Economic Impact Analysis

A visitor spending analysis is a way to measure how much money people spend when they visit a place for outdoor activities such as hiking on a trail, going to a race, or attending a special event. It looks at how much they pay for things like food, gas, lodging, gear, and other local services. This helps towns understand the economic benefits of outdoor recreation and shows how investing in trails or events can bring more money into the community.

The investment opportunity focuses on creating or improving outdoor recreation areas, such as building a trail system or hosting events that attract visitors. One idea could include a resort-style experience with lodging, guided activities, and access to trails. The target market includes outdoor enthusiasts like hikers, bikers, and families looking for nature-based getaways. By bringing in more visitors, towns can expect increased local spending, which supports jobs, small businesses, and long-term economic growth.

To measure economic impact, you start by using the number of people who visit a trail, park, or event. Then, you make an educated guess about what kind of visitors they are—some may be local and visit just for the day, others might come from outside the area for the day, and some might stay overnight. Each type of visitor spends different amounts. For example, local day users might only spend money on snacks or gas, while overnight visitors might also pay for hotels and meals. By estimating how much each group spends, and adding each groups spending together, you can calculate the total money brought into the community. This helps show how outdoor recreation supports local businesses and the economy.

Economic Models

Economic impact models help communities understand how visitor spending supports the local economy. Two well-known tools are IMPLAN and the National Park Service’s Money Generation Model (MGM2). These models estimate direct, indirect, and induced impacts.

• Direct impacts come from the actual money visitors spend, such as spending on food, lodging, or gear. Direct impacts usually make up the largest share of economic impact from tourism.
• Indirect impacts measure how local businesses buy goods and services from other local suppliers.
• Induced impacts reflect how workers spend their wages in the local economy.

IMPLAN and MGM2 can also estimate things like job creation and tax revenue. They use data to show how money spent by tourists on items like food, lodging, and shopping helps create jobs in the community. For example, if more people eat at local restaurants, more workers may be hired. These tools can also estimate how much tax money is generated from visitor spending, like sales tax or hotel tax, which can help support public infrastructure and services in the town.

The worksheet provided below focuses only on direct sales, which is the simplest and most useful starting point, and it doesn’t require complex modeling.

Spending Profiles

Spending profiles help show how much different types of visitors usually spend in a community. These amounts change depending on how far people travel and how long they stay. Here’s how the profiles typically break down:

• Local day users: These are people who live nearby and visit for a short time. They might spend $10 on small items like snacks, drinks, or ice cream.
• Non-local day users: These visitors might drive an hour or two to spend the day. They might spend $60 to $70 on things like gas, one or two meals, and maybe some shopping or entertainment.
• Overnight visitors: People who stay overnight usually spend the most. They pay for lodging, several meals, and other travel costs.

To get an accurate estimate of the total economic impact, we need:

• Total visitor counts for trails or recreation area
• Different spending profiles for each type of visitor
• An educated estimate of what percentage of visitors fall into each group

This helps give a clear and realistic picture of how outdoor recreation supports the local economy.

Types of Recreation Assets

When thinking about the economic impact of outdoor recreation, it's important to understand the difference between two types of trail systems or recreation assets:

• Tourism or Destination Trail System or Recreation Asset: These are places that attract visitors from outside the area. People might travel several hours or even plan a whole trip around visiting. Because of this, they tend to have a higher percentage of non-local and overnight visitors, which means more spending on things like gas, food, lodging, and gear.
• Primarily Locally-Serving Trail System or Recreation Asset: These are places mostly used by people who live nearby. They are often visited for shorter trips, like an afternoon walk or bike ride. These visitors are more likely to be local day users, who usually spend less during their visit.

Since we usually don’t have exact data about where every visitor comes from, we have to make an assumption about what percentage of users are local, non-local day visitors, and overnight visitors. This assumption is key to building accurate spending profiles and estimating the economic impact.