Improving Park Finance Through Tourism Ecotourism and Sustainable Tourism Conference October 27-29, 2008 Vancouver, British Columbia, Canada
Paul F. J. Eagles University of Waterloo Ontario, Canada
As of October As of October 2008 Protected Areas Cover As 12% of the Earth’s land surface area
Costa Costa Rica Rica National National Park Park Visitation Visitation 1,200,000
Nationals
1,000,000
Fore igne rs
800,000
Totals
600,000 400,000 200,000 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
0
US US National National Park Park Visitation Visitation Peak in Recreation Visits
450,000,000 400,000,000 350,000,000
Recreation Visits Non-recreation Visits Total Visits
300,000,000 250,000,000 200,000,000 150,000,000 100,000,000 50,000,000 0 1979
1981
1983
1985
1987
1999
2001
2003
2005
Trends Trends • Over the last 50 years there has been major expansion in most of the world’s park systems. • Therefore, there is much more land to manage. • Many park systems also saw an increase in visitor numbers. • Therefore, there are more people to manage. • Generally, the budgets did not increase accordingly. • Virtually every park system in the world is underfunded.
Financial Financial Options Options for for Park Park Management Management • • •
Government grants based on taxes. Tourism fees and charges. Donations.
Taxes
Tourism
Taxes
Taxes
Tourism Tourism
Growth Growth in in Park Park Tourism Tourism • In most parts of the world, the number of park visitors is continually increasing. • The size of the industry is large and poorly recognized. In 1996: – Canada: 115,323,513 visitor days. – USA: 2,510,951,728 visitor days.
• The associated economic impact was calculated to be between US $236 billion and $370 billion for that year.
Problems Problems • Even with this high economic impact of park-based tourism, the continual refrain is that parks can not properly manage their tourism volumes. • Tourism is usually seen as being a problem, not a solution.
Australia Australia Economic Economic Impact Impact • Driml and Common (1995) calculated that the economic benefits of nature-based tourism in five Australian World Heritage Areas (Great Barrier Reef, Wet Tropics, Uluru National Park, Kakadu National Park, and Tasmanian Wilderness). • The five areas studied experienced tourism expenditures in 1991/92 of $1,372,000,000.
World World Heritage Heritage Economics Economics and and Finance Finance • The five areas studied experienced tourism expenditures in 1991/92 of $1,372,000,000. • The total management budgets were $48,700,000. • The user fee income to the management agencies was $4,160,000.
$1,400,000,000 $1,200,000,000
Tourism Expenditures
$1,000,000,000
Management Income
$800,000,000 $600,000,000 $400,000,000 $200,000,000 $0
1991/1992
Tourism Tourism Capability Capability • The global increase in park area, number of parks and park visitation has outstripped the capability of many park management institutions.
Problems Problems caused caused by by the the lack lack of of capability capability • • • • •
Negative environmental impact. Deteriorating facilities. Demands to reduce tourism. Lowered visitor satisfaction. Negative image of park tourism.
Management Management Responses Responses • • • • • •
Do nothing. Discourage tourism. Use public utility model - parastatal. Contract tourism services to profit-making sector. Contract tourism services to the non-profit sector. Combination model.
Cost Cost Recovery Recovery in in Canadian Canadian Park Park Systems Systems in in mid mid 1990s 1990s 60
52 Percent Cost Recovery
50 35 36
40 30 20 10 0
19
14 11 11
12 5
1 BC
7
AB
SK
MN
ON
PQ
NB
NF
NS
PE
YK
11 4
NT
PC
60
52
50
Percent Cost Recovery 35
40
36
30 20 10 0
19
14 11
12
7
5
1 BC
11
AB
SK
MN
ON
PQ
NB
NF
NS
PE
11 4
YK
NT
PC
YK
NT
PC
30,000,000 Visitation
25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0
BC
AB
SK
MN
ON
PQ
NB
NF
NS
PE
Ontario Ontario Provincial Provincial Parks Parks Cost Cost Recovery Recovery 90 80
Percent Cost Recovery
82
78
2001
2006
56
70 60 50 40
32
30 20 10 0 1990
1996
Movement Movement from from Taxes Taxes to to User User Fees Fees
Tanzania Tanzania National National Parks Parks $20,000,000 $18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0
Revenue Expenditures
1988 1989 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Potential Potential Income Income Sources Sources • Entrance Fees • Recreation Service Fees, Special Events and Services • Accommodation • Equipment Rental • Food Sales (Restaurants and Stores) • Parking • Merchandise Sales (Equipment, Clothing, Souvenirs) • Licensing of Intellectual Property • Cross Product Marketing
Parks Parks Canada Canada Actual Actual Income Income Compared Compared to to Potential Potential Income Income Sources Sources
Income Source Entrance Fees Recreation Fees Accommodation Accommodation Concessions Equipment Rental Food Sales Parking Merchandise Intellectual Property Cross-Product Marketing Other (Interest, land sales)
Parks Canada Income $30.1 $4.5 $10.9 (Camping) $2.3 (Staff Housing) $14.3 0 0 0 0 0 0 $7.8
SAN Parks Income Sources 2006-7 6 1
4 17
5
7
8
33 19
Grants Accommodation Conservation Fee Concessions Activities Retail Interest Sundry Land Grant
South South Africa National Parks Income 40 Grants Accommodation Conservation Fee Concessions Activities Retail Interest Sundry Land Grant
35 30 25 20 15 10 5 0 2003-4
2004-5
2005-6
2006-7
Resistance Resistance Factors Factors to to Park Park Tourism Tourism Finance Finance • • • • • •
Public expectation of free nature. History of pricing below production cost. Private sector resistance to public sector entrepreneurial behaviour. Private sector vultures. Lack of business expertise in park agency. Public concern about commercial development of parks.
The The Future Future • Increased use of tourism to fund park management. • More use of parastatal forms of management. • Higher levels of all types of fees and charges.
Responsibility Responsibility • The private tourism industry has a responsibility to ensure that the financial resources of the park management are sufficient. • The NGO community must lobby for effective and efficient financial policies.
Needs Needs within within aa Park Park Agency Agency • Needs within a Park Agency • Appropriate financial and tourism policies of the park agency and government. • The agency must be able to earn and retain income. • Ability to set prices. • Ability to retain income year over year. • Appropriate purchasing procedures. • Acceptable labour environment.
Needs Needs within within aa Park Park Agency Agency • Sufficient number of staff members. • Professional training in all aspects of tourism and business management. • Ability to undertake, implement and monitor contracts. • Robust financial procedures to guard against theft. • Good combination of specialized expertise at central office and implementation ability in the field.
References References • • • • • •
•
Driml, S. and M. Common. 1995. Economic and Financial Benefits of Tourism in Major Protected Areas. Australian Journal of Environmental Management 2(2):1939. Eagles, Paul F. J. 1998. International Trends in Park Tourism and Finance: Implications for Ontario. Proceedings of the 1998 Travel and Tourism Research Association of Canada. Eagles, Paul F. J. 2002. Trends in Park Tourism: Economics, Finance and Management. Journal of Sustainable Tourism 10(2): 132-153. Eagles, Paul F. J. 2003. International Trends in Park Tourism: The Emerging Role of Finance. The George Wright Forum 20(1): 25-57. Eagles, Paul F. J., Daniel McLean and Mike J. Stabler. 2000. Estimating the Tourism Volume and Value in Parks and Protected Areas in Canada and the USA. George Wright Forum 17(3): 62-76. Eagles, Paul F. J., Stephen McCool and Christopher Haynes. 2002. Sustainable Tourism in Protected Areas: Guidelines for Planning and Management. United Nations Environment Programme, World Tourism Organization and World Conservation Union. Also available in Spanish, Chinese, Japanese and Russian. Indonesian and Korean versions are in process. Eagles, Paul F. J. and Stephen F. McCool. 2002. Tourism in National Parks and Protected Areas: Planning and Management. England: CABI.