Protected areas provide multiple socio-economic benefits. However, these benefits are often not assessed and remain unappreciated by decision-makers and the wider public alike. Therefore using public funding to establish and maintain protected areas is often of low priority. Information about the socio-economic benefits of protected areas, such as streams of revenue to local economies from recreation and tourism, can provide valuable support to maintaining and managing protected areas. The United States National Park Service (U.S. NPS) has been measuring and reporting the annual visitor spending and economic effects associated with protected areas for the past 25 years. In year 2008, Metsähallitus Natural Heritage Services of Finland (NHS) together with the Finnish Research Institute (Metla) modified the U.S. NPS model to adapt it to Finnish circumstances. Consequently, from 2009 on, also Metsähallitus NHS has been reporting annually visitor spending effects. The experiences and lessons learned by the U.S. NPS and Metsähallitus NHS can serve as examples for assisting other protected areas with the development or adaptation of procedures appropriate for estimating local visitor spending contributions.
Protected areas serve as destinations for visitors from nearby and around the world. On vacations or on day trips, visitors spend time and money en-route and within the local communities surrounding protected areas. While spending by visitors generates jobs and supports a considerable amount of economic activity, these economic effects are often quite dispersed among multiple businesses (i.e., lodging, food industries, retail, manufacturing, guiding services, etc.) within the local communities as well as the larger regional area. Therefore, it is often challenging to directly compare the economic activity generated from protected area tourism to the jobs and income generated by extractive industries such as mining and forestry. While it can be challenging to estimate the economic effects of protected area visitation, it is crucial that these effects are included in development policy and planning to ensure wise trade-offs are made among sustainable development decisions and business practices. In Finland, prior to the development process, a number of case studies on the local economic impacts of park visitation existed. However, case studies vary in methodology and are quite expensive to implement. Hence, there was an increasing need to develop a cost-efficient calculation system that ensures comparability of results between the areas and across time as well as the reliability and usability of the method in the long run.
The U.S. NPS and Metsähallitus NHS visitor spending estimates are based on an Input-Output modelling framework which requires three key pieces of information: the number of visitors who visit each protected area, visitor spending patterns in local gateway regions, and regional economic multipliers that describe the economic effects of visitor spending in local economies.
The U.S. NPS has been measuring and reporting visitor spending and economic effects for the past 25 years. Visitation source data are derived from a variety of efforts by the NPS Social Science Program. The 2012 analysis marked a major revision to the NPS visitor spending effects analyses, with the development of the visitor spending effects (VSE) model which replaced the previous Money Generation Model 2 (MGM2). The VSE model measures the annual economic effects of NPS visitor spending as it cycles through Park-level, state, NPS region, and national level economies.
In order to estimate the socio-economic benefits of national parks and other key state-owned protected areas in Finland, Metsähallitus NHS and the Finnish Forest Research Institute (Metla) modified the MGM2 to develop a standardized, easy-to-use method for assessing the local, accumulative economic impacts of visits to parks. In 2010 the method was integrated into the national visitor information database (ASTA) of Metsähallitus NHS, originally developed a few years earlier to estimate the recreational demand in national parks and other protected areas. This integrated application now allows estimating visitor spending related benefits for each key protected area on an annual basis.
The previous U.S. NPS MGM2 model was available on the internet for free, which greatly helped in adopting the model to Finland. This kind of open information sharing is an excellent practice, and should be applied whenever feasible. The accuracy of spending and impact estimates rests largely on the input data, namely:
- public use recreation visit and overnight stay data;
- party size, length of stay, and park re-entry conversion factors;
- visitor segment shares;
- spending averages; and local area multipliers.
Therefore, the basic requirement for estimating economic impacts in on a continuous basis on a national level is a comprehensive, standardized visitor monitoring system, including both visitor logs and surveys. Metsähallitus NHS had such a system already in place, which greatly helped in building a new visitor spending calculation model on top of that. In the U.S. NPS, efforts are underway to develop a more extensive socioeconomic monitoring system with increased sampling rigor across park types and geographic regions to increase the accuracy of these data and thus improve the accuracy of future visitor spending effects analyses.Even though establishing and maintaining such a comprehensive visitor monitoring system requires significant investment in both time and resources this investment can generate high and diverse returns. Finally, it is important to keep in mind that while the economic impacts of recreation originating from park visitors’ spending is important information that can have an impact on policy making, it only provides an estimate of one part of the direct use values. A more complete picture of the socio-economic importance and value of national parks and other key protected areas would require the inclusion and measurement of many other harder to assess ecosystem services and nonmarket values, such as impacts on well-being and health and broader cultural services.
According to the assessments in both the United States and Finland, EUR investment in national parks results in 10 EUR return to local economies. In both countries, the national park visitor spending effects have proven to be of great value in local and national governmental decision making, helping the government agencies in achieving conservation and development planning goals.
In the United States, park-level estimates of the effects of visitor spending on local, state, and national economies continue to serve as key indicators of how parks benefit communities and the American public through visitation. Quantifying these economic effects is essential for NPS planning, management, budget formulation, policy analysis, and public outreach needs. The annual VSE reports are highly visible documents that receive attention throughout the U.S. Department of the Interior and well beyond. In the first few days following the release of the 2013 VSE report, there were more than ,000 media stories in local communities near national parks across the United States. Following the sixteen-day government shutdown of October -16, 2013 a special VSE report was released to provide an early glimpse into the significant effects on NPS recreation visitation and spending in the local gateway communities during the month of the shutdown. Briefings on the VSE shutdown report were held in the U.S. Senate and House of Representatives.
In Finland, the protected areas’ visitor spending effects were one of the key factors that convinced decision-makers a few years ago that the public investment in protected areas pays back manifold. In the end, planned budget cuts to park management were not implemented. Moreover, differences between the local economic impacts across national parks have alerted the regional and nature tourism enterprises, developers and administrators on the potential business opportunities related to protected areas. It has also become clear that investment in both management activities and private sector development is necessary in order to create significant incomes to the regions. In addition to highlighting the benefits of public investment, understanding the economic impacts of visitor spending can also be used to increase general acceptance of national parks among stakeholders.
The government’s budget funds are used for building and maintaining hiking facilities in Finland’s national parks (see photo by Mari Laukkanen attached). These facilities support creating tourism business services around these areas. The visitor spending effects demonstrate that public funds return to society many-folded through local entrepreneurship and jobs.