Outdoor Recreation Spurs Local Economic Growth, But…

30 May

Two years ago, the Outdoor Industry Association released a report estimating the national economic impact of the outdoor industry at $887 billion a year. That number has since become a sort of gospel for people looking to push pro-public lands policies across the finish line and invest in recreation economies at a local level around the country.

But what that number didn’t capture was the direct impact recreation has on the local growth of mountain towns and similar outdoor-oriented communities. A new report from Headwaters Economics, a Bozeman-based nonprofit research group, does just that. The report found that a county with recreation attracts more new residents, higher incomes, and faster earnings growth than a county without recreation, particularly for areas designated as rural (less than 10,000 residents) and micropolitan (less than 50,000 residents).

“We already knew that having outdoor recreation nearby brings tourists to your community,” says Megan Lawson, an economist at Headwaters and author of the study. “But what we didn’t have great information on was whether that tourist and those amenities translate into people actually wanting to move to and live in these communities.”

Lawson looked at each county in the U.S. that the Department of Agriculture’s Economic Research Service designated as a “recreation county”—meaning that the local economy is primarily dependent on entertainment and recreation, as well as the associated hospitality industry—and found that while many tourism-dependent communities are known for their low-paying service jobs, the people moving there tend to be wealthier. And though recreation county wages are lower on average, they are growing at a pace that will soon meet or exceed the wages of non-recreation counties. Places with recreation are seeing a steady trickle of people moving in rather than moving away—something particularly significant for rural America, which is losing more residents than it is gaining.

“Outdoor recreation is being seen as a legitimate economic development strategy,” says Lawson. “It’s not just ski bums and dirt bags any more that are the face of an outdoor recreation economy. It’s the entrepreneurs that are moving to a community, bringing their families and their businesses.”

But this influx of higher incomes and wealthier residents is not without its challenges, as any member of the workforce in Bozeman, Truckee, Jackson, Crested Butte, or any other mountain town could tell you.

Rapid growth in many recreation communities means a higher cost of living, affordable housing challenges, and development encroaching into wildfire-prone and other vulnerable landscapes. If we aren’t careful, the report warns, these risks could outstrip the benefits of a growing recreation-based economy.

“The local government has to play an active role in countering that. It’s not something that will just fix itself,” says Stacy Corless, commissioner for California's Mono County, home to Mammoth.

That can take many forms—from paying for basic needs and services to making high speed internet available to accelerating innovative housing solutions for a town’s workforce. And on top of all that, local governments in outdoor destinations are often the ones who step in to invest in recreation infrastructure when no one else can.

“What we’ve come to recognize is that we need the recreational amenities of our public lands to be in good shape, for our own quality of life, for our communities, but also for our recreation and tourism-based economies,” says Corless. This includes “really basic things like making sure bathrooms get opened in time for the annual fishing season opener. The Forest Service is only budgeted to start doing that stuff on Memorial Day, so we cover the cost and we have our contractor go in and open the bathrooms, clean the bathrooms, and empty trash dumpsters. And I think things like that happen all over the west in rural counties.”

Despite the tradeoffs and active role local governments would have to play to both support and grow and then ultimately deal with the cons associated with recreation economies, the findings from Headwaters Economics show that investing in this kind of recreation infrastructure could be a game changer for many communities.

“There are definitely communities that are looking at recreation, and they want to have those problems associated with too many people moving to town,” says Lawson. “It’s important to recognize that recreation is not a silver bullet for every place. It’s not the case where you build a trail, people will come, the rivers will flow with milk and honey and all of our problems will be solved. It’s one option in the toolbox. But for some places, it might be a good fit.”

States: Want an Outdoor Rec Economy? Pay Up

9 Aug

Since Utah established the country’s first state office of outdoor recreation five years ago, the idea has spread rapidly. Colorado and Washington opened offices in 2015; in 2016, three more states started offices or initiatives dedicated to promoting outdoor recreation. Last year, the number nearly doubled, bringing the total to 11.

This rush of activity indicates that state governments have come around to the idea that outdoor recreation is a significant driver of economic activity that also offers other important environmental and social benefits. Until relatively recently, most states gauged the value of federal public lands within their borders purely in terms of their viability for extractive industries like mining, logging, and oil drilling. But in recent years, thanks to a growing awareness of the consumer spending and state tax revenue associated with outdoor recreation, that attitude has begun to evolve. Now these new offices are looking to advance changes in policies to further support the sector.

While this is good news for the recreation industry, a report released last month by Utah State University’s Institute of Outdoor Recreation and Tourism suggests these offices are in dire need of more support  from outside the outdoor industry if they’re going to have an enduring impact.

“The offices of outdoor recreation represent a watershed moment in the recognition of outdoor recreation being a critical component of any state’s economy, livability, and public policy,” says Bob Ratcliffe, chief of conservation and outdoor recreation programs at the National Park Service (NPS), which commissioned the report. “My interest was to have a better understanding on what ingredients are emerging from these offices, identify their areas of focus, then determine how federal agencies can better align, collaborate, and support public land policy that helps achieve those goals.”

One standout finding in the report was that conversations about the outdoor recreation economy are increasingly commonplace among local, state, and federal politicians. Historically, government agencies haven’t factored in the revenue generated by activities like hiking and biking when assessing public lands. But recent efforts by the Outdoor Industry Association (OIA) and the federal Bureau of Economic Analysis (BEA) to estimate the size of the recreation economy have spurred a shift. The OIA put consumer recreation spending at $887 billion, while the BEA, which didn’t count apparel and equipment manufactured overseas, put it at $373 billion.

The increased dialogue and financial analyses have created momentum for the new state offices, but the report alludes that many of them are still too small or poorly funded to be as effective as they need to be. Some have just a single staff member, in some cases assisted by college interns. Small budgets limit the work of most of the offices, though funding in Maryland, Rhode Island, and Vermont is especially anemic.

Some state legislators have been hesitant to invest much in the offices because they view them as experiments. Another challenge is the fact that compared to top-of-mind voter concerns like jobs, health care, and infrastructure, supporting recreation can seem like a very low priority to policymakers. “Outdoor recreation doesn’t generally have a lot of crises on its own,” said one unnamed government employee quoted in the report. “Crises are what sometimes get money and attention.”

Another political challenge to the offices comes from the fact that they can be created by governors. According to the report, this can lead to an office being seen as an extension of a political agenda, and thus a target for elimination by the next administration. The report suggests that offices will benefit by remaining independent from political parties or executives.

The good news is that outdoor recreation is something both liberals and conservatives support, though often for different reasons. The offices in more progressive states like Oregon, Vermont, and Washington focus on conservation as an end goal to increased use of public lands. Other states, like Maryland, North Carolina, and Wyoming, tend to view recreation as revenue source first, with conservation as a potential side benefit.

Despite their current limitations, some offices have already won big victories. The Utah office successfully lobbied to secure a portion of revenue from hotel and motel taxes for projects like like boat ramps and trail construction in counties and cities.

In determining the offices’ impact, the report stresses that states shouldn’t limit their assessments to economics and the environment. In Rhode Island, for example, the recreation council’s primary goal was improving public health. (Rhode Island's office was a temporary test to study the feasibility and effectiveness of an recreation office, and the results are still being examined.) Recreation doesn’t “exist in a vacuum,” as one government employee was quoted saying in the report, so their impact shouldn’t be measured in one either.

“States that have already set up offices of outdoor recreation haven’t only seen economic benefits,” says Jordan W. Smith, one of the report’s authors and an assistant professor of environment and society at Utah State University. “They’ve also seen benefits to state transportation systems, health care, and people’s general quality of life.”

While it’s clear that all the states’ offices need a lot more resources if they’re going to be effective, the simple fact of their creation is a testament to a new attitude about outdoor recreation and the value of public lands. “For many years, outdoor recreation was really thought of as a byproduct of public lands,” Ratcliffe says, “not as a resource in its own right.”

These 5 States Spend the Most on the Outdoors

26 Jul

In April, the Outdoor Industry Association predicted that outdoor recreation in the United States is worth $887 billion and responsible for 7.6 million American jobs. On Wednesday, the trade group released individual reports that break down those numbers by state, with some surprising revelations.

Each state report reveals the impact of outdoor recreation on consumer spending, state and local tax revenue, and employment. This updates data released in 2012 and now includes 70 percent survey data, conducted by Southwick Associates, a market research, statistics, and economics firm. The 2017 reports also factor in more types of activities, like mountaineering and surfing. One big takeaway is that outdoor spending is on the rise throughout the country. And the industry’s influence is also on the rise—in Texas, for example, more direct jobs depend on outdoor recreation (411,000) than on the oil and gas industry (212,000).

“This latest study reiterates what an important economic driver the outdoor industry is for every state in our nation,” says Matt Powell, sports industry analyst at the NPD Group. “State and local governments should be working to leverage this important revenue growth vehicle.”

Here’s what we learned from the data.

The Top Spenders May Surprise You

Surprisingly, none of the states with a government office dedicated solely to outdoor recreation, like Colorado, were among the top five. Instead, population plays a huge role in establishing a state’s overall contribution to the outdoor economy.

  1. California generates $92 billion in annual consumer spending and $6.2 billion in state and local tax revenue.
  2. Florida generates $58.6 billion in annual consumer spending and $3.5 billion in state and local tax revenue.
  3. Texas generates $52.6 billion in annual consumer spending and $3.5 billion in state and local tax revenue.
  4. New York generates $41.8 billion in annual consumer spending and $3.6 billion in state and local tax revenue.
  5. Pennsylvania generates $29.1 billion in annual consumer spending and $1.9 billion in state and local tax revenue.

Adventure Hubs Employ the Most People

If you look at how many people are employed by the outdoor industry in each state, proportional to its overall population, the list gets a little less predictable. Densely populated states tend not to fare as well here, while the states that come out on top are those known for their outdoorsy draw. Still, count us surprised that New Hampshire made it into the top five while Colorado came in only at number 14.

  1. In Alaska, 9.7 percent of the population works in the outdoor industry.
  2. In Wyoming, 8.5 percent of the population works in the outdoor industry.
  3. In Vermont, 8.2 percent of the population works in the outdoor industry.
  4. In Montana, 6.8 percent of the population works in the outdoor industry.
  5. In New Hampshire, 5.9 percent of the population works in the outdoor industry.

All the Recreationists Are in the West, with One Exception

More than 50 percent of most states’ population considers themselves an outdoor recreationist. That percentage is highest in Alaska and Montana (both 81 percent) and lowest in New Jersey (the only state to dip below 50 percent, at 46 percent). Other top contenders:

  1. Alaska and Montana: 81 percent
  2. Idaho: 79 percent
  3. North Dakota: 76 percent
  4. Wyoming: 73 percent
  5. Utah, Vermont, and Washington: 70 percent

You can view each state’s entire report online. Thanks to the Outdoor REC Act, which passed last December, the Department of Commerce’s Bureau of Economic Analysis will release confirmed numbers on the outdoor industry’s overall impact on the U.S. economy in 2018.