America's Byways® Resource Center

Economic Impact

Articles

Economic Impact: Developing Economic Indicators- An "Idea-Book"

Numbers Count!
While the economic benefits of scenic byways are widely accepted, quantifiable measures of this impact are not widely available. In an era of intense scrutiny of Federal, State and local government spending, the ability to justify economic benefits arising from scenic byways investments and promotion becomes increasingly important.

Additional studies by respected organizations of the economic impact of byways will certainly occur, yielding new data that will be of value regionally and even nationally. Yet, more focused steps to assess this impact can and should proceed across the nation—and immediately. Local studies can, in fact, help build the local support needed for a successful scenic byways program.

To assist local studies of the economic impact of byways, the American Recreation Coalition has spearheaded the development of this “Idea-Book,” describing a range of techniques that can be used on a community or regional level. Many of the methodologies have actually been utilized, though not necessarily for byways purposes. The data can be used in testimony before local, State and Federal legislative bodies, in scenic byway and enhancement grant applications, in meetings with local businesses and in articles explaining the importance of byways to the public.

Getting Started
There are several important considerations as byways advocates develop economic indicators. First, documenting positive change is especially important, making baseline data crucial. The case to be made for byways is that their designation, management for intrinsic qualities, protection and promotion yields benefits to host communities, not just to those traveling through the byways corridor. Some of the methodologies described in this booklet allow the development of baseline data from existing statistics. Other programs involve starting the collection of data now to allow the reporting of changes in Year Two and beyond. The latter methodologies are especially appropriate for new byways.

The second consideration is the need to remain objective and accurate. Claims based on inaccurate data will likely backfire as others review the information. Remember, lowered credibility carries a lasting price.

The third consideration is the way economic indicators are brought to the public’s attention. Who delivers the message and the visual nature of the presentation are critical to news media pick-up. With the advent of simple-to-use graphics packages for personal computers—some an integral part of new versions of popular word processing programs such as WordPerfect and Word—there is no excuse not to showcase your findings graphically; avoid using drab data tables and instead bring the information to life! In addition, the spokesperson for the findings should be a respected figure in your community or region—perhaps an elected official or prominent local business leader.

Find Natural Allies
Before choosing specific economic indicators to evaluate a scenic byway, consider the byway’s corridor to assess the components of the local economy that are likely to show an impact from increased visitation. In what type of activities will visitors participate? Do you want your measurements to be taken during a certain time of the year? Are byways travelers likely to eat in restaurants and stay overnight? Are there museums, rivers, or lakes, wineries, downtown shopping districts, famous attractions or other places that can measure visitation? A meeting with the local economic development commission or the Chamber of Commerce to discuss the benefits of measuring the impact of scenic byways visitors can be useful—and may net you a working partner with skills in economic assessment. Then, consider the measurement methods listed below and map out your study strategy.

Measuring The Impact
Idea #1: When West Yellowstone, Montana, needed to document the importance of winter activities in Yellowstone National park to the community, local business leaders went to see bankers. They were not after loans but information. Cooperating bankers provided consolidate deposit information (cash, checks and credit card charges) for all commercial establishments in town for four months: the previous August and the August five years prior, and the previous February and the February five years prior. The impact of the information galvanized State and Federal elected officials who then worked successfully to prevent a proposed winter shut-down of the park. The findings? First, February deposits had grown dramatically. Second, February deposits now actually exceeded summer deposits!

Interestingly, other statistics originally expected to carry the day in documenting the impact of winter tourism proved less valuable. Unemployment figures, for example, failed to show a sharp decline in the winter. The reason? In previous years, many of those employed seasonally left the area each October, so unemployment never “spiked”.

Idea #2: Most States levy sales tax on goods and services—including goods and services used by byways travelers. Cooperative action by selected businesses, or by tax officials, can generate both baseline and current measurements of economic activity.

Several factors must be taken into account to make this methodology credible. If the data is collected through cooperating businesses, efforts must be made to account for changes in market share within each business. A new motel might show significant new activity but might also have displaced the activity at other local overnight facilities. Inflation and local population growth also need to be considered to adjust the data. It is also important to consider the nature of your sales tax—in some States, food and/or services may not be taxed or may be taxed at a different rate. Also, be sure to consider the full range of businesses serving byways travelers, including campgrounds and gas stations.

Idea #3: Many States either levy, or permit local governments to levy, tourism/bed taxes on hotel/motel rooms and other visitor services. Typically, these funds are used to promote the State or region or to finance services and facilities, such as welcome centers and convention centers. Records of these receipts are a mater of public record and can usually be gathered easily, both for years past and for the current year.

Idea #4: Anecdotal spending by byways travelers can be gathered with the help of the travelers themselves. Provide an addressed, stamped envelope to the travelers at visitor centers or other high-contact sites, along with a form explaining a promotional offer. By enclosing receipts for expenditures at local hotels/motels, restaurants, stores and other sites, the traveler can be offered tangible rewards ranging from a scenic byway videotape to t-shirts to free meals to complimentary lodging on a return visit, based upon the volume of their expenditures. While not a scientific survey, the program would document the nature and volume of spending by select byways travelers. By utilizing other means to estimate the numbers of travelers, a rough approximation of total economic impact associated with byways can be computed.

This approach has been utilized effectively by at least two State travel organizations and the Seaway Trail in New York State. The Nevada Commission of Tourism and businesses along U.S. 50 responded creatively to a news story which described that rout through Nevada as “the nation’s loneliest highway.” The unflattering article suggested that the road passed through veritable ghost towns and had little to lure visitors. The State-led response offered travelers special bumper stickers, discount books and other materials if they proved they had traveled the route and stopped to have their “passports” stamped (and to purchase something) at locations along the route. In Kansas, the State surveyed travelers at welcome station about planned lengths of stay within the State, then attempted to lure travelers for an extra day or two. By sending in hotel/motel receipts from an extra day beyond the originally planned stay in Kansas, travelers received a customized Coleman cooler that was produced in the State and filled with other Kansas Products.

The Seaway Trail utilizes its “Roads Scholar” program to collect information on travelers along this route. Under this program, travelers register and obtain a packet of helpful visitor information. By completing and returning portions of this packet, travelers qualify as “Road Scholars” - and supply Seaway Trail, Inc., with valuable information.

Idea #5: When an advertisement placed in newspapers, magazines or travel publications asks people to write or call for information on a scenic byway a list of “qualified” potential visitors is generated. Follow-up calls should be made to a small percentage of the people on this list to survey them about whether they actually made the trip, how much they spent, what they did and how they rated their experience overall. The Seaway Trail has used this method to assess (1) the percentage of people that respond to their advertisements and (2) typical visitation and expenditure patterns of Trail visitors. Virginia’s Department of Economic Development also has a regular program for sampling respondents to its advertising—both generic and specific—and assessing both the percentage of the respondents who actually visit and the amounts to time and money they spent on their visits.

Idea #6: Census Bureau data on businesses can be accessed for the scenic byway corridor by SIC (Standard Industrial Classification) code. Appropriate SIC codes can be selected, and employment by those companies can be obtained. Those numbers, then, can be compared for the two most recent data sets and further compared to overall employment changes in the counties involved.

Similar data can be obtained in other ways as well. In conducting a study of billboard advertising and commercial activity along scenic byways, the Outdoor Advertising Association of America (OAAA) gathered important information about the location and nature of businesses located along three different scenic routes: Minnesota’s Great River Road, Arkansas Route 7 and West Virginia Route 60.Central to the OAAA’s study was the enlistment of Dunn and Bradstreet Data Service, which provided the business name, number of employees, principal’s name, address and phone number for each business along the three routes.

In all three cases, the study found significant business density along portions of the scenic byway, including a substantial number of travel and tourism-related businesses. Along the Great River Road, for example, the study located a total of 1,559 businesses and 19,198 jobs, 10.3% of which are in the travel and tourism industry. Along Arkansas Route 7, the study found 1,446 businesses and 17,721 jobs, nearly 22% of which are in the travel and tourism industry. West Virginia Route 60 hosts 799 businesses and 9,769 jobs, 10.1% of which are in the travel and tourism industry.

Such numbers are by themselves extremely useful in measuring the economic impact of scenic byways. However, the OAAA study went one step further and used unique computer mapping software to precisely locate these jobs and businesses and display them on color-coded, digitized maps which clearly show how pockets of substantial business activity develop along byways. The overall result is a documented analysis that contains not only useful statistics but striking visual aids as well.

Idea #7: Provide travelers with an instant discount card for 5-20% savings at participating businesses and then gather data from the businesses on the volume of the discounts provided. Require that the discount card holders show proof of residing at least 50 miles away to avoid unintended local users.

Idea #8: Obtain historic traffic count data from the agency responsible for management of the byway to measure any changes in volume. Estimates of daily tourism expenditures can be obtained from the U.S. Travel Data Center to apply to these counts. If traffic data is incomplete, develop your own count! Approach a local college or university—try both tourism and business programs—and design a collection strategy that will sample more than traffic: collect data on vehicle types, State of origin and perhaps even the estimated number of occupants.

Idea #9: Be creatively opportunistic about gathering statistics that are already available in your area. The Seaway Trail uses statistics as diverse as international bridge crossings (broken down into vehicle types), fishing license sales, travel and tourism employment, park attendance and boater registrations as benchmarks for measuring changes in visitation. Be sure to contact the agencies collecting these statistics directly to ensure you get the numbers while they are still “fresh.” In addition, obtain the assistance of key businesses along the byway. Develop a simple questionnaire, and ask these businesses to collect data from travelers residing outside the area. Compile the results.

Idea #10: Use information on gasoline sales along the byways. States levy gas tax, and records of tax deposits may be available for stations along the byway. Alternately, the stations themselves may be willing to provide information on volume of fuel sold. Look at sales data historically, as well as for specific periods such as weekends and peak tourism times.

Idea #11: Find ways to collect simple demographic and economic data from byways travelers at visitor centers along the byway. Most States already have a survey program operating at these centers; if not, you can use volunteers, students or others to collect this data yourself

Idea #12: Make economic data collection and analysis a part of your scenic byways funding applications. Virginia secured ISTEA funds for interpretive enhancements along Lee’s Retreat, a historic and cultural byway running from Petersburg to Appomattox. The funding covered 20 new interpretive sites with pull-offs and signs, as well as a continuous low-power radio network to provide travelers with information. The radio system links travelers to museums and other features along the route and lures them to sites where the State can collect data on byway visitors—all helpfully funded through the ISTEA grant.

Idea #13: Collect names and addresses from hotels, motels and bed-and-breakfast along the byway and send out a survey to overnight guests. Find out the purpose of their visit (business, visiting relatives, vacation, etc.) and other details, including length of stay, activities undertaken and types and amounts of expenditures.

Funding Your Research
Collecting useful data on the economic impact of a scenic byway will require funding and expertise. The best news is that both can be solicited from a number of sources. Your State tourism agency should be one of the first stops on your research effort. Many States have sophisticated tourism research operations in place and may be willing to undertake your research. In other cases, the agencies can provide you with the right contacts at State highway, revenue and economic development departments.

Another option is universities and colleges. Virginia reports having great relationships with more than five disciplines at Virginia Polytechnic Institute (VPI), including the business, mathematics, tourism/hotel and recreation/natural resources departments. VPI is a land grant university, so it also is actively involved in the agricultural extension agent network—another very valuable source of expertise and contacts. Local merchants associations and chambers of commerce are also good prospective partners.

Acknowledgements: The American Recreation Coalition wishes to express its sincere thanks for the important leadership on scenic byways issues generally and on this “Idea-Book” specifically provided by: Teresa Mitchell, Executive Director of Seaway Trail, Inc.; Pat McMahon, Director of the Division of Tourism for the Virginia Department of Economic Development, Homer Staves, Vice President of International Marketing for Kampgrounds of America; Ann Bond, Public Affairs Office for Colorado’s San Juan National Forest; Ralph McMullen, Tourism Director of the Mammoth Lakes (CA) Visitors’ Bureau; and Myron Liable, Director of State and Local Activities for the Outdoor Advertising Association of America.