On Surrounding Local Areas Dr. Mark A. Bonn



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However, for the State of Florida the participation rate is 78.5% or nearly 15 percentage points above that for Suwannee County. A similar pattern is true for Columbia County, but disguised unemployment may be less severe in this county. Obviously, if a high segment of the population is not gainfully employed, this tends to lower the level of economic welfare or per capita income as we have discussed above. We believe that much of the lower level of per capita income in the eight counties surrounding the Suwannee River is a result of disguised unemployment. This was discussed recently by Bonn and Bell (2002). A more rapid rate of job creation in the area would help to expand the job base. Bonn and Bell (2002) concluded that employment related to visitors and the location of retirement communities in the Suwannee River area might have a comparative advantage over other areas such as those in Central and South Florida. Thus, the valuable natural springs in North Florida might be important for attracting visitors to the area.

The poverty rate is another indicator of the economic welfare of a region. This rate measures the number of “poor people” as a percent of the population. A poor person is one earning less than $9,000 per year. In Table 2.2, 20% of the Ichetucknee counties fall into the poverty category. In the entire State of Florida, only slightly more than 15% lie below the poverty line. This finding is consistent with our hypothesis of disguised unemployment.

Finally, for those people receiving income, we might look into the components of per capita income. This is shown at the bottom of Table 2.2. In essence, there are three large components of per capita income: (1) earning from work; (2) income from investments such as bank deposits, bonds and stocks and (3) transfer payments to individuals such as income maintenance (e.g., unemployment compensation). For example, Suwannee County residents received, on average, $18,432 in per capita income, which consisted of $10,254 in earned income (i.e., 56%). Transfer payments were $4,956 while income from capital investment was $3,222 per year. Except for transfer payments, all components of per capita income are considerably smaller than the State of Florida. This is consistent with our economic analysis of Suwannee County. Residents earned a relatively low income from work and investments. The industrial structure of Suwannee County has relatively low-paying jobs and their per capita income makes it difficult to save much to invest. Thus, their flow of interest, dividends and rents per capita (i.e., Cap. Inc in Table 2.2) is less than one-half of that received by other Floridians.



Direct Economic Impact of Ichetucknee Springs: The Model

In this section, we shall first discuss the rudiments of the economic model used to estimate spending, wages and job creating power of the visitor sector for Ichetucknee Springs, Florida. As we have seen in earlier sections, very good data are available on the universe (numbers) of persons visiting a springs during any particular year, yet we know very little about their actual behaviors such as the types of accommodation modes they use, their spending patterns and the numbers of jobs and wages they create by visiting the Springs and sending money in the immediate area. Every time a person visits a natural spring, we can call this a person visits (PVIS) which is composed of both visitors from outside the economic area (e.g., Columbia; Suwannee or a combinations of these counties) and residents from within the economic area. In this report, we shall concentrate on visitors or eco-tourists from outside the economic area in which the springs are located. Spending by visitors is especially important since they have a multiplier effect throughout the region. Small economic areas in which these natural springs are located usually have low multiplier effects since their initial spending is rapidly “leaked” out of the area. Because of this, we have only included the direct economic effect of visitors. Also, resident spending was not included since they are a result of the growth of the region and not the prime stimulus such as tourism or physical exports from the region. If we define “k” as the percent of persons attending the springs whom are from outside the economic area or visitors (i.e., eco-tourists), then visitor person visits may be defined as follows:

(1) VIS = k PVIS

where VIS = Number of visitors from outside the springs area;

k = Percent of all visitors from outside the springs area

PVIS = Total number of people attending the springs area

We have already looked at the trend in PVIS in Figure 2.1 above. Some fraction of PVIS or “k” is from outside the economic area. To estimate the total expenditures by VIS (i.e., non-residents), we can use the following formula:

(2) $EVIS = VIS*LS* ($EPPD/ SP)

where $EVIS = Total expenditures by visitors outside the springs area

VIS = Person visits from outside the area (Equation 1)

LS = Length of stay in the springs area

$EPPD = Expenditures by VIS

SP = Size of party

These total expenditures by visitors range from items such as camping fees, costs of motel rooms, and dollars spent in local restaurants. They will be discussed in detail below when we arrive at the empirical implementation of this direct economic impact analyses. On the right hand side of equation (2), we first multiply VIS by LS. LS is the average number of days stayed in the springs area by the visitor. Note that we are attributing all days spent in the area to the springs since this was the primary motivation for the visit according to the survey responses. This yields the total number of days spent in the springs area. The last term or ($EPPD/SP) is the expenditures per person day. The reason we express expenditures in per person days is because when sampling visitors (i.e., covered below) the head of the party is asked what is spent for the entire group. This is especially important in families where the father or mother can speak for the entire group including children. Equation (2) above is for all expenditures. Individual items from $EPPS can also be isolated so that we may estimate total expenditures on restaurants or gas stations, for example.

Finally, we can derive the direct employment created by expenditures using the following formula:

(3) E = $ELVIS / (SPEND/ EMP)

E = Employment created by visitors from outside the Springs area;

$ELVIS = Total expenditures by visitors from outside the Springs area;

(SPEND/EMP) = Ratio of sales or spending to employment for those categories such as motels, restaurants and camp fees by those from outside the Springs area.

The sales or spending to employment ratio is obtained from Census data collected by the Federal government within the region under consideration. Finally, the same source yields the ratio of wages generated to sales or

(4) WAGES = g $ELVIS

Again, both employment and wages can be estimated for aggregate spending and spending on individual items by obtaining the sales to employment ratio and percent wages of sales or spending from outside sources. Thus, the economic impact of the Springs can be obtained by using the combination of published data supported by data collected on-site during the sampling of visitors actually using the natural springs. In addition, visitors may also be categorized into groups based upon the type of accommodation mode they used which includes (l) hotels/motels; (2) condominiums; (3) family/friends; (4) campsites and (5) day visitors. In the latter case, there is no real accommodation mode since visitors spend the day and then return to home or elsewhere. Day visitors might come from surrounding counties since the travel distance to Ichetucknee Springs is not far, allowing visitors to return to their home at night. This is probably more prevalent in Ichetucknee Springs since there are no campsites in the Springs/Park.

The above model may be illustrated by an example. Assume that 1,000,000 visitors attend the springs during a given year and 90% (k) are from outside the springs area yielding 900,000 VIS. According to sampling, it is determined that the average length of stay in the springs area (LS) is 2 days and the size of the average party (SP) visiting the springs is 4 individuals. These parties collectively spend $400 per day (i.e., $EPPD). Using equation (2), spending by the VIS would be estimated as follows:

(5) $ELVIS = $180 Million = 900,000*2 ($400/4)

Thus, visitors from outside the springs area are estimated to spend $180 million in this example. For the combination of goods and services bought by visitors to the springs, assume that each employee sells $250,000 per year. These sales would support 720 employees per year ($180 Million / $ .25 Million). Lastly, assume that wages are about 15% of sales (“g”). This would mean that wages generated are $27 million (.15*$180 Million) or $37,500 per employee as annual wages. This is just an example; all numbers are hypothetical and may not reflect actual ones in the case of this report’s natural springs.



Estimation of the Direct Economic Impact of Ichetucknee Springs

Table 2.3 contains the result of implementing the model discussed above to ascertain the direct economic impact of visitors from the area surrounding the Ichetucknee Springs. During the 2002 fiscal year, 188,845 people visited the park of which 90% were from outside the region (i.e., Columbia, Suwannee Counties). Thus, there are an estimated 169,962 person visits from outside the region of impact. These individuals are from Florida and outside of Florida. From the sample discussed above, we obtained the distribution of those person-visits from outside the region of impact. Notice that day visitors make nearly half of all person-visits. Ichetucknee Springs is a short drive from such population centers as Jacksonville, Tallahassee, Tampa and Orlando, Florida for example. In addition, the Springs offers no overnight camping so it is not surprising that most of the visitors are classified as day visitors. Day visitors are of interest since they spend less because they have no lodging expenses. $EPPED or daily spending per person was estimated from our sample at only $19 per person day as shown in Table 2.3. Near the top of this table, we find non-resident visitors segmented by their accommodation mode, their party size and their length of stay in the area, which are all needed to calculated expenditures.

We found that party size is largest for condominium use and smallest for those staying in hotels and motels. Those staying with friends and family stayed the longest in the Ichetucknee Springs area (i.e., 7 days) while day visitors were, of course, limited to one day.

Equation (5) was used to illustrate just how expenditures by visitors are estimated. Such expenditures can be estimated for each category of accommodation as shown in Table 2.3. Consider Friends and Family as an illustration as follows:

(6) $ELVIS (Friends/Family) = 31,953 * 7 ($247 / 4.5) = $12.3 Million

Those staying with friends and family while being drawn to Ichetucknee Springs for its amenities spent an estimated $12.3 million in fiscal year 2002. This accommodation mode spending is shown at the bottom of Table 2.3. There are 10 spending categories in the survey instrument. The pattern of expenditures varies depending, in part, upon the accommodation mode.




Table 2.3



Estimation of the Direct Economic Impact of Visitors

Associated with Ichetucknee Springs, Fiscal Year 2002








































All People

X

Percent of

=

Estimated













Attending

Attendance

Outside













Springs

Visitors

Area Visitors

Non-Resident Visitors to the Springs

188,845




0.9




169,962




























Percent of Visitors from Outside the Springs

Sample Size

Percent

Visitors

Party Size

Length of

by Accommodation Mode & Other Statistics

N

(k)

(VIS)

(SP)

Stay (LS)




























Hotels and Motels







42

0.118

20,056

4

2




























Condominiums







7

0.020

3,399

6.5

5.6

























Friends and Family







67

0.188

31,953

4.5

7




























Camping










66

0.185

31,443

8

3




























Day Visitors







174

0.489

83,111

7

1































Total







356

1

169,962

6.4

2.7




























Estimated Spending per Party and Individuals

$EPPD

$EPPED

by Accommodation Mode







(Daily Spending

(Daily Spending
















Per Party)

Per Person)

Hotel and Motels










$410

$102




























Condominiums










$451

$81



















Friends and Family










$247

$55




























Camping













$275

$35




























Day Visitors










$134

$19































All










$215

$34




























Estimated Spending, Wages and Employment

Spending

Wages

Employment







(Mil $)

(Mil $)






Hotel and Motels







4.1

0.99

59

Condominiums







1.5

0.37

21

Friends and Family







12.3

2.63

160

Camping










3.2

0.78

48

Day Visitors







1.6

0.32

23































Total







22.7

5.09

311

For example, as pointed out above, day visitors will not have any expenditures on hotels and motels. As pointed out in the last section, the wages and employment derived from this spending are treated by the kind of expenditure. For example, out of $12.3 million of spending by those visiting friends and families, $1.99 million was spent on restaurants. From the U.S. Census of Business (1997) and an update to current or 2002 dollars for restaurants, this yields $37,939 in revenue (i.e. customer spending) generated per employee annually for the restaurant industry. Thus,

$1.99 million will employ about 53 individuals (i.e., $1.99 Million divided by $37,939). Wages generated by visitors staying with friends and family was estimated at 26.94% from the U.S. Census of Business (1997) or $.536 million by spending at restaurants, for example. On an annual basis, full and part-time restaurant workers would earn about $10,113 per year.

Visitors staying with friends and family spent a total of $12.3 million on goods and services related to Ichetucknee Springs of which $2.63 million were generated as wages and salaries employing an estimated 160 full and part-time individuals. This would mean that annual earning would be about $16,438. This reflects many low wage industries such as motels, restaurants, entertainment and shopping to mention a few. Also, many of these jobs are part-time in nature yielding less income per year.

Looking at the bottom of Table 2.3, we see the direct economic impact of visitors to the area in which the Ichetucknee Springs is located summed across all accommodation modes. In terms of spending, the friends and family category contributed the most spending while attending the Springs (i.e., $12.3 million) while those using condominiums contributed the least spending while attending the Springs (i.e., $1.5 million). Eco-tourism that depends on visitors staying in hotels and motels would contribute the most per party day to the area (i.e., $410). There are camping facilities near the Ichetucknee Springs and these are apparently used by those visiting the Springs. Campers visiting the Springs contribute $3.2 million in spending while visiting the Springs. This impact assumes that the Ichetucknee Springs was the main and fundamental attraction to the area and that campsites were supportive of this visit.



In summary, visitors from out of the area to Ichetucknee Springs contributed about $22.7 million in spending in Columbia and Suwannee Counties. This direct spending created an estimate $5.09 million in wages and salaries supporting 311 jobs in the area. Workers in this visitor industry make $16,367 per year. Most of the spending and employment is created in restaurants ($3.86 million); shopping ($3.75) and ground transportation/gasoline ($2.95) or over 47% of all spending in Table 2.4. More specifically, the distribution of spending and related employment and wages is shown in detail for our ten categories of spending by visitors in Table 2.4. These industries are rather labor intensive. For example, the average wages per job in the two-county area was $23,764 or 45% higher than that estimated for spending categories related to the springs. Finally, if we combined the two counties of Columbia and Suwannee as discussed above, Ichetucknee Springs accounted for only 1% of employment and .7% of wages in the area. Of course, these percentages would be higher if we compared the springs created employment and wages to just Suwannee County where most of Ichetucknee is located. If we did this, the springs direct employment would be 3.1% of employment and 2.4% of wages when the Ichetucknee Springs created employment and wages is compared to just Suwannee alone. Since most of the industries are labor intensive compared to the entire county employment, we would expect that the expansion in the industries servicing the springs would add more jobs than a general expansion of employment in the counties, but, of course, less wages.


Table 2.4

Estimation of Categories of Spending by Those Visitors Outside



the Ichetucknee Springs Area, Florida, 2002



































































Spending Category




Spending (Mil $)

Related Employment

Related Wages (Mil $)

























Lodging







1.44

29

0.35

























Food & Beverages(Restaurants)

3.86

102

1.04

























Food & Beverages(Groceries)

1.78

13

0.18

























Sport Fees




1.04

12

0.48

























Event Admission Fees

1.67

18

0.29

























Admissions to Attractions

1.63

18

0.37

























Evening Entertainment

2.31

26

0.83

























Ground Transportation

2.95

14

0.94

























Shopping







3.75

31

0.39

























All Other







2.27

48

0.22

























All







22.7

311

5.09



































































Note: Aggregate Expenditures for All Categories Including Hotel/Motel; Family/Friends;




Camping and Day Visitors to Ichetucknee Springs State Park.








CHAPTER 3
Direct Regional Economic Impact of

Wakulla Springs State Park, Florida

on Surrounding Areas
Description of Wakulla Springs

The Edward Ball Wakulla Springs State Park is located in Wakulla County, Florida. This county is located on the Gulf of Mexico in the northwestern part of Florida. More specifically, the park is located 14 miles south of Tallahassee on S.R. 267 at the intersection with S.R. 61. Wakulla Springs is heralded as one of the largest natural spring basins in the world. The spring, some four acres in size, boils from a limestone foundation to form the head of the Wakulla River. The main spring boil is very deep (about 200 feet) and so clear that the bottom can be seen in detail. The central point of public areas includes a grand lodge complete with 27 guest rooms. The building is listed on the National Registry of Historic Places. Structured from local cypress timbers, the main entrance to the lodge’s front desk creates a spectacular ambiance with 30 foot high ceilings, a huge 20 foot hearth fireplace constructed with lime rock boulders, a solarium, gift shop, snack bar, and a regionally acclaimed restaurant capable of seating several hundred guests for banquet-style events such as weddings. Visitors are eventually lured to the dock, where informative Florida Park Service rangers guide small groups of nature lovers through the waterways in glass bottom tour boats. The boat tour meanders through areas where Tarzan and Creature From the Black Lagoon were filmed decades ago. Industrialist and Financier Edward Ball, built the massive hotel and developed the property for public use. Picnicking and swimming are popular park activities. Visitors are also commonly seen fishing and snorkeling in the Wakulla River just below U.S. 319, outside the park boundary. This natural area is known for abundant wildlife, especially deer, turkey, wild boar, bald eagles, alligators, manatees and abundant species of fresh and saltwater fish.

Located within a pristine ecosystem, Wakulla Springs State Park is surrounded by 4,741 acres of protected forest. This area has been managed as a public state park since 1986. The actual natural spring is semi-circular with a diameter of 400 feet. This natural spring generates 252 million gallons of water per day. This flow forms the Wakulla River, which proceeds on a nine-mile journey where it merges with another spring-fed water source named the St. Marks River. The confluence of these two rivers then empty into Appalachee Bay where many marine species of fish and shellfish thrive as a result of an optimal habitat produced by the proper salinity which represents a balance of fresh and salt water.

In 2001-2002, 12,662 individual used the lodge at Wakulla Springs State Park for “night use” while 167,811 visitors came for just a day visit. Over 3,500 individuals engaged in boat tours during the year. The primary mission of Wakulla Springs is to ensure that guests have a quality experience when visiting for dining, lodging, enjoying nature, education, swimming, picnicking, or any other form of recreation. Management of these precious natural and cultural resources for future generations is also a key mission. The park slogan is “We Make Memories”.


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