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INTRODUCTION
The economy of West Virginia historically
has been one dominated by resource extractive industries and manufacturing.
As these industries have declined in recent decades, economic activity
generated by commercial recreation and tourism has grown and has become
a primary source of employment and income in many communities. Opportunities
that attract tourists to West Virginia include those associated with the
State's abundant wildland resources -- it's mountains, forests, and rivers.
Many thousands of people take advantage of these opportunities each year
by visiting West Virginia, and the economic impacts of these visitors are
presumed to be substantial. Among the visitors are people who come both
from within and outside the State for commercial whitewater rafting, and
this report contains a summary of a 1995 survey of commercial whitewater
boaters on the Cheat, New, and Gauley Rivers.
Socioeconomic information about commercial
boaters was compiled from three separate surveys conducted in 1995 on the
three rivers. Consequently, a relatively large sample was obtained to characterize
commercial boaters in terms of their age, income, education level, state
of residence, and size of their household (Table 1). Additional data were
collected with a survey designed specifically to assess direct spending
behavior and economic impacts of the commercial whitewater industry. Data
from this survey were used to characterize boater's trips to West Virginia
and to document the amount and type of expenditures they made when visiting
the State for whitewater rafting. Expenditure categories included spending
directly related to rafting (e.g., outfitter fees, river trip videos and
photographs, etc.), and expenditures for food, gas, lodging, and other
miscellaneous items. In an attempt to identify potential economic impacts
for local communities and for the State, boaters were asked to report their
expenditures for three geographic regions: the local area within 50 miles
of the river they ran; outside the local area but in other parts of West
Virginia; and outside of West Virginia.
Since boaters were surveyed
in the midst of their visit, they were asked to report expenditures made
up to the time at which they were surveyed, plus any additional expenditures
they expected to make during the remainder of their trip. It was expected
that boaters could reliably and accurately report the amount of money they
had already spent. On the other hand, their estimates of additional amounts
they expected to spend probably are less accurate. Despite the potential
for error in boaters' estimates of expected additional spending, these
estimates were combined with the reports of dollars already spent to approximate
total spending by individual boaters. Also, up to as many as 20% boaters
indicated having already spent or expecting to spend money in most expenditure
categories, but provided no dollar values. These boaters were not included
in calculations of total expenditures presented in this report, although
their expenditures potentially could contribute substantially to total
spending. Also, because of item nonresponse, which averaged approximately
18% across the three rivers, data were missing in most expenditure categories.
Consequently, it is not known if boaters who failed to provide a response
did or did not spend in expenditure categories. Missing data also were
excluded from expenditure estimates reported herein.
Local and statewide economic impacts of the
commercial whitewater industry were estimated using the US Forest Service
IMPLAN model, an input-output modeling system that facilitates estimation
of direct, indirect, and induced economic effects within user defined impact
regions. For the Cheat River, the local impact region was defined as Monongalia
and Preston Counties; for the New and Gauley Rivers, the local impact region
included Fayette, Nicholas, and Raleigh Counties. Typically, only the expenditures
of visitors from outside the defined impact regions are included in economic
impact estimates as their spending represents an infusion of outside dollars
into the economy. However, no effort was made in this study to exclude
the expenditures of resident boaters. Overall, West Virginians comprised
2.8% or fewer of boaters surveyed on the Cheat and Gauley Rivers, respectively,
and about 7.5% of boaters surveyed on the New River. Of these West Virginians,
less than 1% on each river were residents of the defined local impact regions.
COMMERCIAL
WHITEWATER EXPENDITURES
Data collected in 1995 from commercial boaters
on the Cheat, New, and Gauley Rivers suggest that total direct expenditures
associated with rafting these rivers were approximately $49.4 million.
Of these total trip expenditures, approximately $43.1 million were made
within West Virginia, with $41.3 million of that taking place in local
areas surrounding the three rivers. These estimates are considered somewhat
conservative in that they included only survey respondents who provided
dollar values for the expenditures they made during their trips.
A relatively large proportion of total expenditures
made by commercial boaters -- 45% on the Cheat; 39% on the New; 53% on
the Gauley -- was in the form of expenses directly related to the rafting
trip. These expenses included outfitter fees for rafting and guiding services,
clothing and/or equipment, videos and photographs, trip souvenirs, and
other unspecified expenses. Average expenditures by individual boaters
for these rafting expenses were $87.47 on the Cheat, $96.02 on the New,
and $173.91 on the Gauley. Using these average estimates to extrapolate
to the commercial boaters on each river, rafting expenses amounted to approximately
$0.84 million on the Cheat; $11.6 million on the New; and $9.7 million
on the Gauley. The commercial whitewater industry presumably distributes
a large fraction of the revenue from fees and purchases of items such as
videos and souvenirs into the local communities surrounding these rivers.
Commercial rafting customers spent comparable
amounts at restaurants, retail stores, gas stations, motels and hotels,
and night clubs and bars in the local area surrounding these rivers. Local
spending was defined as expenditures made within 50 miles of the respective
rivers, and accounted for an additional 35% to 41% of total direct spending
of commercial rafters. Estimates of average local spending by individual
boaters were $104.41 on the Cheat River, $151.31 on the New, and $148.00
on the Gauley. Expanded to the total population of commercial boaters on
each of these rivers, local spending amounted to approximately $0.73 million
on the Cheat; $12.1 million on the New; and $6.4 million on the Gauley.
Commercial boaters traveled an average of
269 to 436 miles one way to raft the Cheat, New, and Gauley Rivers, and
came from several states. States most represented by boaters include New
York, Ohio, Michigan, Virginia, Pennsylvania, Maryland, and Indiana. West
Virginians made up only a small proportion of surveyed boaters: 2.5% on
the Cheat; 7.5% on the New; and 2.8% on the Gauley. Data obtained from
boaters suggest that they made substantial expenditures while traveling
to and from West Virginia. However, most of that spending took place outside
the state. In route, boaters reported spending between 8% and 16% of their
total trip expenditure outside the borders of West Virginia. Only 3% to
4% of total expenditures occurred in other parts of the state while traveling
to and from their rafting destination.
ECONOMIC
IMPACTS OF WHITEWATER RAFTING
The expenditures reported above were used
to estimate the economic impacts of commercial whitewater rafting in terms
of effects on local communities and statewide. The infusion of dollars
into an economy generates direct, indirect, and induced impacts within
various economic sectors. Direct impacts reflect the value of goods and
services purchased through initial direct expenditures; indirect impacts
reflect the value of secondary purchases by businesses or service providers
for operational needs; and induced impacts reflect the economic activity
traced through employee earnings and resulting household spending. Total
economic impacts simply are the sum of direct, indirect, and induced impacts.
Impact measures for which impacts were estimated in this study include
total output, personal income, employee compensation, tax revenue, and
employment. With exception to employment impacts, which reflect full and
part-time jobs created, all impacts are reported in dollars. The estimated
sales tax revenue from the IMPLAN model was based on an assumption that
some portion of gross income (i.e., employee compensation) is spent on
sales taxes. As a result, sales tax estimates from IMPLAN do not include
sales taxes collected on direct expenditures reported above. Consequently,
the estimated tax revenue reported in the following pages includes the
IMPLAN sales tax estimates plus the 6% West Virginia state sales taxes
on direct expenditures.
Local Economic Impacts
To assess the economic effects of commercial
whitewater rafting on local economies, data on the expenditures of commercial
boaters within 50 miles of the river they paddled was collected. As indicated
earlier, most boaters were nonresidents of West Virginia and likely had
little knowledge of local place names or county boundaries. However, in
the IMPLAN model counties or states often are used as the most convenient
and practical unit to define local impact regions. In this study, the counties
surrounding respective study rivers were defined as local impact regions
for the estimation of economic impacts. Also, impacts are reported in two
formats: (1) unitary impacts per 1,000 commercial user days; and (2) cumulative
impacts for the total 1995 population of commercial boaters on each river
-- 12,746 on the Cheat; 160,142 on the New; and 65,438 on the Gauley.
On the Cheat River, each 1,000 commercial
user days were estimated to generate approximately $160,800 in total output,
$61,000 in personal income, $41,700 in employee compensation, $10,000 in
tax revenue, and 4.5 jobs within Preston and Monongalia counties (Table
2). Extrapolated to the entire commercial boater population on the Cheat
River in 1995, local economic impacts were estimated at about $2.1 million
in goods and services in Preston and Monongalia counties as indicated by
the total output impact (Table 3). Personal income, which includes compensation
to employees and the income of proprietors, was estimated at approximately
$777,000, while employee compensation alone was $530,000. In terms of employment,
an estimated 56.9 full- and part-time jobs were created as a result of
the Cheat River rafting industry. Finally, approximately $128,000 in various
tax revenue was generated.
Local impacts stemming from commercial
whitewater rafting on the New and Gauley Rivers were substantially higher
than on the Cheat as a result of larger numbers of users and higher average
expenditure levels of those users. Each 1,000 commercial boaters on the
New River generated about $187,700 of total output, $73,600 in personal
income, $52,800 in employee compensation, $12,100 in taxes, and 4.6 jobs
in the local impact region (Table 2). Expanded to the entire population
of 160,142 commercial boaters in 1995, the New River rafting industry generated
approximately $30.1 million in total output, $11.8 million in personal
income, $8.5 million in employee compensation, $1.9 million in tax revenue,
and 736.4 jobs for Fayette, Raleigh, and Nicholas counties of West Virginia (Table
3).
Because of substantially higher per
person spending levels, per 1,000 user economic impacts on the Gauley River
are markedly higher than on the Cheat and New Rivers. Each 1,000 commercial
users on the Gauley generated an estimated $319,100 in total output, $127,300
of personal income, $87,500 in employee compensation, $20,100 in taxes,
and 7.9 local jobs (Table 2). For the 65,438 commercial boaters on the
Gauley River in 1995, these unitary impact estimates translate into local
impacts in Fayette, Raleigh, and Nicholas counties of $20.9 million in
total output, $8.3 million in personal income, $5.7 million in employee
compensation, $1.3 million in taxes, and 513.5 jobs (Table 3).
Statewide Economic Impacts
It was reported earlier that up to 4% of customer
expenditures were made outside of local areas surrounding each study river
but still within West Virginia. Adding the economic impacts of these additional
in-state expenditures to the local spending estimates made it possible
to approximate the contribution of each respective river to the state economy.
Additionally, by summing across rivers it was possible to estimate the
cumulative impact of the commercial whitewater industry on the three rivers
on the state economy (Table 4). Statewide impacts estimated for each study
river were only 10% to 13% higher than the local impacts reported above.
One reason for this is that a large proportion of boater expenditures were
in economic sectors containing businesses providing services (outfitters,
restaurants, lodging, etc.) in local areas and along travel routes. These
businesses tend to be highly labor intensive and generally contribute to
higher induced economic impacts (e.g., household incomes of local labor
force). As well, expenditures made in these businesses typically leak out
of local economies at relatively low rates.
Based on the cumulative statewide estimates,
each 1,000 commercial river users who raft the Cheat, New, or Gauley Rivers
generates about $248,700 in total output, $96,000 of personal income, $69,600
in employee compensation, $15,200 in tax revenue, and 6.0 jobs in West
Virginia (Table 4). Expanded to the total number of commercial user days
on these three rivers in 1995, total statewide impacts are estimated at
$59.3 million in total output, $22.9 million in personal income, $16.6
million in employee compensation, $3.6 million in taxes, and 1,415.8 jobs (Table
4).
Multipliers
Multipliers were calculated for each impact
measure as the ratio of total impacts to direct impacts for both local
regions and statewide (Table 5). Impact multipliers are sensitive to the
amount and type of visitor expenditures and the structure of the local
and state economy. In the present study, local impact multipliers ranged
from approximately 1.25 for employment to about 1.6 for employee compensation,
and were relatively consistent across rivers (Table 5). For the monetary
impact measures of total output, personal income, and employee compensation
multipliers ranged from 1.39 to 1.55.
Cumulative and per river statewide multipliers
were slightly higher than local multipliers. Statewide economies are larger,
more diverse, and typically experience less leakage than the economies
of local regions. Cumulative statewide multipliers ranged from 1.32 for
employment to 1.57, 1.46, and 1.59 for total output, personal income, and
employee compensation, respectively. The multipliers calculated for the
impact estimates reported in this study are consistent with those published
by the U.S. Department of Commerce for West Virginia. For example, total
output multipliers for West Virginia are expected to range from 1.1 to
2.2 (U.S. Department of Commerce, 1992).
Comparison to Previous Studies
The findings reported in this study for boater
expenditures and the resulting economic impacts of whitewater rafting appear
to be relatively consistent with previous studies. DeHart (1990) estimated
total direct spending of approximately 35,000 commercial boaters on the
Gauley River in 1989 at over $9 million. It is presumed that these estimates
were for local expenditures. Average boater spending in 1989 was estimated
at about $300, which included $128 for outfitter fees, $50 for lodging,
$37 for meals, $16 for gifts and souvenirs, $11 for other recreation or
entertainment, $10 for photographs and videos, and $4 for equipment. In
the present study, total local spending, including rafting expenses, of
Gauley boaters was approximately $16 million among 65,438 boaters. Also,
the magnitude of expenditures in the various categories reported by DeHart
(1990) were distributed similarly.
English and Bowker (1996) reported statewide
economic impacts from and 1993 study of the Gauley and four other whitewater
rivers. On a per 1,000 nonresident boater basis, they estimated total output
impacts at $209,500, personal income impacts of $115,000, and employment
impacts at 5.14 jobs from commercial rafting on the Gauley River. Extrapolated
to the population of nonresident boaters, total statewide impacts in 1993
were about $8.5 million in total output, $4.7 million in personal income,
and 271 jobs (English and Bowker, 1996). These impacts are somewhat smaller
than estimates reported in this study for at least two reasons. First,
it appears that English and Bowker (1996) may have underestimated boater
spending within West Virginia. For example, they report total average spending
within West Virginia by nonresident boaters of $148.74, with average in-state
spending for activities -- including outfitter fees -- of only $73.40.
These are substantially lower that average spending estimates reported
in this study and by DeHart (1990). Second, English and Bowker (1996) appear
also to have underestimated the proportion of nonresident boaters on the
Gauley River. In their study, they estimated 80% of boaters on the Gauley
were from outside West Virginia. However, this and other studies (e.g.,
USDI 1993) indicate that the nonresident proportion of commercial boaters
to be greater than 95%.
McClung (1996) reported on the economic impacts
of business and tourism travel in West Virginia in 1995. Overall statewide
economic impacts of tourism related travel were estimated at about $2.3
billion in total output, 42,000 jobs, and $799 million in payroll (employee
compensation). Based on the estimated economic impacts generated by commercial
whitewater rafting on the Cheat, New, and Gauley Rivers, it appears that
the rafting industry accounts for approximately 2.6% of the total economic
output from tourism, 3.4% of tourism related employment, and 2.1% of the
payroll or employee compensation from the tourism industry.
Accuracy of Impact Estimates
The estimates of commercial boater expenditures
and corresponding economic impacts reported herein are considered somewhat
conservative. As noted in the introduction, only boaters who provided dollar
values for their expenditures were used to calculate average and total
direct spending estimates, which in turn were used to estimate local and
statewide economic impacts. The total expenditures of commercial boaters
may have been underestimated by excluding those who reported spending money
but failed to provide dollar values, and those for whom data were missing.
For example, including boaters who provided no dollar values for their
expenditures alone would have increased total expenditure estimates by
9.4% on the Cheat River, 18.7% on the New River, and 3.0% on the Gauley
River, assuming they spent the average of boaters who provided dollar values.
The local and statewide economic impacts of these rivers also would have
increased proportionally.
Also excluded from the expenditure and impact
estimates reported in this study are boaters who rafted the Tygart and
Shenandoah Rivers. Commercial rafting on the Tygart occurs at relatively
low levels (e.g., less than 500 visitors annually) and likely contributes
little to the local and statewide economies. On the other hand, approximately
19,000 people raft the Shenandoah River annually. However, the Shenandoah
is located at the junction of West Virginia, Virginia, and Maryland and
is in very close proximity to major metropolitan areas such as Washington
DC and Baltimore. As a result this river serves a market of mostly single-day
visitors who make a large proportion of their expenditures outside of West
Virginia. Also, outfitter fees for a rafting trip on the Shenandoah River
at the time of this study were approximately $40 to $45 per person.
REFERENCES
DeHart, J. (1989). Spending behavior of whitewater
recreationists, Gauley River, West Virginia. Unpublished report.
English, D. B. K., and J. M. Bowker. (1996).
Economic impacts of guided whitewater rafting: A study of five rivers.
Water Resources Bulletin 32(6): 1319-28.
McClung, G. W. (1996). West Virginia Travel
Economic Impact 1995. Report to the WV Division of Tourism.
U. S. Department of Commerce. (1992). Regional
Multipliers: A User Handbook for the Regional Input-Output Modeling System
(RIMS II). Washington, D.C.: U.S. Dept. of Commerce, Bureau of Economic
Analysis.
U. S. Department of the Interior. (1993).
Draft General Management Plan/Environmental Impact Statement/Land Protection
Plan for the Gauley River National Recreation Area. Denver, CO: U. S. National
Park Service, Denver Service Center.
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