreover, no economic sector relies exclusively on tourism for its activity (7). As a consequence, primary data need to be collected.
Several alternatives exist to measure visitor expenditures. It is important to keep in mind that an economic impact study of tourism will be as good as the visitor expenditure data it is built upon. Directly estimating tourism expenditures through observation of identified tourists is not a realistic approach (2). Typically, an indirect method is preferred, through surveying a sample of visitors who have completed their trips (household survey) or during their trip (location or en-route survey). The latter method yields more accurate data because people still remember the amount and distribution of their expenditures, whereas the recall factor becomes a problem with the former survey method (1; 5). Taylor, Fletcher, and Clabaugh (12) quantified visitor expenditures through visitor surveys conducted at sites where tourists are likely to stop (visitor centers, campgrounds, historical sites, motels). These face-to-face surveys have the highest response rates (4). Some researchers investigated the method of having a sample of visitors record their expenses in a diary as expenditures occur (8). This supposes that a large enough proportion of people would complete the diary while on vacation. The study showed that mail questionnaires sent to visitors after returning home underestimates expenditures compared to the diary method. The 1983 Nebraska Visitor Survey used the diary questionnaire methodology to achieve a 62 percent response rate at a reasonable cost (10); visitor parties were contacted by field representatives during their stop at sampled gasoline stations. Another possibility would be to survey businesses' owners and operators whose activity is, at least in part, due to tourism (7). It is difficult to distinguish business receipts from those of tourists after the fact (1).
The alternative exists between mail and telephone questionnaires. It seems that the telephone method is faster, even if slightly more expensive, and also more accurate than a mail survey due in part to a lower non-response rate (4; 6).
Some studies have combined evaluation of the effectiveness of advertising programs (conversion studies) with estimates of average visitor expenditures. Methodological concerns have been raised about the quality and accuracy of this type of method which have too often returned invalid conclusions about the related economic impact of tourism marketing campaigns. It is not surprising that people who visit a destination are more likely to respond to a survey focused on that destination than those who did not visit it (4). This overestimates actual visitation rates and derived economic impacts. Evaluating a conversion rate (the percentage of persons who respond to destination advertising by requesting specific information and who eventually visit the destination) is not our purpose; however, it is important in determining how to measure economic benefits. We intended to evaluate the economic effects of tourists following two of Wyoming's Loop Tours.