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Outdoor Recreation IMPACTS and OPPORTUNITIES Presented to the Alaska Division of Economic Development

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Outdoor Recreation IMPACTS and OPPORTUNITIES Presented to the Alaska Division of Economic Development ECONOMIC DEVELOPMENT IN ALASKA Outdoor Recreation IMPACTS AND OPPORTUNITIES Presented To The Alaska Division Of Economic Development Prepared By The University Of Alaska Center For Economic Development March 2019 ua-ced.org Table of Contents I. Executive Summary 3 II. Introduction 7 III. Economic Impacts in Alaska 11 IV. The Nexus of Outdoor Recreation, Quality of Life, and Economic Development 22 V. Entrepreneurial Successes and Emerging Market Areas 30 VI. Conclusions and Recommendations 37 VII. Endnotes 40 VIII. Appendix A: Methodology 43 IX. Appendix B: Activity Specific Impacts 48 X. Appendix 3: Customer Segments 60 XI. Contributors 61 UNIVERSITY OF ALASKA CENTER FOR ECONOMIC DEVELOPMENT OUTDOOR RECREATION: IMPACTS AND OPPORTUNITIES 1 Table of Figures Figure 1: Alaska’s Outdoor Economy 6 Figure 2: Value Added to U.S. Economy Through Outdoor Recreation 8 Figure 3: Outdoor Recreation Economic Impact 11 Figure 4: Participation adn Consumer Spending by Activity Type 12 Figure 5: Flow of Economic Impacts 13 Figure 6: Economic Impact of the Outdoor Recreation Industry 14 Figure 7: Economic Impacts of One More Day Outside 19 Figure 8: Alaskans’ Reasons for Living in Alaska 23 Figure 9: Anchorage Residents’ Preferences for Housing Area Amenities 24 Figure 10: Businesses’ Preferred Amenities 25 Figure 11: Outdoor Recreation Participant Demographics 33 Figure 12: Iditarod National Historic Trail Southern Trek 36 Figure 13: Economic Impacts of Fishing Related Recreation, Source: IMPLAN, CED calculations 48 Figure 14: Economic Impacts of Hunting Related Recreation, Source: IMPLAN, CED calculations 49 Figure 15: Economic Impacts of Wildlife Viewing Related Recreation, Source: IMPLAN, CED calcula- 50 tions Figure 16: Economic Impacts of Backpacking, Hiking, and Walking Related Recreation, Source: 51 IMPLAN, Figure 17: Economic Impacts of Campging Related Recreation, Source: IMPLAN, CED calculations 52 Figure 18: Economic Impacts of Boating Related Recreation, Source: IMPLAN, CED calculations 53 Figure 19: Economic Impacts of ATVing Related Recreation, Source: IMPLAN, CED calculations 54 Figure 20: Economic Impacts of Snowmachining Related Recreation, Source: IMPLAN, CED calcula- 55 tions Figure 21: Economic Impacts of Bivycling Related Recreation, Source: IMPLAN, CED calculations 56 Figure 22: Economic Impacts of Downhill Skiing and Snowboarding Related Recreation, Source: 57 IMPLAN, CED calculations Figure 23: Economic Impacts of Cross Country Skiing Related Recreation, Source: IMPLAN, CED 58 calculations Figure 24: Economic Impacts of Gathering Related Recreation, Source: IMPLAN, CED calculations 59 Figure 25: Outdoor Recreation Customer Segments 60 UNIVERSITY OF ALASKA CENTER FOR ECONOMIC DEVELOPMENT OUTDOOR RECREATION: IMPACTS AND OPPORTUNITIES 2 I. Executive Summary Of all 50 states, Alaska has the lowest population and K’esugi Ken in Denali State Park) and one density, greatest acreage of wilderness areas, proposed project (an Anchorage-to-Seward trail). and highest rates of participation in many The economic impacts of outdoor recreation reach outdoor activities. A majority of Alaskans say that beyond the immediate stimulus of consumer opportunities to get outside are a reason they spending. Outdoor amenities contribute to an choose to live or remain in the state, and a similar improved quality of life that attracts new residents share of visitors come to Alaska to experience who become part of the state’s workforce. Access the great outdoors. Both locals and visitors to parks and trails makes neighborhoods more spend money in the course of their activities that desirable, according to a multitude of survey data.1 circulates throughout the state economy, making Additional research shows that businesses are outdoor recreation a substantial industry. more likely to invest in places with perceived high This report characterizes the economic impacts of quality of life. These impacts are more difficult outdoor recreation in Alaska. Through the analysis to measure but are discussed in the report in presented here, the University of Alaska Center qualitative terms. for Economic Development (CED) estimates that Outdoor recreation provides an impetus for in-state consumer spending related to outdoor entrepreneurship in Alaska, as well. A previous recreation trips amounts to nearly $3.2 billion study, Emerging Sector Series: Outdoor Products, annually. That spending creates about 29,000 direct documented the growing Alaska-based companies jobs, and 38,100 total jobs through a multiplier that build or design outdoor recreation products, effect (indirect and induced). About one job in ten serving in-state as well as out-of-state markets. This in Alaska is tied to trip-related outdoor recreation report incorporates interviews from a selection spending. of businesses that participate in the outdoor Using these expenditure figures, CED estimates economy, which range from a brewery to a dog sled the economic impact of two outdoor recreation tour provider, showing the diverse opportunities for amenities in Alaska (Olnes Pond north of Fairbanks entrepreneurship in the sector. Alaska State Parks Ranger Photo Credit: Alaska Division of State Parks UNIVERSITY OF ALASKA CENTER FOR ECONOMIC DEVELOPMENT OUTDOOR RECREATION: IMPACTS AND OPPORTUNITIES 3 Key findings from the report include: Outdoor Recreation and Quality of Life Participation and Economic Impacts • Nearly 6 out of 10 Alaskans said that outdoor recreation opportunities were an important • Alaska has the highest rate of participation in outdoor recreation in the U.S. overall (tied with reason for living in the state. Of those, half cited Montana), as well as in fishing and hunting fishing and hunting as reasons for living in or specifically. staying in Alaska. A large majority of corporate executives • Participants spend almost $3.2 billion on • outdoor recreation trips annually in Alaska. This (87%) say “quality of life” is a major factor in includes purchases made in conjunction with deciding where to expand or relocate business 2 an outdoor recreation trip (such as lodging and operations. fuel) but excludes equipment (such as rifles or • According to a National Association of Realtors, bicycles). four of the top seven most important factors in an American deciding where to live concern • A total of 38,100 direct, indirect, and induced 3 jobs in Alaska result from these expenditures outdoor recreation, including walkability. circulating through the Alaska economy. • Some places in the U.S., including the state of Outdoor Amenity Case Studies Vermont, advertise their outdoor recreation opportunities to attract remote workers as a • K’esugi Ken and Olnes Pond are two facilities form of economic development. within the Alaska State Parks system that have Economic Development Case Studies seen recent infrastructure investment through a combination of state and federal funds. In 2017, • The Colorado Outdoor Recreation Industry visitation to both sites combined generated an Office has helped to land a major investment estimated $1.1 million in consumer spending from VF Corporation, a leading outdoor gear related to outdoor recreation trips. company that owns The North Face and other brands. The office also leverages a university • Creation of an Iditarod Historic Trail (from Anchorage to Seward) is still a dream, but partnership to help rural communities grow construction of a continuous “long trail” from their outdoor economies. Anchorage to Seward is an example of a project • Tested in Idaho is a shared branding initiative that could become a signature destination for by the Idaho Department of Commerce to adventurers from around the world. It would promote outdoor products companies based be an asset for locals and could potentially in the state. It includes a strong social media attract new visitor segments to the state, as presence, brand ambassadors, and a roadshow well as facilitate economic growth in the small to elevate the Idaho brand. communities adjacent to the trail. • Bend, Oregon has attracted and grown a vibrant entrepreneurship community partly on the strength of its access to outdoor recreation. The city is home to an outdoor product startup accelerator called Bend Outdoor Worx. UNIVERSITY OF ALASKA CENTER FOR ECONOMIC DEVELOPMENT OUTDOOR RECREATION: IMPACTS AND OPPORTUNITIES 4 Recommendations • Create a stronger entrepreneurship support system within the outdoor recreation sector. • Improve data collection to better understand the outdoor consumer base in Alaska. A With significant assets in outdoor recreation patchwork of different agencies collect data and a culture of entrepreneurship, Alaska on participation and spending by outdoor has opportunities to further develop the recreators, and notable gaps exist that limit the sector. Design sprints, a startup accelerator, ability to assess economic impacts. and other tailored programs could further the opportunities in the sector for Alaska • Assess the economic impacts of proposed entrepreneurs. state-led recreation projects. The economic Explore opportunities to attract and retain impacts of new trails, access points, and • residents to the state. The idea of attracting other outdoor infrastructure are not always teleworkers, entrepreneurs, and workers from understood. Assessment of these impacts could in-demand fields could help grow the Alaska help policymakers decide which projects to economy. prioritize. Chugach State Park. Photo Credit: Ciara Zervantian. UNIVERSITY OF ALASKA CENTER FOR ECONOMIC DEVELOPMENT OUTDOOR
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