Report sees resilient Montana tourist industry

Montana's nonresident travel is not always understood

By RICHARD HANNERS / Whitefish Pilot

Montana ranks 42nd in the U.S. for tourist spending, but it ranks seventh in the nation in per capita tourist spending, according to a research report on the state's tourist economy in 2007.

The nonresident travel industry accounted for about 7 percent of the state's total employment, making it the fifth largest employer, after construction but ahead of agriculture, the report concluded.

The report was written by Kara Grau and Melissa Bruns-Dubois, of the University of Montana's Institute for Tourism and Recreation Research. This is the institute's fifth edition of the biennial report.

The authors say the "same economic complexity that is one of the industry's strengths" also makes it hard to measure and compare to other sectors.

"As a consequence, government officials, business executives and the general public have been slow in grasping the significance of the industry," they said. "This lack of recognition is perhaps the industry's greatest hurdle and can make it vulnerable to unfavorable policy decisions and negative press."

On average, every dollar spent by tourists generated 34.2 cents in wages and salaries for Montana residents, compared to 26.2 cents nationwide.

Last year, travel expenditures by nonresident travelers totaled more than $3.08 billion, which in turn generated more than $4.31 billion in total economic impact, about 9 percent of the state GDP. The increase continues an upward trend over the past 20 years, the authors said, despite the wildfires of 2007.

Montana residents spent more than $803 million on pleasure travel within the state, based on a 2005 study converted to 2007 dollars. How that money is spent has not yet been determined.

According to Grau and Bruns-Dubois, tourist spending in Montana last year directly created 33,200 jobs in Montana. All told, nonresident spending created 44,800 jobs and $1.05 billion in personal income for Montana residents.

State and local governments took in about $235 million in taxes as a result of tourist spending. Part of the state's tax revenue comes from the 7 percent accommodation tax.

About 10.68 million nonresident travelers came to Montana last year, an increase of 2.9 percent over 2006. That translates into 4.36 million travel groups at the average 2.45 people per travel group. Length of stay averaged 4.6 days.

Tourists from the U.S. accounted for 89 percent of nonresident travelers in Montana. About 7 percent of the visitors came from Canada, and about 4 percent came from foreign countries.

Room demand and supply increased last year by 4.3 and 1.3 percent, respectively. Occupancy rates increased by 3 percent.

Mountains and forest and Yellowstone National Park were the biggest attractions cited by tourists, while wildlife watching and pleasure driving were the most popular recreational activities. Glacier Park was the No. 5 attraction cited by tourists. Fishing came in No. 10 for recreational activities.

By the numbers, Glacier Park is the No. 1 destination for nonresident travelers in Montana, followed by Yellowstone Park, Fort Peck Reservoir, Little Bighorn Battlefield and Giant Springs State Park. Libby Dam came in ninth, and the National Bison Range was 10th.

Visitation to Montana state parks by both residents and nonresidents increased by 3 percent over 2006.

Airline passenger boardings in Montana increased by 3.4 percent last year, adding up to a 19.2 percent increase since 2000, but Amtrak ridership only increased by 0.9 percent. Whitefish, the busiest passenger train depot in the state, saw a drop of 4.1 percent compared to 2006.

Due to its economic diversity, "the travel industry is often considered to be relatively resistant to recessions," the authors said. One exception was in 1991-1992, during the Persian Gulf War.

Tourism took a hit as the effects of the Sept. 11, 2001, terrorism attacks "rippled through the economy," they noted, "but the industry quickly rebounded." Travelers sought out more affordable and safer domestic destinations, they said.

"It remains to be seen exactly what the effects of the current rapid increases in fuel prices and other recessionary economic conditions will be," the authors said.

The largest spending category for nonresident travelers last year was gasoline and oil, and fuel prices were higher, but "rather than seeing fewer travelers in Montana, the number has steadily increased."

The authors say that in years following a recession, "the travel industry has a tendency to lag behind the overall growth rate in the economy."

Grau and Bruns-Dubois note that many travelers who may have wanted to visit Montana in the past "now had more reasons to visit the state" as a result of economic downturns in late-2000 through late-2003.

For more information, visit online at www.ittrr.umt.edu.