RESOURCES LIST 

Annualized Costs 

Benefit Cost Ratio 

Capacity 

Carrying Capacity 

Demand 

Impacts 

Local Income Multiplier Coefficient 

Unmeasurables 

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CONCEPTS GLOSSARY    & RESOURCE LIST

The factors for some commonly used discount rates and life spans are included in the following table. 
 
 

5 years  10 years  15 years       20 years       25 years       30 years       35 years       40 years       45 years       50 years

4% Discount Rate  4.452  8.111  11.118  13.590  15.622  17.292  18.664  19.793  20.720  21.482

5% Discount Rate  4.329  7.722  10.380  12.462  14.094  15.372  16.374  17.159  17.774  18.256

6% Discount Rate  4.213  7.360  9.712  11.470  12.783  13.765  14.498  15.046  15.456  15.762

   
For example, the factor for a 10 year time period and a 6% discount rate is 7.360. This means that the annualized cost of a $50,000 building over a 10-year period is $50,000 & divide; 7.360 or $6,793 per year. 

Benefitn Cost Ratio: The benefit/cost ratio divides the total amount of benefits from the proposed project by the total costs of building and operating the development. If the ratio is greater than 1 that means the benefits likely to accrue to your community are greater than the estimated costs. Conversely, if the ratio is less than 1, for example .33, then the likely costs outweigh the predicted benefits. You want a benefit/cost ratio greater than 1 to go ahead with planning a project. You would only consider going ahead when the ratio is less than one if you found an unusually strong amount of unmeasurable benefits to offset the costs. 

Capacity: When calculating the demand for a tourism site or facility, it is not enough to just look at how many people might want to come. You must temper that figure with consideration of how many visitors you can handle at any one site and overall in the community on any given day. Do not estimate your potential benefits based on expenditures by more visitors than you could actually serve. 

Carrying capacity: The amount of use (of a given kind) a particular society/environment can endure year after year without degradation of its suitability for that use (Cattin 1982). Carrying capacity is dictated by limiting factors, which are whatever necessities are least abundantly available relative to per capita requirements. 

Demand: Basically, in figuring demand, you are trying to put a number on "How many people will stop and visit?" "How long will they stay?" and "How much will they spend on average each day?" 

Impacts may be thought of as the net difference between the local situation with and without the project you are assessing. Thinking of it in this way recognizes that changes are going to occur in the community whether a project occurs or not. Those changes need to be projected into the future just as the situation with the development project must be projected. To simply look at the present situation and try to compare that with a future scenario that includes the development ignores the fact that some changes will inevitably take place even without the development. Impacts can be benefits or costs. And, this will vary in the eyes of different people or groups within a community or population. For example, some people will see newcomers from different cultures moving to the community as positive while others will see it as undesirable and likely to cause problems for their traditional life styles. 

Local Income Multiplier Coefficient: Tourism expenditures do not simply increase local income by the initial amount of money visitors spend. As the figure below illustrates, the money is spent in more than one round. Each time some of the money stays in the local economy buying locally produced goods and services and some is trickled out through the purchase of extra local goods and inputs to production. Tourists purchase goods and services that are only partially produced or supplied locally. Therefore, part of their expenditures immediately leave the local economy. Then the tourist dollars received by local businesses and employees are spent to purchase additional items for personal or business use, only some of which again are produced or supplied locally. 

Most likely you will not be able to find a local income multiplier coefficient calculated specifically for your local economy based on historical tourism research. So, if you are just beginning to develop a tourism industry, you will have to rely on average figures. Research on rural tourism has found a realistic multiplier effect to be 0.3 to 0.5, meaning that every dollar spent by a tourist results in $0.30 to $0.50 in local income. Select a number higher or lower in this range based upon your best judgement of how much money spent in your community stays in the community versus is taken outside to be spent. In other words, are most items purchased in your community produced in the community with local inputs? Or, are most items either purchased outside the community or purchased in the community but made with inputs that are imported? 
 

First Round - Direct Impact   $100 Increase in Local Income

Second & Subsequent Rounds   $22 Increase 2nd Round

 

Tourist     Expenditure =    Local Sales     $200

$100  50% for purchases  of goods & services  produced outside; taxes  $100 - equals -   50% for local  goods

$100  Increase in  local income;  1st round

$45  45% of income & taxes; purchases  outside community  $55  55% income  spent  locally

$33  60% buy  goods &  services produced outside community; taxes      $22   40% for local goods

From Tourism USA.  

    

Unmeasurables are benefits and costs that can not have a dollar value placed on them, but which do either enhance or detract from the local economy, society, or environment in some way. For example, an increase in jobs can have a dollar figure attached to it if you consider increase in local wages. The analysis, however, should not end there. You need to assess whether the proposed types of jobs to be created match your available work force and its members needs and desires in terms of employment. Also be aware that tourism jobs can be low paying and tend to not offer benefits due to their often part time, seasonal nature. This is a cost of pursuing a tourism economic development strategies instead of some others. You need to consider how these compare with other locally available jobs to determine if people will indeed seek out employment in the tourism activity. 

Another cost could be lack of "peace and quiet" of a slack season if your community uses tourism to fill in the off season gaps of other ongoing economic activities. Do the economic benefits offset this perceived social cost/value? 
 

Unmeasurable Benefits  New jobs    Expanded economy    Clean industry    Investment opportunities    Supports public facilities    Boosts local businesses    Promotes variety    Encourages civic involvement and pride    Provides cultural exchange between hosts and guests    Fosters conservation and preservation of natural, cultural and historical resources    Encourage community beautification and revitalization

Unmeasurable Costs  Seasonal, lower paying jobs    Higher taxes/user fees for residents    No guarantee of success    Seasonal markets    Higher public maintenance costs    Conflict between lifestyles of visitors and residents    Crowding and congestion    Competition for available services,   facilities, and existing recreation opportunities    Degradation of quality of sensitive    natural or historical sites.   Increase litter, noise, and pollution

 

RESOURCES LIST 
Ayres, Janet, Robert Cole, Clair Hein, Stuart Huntington, Wayne Kobberdahl, Wanda Leonard and Dale Zetocha. 1990. Take Charge: Economic Development in Small Communities. Ames, IA: Iowa State University, North Central Regional Center for Rural Development. 

Bramwell, Bill and Bernard Lane (eds.) 1994. Special Issue on Rural Tourism. Journal of Sustainable Tourism. 2(1&2). 

Bruns, Don, Sarah Richardson, and Terry Sullivan. 1994. Recreation Tourism Community Partnerships for Sustainable Adventure Travel. Paper presented at the Fifth International Symposium on Society and Resource Management, Fort Collins, CO. (First author is in the Colorado State Office, US Dept. of the Interior, Bureau of Land Management) 

CAP International. Leisure Recreation and Tourism Abstracts. Tucson, AZ: CAP International. 

Community Enterprise Development Corporation of Alaska. 1989. Rural Alaska Tourism Development: a Tourism Planning Handbook. Anchorage, AK: Alaska Village Tours, Inc. 

Fleming, William R. and Lorin Toepper. 1990. Economic Impact Studies: Relating the Positive and Negative Impacts to Tourism Development. In the Journal of Travel Research 24(1). 

Gahring, Sherri et al. 1992. Marketing Crafts and Other Products to Tourists. NC Regional Extension Publication 445. Ames, IA: Iowa State University. (Video available, too). 

Goldman, George, Anthony Nakazawa, and David Taylor. 1994. The Economic Impact of Visitors to Your Community. WREP 144. Corvallis, OR: Oregon State University, Western Rural Development Center (WRDC). 

----. 1994. Measuring Visitor Expenditures and Their Impact on Local Income. WREP 145. Corvallis, OR: Oregon State University, WRDC. 

----. 1994. Estimating Visitor Demand and Usage. WREP 146. Corvallis, OR: Oregon State University, WRDC. 

----. 1994. Cost Benefit Analysis of Local Tourism Development. WREP 147. Corvallis, OR: Oregon State University, WRDC. 

Heise, Dorothy A. 1994. Promoting Tourism in Rural America. Rural Information Center Publication Series No. 35. Beltsville, MD: USDA National Agricultural Library. 

Hetherington, Arlene. Rural Tourism: Marketing Small Communities. Bainbridge Island, WA: Meta-Link. 

Holland, Dave. 1994. Economic Impacts: What an Impact Statement Says. WREP 31. Corvallis, OR: Western Rural Development Center. 

Inskeep, Edward. Tourism Planning: an Integrated and Sustainable Development Approach. New York: Van Nostrand Reinhold. 

Kerr, William, Robert Sorrels, and Mary Emery. 1991. Marketing Your Community: a Marketing Plan Workbook for Attracting Retirees as an Economic Diversification Strategy. Lewiston, ID: Idaho Small Business Development Center and Lewis-Clark State College Institute for Community Development. 

Koth, Barbara, Glenn Kreag, and John Sem. 1991. A Training Guide for Rural Tourism Development. St Paul, MN: University of Minnesota Tourism Center. 

Leyva, Michael E. And John Sem.1995. The Rural Tourism Development Team Training Manual. Arizona Rural Tourism Development Program. Phoenix, AZ: Arizona Department of Commerce. 

Lindberg, Kreg. 1991. Policies for Maximizing Nature Tourism's Ecological and Economic Benefits. International Conservation Financing Project working paper. Washington DC: World Resources Institute. 

Lindberg, Kreg, Rebecca Johnson, and Bruce Rettig. 1994. Attitudes, Concerns, and Priorities of Oregon Coast Residents Regarding Tourism and Economic Development. Corvallis, OR: Oregon State University SeaGrant Program. 

McIntyre, George, Arlene Hetherington and Edward Inskeep. 1993. Sustainable Tourism Development: Guide for Local Planners. Madrid, Spain: World Tourism Organization. 

Miosey, Neil, and Michael Yuan. 1991. Teton County Non-Resident Visitor Study. Missoula, MT: Institute for Tourism and Recreation Research (ITRR), University of Montana. 

Murphy, Peter E. 1985. Tourism: a Community Approach. New York: Routledge. 

Organization for Economic Cooperation and Development. 1980. The Impact of Tourism on the Environment. Paris: OECD. 

Rasker, Ray, Jerry Johnson, and Vicky York. 1994. Measuring Change in Rural Communities: A Workbook for Determining Demographic, Economic, and Fiscal Trends. Washington DC: The Wilderness Society. 

Richardson, Sarah. 1991. Colorado Community Tourism Action Guide. Boulder, CO: University of Colorado, Center for Recreation and Tourism Development and University of Colorado at Denver Center for Community Development. 

Ritchie, J.R. Brent. c1987. Crafting a Destination Vision. In Ritchie, J.R. Brent and Charles R. Goeldner (eds.). Travel, Tourism, and Hospitality Research. 2nd Edition. New York: Wiley. pp. 29-38. 

Rosenow, John E. and Gerreld L.Pulsipher. 1979. Tourism: the Good, the Bad, and the Ugly. Lincoln, NB: Media Productions and Marketing, Inc. 

Rundell, John B., William J. McLaughlin, , and Charles C. Harris. 1989. Idaho Rural Tourism Primer: a Tourism Assessment Workbook. Moscow, ID: Department of Wildland Recreation Management, University of Idaho. 

Sharpe, Dave. 1990. Choosing Leadership Styles. MONTGUIDE 8404. Bozeman, MT: Montana State University Extension Service. 

----. 1990. Conflict Management. MONTGUIDE 8515. Bozeman, MT: Montana State University Extension Service. 

Taking the Hype out of Ecotourism. Trends Journal Special Edition. 1994. Vol.31, No. 2. Washington DC: National Park Service. 

Tait, John L., Janet Bokemeier, and Joe M. Bohlen. 1988. Identifying the Community Power Actors: A Guide for Change Agents. North Central Regional Extension Publication 59. Ames, IA. Iowa State University Cooperative Extension Service. 

U.S. Travel Data Center. 1984-85. Survey of State Travel Offices. Washington DC: Travel Industry Association of America. 

Weaver, Glenn. 1991. Tourism USA: Guidelines for Tourism Development. Columbia, MO: Department of Parks, Recreation, and Tourism, University of Missouri. 

----. 1993. Tourism Development: a Guideline for Rural Communities. Columbia, MO: Department of Parks, Recreation, and Tourism, University of Missouri. 

Western Entrepreneurial Network. 1995. Multi-Cultural Tourism Development Workbook. Denver, CO: University of Colorado at Denver, Colorado Center for Community Development. 

Yuan, Michael, David Snepenger, and Susan Yuan. 1993. The Montana Tourism Primer: an Assessment of Tourism Potential in Rural Communities. Missoula, MT: ITRR, University of Montana. 

World Wide Web Resource: http://govinfo.kerr.orst.edu 
This page was developed through the Government Information Sharing Project, Information Services, Oregon State University. It provides access to county level data from a variety of sources.