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4.0 REGIONAL STRATEGIES PROGRAM TOURISM EXPENDITllRE WORKSHEET One of the objectives of this research was to identify existing tools.for determining the economic impacts of transportation investments. During the preliminary survey of select DOTs and STOs one such economic approach was submitted by the Oregon Tourism Division. Although this approach is deficient in some areas, it is important to acknowledge state-level initiatives to link transportation and tourism.
REGIONAL STRATEGIES PROGRAM TOURISM EXPEIS!DITURE WORKSHEET FOR EVALUATION OF TOURISM RELATED SHORT LIST PROJECTS INTRODUCTION This procedure provides a standard means for assessing the economic benefits of most tourism-related regional strategy projects. The procedure was developed by Dean Runyan and Associates and revised slightly by the Regional Strategies Section. The procedure should be applied to each of the tourism-related projects in your ~ 987-89 biennium approved regional strategy as part of your "Strategy Assessment" and "Biannual Report". (See the Amendment of Approved Regional Strategies handbook for details on these reports.) It should also be applied to each project which is being proposed in your 1989-91 regional strategy amendment as part of the "Economic Impact Analysis" section of the handbook. The procedure is suitable for any project where on-site visitation can be measured, estimated or projected. Both proposed projects and projects which are at least partially completed can use this procedure. This procedure is not applicable to marketing projects, hospitality training programs or other programs which do not involve a facility, event or program amended by visitors. Call your Regional Coordinator for suggestions on how to assess the impact of these kinds of projects. The procedure consists of a worksheet which derives an estimate of the visitor expenditures associated with a project. Use one worksheet per project. Only direct visitor expenditures should be estimated using this worksheet. Indirect and multiplier effects will be calculated by Economic Development Department staff with support from the Employment Division. The Economic Development Department and the Employment Division will also estimate the direct and indirect jobs associated with these expenditure levels. Instructions for filling our the worksheet, plus several tables which provide useful figures, are included. 4-!
Please keep the following in mind . . This standardized procedure may fit some projects better than others. Try to represent each of your projects as accurately as possible and explain any deviations from the procedure which you make. If you have data for your area which deviates significantly from that which is provided and which you would like to use, reference and explain your sources for these figures. Projections which are made now will be used in the future to gauge project success and keep them realistic. 4-2
Regional Strategies Program Tourism Expenditure Worksheet Project: . Strategy. I. New Vlslton; Generated by the Project RS Funds: Number of Months in New Visitors New Visitors Your Visitor Season per Month per Year (1) ~) o) Peak Season: X . Ott Peal; Season: ); Total Year 19 Ii: Visitor Ache It Attributable to the Project Percent of Visitor Average Length of Visitor Hours per Day Attributable Stay at Projen Day in Recreation to Project Go) (1) (a) (3) Day Visitors: Overnight Visitors: III. Visitor Expenditures Assoclated with Me Project ~ of Visit Day Attri- Average Annual New Visitors butable Expenditure Ex~en Percent per Year to Project per Day ditures (1) ~) (33 (4) (O Day Visito s ~); ); - Overnight Visitors X Annual Total 1 00°~ I\'. Comparison to County Totes Total direct visitor expenditures in the county (1987) (1) Percent expansion attributable to this project (2) V. Return or Regional Strategies lovestment l Aspen ditur eslye ar/Regi on al Strategi es Fun ds (1 ) . Cor`~ue~ CJ~ back on .~
\l Assumpbo" e 11 11 .
WORKSHEET INSTRUCTIONS Enter the name of the project and name of the region. Enter the amount of Regional Strategies Funds that have been committed to the project, or the amount of Regional Strategies funding that is being requested. 1. NEW VISITORS ARE USERS GENERATED BY THE PROJECT (1 ~ Number of months in your visitor season. Fill in the number of months of your peak season on the first row, and the number of remaining months in the year on the second row. For a typical summer-oriented attraction, the peak season would be four months. The two numbers should total to 12. (2) New visitors per month. Estimate the number of new users or visitors which the project generates each month of the peak season (on average) and place this figure on the first row. Count all members of visitor parties, including children. For a new facility, this probably would be the number of users or visitors to the facility. For an improvement or expansion of an existing facility, this would be the new. additional visitors which the improvements would attract. If the typical visitor stays at the facility more than one day -- for example if the facility offers residential classes for students who stay a week or two -- then fill in the number of visitor-days, which equals the number of expected visitors times the average length of stay (in days) for each. Repeat the . process for the off-peak season and place this figure on the second row. If you know that your facility will attract a large proportion of local residents, you may want to compensate for this in your estimate of new visitors per month. If your facility is keeping these residents from traveling outside the local area for recreation, count them. Otherwise, adjust for focal use and count only those visitors which will travel to your attraction from outside the focal area. If you adjust for local use, indicate that you have done so in the "Assumptions" section of this worksheet. (3) New visitors per year. For each of the two rows, multiply the first two columns and place this figure in the third column; then total at the bohom. This is the volume of travel to the area which directly involves the project. The column total in 1~3) will be transferred to a location in the worksheet further below, as explained later in the instructions. 4-5
11. VISITOR ACTIVITY ATTRIBUTABLE TO THE PROJECT (1 ) Average length of stay at project. Enter the number of hours (on the average) which visitors stay at the project each day. If visitors to the area come just to visit the project, enter the same number as you use in the next column. (2) Visitor hours per day typically spent in recreation. For each of the two rows, enter the total number of hours per day in which visitors in your area typically participate in some form of recreation activity. In most instances, this would be between eight and twelve hours; day visitors typically would spend less than overnight visitors since they spend a portion of their clay traveling to and from the area. Be sure to take into account the number of visitors that are just passing through the area and factor than into your estimate for the length of stay of day visitors. If you do not know a specific figure for your area, use eight hours. (3) Percent of visitor day attributable to project. Compute this by dividing the figures in column (a) by those in column (2~. The resulting values should be no greater than 1.0, and for most projects would be between 0.2 and .05. A higher figure typically would be associated with a project which is largely responsible for most visitors' travel to the location and which occupies most of their stay. . . . . 111. VISITOR EXPENDITURES ASSOCIATED WITH THE PROJECT (1 ~ Percent distribution of day and overnight visitors. Show the percent distribution of these two categories of visitors for your area. For many locations in Oregon, the proport ons are about 50/50; if you have no data for your area, you should use these figures. (2) New visitors per year. insert the total from I(3) in each of the blanks. (3) Percent of visitor day attributable to project. The two figures here are transferred directly from Il(3~. (4) Average expenditure per day. Enter the average expenditure per person for the day and overnight visitors who visit the project. Include all of their daily expenditures, both on the project site and off-site. 4-6
For your reference, Table ~ shows the average daily expenditures from visitors to each of Oregon's regions; unless you have more specific and justifiable data available, use the appropriate figures from the table. Do not add on-site expenditures for your project to the figures provided. This will cause double counting of jobs and expenditures. (5) Annual expenditures. Multiply columns Aft, (2), (3) and (4) together to compute this amount; then total the two rows at the bohom of the column. The total represents the expenditures in the area which are ahribulable to visitors to the project. IV. COMPARISON TO COUNTY TOTALS (1 ~ Total visitor expenditures in the courtly. Enter the total expenditure by visitors in your courtly. These figures appear in Table Ill. (2) Percentage expansion ahribulable to the project. Calculate the percentage expansion which the project generates in the county by dividing the total project-related expenditures [~5~] by the total county travel-related expenditures [IV(1 hi. The more significant the project in the county the larger this number would be. If the percentage seems disproportionately large or small, reconsider your worksheet calculations. V. RETURN ON INVESTMENT (~) Tourism expenditures per year per Regional Strategies Funds investment. This is calculated by dividing the total tourism expenditure figure at the bosom of column Ill(5) by the Regional Strategies Fund request listed at the top of the worksheet. Vl. ASSUMPTIONS Describe the assumptions that you made in arriving at the information which you used in this model. Where did you get your data? Discuss your reasons for any deviation from data provided in the worksheet instructions and tables. Attach additional pages as necessary. 4-7
COMMENTS REGARDING VISITOR PATTERNS AND EXPENDITURES The following are some comments and suggestions for the use of the expenditure worksheet model. Base your visitor projections on the experience of comparable facilities or programs. Experience is the best guide. When estimating future attendance for a proposed facility or program, identify several comparable attractions as close to your location as possible, or attractions in a similarly sized community, and investigate their visitor patterns. How many visitors per year do they see? What is the breakdown by peak and non-peak months? Where do these visitors come from? How long do they stay at the attraction? Is the attraction a primary destination that draws visitors to the area, or one of several things which most visitors do while in the area? The answer to these and similar questions provide some of the best guidance for predicting the volume and characteristics of visitors which a new facility or program will attract. Use realistic demand estimates. Inflated statements about visitation or attendance can be embarrassing when, at a later time, you are asked to compare your actual performance with your predictions. Overblown forecasts can lead to unrealistic expectations and. when the oroiect or Droaram is underway, the perception that the project is a failure when in fact it is performing adequately. ---I-~ -my ~ r - -J- - - - - ~ - -- Adjust visitor expenditure levels, if necessary, to properly represent the types of visitors attracted. if your project or program specifically targets a particular type of visitor, e.g., a camper or a charter boat angler, use a per-day expenditure figure for that particular type of traveler if such information is available. 4-8
PRIORITIES AND LIMITATIONS This worksheet is intended to provide a basis for estimating the visitor expenditures associated with tourism-related regional strategy projects. This information is used to help predict and report job impact. In order to prepare a standardized framework such as this, a number of simplifying assumptions were made, resulting in certain limitations on the methodology. This section reviews the major assumptions and discusses the sensitivity of the impact projections to them. Net Economic Benefits Net economic benefits of a project -- consisting of visitor expenditure sand the associated employment -- are attributed to a project by measuring or projecting net new visitation for that project. The portion of a day which a visitor spends at the project is used to adjust the expenditure totals to represent the impact of just the project. This approach implies that a causal relationship exists: the project will lead to net new visitation, leading in {urn to expenditure and employment gains. If demand exists or can be generated in Oregon's primary travel markets, then the assumption is reasonable that facilities or programs will lead to additional visitor volume and the associated economic impacts. There may be some lag, however, before these economic benefits are felt. Substitution Effects Several factors can mitigate economic impacts of this type. First, a substitution effect can occur whereby visitation at the new project occurs at the expense of visitation at other attractions in the area. To the extent that this occurs, the net economic benefits are diminished; if there is complete substitution, there is no net benefit. In the short run, such substitution effects can be large. In the long run, assuming that the project significantly enhances the locality or region as a visitor attraction, overall visitation should increase, and substitution effects will diminish. - " ' '- " typically, 't Is very d~tt~cult to attribute long-range increases in visitor traffic to any particular attraction, facility or transportation change; one must assume that each significant project contributes its complementary share to an area's attractiveness. 4-9
Export Income This analysis considers all visitor expenditures to be economic benefits, irrespective of visitors' origin. Since only a portion of these visitors are from outside Oregon, only a portion of the economic benefits represent new, "export" income to the state. Most visitor expenditures do derive from outside the communities or counties in which the regional strategy projects are located and, therefore, represent new economic benefits from the perspective of these communities. If an attraction will receive a large proportion of local use, the estimate of new visitors may be adjusted accordingly, as described in i(2) of the instructions. This adjustment will help compensate for the distortion. Difficulty of Making Attendance Projections Making accurate estimates of future visitation for many new facilities or programs is difficult, particularly if there are no nearby comparable facilities or programs. In this situation, it is sometimes usefu'to make use of a range of estimates (e.g., a low, intermediate and high estimate), calculate impacts for each, an discuss the factors which influence the likelihood of each impact level. Danger of Relying Solely on the Expenditure Mode! for Economic Impact Information The expenditure mode! provides useful information, but should only be considered as one part of the total picture of a project's performance. Projects will have economic benefits which are not measured by this model. This mode! does not account for: a project's contribution to an improved quality of life in the region; the business development impact of visitors that later start a business or do business in Oregon; the educational value of a project; and other factors. When reporting on or describing projects, remember to describe as many of these factors as possible. Do not rely on the expenditure mode! and the resulting job impact information as the sole indicator of economic performance. 4-10
TABLE 1 AVERAGE DAILY VISITOR EXPENDITURES The following are average daily expenditures per person for travelers to the nine regions in Oregon. Separate figures are shown for day and for overnight visitors. The figure for each region represents the current mix of overnight visitors for that region (e.g. , the proportion of campers, hose! guests, those staying with friends and relatives, etc.), the mix of in-state and out-of-state travelers, and the typical activities for each area. This data is from the Oregon Tourism Division's ~ 988 study of Oregon travel and tourism, with the values adjusted to ~ 989. AVERAGE DAILY EXPENDITURES BY REGION, 1989 Region Expenditures* Day Overnight WilIamehe Valley $ 26 $ 37 North Coast 25 48 Central Coast 25 42 South Coast 25 41 Portland Area 26 53 Southern 30 43 Central 24 41 Northeast 28 38 Southeast 27 29 * Expenditures are in dollars per person per day. 4- ~ ~
TABLE 11 VISITOR ATTRACTIONS ATTENDANCE The following attendance figures are for those attractions in Oregon which responded to the survey distributed as part of the 1988 Oregon Tourism Division's study of travel and tourism, plus several additional facilities which did not respond to the survey but for which data was available in Dean Runyan and Associates files. These figures have not been confirmed by the facilities listed and should be considered estimates only. In addition, attendance during 1989 is up for a number of these facilities; check with those facilities in your area for current attendance levels. ATTENDANCE AT OREGON ATTRACTIONS, 1988 Attraction 1988 Attendance Albany Regional Museum Bandon Historical Society Butte Creek Mill Canby Depot Museum Caples House Museum Cascade Locks Historical Museum CastIe/Flippen House Center for Art & Ecology Children's Museum Columbia River Maritime Museum Coos County Historical Museum Coos Art Museum Cottage Grove Historical Museum Crater Rock Museum Crater Lake National Park (1987) Crook County Historical Society Depot Museum Complex Douglas County Museum of History East Linn Museum Eastern Oregon Museum FaveIt Museum of West & Art Fort Stevens St. Park Military Museum Fort CIatsop National Memorial Fraizer Farmstead Museum Grants Pass Museum of Art Gresham Historical Society HarIow House Museum Harney County Historical Museum 4-12 3,500 6,315 35,000 253 600 9,652 2,400 700 105,400 89,943 6,220 15,000 2,000 1,200 480,000 3,430 1,650 25,000 4,000 3,000 7,204 180,000 201,000 2,000 1 0,000 500 900 1 787
High Desert Museum Hoover-Minthorn House Museum Homer Museum Jefferson County Museum Junction City Historical Society Kam Wah Chung Museum Klamath County Museum Lane County Historical Museum LincoIn County Historical Society Museums Mark O. Hatfield Marien Science Center McLaughlin House Mission Mill Museum MolalIa Area Historical Society Oregon Cabaret Theater Oregon Trail Regional Museum Oregon Shakespeare Festival Oregon Maritime Center & Museum Original Wasco Co. Courthouse Pau'densen Arctic Museum PendIeton Woolen Mills Pitiock Mansion Portland Art Museum Prehistoric Gardens Rogue Gallery Schminck Memorial Museum Schneider Museum of Art Sea Lion Caves Silka South Slough National Estuarine Reserve Southern Oregon Historical Society Springfield Museum Storefront Theater Tillamook Cheese TroutUale Rail Depot Museum UmatilIa County Historical Society Museum University of Oregon Museum of Art Wallowa County Museum Washington Park Zoo Washington County Museum Wildlife Safari WilIamede Science & Technology Center Woobville Museum Inc. World Forestry Center 4-13 99,210 1,600 42,500 300 267 2,716 14,800 ~ 5,992 13,501 371,000 12,000 14,018 356 1 0,000 9,527 342,000 3,000 3,944 9,000 15,000 65,000 150,000 50,000 600 700 20,000 250,000 15,000 135,000 6,000 48,000 683,312 400 3,297 48,400 11,000 987,Q23 4,000 172,000 80,000 4,000 39,104
TABLE 111 VISITOR EXPENDITURES BY COUNTY, 1987* COUNTY TRAVEL EXPENDITURES BAKER BENTON CLACKAMAS CLATSOP COLUMBIA COOS CROOK CURRY DESCHUTES DOUGLAS (EAST) DOUGLAS (WEST) GILLIAM GRANT HARNEY HOOD RIVER JACKSON JEFFERSON JOSEPHINE KLAMATH LAKE LANE (EAST) LANE (WEST) LINCOLN LINN MALHEUR MARION MORROW MULTNOMAH POLK SHERMAN tlLLAMOOK UMATILLA UNION WALLOWA WASCO WASHINGTON WHEELER YAMHILL TOTAL $ 18,287,000 23,216,O00 120,351,000 107,612,000 12,554,000 29,936,000 5,543,000 36,387,000 97,737,000 38,603,000 12,874,000 768,000 7,822,000 6,932,000 15,295,000 84,131,000 14,370,000 27,944,000 38,110,000 7,087,000 154,917,000 21,975,000 151,353,000 27,173,000 14,390,000 65,600,000 4,403,000 383,866,000 8,820,000 4,442,000 38,404,000 21,291,000 14,712,000 6,910,000 21,370,000 128,217,000 768,000 21,445,000 $1,795,615,000 * Source: The Economic Impact of Travel In Oregon (1989) prepared for Oregon Tourism Division by Dean Runyan and Associates, Portland, Oregon. 4-14
