1997 outlook and trends for tourism and recreation.
Nonresident travel to Montana continued at a slower pace of growth in 1996. Over 8 million nonresidents visited in 1996, approximately a 1 percent increase from 1995. While tourism growth continues, Montana is not seeing the substantial growth experienced in the early 1990s [ILLUSTRATION FOR FIGURE 1 OMITTED]. Airport traffic increased nearly 1 percent while interstate traffic actually decreased by 0.5 percent [ILLUSTRATION FOR FIGURE 2 OMITTED].
Montana is not different from its neighboring states. Idaho, Wyoming, North Dakota and South Dakota have also seen a leveling of visitation rates. One cannot expect high levels of growth every year.
What is peculiar about the 1996 nonresident travel to Montana is the substantial visitation decrease in many sites or attractions. After a nearly record-breaking year in 1995, visitation to Yellowstone National Park was down 4 percent in 1996. Although figures haven't been finalized, Glacier National Park appears to be down again this year after a nearly 15 percent decrease in 1995 [ILLUSTRATION FOR FIGURE 3 OMITTED]. Other areas of downward visitation include:
Approx. declines Lewis and Clark Caverns -7% Bighorn Canyon National Recreation Area -23% Little Bighorn Battlefield National Monument -11% National Bison Range -11% Libby Dam -11% Montana Historical Society -7% Museum of the Rockies -17%
A Montana tourism industry survey conducted in mid-December 1996, by the Institute for Tourism and Recreation Research, The University of Montana-Missoula, shows that 1996 visitation was down for 41 percent of the respondents, while only 28 percent of the respondents indicated revenues were down [ILLUSTRATION FOR FIGURE 4 OMITTED]. The study surveyed 91 industry leaders managing hotel/motels, bed and breakfasts, attractions, campgrounds, ski resorts, guest or dude ranches/resorts, outfitter/guides, CVB/Chambers of Commerce, and public lands.
Weather was cited as the number one factor affecting visitation, followed by gas prices and the economy - all factors beyond industry managers' control. Marketing and advertising, which came in as the fourth most frequently mentioned factor, is the only area where a business can exercise some direct control. The fifth most frequently mentioned factor was the Canadian exchange rate.
On the up side, skier visits to Montana rose 0.5 percent during the 1995-96 ski season. This comes after a 7 percent increase the previous season [ILLUSTRATION FOR FIGURE 5 OMITTED]. Skier visits to Montana have increased steadily since 1991, defying the level, or even downward, national trend.
Another upward trend is the rising air passenger deplanements in Montana since 1990. While only a 1 percent increase this year, the trend continues upward; total Montana deplanements now exceed the 1 million mark [ILLUSTRATION FOR FIGURE 6 OMITTED].
Canadian border crossings also declined in 1996, by nearly 2 percent [ILLUSTRATION FOR FIGURE 7 OMITTED]. However, this decline is much better than the average annual drop of nearly 8 percent between 1993-1995. The slowing effect is a positive sign for businesses relying on Canadian traffic.
Montana appears to be keeping pace with national trends. The major difference is air travel where Montana did not benefit from the substantial increase seen nationwide. While prices were lower this past year, Montana is still a higher priced destination than most areas. The state appears to be beyond the financial means of many families flying for vacation.
National Auto travel +1% Canadian traffic -2% Domestic air traffic +7% National park visits -2% Montana Interstate travel -0.5% Canadian border crossing -2% Air passenger deplanements +1% Yellowstone National Park -4.1% Glacier National Park -7%
Other trends affect national and statewide tourism. As reported at the National Travel Outlook Forum, consumer confidence was strong in 1996 (strongest since 1989) and consumer sentiment was up in 1996, a six-year high. When these two factors are up, leisure spending tends to increase. However, real disposable income growth slowed in 1996 and growth in consumption lagged income in 1995-96. Consumer debt appears to be a driving force in the availability of disposable income spending for many Americans, more so now than in the past.
Income trends are important for tourist industry prospects. The top 5 percent of households earn 21 percent of all income and the top 20 percent have seen their real wages and salaries increase by a quarter over five years. Meanwhile, incomes have inched up only slightly for the remaining 80 percent of households. For a majority of households then, income is virtually stagnant and consumer debt is increasing; their travel choices may be reduced to where they can drive with the time available.
Another national trend, which could certainly affect Montana, concerns the recreational vehicle business. The RV industry will begin a three year, $5 million campaign in early 1997, centering on the theme, "Wherever You Go You're Always at Home." The campaign aims to increase RV ownership among baby boomers, who are seen as prime RV buying candidates and to increase RV usage among current owners. The result should be more recreational vehicles on the road this year. During the upcoming 10 years, 12,000 Americans per day will turn 50 years old, bringing nearly 10 million more U.S. households into the ranks of prime RV buyers.
Nationally, there is a projected 3 percent gain in travel activity. Auto travel is expected to increase 3 percent in 1997. After two years of very slow growth, Montana may experience as high as a 3 percent increase in nonresident visitation in 1997. While travel was nearly stagnant in 1996 - only a 1 percent increase - it may get better in 1997. Here's why:
Canadian exchange rates have leveled off in the last three years. The Canadian dollar exchange rate plummeted in the early 1990s, hitting a low point in 1994 and then remaining constant through 1996. While U.S./Canadian currency values aren't expected to change in the near future, Canadian visitation to the United States should increase 1-2 percent per year through 1999. It's possible that Canadians rejected the lowering dollar value by not visiting for a few years, in hopes rates would get better. Rates did not improve. Now, however, it is more acceptable to travel across the border because there is a higher comfort level with the dollar difference compared to three years ago.
Industry managers throughout the state believe visitation will be up because:
* There is a greater awareness of attractions in their area or there are new attractions.
* There is an increased level of 1997 reservations compared to the same time last year.
* There is increased advertising and promotion.
* There are no Olympics or large national events drawing visitors in 1997.
Finally, 56 percent of the respondents in the 1997 Outlook survey indicated plans for expansion, renovation, or adding more sites in 1997. This business investment shows a strong belief in the economy and the tourism industry.
1 Cook, S. (1996). Outlook for Domestic Tourism, in TIA's 1996 National Outlook Forum. Travel Industry Association of America, Alexandria, VA.
2 Cammisa, J. V. (Dec. 1996). Travel Industry Indicators. Miami, FLA, James V. Cammisa, Jr., Inc. Publications.
3 Humphreys D. J. (1996). Outlook for the Recreational Vehicle Market, in TIA's 1996 National Outlook Forum. Travel Industry Association of America, Alexandria, VA.
4 Cheske, J. (1996). Outlook for Leisure Travel and Auto, in TIA's 1996 National Outlook Forum. Travel Industry Association of America, Alexandria, VA.
Norma Nickerson is director of the Institute for Tourism and Recreation Research and research associate professor in the School of Forestry at The University of Montana-Missoula.