ECONOMIC IMPACT OF A BIRDING FESTIVAL

Transcription

1 Festival MafUlgemen/ & Event Tourism, Vol. 5, pp Printed in the USA. All rights reserved /98 $ Copyright 1998 Cognizant Comm. Corp. ECONOMIC IMPACT OF A BIRDING FESTIVAL CHULWON KIM,*' DAVID SCOIT,* JOHN F. THIGPEN,t and SEONG-SEOP KlM* *Department of Recreation, Park and Tourism Sciences, Texas A&M University, College Station, TX tlnstitute for Coastal and Marine Resources, East Carolina University, Greenville, NC The purpose of this study is to determine the direct, indirect, and induced impact of a birding festival on a local economy. Nonresident visitors to the 7th Annual HummerlBird Celebration (September 7-10, 1995) in RockportlFulton region, Texas, spent over $1.1 miliion. Substantial economic impacts were also realized in terms of total gross output, employee compensation, and employment. The results indicate that spending among nonresident visitors contributed about $2.5 miliion in total gross output in the local community. In addition, it contributed about $0.8 million in personal income and also contributed about 73 full-time and/or part-time jobs to the local community. By documenting the direct, indirect, and induced impacts of birding festivals, event organizers and community leaders may be in a beller position to create interest in preserving natural resources and birding habitats. This study will provide event organizers and community leaders with microeconomic data, which may be useful for their investment decisions related to future birding festivals. Birding festivals Economic impact HummerlBird Celebration Multiplier Festivals can be essentially community-based endeavors (Heenan, 1978), organized for a variety of reasons, "inc1uding enhancing or preserving local culture and history, providing local recreation and leisure opportunities, and enhancing the local tourism industry" (Long & Perdue, 1990, p. 10). Festivals enhance the tourist appeal of a destination, which, potentially, have a considerable economic impact on the surrounding region (Frisby & Getz, 1989; Uysal & Gitelson, 1994; Zeppel, 1992). Birding festivals have sprouted up across the country. In 1996 at least 23 states and provinces held birding festivals. Texas alone has eight annual birding festivals. Many birding festivals are popular tourist events, attracting thousands of visitors annually. Unlike many other festivals, birding festivals thrive, in part, on the health of local ecosystems and flora and fauna. Indeed, local residents and festival organizers are keenly aware that the success of their festival is dependent on their ability to protect and preserve habitats and birds. This growing interest in nonconsumptive wildlife activity offers an outstanding opportunity for wildlife managers, community leaders, and festival organizers to pursue various benefits through nonconsumptive use of wildlife resources in regions with exceptional wildlife resources (Boxwall & McFarlane, 1993; Kellert, 1985; Kellert & Brown, 1985; Vickerman, 1988). From the community's perspective, a birding festival can be a way of gathering support and interest for protecting natural areas and obtaining economic benefits by utilizing wildlife resources (Hvene- 'Address correspondence 10 Chulwon Kim, Depanment of Recreation. Park and Tourism Sciences, Texas A&M University, 354 Francis Hall, College Station, TX Tel: (409) ; Ckim@rpts.tamu.edu 51

2 52 KIM ET AL. gaard, Butler. & Krystofiak. 1989; Kerlinger '!' Wiedner, 1994). Because birding generally occurs In rural areas, birders' expenditures on lodging, food, equipment. souvenirs, films. and guide services may provide a primary source of revenue for these communities (Eubanks. Kerlinger. & Payne. 1993; Kerlinger & Wiedner. 1994; Wiedner & Kerlinger, 1990). According to the National Survey of Fishing, Hunting, and Wildlife-Associated Recreation (U.S,. Dep~ments of the Interior and Commerce, 1993), birders In the US spent approximately $7 biliion on birding trips in Food and lodging accounted for about $4.1 billion. transportation expenses were about $2.6 billion, and other trips costs. such as land use fees and equipment rental. were about $421 million for ~he year. They also spent about $30 I milli~n on magazmes.and about $697 million on membership dues and contnbutions for the year. In a survey of Texas members of the American Birding Association (ABA), Texas members and Texas Ornithological Society members. Leifester and Adams (1994) found that birders spent an average of $3,357 per year on birding. Although birders' expenditures are significant. only a few studies have focused on the economic importance of birding and birding tourism to local areas (Hvenegaard et al ; Kerlinger & Wiedner. 1994; Wiedner & Kerlinger. 1990). When the economic contributions of birding tourism are examined, the existing approach is to simply multiply total number of birders by their average expenditures to generate total benefits. However. birders. especially nonresident birders. spend time and money in the local community. purchasing retail goods. services, eating, and lodging, and thus affect local economic structures. Nonresident birders' expenditures can be likened to the ripples made in a pool if more water is poured (Archer. 1973). The pool represents the given local economy structure and the added water reflects expenditures by nonresident birders... The purpose of this study is to determme the direct. indirect, and induced impact of a birding festival on a local economy. In order to illustrate the importance of protecting natural areas and obtaining economic benefits by utilizing wildlife resources, local communities and recreation managers need to know how much of nonresidents' trip-related expenditures impact local economies. This study will provide policymakers with microeconomic data. which may be useful for their investment decisions related to future birding festivals. Previous Studies Participation in birdwatching (or simply birding) doubled between 1965 and 1983 (Kelly, 1987). The U.S. Fish and Wildlife Service estimated that more than 76 million people were involved with wildliferelated recreational activities (Eubanks et al ). According t~ Murdock, Backman, Hoque, and Ellis ( 1991). the net number of participants in bird watching is estimated to increase to 101 million by A handful of studies have examined the economics of birding. According to Hvenegaard et al. (1989), birders' trips to Point Pelee National Park in Ontario. Canada resulted in total expenditures of $3.8 million during the month of May involving nearly 20,000 individual bird watchers. Their dollars were mainly spent on travel (27.2% of total expenditures), food (26.3%), and accommodations (22.5%). Considering an additional $506,000 (13.4%) of annual expenditures for birding equipment, which could be attributed to May birding trips, the birders spent an average of $224 on their trips to Point Pelee in May. According to Kerlinger and Wiedner ( 1994), more than 100,000 birders annually visited Cape May, NJ and spent over $10 million in During the spring of 1992 (April and May), about 6000 birders traveled to the High Island region in Texas, which is among the best-known avitourism destinations in the US. and spent over $2.5 million in lodging and other travel-related activities (Eubanks et ai., 1993; Kellert & Wiedner, 1994). The above studies show that birders have greatly contributed to local economies. However, previous studies simply estimate total number of participants and multiply this number by the estimated average expenditures for a given event in order to gene~ate estimated total expenditures. The benefits of blrdwatching are probably underestimated as a contributor to the local economies (Vickerman, 1988). Few attempts appear to have been made to apply an economic multiplier to calculate the spillover effect from birders' expenditures. Moreover, we are not aware of any studies that have examined the economic impacts of birding festivals. Methods Data were collected in September, 1995 at the Seventh Annual HummerlBird Celebration held in

3 ECONOMIC IMPACT OF BIRDING FESTIVAL 53 Rockport, TX. The region is an internationally renowned bird-watching site and over 500 different species have been recorded there. The 4-day festival is named after the hummingbirds that migrate through the area. Festival organizers reported that the 1995 event attracted approximately 4500 visitors. This estimate is fairly accurate as participants were to have signed a registration list upon arrival. Festival organizers compiled a list of 4000 participants. These individuals participated in workshops, seminars, and field trips led by expert birders, including the late Roger Tory Peterson, America's most famous birder. Festival organizers estimated that an additional 500 people attended the event but did not sign the registration list. Organizers believe these individuals limited their participation primarily to self-guided tours. The sampling frame for the study consisted of 831 participants who were randomly selected from the registration list. It is important to note that the list was an incomplete sampling frame of all those who attended the festival. However, festival organizers believed that visitors on the list and visitors not on the list did not differ significantly in behavior during the event. Hence, individuals on the sample frame was assumed to accurately reflect the spending patterns of those not on the list. The survey design was essentially a modified Dillman's (1978) method comprised of (I) preliminary notification, (2) sending out of the survey (first wave), (3) sending out of a postcard reminder, and (4) sending out of a replacement survey (second wave). Preliminary notification was designed to notify potential respondents of the purpose of this study, the survey schedule, and the need for their assistance. It included an incentive promise of a raffle in which respondents could win a prize. One week after preliminary notification, a first mailing was sent, which included a self-addressed, postage-paid envelope and a cover letter with each questionnaire. One week later, postcard reminders were sent to those individuals who had not returned a completed questionnaire. Two weeks after sending postcard reminders, new questionnaires, postage-paid return envelopes, and cover letters were sent to those who still had not returned completed questionnaires. Twenty-six surveys were returned with duplicate or wrong addresses. Thus, the effective sample size was 805. Of this, 517 usable surveys were returned, amounting to a 64.2% response rate. Questions were included on the survey pertaining to trip-related expenses incurred by festival attendees while they stayed in the RockportlFulton region. Ex.. penditure categories included lodging, meals, gasoline and auto expenses, groceries, shopping except groceries, entrance fees/admissions, and other expenses. It was assumed that expenditures on car rentals and airplane flights did not affect the local economy because these purchases were likely to be made outside Aransas County. Hence, these products were likely to benefit businesses and individuals outside the region. The distinction between resident and nonresident visitors was made by zip code information in the questionnaire. The distinction between resident and nonresident visitors is important because the expenditures of nonresident visitors represent an influx of outside money to the local economy. Expenditures by local visitors, on the other hand, represent circulation of money that is already in the local economy rather than an inflow of outside money. Economic impacts on local communities by nonresident birders were estimated using the Micro- IMPLAN model by U.S. Forest Service, which is a data base and software system that simulates the effects of economic activity in a region from changes in the final demand for goods and services (Cordell & Bergstrom, 1992). Micro-IMPLAN is a microcomputer program that performs regional input-output (1-0) accounts and models. An 1-0 model was established by the program for Aransas County in Texas using secondary data. Primary expenditure data from this study were input into the model. Expenditures in Aransas County by nonresident birders to the HummerlBird Celebration translated into increases in the final demand for goods and services produced by local firms and lodging facilities in Aransas County, TX. In order to estimate the economic impacts of nonresident birders' expenditures, it was necessary to allocate these expenditures across the IMPLAN sectors represented in Aransas County, Texas 1-0 model. For this analysis, a 1993 Input- Output Table of Aransas County was used, which shows the flow of commodities and services from each of the relevant producing sectors to all consuming sectors and final demand. Once the 1-0 modeling was complete, it was possible to measure the direct, indirect, and induced effect of any change in final demand on the levels of output, personal income, and employment.

4 54 KIM ET AL. Visitors' expenditures become business receipts that, in turn, are used to pay wages and taxes, which represents the direct personal income and valueadded impacts of the hirding festival. In addition to these primary effects.' there are secondary effects of birding festival. Business establishments spend part of their receipts on goods and services they need to serve birders. In turn. their suppliers must purchase certain items from firms outside of the local community. In this case. money spent on these goods and services leaks out of the local economy. These local firms then spend some of their receipts locally and some outside the local economy. As this chain continues in an area, income and employment are produced indirectly. The other type of secondary effects is induced. Induced effects represent the spending that occurs because part of the increase in business revenue is used to pay wages to employees in the industry. The amount employees spend on local goods and services causes tlie induced effect. The respending effect associated with nonresident birders' expenditures is known as the multiplier effect. Three multipliers were calculated to assess the economic impact of the birding festival: output, personal income, and employment multipliers. Results The demographic profile of respondents is shown in Table I. The birding festival attracted 4500 birders in Respondents were disproportionately female (77(1/(1).over 45 years of age (73%), and graduates of high school (97%). Forty-seven percent of respondents reported annual household income of $ or more. Table 2 indicates that the average expenditure per birder was $ Because the number of attendees was 4500, the total expenditure of birders staying in Aransas County was $1.27 million during the 4-day event. Both of these total expenditure amounts exceed comparable figures for the 1994 Hummer/Bird Celebration. According to the Rockport Chamber of Commerce, the 1994 festival attracted 3300 visitors, who spent well over $1 million (Texas Parks and Wildlife Department, 1996). It is important to note that 71 % of birders to the 1995 Hummer/Bird Celebration were nonresidents. This percentage is derived from zip code information provided by survey respondents. The economic impact of Hummer/Bird Celebration should be calculated only in terms of nonresidents. The average expenditure per nonresident birder was $ and the total amount of nonresident expenditures was approximately $1.1 million (Table 2). Table 3 shows that among nonresident birders, lodging accounted for $3 I6.000, meals in restaurants accounted for $238,000, auto expenses accounted for $119,000, groceries accounted for $47,000, general shopping accounted for $279,000, admission fees accounted for $74,000, and other expenses accounted for $29,000. These totals were calculated by taking the product of the number of nonresident birders and the average expenditure per item. Table 4 shows that the output multiplier for Aransas County associated with the final demand change, resulting from nonresident birders' expenditures, was 2.28, which means that for each dollar of output produced by the birding festival, $ 1.28 worth of indirect and induced output is generated in other local sectors. This output multiplier of 2.28 is reasonable as evidence from a study by Walsh (1984) suggests that regional multipliers typically average 2.0 and ranged generally between 1.5 and 2_5 in the US. Thus, the economic impact in terms of output in Aransas County attributed to the festival was approximately $2.5 million. The approximate impacts, by expenditure sectors, are as follows: $704,000 was contributed by lodging, $512,000 hy meals in restaurants, $675,000 by shopping, $19\,000 by auto expenses and gasoline, $102,000 by groceries, $252,000 by entrance fees, and $81,000 by other expenses. Table 5 summarizes the multipliers of personal income related to the employee compensation generated from the production of $1.00 worth of final demand. Employee compensation is the total cost of wages, salaries. and benefits paid by local business establishments. This table indicates that direct employee compensation stemming from the Hummer/ Bird Celebration is approximately $392,000 whereas (he total economic effect on personal income is about $809,000. Lodging contributed the most to this total ($250,000), followed, in order, by shopping ($2] 8,0(0), meals in restaurants ($174,000), entrance fees ($73,000), groceries ($42,000), auto expenses and gasoline ($33,000), and other items ($ I8,000).

5 ECONOMIC IMPACT OF BIRDING FESTIVAL 55 Table I Sociodemographic Characteristics of Respondents n Percent (%) Gender Male Female Age Under Over Educational level Under high school graduate Some college College graduate Graduate degree Annual household income Under $ $ $ $50,000 or more Table 2 Expenditure per Birder Resident Nonresident Total Mean expenditure Visitors (n) Percentage Total expenditures $ % $174,465 $ % $ $ % $ Table 6 summarizes the direct, indirect, and induced effects of expenditures on employment in Aransas County. The total employment multiplier was 1.68, which means that for each job created directly by the birding festival, 0.68 jobs would be created indirectly in the economic structure of the Aransas County. Table 6 shows that for the $1.1 million spent on lodging, restaurant, food and groceries, entrance fees, and gasoline and auto expense by nonresident birders to the Hummer/Bird Celebration, about 73 full-time and part-time jobs would be created in Aransas County. It is important to note that employment is defined in terms of total number of jobs, fulland part-time, and not in terms of full-time equiva- Table 3 Expenditures Among Nonresident Birders Total Mean Expenditure Percent of Items Expenditure ($) per Birder ($) Spending on Item Lodging 316, '70 Meals in restaurant 237, '70 Auto expenses % Groceries % Shopping <;, Entrance fees 74, % Other <;0 Total <;<

6 56 KIM ET AL. Table 4 Expenditures and Output Multipliers ExpemJilUre Direct Indirect Induced Total hems ($) ($) ($) ($) ($) Muhipliers Lodging > '1 Meals in restauranl , ~ AUIO expenses 11~,91~ 11~.91~ ,45~ Groceries , Shopping 27~ ~ , Entrance fees 74, , Other 29.1)42 29, ~O.5~ ~ TIIlal 1.102,O~ ,OlB ~ ~43 Table 5 Expenditures and Personal Income Multipliers Expendilure Direct Indirecl Induced TOIal Ilems ($) ($) ($) ($) ($) Multipliers LmJging. 316, , , Meals in reslaurant Auto expenses ~ Groceries 46, Shopping 2711, l!.25~ Entrance fees 74, , Other , Total 1.I02,0~ , ,347 80~, \ lents (FfE). In general, it is not possible to estimate full-time equivalent jobs by the given data in the 1- a model. According to Crandall, Leones, and Colby (1992), using national ratios of all full- and part-time employment to FfE by industry, FfE is approximately 85% lower than employment figures provided in the community as a result of the visitors' expenditures. Thus, this study estimated that the Hummer/ Bird Celebration would produce about 61 full-time equivalent jobs (FTE) in Aransas County, Discussion Nonresident visitors to the 7th Annual Hummer/ Bird Celebration spent over $1.1 million. Lodging constituted the largest portion of this total (29%), fol- Table 6 Expenditures and Employment Multipliers Expenditure Direct Indirect Induced Total hems ($) (II) (II) (II) (II) Muhipliers Lodging Meals in restaurant Auto expenses 11~ Groceries 46,679 1.~ Shopping Enlrance fees 74, Other Total

7 ECONOMIC IMPACT OF BIRDING FESTIVAL 57 lowed, in order, by shopping (25%), meals (22%), auto expenses and gasoline (II %), entrance fees (7%), groceries (4%), and other expenditures (2%). Additional economic impacts to Aransas County were estimated by considering the indirect and induced effects of visitors' expenditures. These impacts include changes in total gross output, personal income, and employment. The results indicate that spending among nonresident visitors contributed about $2.5 million in tota] gross output in Aransas County, showing an output multiplier of In addition, nonresident visitors' expenditures contributed about $0.8 million in personal income; the personal income multiplier was 2.0. Nonresident visitors' spending also contributed about 73 full- and part-time jobs to Aransas County's economy, showing an employment multiplier of ].68. The output multiplier observed in this study was These are similar to those observed in studies of other recreationists. Chappelle (1985) reported output multipliers between 1.6 and 2.7 across several studies he reviewed. Walsh (1984) found that regional output multipliers typically average 2.0 and ranged generally between 1.5 and 2.5 in the US. The consistency of multiplier found in this study with those reported in other studies suggests that Micro-IMPLAN inputoutput models may be an effective strategy for estimating the economic impacts of birding festivals to regional economies. This study, as most, has limitations and weaknesses. First, a business survey was not conducted, which would help in improving the validity and reliability in the secondary data of Micro-IMPLAN inputoutput model for sectors directly influenced by the HummerIBird Celebration. Second, this study did not take into account money that is likely to have leaked out of the local economy. Of particular relevance here is optical equipment and artwork sold by nonresident festival vendors. Third, "time-switchers" and "casuals" were not considered in the measurement of visitors' expenditures. Some nonresident visitors may have intended to visit the RockportlFulton area for a long time, but switched the timing of their visit to correspond with the 7th Annual Hummer/Bird Celebration. Similarly, some visitors already may have been in the community, attracted by some other purpose, and chose to go to the birding festival instead of doing something else. Ex.penditures by timeswitchers and casuals would have occurred in RockportlFulton area regardless of whether or not the HummerIBird Celebration had been conducted (Howard & Crompton, 1995). Withstanding these limitations, it is important to note that the HummerIBird Celebration has grown markedly since its inception in Many visitors return annually and the festival is becoming widely known among hummingbird enthusiasts and birders in general. Both the growth and economic impact of the event should provide festival organizers and business establishments an incentive to improve service delivery. Lack of manpower and service quality, for example, may lead to dissatisfied visitors in the future. Moreover, the festival is increasingly becoming an integral segment of the nature-based tourism industry in the region. As such, the festival is likely to become an image-builder for newcomers (Getz, 1991) and an essential component in the future marketing of the region. Other communities and conversation groups may also benefit from this study. A birding festival can be seen as an expression of the social norms and values of the community (Chacko & Schaffer, 1993). Like any other festival, a birding festival usually starts out as a small community event whereby local residents and neighbors celebrate the area's natural heritage, resources, and/or culture. As the festival grows, it is likely to attract visitors and dollars from outside the region. In the case of large events, such as the HummerIBird Celebration, the expenditures among nonresidents may be considerable. By documenting the direct, indirect, and induced impacts of birding festivals, event organizers and community leaders may be in a better position to promote the preservation of the natural resources and birding habitats. In sum, it is possible that birding festivals can minimize the negative impacts of tourism, contribute to sustainable development, and help preserve sensitive natural areas (Uysal & Gitelson, 1994). References Archer. B. H. (1973). Impact (~f domestic tourism. Bangor: University of Wales Press. Boxal1. P. C., & McFarlane. B. L. (1993). Human dimensions of Christmas bird counts: Implications for nonconsumptive wildlife recreation programs. Wildlife Society Bulletill, 2/ Chacko, C.. & Schaffer, J. D. (1993). The evolution of a fcsti-

8 58 KIM ET AL. val Creole Christmas in New Orleans. Tourism Management, /4(4}, Chappelle, D. E. (1985). Strategies for developing multipliers useful in assessing ewnomic impacts of recreation and tourism. Asheville. NC: Southeastern Forest Experiment Station. Cordell, H. K" & Bergstrom, J. C. (l992). Economic growth and interdependence effects of State Park Visitation in local and state economies. Journal of Leisure Research, 24(3}, Crandall, K., Leones, J., & Colby, B. G. (1992). Nature-based tourism and the economy of southeastern Arizona: Economic impacts of visiultion to Ramsey Canyon Preserve and the San Pedro Riparian National Conservation Area. The University of Arizona. Dillman, D. A. (1978). Mail and telephone surveys: The tolal design methods. New York: John Wiley & Sons. Eubanks, T., Kerlinger, P., & Payne, R. H. (1993). High island, Texas. Birding. 25, Frisby, W., & Getz, D. (1989). Festival management: A case study perspective. Journal of Travel Research, 28( I}, Getz, D. (I991). Festivals, special events, and tourism. New York: Van Nostrand Reinhold. Heenan, D. A. (1978). Tourism and the community: A drama in three acts. Joumal of Travel Research, /6(4}, Howard, D. R., & Cromplon, J. L. (1995). Financing sport. Fitness Information Technology, Inc. Hvenegaard, G. T., Butler, J. R., & Kryslofiak, D. K. (1989). Economic values of bird watching at Point Pelee national park, Canada. Wildlife Society Bulletin. 17, Kellert, S. R. (1985). Birdwatching in American Society. Leisure Sciences, 7(3}, Kellert, S. R., & Brown, P. 1. (1985). Human dimensions' information in wildlife management, policy, and planning. Leisure Sciences. 7(3}, Kelly, 1. R. (1987). Recreation trends towards the year Champaign, IL: University of Illinois Management leaming Laboratories. Kerlinger, P., & Wiedner, D. S. (1994, November). America's favorite birding sites. Bird Watcher's Digest, leifester, J. A., & Adams, C. E. (l994). A comparative.\'iudy of Texas birders and waterfowl hunters. College Station, TX: Texas A&M University, Agricultural Experiment Station. Long, P. T., & Perdue, R. R. (1990). The economic impacts of rural festivals and special events: Assessing the spatial distribution of expenditures. Joumal of Travel Research, 28(4}, Murdock, S. H., Backman, K., Hoque, M. N., & Ellis, D. (l991). The implications of change in population size and composition on future participation in outdoor recreational activities. Joumal of Leisure Research, 23(3), Texas Parks and Wildlife Department. (I 996}. Making nature your business. Austin, TX: Author. U.S. Department of the Interior, Fish and Wildlife Service, & U.S. Department of Commerce, Bureau of the Census. (1993). /991 national survey offishing, hunting, and wildlife-associated recreation. Washinglon, DC: U.S. Government Printing Office. Uysal, M., & Gitelson, R. (1994). Assessment of economic impacts: Festivals and special events. Festival Management & Evelll Tourism, 2, 3-9. Vickerman, S. (1988). Stimulating tourism and economic growth by featuring new wildlife recreation opportunities. Paper presented at the Fifty-third North American Wildlife and Natural Resources Conference, Washington. DC. Walsh, R. G. (1984). Recreation economic decisions. Ft. Collins, CO: Department of Agriculture and Natural Resource Economics, Colorado State University. Wiedner, D. S., & Kerlinger, P. (1990). Economics of birding: A national survey of active birders. American Birds, 44(2}, Zeppel, H. (1992). Case study: The festival of pacific arts: An emerging special interest tourism event. In B. Weiler & C. M. Hall (Ed.), Special interest tourism (pp ). London: Belhaven Press.