The impact of fees on visitation of national parks

Abstract

This study assesses the impact of the change in revenue management policy (namely the increased public land recreation fees) on the number of domestic and international travelers that visit the large, mostly well-known US National Park System sites. Baseline, multivariate demand models were developed based on secondary data from 10 years prior to the fee policy change, and were used to predict demand in years following the fee change. The predictions of the baseline demand models were then compared to the sites’ actual visitation. The differences between the actual and the predicted visitation are statistically significant, indicating that the change in the federal agencies’ revenue management policy might have had an adverse effect on the visitation of the largest US national sites.

Introduction

In an attempt to address long-term financial difficulties, the US Congress authorized four federal agencies—the National Park Service, the USDA Forest Service, the US Fish and Wildlife Service and the US Bureau of Land Management—to charge an entrance and usage fee at selected sites. This Recreational Fee Demonstration Program (RFDP) was designed to test the four agencies’ ability to use public land recreation fees to better maintain sites and improve their visitors’ experiences. The federal agencies began implementing this major change in their revenue management policy in late 1995.

A comprehensive discussion on the controversy over fees for use of public lands can be found in Anderson (2000), Watson and Gamini (1999) and Winter, Palucki, and Burkhardt (1999, pp. 207–209) where possible adverse effects include reduced visitation, decreased public support, non-compliance, and the exclusion of the economically disadvantaged and minorities. For example, a mail survey of New Hampshire and Vermont households (More & Stevens, 2000) indicates that, although widely supported, user fees might have had a discriminatory impact on the participation of low-income households. Addressing this concern, Dustin, More, and McAvoy (2000) argued that the national parks are a public good that should be fully funded through taxes and accessible to all people. The authors state that if certain socioeconomic groups are excluded from public lands because of user fees, the very purpose of public recreation becomes questionable.

Another concern (Anderson & Freimund, 2004) involves the inappropriate impact that usage fees might have on policy and decision-making, since the individual sites retain 80% of the fee revenues while the other 20% is allocated to the agency at the regional level. Accordingly, Martin (1999) asserts that user fees have implications far beyond raising revenue and deciding how to spend it. He encouraged the participating agencies to develop specific objectives for their fee programs that clearly reflect the agencies’ philosophies and missions and to carefully articulate their criteria for determining what fees to charge and when. McDonald, Noe, and Hammit (1987) and More, Dustin, and Knopf (1996) add that as the fee increases, so too might visitors’ expectations of benefits.

Since the program's inception, a major concern has been the impact on visitation as stated by Schroeder and Louviere (1999, p. 300): “An important question in the implementation of fee programs is how various levels and types of fees will affect people's decisions about whether and how often to visit particular sites”.

The purpose of this study is to determine whether this national change in revenue management policy has, indeed, affected the visitation of national park system sites, which have been popular destinations for millions of domestic and international travelers every year. In recent years, numerous studies and reports have attempted to assess the impact of recreation fees on public land visitation and use. Some of these reports tried to anticipate the potential impact on visitation before a fee was implemented or increased (for example see Leuschner, Cook, Roggenbuck, & Oderwald, 1987; Marsinko 2000, Relling et al., 1995; Schroeder & Louviere, 1999) while others evaluated the effect of a recreation fee on visitation after a fee had been implemented or changed (e.g., Bamford, Manning, Forcier, & Koenemann, 1988; Krannich, Eisenhauer, Field, Pratt, & Luloff, 1999; Schneider, LaPointe, & Stievater, 2000). These studies apply methods that can be grouped into two major categories. The first category is users/managers survey-based, which survey respondents about their attitudes toward usage fees and their assessment of the likely impact on visitation (e.g, Bowker, Cordell, & Cassandra, 1999; Fedler & Miles, 1989; Krannich et al., 1999; Schneider et al., 2000). Some of these studies examined intention to use or revisit these sites given a fee level, and others looked at self-reported willingness to pay. For example, Schneider and Budruk (1999) found evidence that user fees might displace visitors to non-fee areas. Their survey at a non-fee National Forest beach area revealed that 50% of the participants selected the site because it was free of charge and about one-third indicated they had altered their choice because of the fee program.

The studies and reports in the second category analyzed actual visitation figures. Some compare visitation before a fee was implemented or changed to the period following the change, while others compare visitation of fee sites to non-fee sites or among sites with different fee levels (US Department of the Interior, US Department of Agriculture, 1998). Still other studies measure price demand elasticity by simultaneously examining changes in visitations and changes in fees (e.g., Lindberg & Aylward 1999).

This study examines the “before” and “after” actual visitation figures while also comparing the visitation of fee demo sites to non-fee sites. It differs from other published reports on the impact of the fee demo program on visitation in that it does not simply compare visitation figures. Rather, this study fits baseline models to the “before” data and uses those models to predict the “after” values. That is, a key concept of this study is to establish (for each of the examined parks) what the visitation would have been if the RFDP had not been implemented.

To the best of the authors’ knowledge, those reports that address the effects of the demo fee program on visitation in the National Parks system state the rather surprising observation that little or no decrease has been detected (Field, Krannich, Luloff, & Pratt, 1998, p. 1; Lundgren, Lime, Waezech, & Thompson, 1997, p. 1; US Department of the Interior, US Department of Agriculture, 1998, p. 4; US General Accounting Office, 1998, p. 3; US General Accounting Office, 2001, p. 18). Economic theory predicts that as the price of a product or service increases, the quantity demanded (visitation) in equilibrium decreases, unless demand is completely inelastic or the product is peculiarly “inferior” such that the substitution effect is overcome by the perverse income effect, i.e., the product is a Giffen good. Several explanations as to why a negative impact was not detected have been suggested. The main arguments are as follows:

• Too few observations.

• Visitation data inadequate for analysis because of inconsistency in counting methods.

• Fee hike not large enough to affect visitation.

• Unique and temporary circumstances (external factors) that affect each park's visitation patterns.

This study asserts that 7 years after the program's implementation, it should be possible to detect an impact on visitation if, as theory predicts, the visitation has indeed changed. This paper analyzes individual national sites, selected from a pre-defined group based on visitation volume, fee collected, and performance according to the baseline visitation prediction model. By focusing on this pre-selected group of parks, we enhance the likelihood of detecting an impact, if present. Our results indicate that the visitation of several high volume and well-known national sites may have declined due to the change in revenue management policy.