Live-aboard dive boats in the Great Barrier Reef: regional economic impact and the relative values of their target marine species

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1 Tourism Economics, 2010, 16 (4), doi: /te Live-aboard dive boats in the Great Barrier Reef: regional economic impact and the relative values of their target marine species NATALIE STOECKL, ALASTAIR BIRTLES, MARINA FARR, ARNOLD MANGOTT, MATTHEW CURNOCK AND PETER VALENTINE James Cook University, Townsville, Queensland 4814, Australia. Using data collected from more than 1,000 tourists on live-aboard dive boats operating in the Cairns/Cooktown management area of the Great Barrier Reef, this paper estimates the regional economic impact of that live-aboard industry. It also uses a subset of these data (247 respondents) to investigate some of the relative values of key marine species seen on the trips that included the Coral Sea location of Osprey Reef and which targeted multiple species of wildlife. The authors find that (i) each year, the live-aboard dive boats are directly responsible for generating at least AU$16 million worth of income in the Cairns/Port Douglas region; (ii) visitors participating in different types of trips gain their highest levels of satisfaction from interacting with different types of species; and (iii) visitors to Osprey Reef would be willing to pay more for a guaranteed sighting of sharks than they would for a guaranteed sighting of large fish, marine turtles or a wide variety of species. Keywords: economic impact; willingness to pay; wildlife values; Great Barrier Reef; marine tourism; live-aboard dive boats Arguably, one of the world s most famous and its largest coral reef systems, the Great Barrier Reef (GBR) extends for more than 2,300 km along Australia s north-east coast. Given the vast size and diversity of the Reef, there are, not surprisingly, many different ways in which it is used. Not only is the Reef a unique marine environment that provides essential ecosystem services, but the This project was funded by the Australian Government s Marine and Tropical Sciences Research Facility. The authors gratefully acknowledge that funding and also the support provided by James Cook University. We are particularly grateful to the managers and owners of the five live-aboard dive operations who helped us by providing logistical and financial support. We would also like to thank their office personnel who helped facilitate the data collection and the crews for their enthusiasm in distributing and collecting questionnaires. Finally, we would like to extend a special thank you to all passengers for sharing their experiences, thoughts and financial details with us.

2 996 TOURISM ECONOMICS area between the mid and outer shelf reefs and the mainland, for example, provides a safe shipping channel (Australian Maritime Safety Authority, 2001; Great Barrier Reef Marine Park Authority, 2003): the Australian Government Department of the Environment, Water, Heritage and the Arts (2006, p 103) estimate that every year approximately 6,000 ship movements of large vessels in excess of 50 metres in length occur within the GBR and Torres Strait region. The reef and its environs are also used extensively for education and research; it is rumoured to contain oil reserves (Forest Protection Portal, 2001; Cummins, 2002, cited in World Wildlife Fund Australia 2004, p 128), more than AU$190 million worth of fish were caught within the Coral Sea fishery in (ABARE, 2007) and, perhaps more widely known, almost two million tourists visit the area each year (Tourism Queensland, 2002, 2007b; Great Barrier Reef Marine Park Authority, 2005). Some of these uses are, at least partially, complementary in that they can coexist. For example, the GBR can sustain a well-managed tourism industry and can probably also provide safe shipping channels (assuming no accidents) simultaneously with the provision of essential ecosystem services. Yet some of the uses are competitive, as when, for example, both commercial and recreational fishers target the same species. Whilst some uses are complementary at low levels, they may become competitive at higher levels (for example, a well-managed fishery is sustainable, but overfishing could lead to the collapse of some fish stocks, thus reducing other values). Regional managers are therefore faced with an exceedingly complex challenge: namely, to balance this diverse set of uses. Not only is this an important environmental challenge, but it is also an important social and economic one. Most of the communities along the GBR s coastline are relatively small the largest cities being Cairns and Townsville, with populations of 122,731 and 194,908 respectively 1 (ABS, 2008). Relatively small urban communities such as these do not have the rich diversity of industry prevalent in larger urban centres and often rely heavily on just one or two industries for income and employment (Stoeckl et al, 2007). The lives and livelihoods of people living within these GBR communities are thus linked inextricably to the Reef, at least partially, because the economic activities associated with it are vitally important to these communities. Indeed, Access Economics (2007, p 2) reported that tourism, commercial fishing and cultural and recreational activity in the Great Barrier Reef Catchment Area (GBRCA) contributed in excess of AU$4.5 billion to Queensland s economy during In an idealistic economic test tube, regional managers would be able to maximize the net social benefits of the Reef by equating the marginal value of its uses. 2 But we do not live in an idealistic test tube; and we do not have enough information to assess the precise marginal values of all potential environmental, social and economic uses of a resource as rich and diverse as the GBR particularly since many of the Reef s uses are non-priced and many marginal values are interdependent, either competing with or complementing each other. Amongst other things, regional managers thus face significant informational constraints when seeking to determine how to make best use of this valuable resource. Research which increases the size and/or quality of the information about the relative value of different uses of the GBR will

3 Economic impact of live-aboard dive boats in the Great Barrier Reef therefore be of considerable assistance to those who are keen to ensure that the GBR is managed sustainably. This paper helps reduce the size of the current information deficit by providing information about the tourism values associated with key marine species accessed by the live-aboard dive tourism industry in the Cairns/Port Douglas region. Whilst there are numerous examples of studies which have attempted to quantify the economic value of a species in terms of willingness to pay (for conservation) and/or the consumer surplus associated with species conservation, there is...another sense in which wildlife may be valued ; this is in terms of the benefits that the presence of wildlife... may confer on the economy of the surrounding area (Crabtree et al, 1994, p 61). It is on this type of value that this research focuses. As noted in Smith et al (2006) wildlife tourism the viewing and visiting of wild animals for recreational purposes or as a tourist attraction is a relatively recent phenomenon. But this type of tourism has grown rapidly in recent years (Orams, 1996; Roe et al, 1997; Hoyt, 2001; Mvula, 2001; Wilson and Tisdell, 2001), and in Australia, there are many destinations where tourists expect to view particular types of wildlife for example, crocodiles in the Northern Territory (Ryan, 1998; Tremblay, 2002); little penguins at Phillip Island (Head, 2000; Phillip Island Nature Park, 2005); dingoes on Fraser Island (Lawrance and Higginbottom, 2002); dolphins at Monkey Mia (CALM, 1993); and whales at Hervey Bay (Corkeron, 1995). Most pertinent here is the fact that wildlife tourism has the potential to make a significant contribution to regional economies (Crabtree et al, 1994, p 61). Whale watching, for example, is estimated to have contributed close to AU$300 million to the Australian economy during 2001 (Hoyt, 2001); and the tourism expenditures associated with dolphin viewing in Monkey Mia, Western Australia, accounted for up to 11% of Gascoyne s total regional income (Stoeckl et al, 2005). The primary aim of this paper therefore, is to determine the importance of tourism based on key marine species to the Far North Queensland economy. The secondary aim is to explore some of the relative values of those key marine species. To be even more specific, this paper presents and analyses data that were collected from a survey of more than 1,000 live-aboard dive boat tourists in the Cairns and Far Northern sections of the Great Barrier Reef Marine Park (GBRMP). It uses the data to meet three objectives; namely to: (1) Estimate the regional economic impact of visitor expenditure that is generated by the live-aboard dive boats which specifically target key marine species in the Cairns/Cooktown management area of the GBR; 3 (2) Examine the degree to which interactions with different types of marine species contribute to visitors overall satisfaction with their trip; and to (3) Explore differences in visitor willingness to pay (WTP) for a guaranteed sighting of different species. In theory, one could assess (1) using a two-step process. First, one could determine how much extra regional expenditure is generated by the dive boat industry (termed substitution by Jones and Wood, 2008). Then one could use a computable general equilibrium (CGE) model to determine the aggregate, and distributional, regional impact of that substitution. Although this sounds like a relatively easy task, there are a few operational hurdles which need to be 997

4 998 TOURISM ECONOMICS overcome: it is not always easy to determine the amount of tourist expenditure that is generated by an industry and few (if any) small, regional economies have readily available CGE models. Neither of these tasks has trivial solutions, and applied researchers thus frequently find themselves in a position where they need to make approximations and/or take short cuts. These are discussed in more detail in the following sections but, to outline briefly the methodological approach used here, the researchers involved in this project used survey data to estimate the total annual visitor expenditure that occurred because of the presence of live-aboard dive boats that operated out of the Cairns/Port Douglas region during the 2007/08 financial year, and then multiplied that estimate by a generic tourism multiplier to generate an estimate of the regional economic impact of that industry. As regards objective (2), in an attempt to assess the relative value of key species observed by the people on these trips, the research team used visitor ratings of the level of satisfaction they had with interactions with different types of key marine species to draw inferences about the relative (financial) tourism values of those species, in their current state. However, this only provides information about the total levels of satisfaction associated with key species and it is, arguably, marginal values which managers need when trying to make tradeoffs between competing uses of scarce resources. Hence, the need for objective (3), which is met by using survey responses to a hypothetical question about WTP for a guaranteed sighting of different species to estimate the marginal values of improved (tourist) access to a subset of key marine species. The paper is structured as follows. In the next section, we describe the surveys used to collect the data for our analysis. In the subsequent section, we present and analyse our data, explaining the methodological approaches used in a step-by-step manner. We then discuss the results and, finally, highlight some of the policy implications of our findings. The surveys Live-aboard boat operators schedule trips to different locations on the GBR at different times of the year as shown in Figure 1. Hence, passengers are likely to encounter different large, iconic species of GBR wildlife at different times of the year. So, the research team designed three different visitor (passenger) questionnaires that were tailored specifically to target the different species most likely to be encountered on different trips. All questionnaires were selfadministered and completion was entirely voluntary. Details of each are given below Far Northern GBR passenger survey This survey was conducted in both 2006 and 2007 on the only two live-aboard dive boat operations (Undersea Explorer and Nimrod Explorer) that conducted regular, scheduled expeditions to the Far Northern Section of the GBRMP between October and December. Key features of these trips include sightings and interactions with large (breeding) aggregations of green turtles (Chelonia mydas) in the vicinity of remote and significant turtle nesting islands (for

5 Economic impact of live-aboard dive boats in the Great Barrier Reef 999 Figure 1. Survey regions. example, Raine Island), as well as relatively high concentrations of sharks and pelagic fishes, encountered more opportunistically at a number of shelf edge sites. An additional feature of the Undersea Explorer Far Northern expeditions includes the capture, tagging and release of tiger sharks (Galeocerdo cuvier), conducted under scientific permit by shark researcher R. Fitzpatrick as part of a satellite-tracking programme. The opportunity for tourists to watch the shark being tagged (from the safety of the vessel) is promoted as a highlight of the trip. During both sampling periods, the two vessels carried a total of 213 passengers (122 in 2006 and 91 in 2007), and all were asked to participate in our survey. In total, we received 177 completed questionnaires from this group, although two were excluded from the analyses (one was only partially completed and the other had been filled in by a crew member). The response rate is calculated as 177/213, or 83%.

6 1000 TOURISM ECONOMICS 2007 live-aboard GBR (minke whale) passenger survey This survey was conducted in 2007 on all four swimming with dwarf minke whale endorsed live-aboard dive boats which conducted regular itineraries (varying from three to six nights in duration) over the June July dwarf minke whale season (Undersea Explorer, TAKA, Nimrod Explorer and Spoilsport). These trips were advertised as providing dive opportunities along the Ribbon Reefs in the Cairns/Cooktown section of the GBR, as well as opportunities to swim with dwarf minke whales (Balaenoptera acutorostrata subsp.) whenever possible. The four live-aboard vessels carried a total of 824 passengers over June July Of those passengers, 575 completed a minke whale questionnaire, giving an overall response rate of 69.8% GBR and Coral Sea Reefs (for example, Osprey) passenger survey Between December 2007 and May 2008, we distributed our questionnaire across the five live-aboard dive boats that operated along the Ribbon Reefs with regular scheduled trips (weather dependent) to Osprey Reef in the Coral Sea (Undersea Explorer, TAKA, Spoilsport, Nimrod Explorer and Spirit of Freedom). Highlights of the trips include the dive site Cod Hole where potato cod (Epinephelus tukula) are encountered with high predictability. Several of these operators conduct a controlled feed of these fish in front of divers. Osprey Reef is renowned for its spectacular wall diving and regular and close encounters with several shark species (for example, white tip reef sharks, grey reef sharks, silver tip whaler sharks and, occasionally, hammerheads and tiger sharks, etc), as well as manta rays. A total of 1,008 passengers participated in these trips (hereafter called Osprey ) during our sampling period. From this survey, we received 350 completed questionnaires, giving an overall response rate of 34.7%. 4 This latter group of passengers were asked to complete the extended questionnaire that sought information about WTP. Data and analysis Respondent profile Amongst other things, respondents were asked to provide some general background information about themselves: their age, their gender, where they came from, how long they were staying in the region and whether or not they had been to this part of the GBR before. When first analysing the data, responses from the 2006 and 2007 Far Northern GBR survey were kept separate. However, there were no statistically significant differences in responses for these variables in either the socio-economic characteristics or the expenditure questions. They have therefore been grouped together, giving three broad groups (hereafter referred to as our samples ). As shown in Table 1, the total sample was divided fairly evenly by gender, with 48% of all respondents being female. The average age was 36 years, only 30% of respondents were Australian residents and more than half were visiting the GBR for the first time. At just over two days, the average length of time

7 Economic impact of live-aboard dive boats in the Great Barrier Reef 1001 Table 1. Key socio-economic characteristics of respondents by sample. Sample Variable Statistic Far Northern Minke Whale Osprey All respondents Proportion female Proportion N ,112 Age Mean Std deviation N Minimum Maximum Proportion Australian Proportion residents N ,091 Proportion first-time Proportion visitors to Great N ,113 Barrier Reef Number of days spent Mean in Port Douglas Std deviation region (before and N after boat trip) Minimum Maximum Number of days spent Mean in Cairns region Std deviation (before and after N boat trip) Minimum Maximum spent in Port Douglas was relatively short although the average respondent spent almost a week in and around Cairns. Also evident from the maximum values associated with the number of days spent in Cairns and in Port Douglas (before and after the trip) is the fact that at least some respondents were, essentially, local residents. Following the lead of SQW Co UK (2006), residents and pseudoresidents (those staying in the region for more than 30 days) were excluded from the sample approximately 2% of respondents. It is this later, smaller subgroup (comprising 989 respondents in total) which is used in the subsequent analysis. Per-person non-boat expenditure Respondents were asked to indicate the approximate amount they had spent per day on different categories of goods whilst in the Cairns/Port Douglas region (see Figure 2). Midpoints were then used to determine the total expenditure on each category (for example, AU$35 for the range AU$21 50; AU$75 for the range

8 1002 TOURISM ECONOMICS Figure 2. Questionnaire excerpt: per-person non-boat expenditure. AU$51 100, etc) although the lowest amount (for example, AU$300) was used for the top category, giving an unambiguous downward bias to final estimates. These midpoints were added together to arrive at an estimate of daily (non-boat) regional expenditures across all items. Daily expenditure estimates were multiplied by the total number of days that were spent in the region both before and after the boat trip (information also elicited in the survey), to generate an estimate of total regional non-boat spending (hereafter referred to as total non-boat spending). As shown in Table 2, these visitors injected substantial funds into the regional economy. The average respondent spent more than AU$320 per day on accommodation, food, entertainment, etc, and since these respondents stayed, on average, between 5 and 6 days in the region, they spent almost AU$2,000 during their entire visit. Given that four of the five boats that were surveyed operated out of Cairns, and since even those who left from Port Douglas must first travel through Cairns to get there, it was not surprising to find that most money was spent within the Cairns region (on average 78%). It is also important to point out that the data are highly skewed as most clearly evidenced by the high maximum values for daily and total non-boat expenditure and the fact that the means are generally much higher than the medians. Indeed, our maximum estimates of total non-boat regional expenditure for the three samples are (close to) AU$12,000, AU$23,000 and AU$64,000, respectively. We therefore recommend that readers focus on our medians rather than our means when looking for robust measures of central tendency (as is often done in the biophysical sciences and as is suggested by English, 2000, in his investigation of confidence intervals associated with visitor expenditure). Interestingly, the median total non-boat regional expenditures of all three samples are surprisingly close ranging from just AU$1,131 per person (for Osprey Reef visitors) to AU$1,173 per person (for Far Northern visitors).

9 Economic impact of live-aboard dive boats in the Great Barrier Reef 1003 Table 2. Time spent and non-boat expenditure within the Cairns/Port Douglas region by sample. Sample Variable Statistic Far Northern Minke Whale Osprey All respondents Days spent in Cairns Mean and Port Douglas Median before and after N boat trip (non- Std deviation local residents) Daily non-boat Mean regional expend- Median iture (non-local N residents; AU$ Std deviation ) Total non-boat Mean 1, , , , regional expend- Median 1, , , , iture (non-local N residents; AU$ Std deviation 1, , , , Proportion of non- Proportion boat expenditure N spent in Cairns Per-person boat expenditure Respondents were also asked to provide us with an estimate of other costs incurred while aboard the boat, and these costs, together with the advertised price of each boat trip, 5 are summarized in Table 3. As expected, the advertised price of boat trips differs substantially across surveys; the longer trips to the Far Northern section of the reef being more expensive than the shorter trips. Osprey respondents also spent significantly more money on extras while onboard the boat than did other respondents, although, as previously, these results were highly skewed; hence, the importance of focusing on medians rather than means (although even median estimates of on-board expenditure were higher for Osprey respondents than for others). Per-person expenditure attributable to the boat trip Estimates of the cost of the boat trip were then added to respondent estimates of other costs incurred while aboard the boat, to estimate total boat expenditure (hereafter referred to as total boat spending ). Total (per person) regional expenditure was calculated simply as: Total regional expenditure = total non-boat spending + total boat spending. However, one cannot claim that it is marine wildlife, or indeed even the Reef

10 1004 TOURISM ECONOMICS Table 3. Boat expenditure by sample. Sample Variable Statistic Far Northern Minke Whale Osprey All respondents Advertised price Mean 3, , , , of boat trip Median 3, , , , (AU$ 2006 N , ) Std deviation Extra expenditure Mean while on boat Median (AU$ 2006 N ) Std deviation Advertised price of Mean 3, , , , boat trip PLUS Median 3, , , , additional on- N board expend- Std deviation iture (AU$ ) itself, which attracts all these visitors. Some people, for example, come to the region to visit friends and relatives, some come on business trips and some travel to the region especially to see the Wet Tropics rainforest rather than the GBR (Tourism Queensland, 2003, 2006a,b, 2007a). Consequently, only part of this total regional expenditure is attributable directly to dive boat trips and the key marine species viewed by them. The key problem here, however, is that without more information, one cannot determine how large or small that part is, and there is evidence to suggest that the proportion of total visitor expenditure that is attributable to any one species at a particular locality will depend on the type(s) of visitor and the characteristics of the attraction (SQW Co UK, 2006). Unfortunately, central data collecting agencies such as the Australian Bureau of Statistics and the Tourism Research Authority generally do not ask questions that are specific enough to allow one to determine how to attribute total visitor expenditure across specific attractions (for example, marine species). So, we chose to follow the lead of others (such as Crabtree et al, 1994; Utech, 2000; Parsons et al, 2003; and SQW Co UK, 2006) eliciting such information from the survey. To be more explicit, responses to the questions shown in Figure 3 were used to determine how much total (per person) regional expenditure was attributable to the boat trip (hereafter termed boat attribution ). Specifically, if the respondent was a local resident, or was spending more than 30 days in the region, then boat attribution was set to zero (that is, residents were excluded) if the respondent would have come to the region even if they could not have taken the boat trip and spent the same amount of time then boat attribution was set to zero

11 Economic impact of live-aboard dive boats in the Great Barrier Reef 1005 If you had not been able to go on this boat trip, would you have still taken this trip to the Cairns/Port Douglas region? (Please mark [ ] the appropriate box for the scenario that best fits your travel choices.) Yes, and I would have spent the same amount of time in the Cairns/Port Douglas region (if so, please choose from box below): But I would have gone on a different reef/boat trip instead - What type of dive/boat trip would you have taken instead? But I would have done something else in the Cairns/Port Douglas region instead - What type of activity would you have done instead? Yes, but I would have spent less time/fewer days in the Cairns/Port Douglas region: - If so, how much? I would have spent fewer days in this region. No, I would have travelled elsewhere. No, I would not have taken the trip away from home at all. I don t know. Figure 3. Questionnaire excerpt: per-person regional expenditure attributable to boat trip. if the respondent would not have come to the region if they could not have taken the boat trip (that is, travelled elsewhere or not taken the trip away from home), then boat attribution was set to one if the respondent still would have come to the region but would have spent less time, then boat attribution was set equal to: the reduction in time that would have occurred, divided by the total time actually spent in the region. The total regional expenditure (boat and non-boat) that was attributable to the boat trip (hereinafter attributable expenditure ) was calculated subsequently by multiplying boat attribution by total regional expenditure: (per-person) attributable expenditure = total regional expenditure boat attribution. As shown in Table 4, the boat trips are responsible for a significant proportion of expenditure: an average of 86% of total expenditure. These figures indicate the dive boats generate approximately AU$2,500 of regional income for each passenger since this amount is that which is directly attributable to the boat trips. The Far Northern visitors are the most regionally lucrative, generating close to AU$4,200 per passenger. Regional economic impact of the live-aboard dive boat trips The next step of the analysis required us to generate an estimate of the total number of live-aboard dive boat passengers that took similar trips within the same study area each year. To do this, we compiled a list of all the commercial operators that advertised regular trips of each of the following three types : that is, those that went to the Far Northern GBR for one month of the year, those that viewed minke whales for 2 months of the year and those that visited the GBR and the Osprey Reef in the Coral Sea for 9 months of the year. We then

12 1006 TOURISM ECONOMICS Table 4. Regional expenditure attributable to boat trip by sample. Sample Variable Statistic Far Northern Minke Whale Osprey All respondents Proportion of non- Mean boat regional Median expenditure N attributable to Std deviation boat trip Total (boat and non- Mean 4, , , , boat) regional Median 4, , , , expenditure N attributable to Std deviation 2, , , , boat trip (AU$ ) Table 5. Estimated total number of passengers carried to each survey region between August 2006 and July Vessel name Estimated passengers per year Far Northern Minke Whale ,159 Osprey ,890 6,542 a Total 6,166 7,818 Note: a In the GBR and Coral Sea Reef survey, two vessels may have done either one or two trips per week. Therefore, we provide both an upper- and a lower-bound estimate of aggregate passengers. used their advertising material to estimate the total number of each type of trip that each boat took each year and multiplied that by boat capacity and an assumed occupancy rate of 77.3% (as calculated by Miller, 2006). On average, we estimated that 117 passengers participated in the live-aboard expeditions to the Far Northern Section of the Reef during 2006 and During June July 2007, 824 passengers were carried by the four live-aboard vessels licensed to swim with (minke) whales which we surveyed although we estimated that 1,159 passengers undertook trips on these vessels with the balance not being sampled. 6 Between 4,890 and 6,942 passengers visited the Osprey Reef survey region from August 2006 to July 2007 see Table 5. Estimates of the total number of people travelling to each survey region each year were then multiplied by estimates of the (median) per-person regional expenditure attributable to each boat trip, to determine the aggregate, annual regional expenditure attributable to these live-aboard boat trips (often termed the DIRECT expenditure impact).

13 Economic impact of live-aboard dive boats in the Great Barrier Reef 1007 Across all three survey segments, this amounts to between AU$14.6 million and AU$18.4 million per annum depending on the assumptions made regarding the numbers of trips per week undertaken by two of the operators. This amount is divided as: approximately AU$495,000 from the Far Northern trips; AU$2.6 million from the live-aboard minke trips; and between AU$11.5 million and AU$15.34 million from trips centred on the Osprey Reef. As noted previously, if one wishes to estimate the economic impact of marine wildlife tourism in a particular region, one needs first to identify the tourist expenditure that is attributable to wildlife tourism (as presented above) and then one needs to multiply that figure by an appropriate regional multiplier. Ideally, multiplier estimates should be derived using some type of general equilibrium modelling approach (for example, an input output model, social accounting matrix, or better still a CGE model), since this allows one to estimate regional multipliers by considering an entire SYSTEM of regional expenditures. However, models such as these can be costly to develop and timely data with which to calibrate the models are not always readily available. In Australia, there are relatively few fully-fledged economic models of small or rural regions. It is not surprising, therefore, to find that although there have been many studies on the economic impacts of different types of tourism, these impacts are usually measured with respect to a state or regional economy (Mules, 2005, p 250) where large-scale economic models are more commonly available. In contrast, those interested in estimating economic impacts in small or rural economies are often forced to take short cuts and/or use approximations multiplying estimates of first-round visitor expenditure, for example, by what seems to be an appropriate regional multiplier to generate an aggregate estimate of the regional economic impact of that type of tourism. Yet even when researchers decide to take this type of short cut (for example, using multipliers from other studies), they must determine what size multiplier should be used either collecting enough local data to draw inferences about the size of multipliers in a particular region, or transferring estimates from one region to another. And it is not always easy to determine which multiplier to use. In their study of wildlife tourism in rural Scotland, Crabtree et al (1994) collected data from 200 businesses, producing regional multiplier estimates of between 1.18 and 1.34 (depending on the region). Frechtling and Horvath (1999) estimated that the final demand multiplier for tourism in Washington, DC, was 1.2, and they also cited other studies that had produced regional tourism multiplier estimates for Washington, DC, of between 1.26 and 1.63, and of 1.76 for Miami, Florida. The Scottish Executive (2005) used a Keynesian approach to investigate the economic linkages between small towns and surrounding rural areas in Scotland, producing regional multiplier estimates of between 1.1 and 1.4. Utech (2000) used a tourism multiplier of 1.71 to determine the economic impact of cetacean-based tourism in Hawaii and Stoeckl et al (2007) provided a range of different estimates of multipliers from different studies in different parts of Australia with the most relevant estimates (arguably, the small-area business-level multipliers for the accommodation, cafe and restaurant sector and for the transport sector) ranging from 1.4 to 1.5. Evidently, tourism multipliers in small and/or remote regions are generally

14 1008 TOURISM ECONOMICS Table 6. Estimates of the direct and indirect regional economic impact of live-aboard dive boats (AU$ million per year). Multiplier Expenditure attributable to live-aboard dive boats quite small: often between 1.1 and 1.5. We therefore used both of these multipliers to generate lower- and upper-bound estimates of the regional economic impact of this industry, between AU$16.06 million and AU$27.6 million (Table 6). As termed by Access Economics (2007), this amount is referred to hereafter as the economic contribution of the industry. The relative value of individual species Visitor satisfaction with interactions with key species. If one is willing to assume that the primary reason for choosing to go on a boat trip is to view marine wildlife, 7 then the estimates generated using the foregoing approach will provide information about the tourist value of key marine species in the Cairns/ Cooktown management area of the GBR. Yet, at this highly aggregated level, there is still no information about the relative value of individual species the previous method provides information only on the total value of boat trips, the primary purpose of which is to view key marine species. It is particularly difficult to try to determine values for individual species because boat trips, like nature reserves and other wildlife sites, have multiple attributes which may be inherently inseparable from each other (Crabtree et al, 1994) and because many of these trips are characteristically multispecies (Birtles et al, 2001). In other words, people choose to go on boat trips for a variety of different reasons: some may go to see an individual species (for example, minke whales), but some may wish to see multiple species, to be with friends and/or simply to enjoy a day (or week) at sea. Consequently, the boat expenditures of some visitors may be attributed validly to individual marine species, but the expenditure of other visitors may be difficult to attribute to precise factors (that is, they may be inherently inseparable). There is a substantive body of literature which seeks to determine valid ways to do so under various assumptions (for example, hedonic pricing, choice modelling), each of which themselves warrant a separate research paper. But, as an initial, exploratory investigation, responses to questions about how satisfied visitors were with different species of marine wildlife when on the boat trip were used to assess the relative value of those key species. Specifically, the survey asked respondents to answer the following question on a 10-point unidirectional scale: How much did your interactions with each of the following types of marine wildlife contribute to your overall satisfaction with your trip?

15 Economic impact of live-aboard dive boats in the Great Barrier Reef 1009 Table 7. Degree to which interactions with different marine species contributed to overall trip satisfaction (1 = not at all; 10 = contributed a great deal) by survey group. Variable Statistic Far Northern Far Northern Minke Whale Osprey Marine turtles Mean N Sharks and rays a Mean N Large fish (including Mean potato cod) N Whales and dolphins a Mean 9.28 N 562 Seabirds Mean N Other wildlife Mean N Many different types Mean of wildlife (variety) N Note: a Rays and dolphins were not specifically mentioned in the questionnaire, but were selfnominated by several respondents. Each questionnaire listed several key species and also allowed visitors to nominate specifically other species which contributed to their overall trip satisfaction. Responses were recoded whenever self-nominated species were similar to species that had been listed specifically in the questionnaire 8 and mean levels of satisfaction were calculated for groups of similar species (for example, large fish). Table 7 shows the mean responses, grouped by survey (and in this case, data relating to the two different surveys in the Far Northern section were separated since the groups were asked slightly different questions). What is perhaps most striking is the degree to which the relative rankings of the satisfaction scores differ across groups although all of those who were asked attributed relatively little satisfaction to their interactions with seabirds. Not surprisingly, those on the minke whale trips attributed most of their satisfaction to whales, with an extraordinarily high mean rating of 9.28 out of 10 being recorded by the 562 respondents who had encountered minke whales. Those travelling on multi-species trips scored variety particularly well. An ANOVA was conducted to test if differences in reported satisfaction levels were statistically significant across survey groups for the three species that were included in all surveys. When these differences were found to be significant, a post hoc test was conducted, allowing for the following comments: Visitors on the 2006 Far Northern trips reported higher levels of satisfaction with their marine turtle interactions than did 2007 visitors. Anecdotal

16 1010 TOURISM ECONOMICS Figure 4. Questionnaire excerpt: willingness to pay for guaranteed sightings. evidence suggested that marine turtles were far less numerous during 2007 then they were in 2006, which might partially explain this result. Visitors on the minke whale trips reported lower levels of satisfaction with both sharks/rays and large fish interactions than did either of the other two groups of respondents. This could be explained by the fact that there are much higher probabilities of encountering sharks/rays and large fish on the Osprey Reef trips than on those which are dedicated primarily to minke whales (which are encountered only within the GBR and with around 90% of sightings in June and July). Willingness to pay for a guaranteed sighting of key species. For one batch of surveys only (those visiting the GBR Ribbon Reefs and Coral Sea Osprey Reef at a time of year when minke whales were not present), monetary estimates of the relative values of different species encountered whilst on the trip were derived by comparing visitor responses to a hypothetical question about their WTP for a 100% guarantee of seeing a range of different types of marine wildlife 9 (see Figure 4). Although the payment-card approach avoids the starting point bias problem faced in some CV studies (Mitchell and Carson, 1986), the range of values used, anchoring effects and the size of intervals displayed on the card can affect responses (Cameron and Huppert, 1989). In an attempt to minimize those problems, the approach taken here was to produce four different questionnaires using two different ranges of values (AU$0 150; AU$0 300), with associated differences in intervals; and using two different starting values (one version had AU$0 in the first column adjacent to the species name; the other version had the highest range AU$150 or AU$300 adjacent to the species name). As clearly highlighted in Table 8, the mean WTP for a guaranteed sighting of sharks is considerably higher than the mean WTP for guaranteed sightings of other key species, and these differences are statistically significant at the 1% level. 10 Interestingly, the mean WTP for a guarantee of seeing large fish is lower than all other WTPs, and this difference is also statistically significant. If one is willing to believe that that the entire visitor population of Osprey Reef visitors have preferences which are similar to those of our respondents, then

17 Economic impact of live-aboard dive boats in the Great Barrier Reef 1011 Table 8. Willingness to pay for a 100% guarantee of sighting particular species Osprey survey (AU$ financial year). Sharks Large fish Sea turtles Wide variety of wildlife Mean Median N Std deviation Maximum Minimum one can obtain an estimate of the total amount which visitors to Osprey Reef are willing to pay for guaranteed sightings of key marine species by multiplying our mean estimates of WTP by our estimates of the total number of visitors that travel to the Osprey Reefs each year (between 4,890 and 6,542). Using the midpoint of our estimated visitor numbers, these figures indicate that, in total, visitors would be willing to pay almost AU$1 million each year for an improvement in the resource, divided as: AU$368,000 for a 100% guarantee of seeing sharks; AU$158,000 for large fish; almost AU$200,000 for sea turtles; and close to AU$220,000 for variety. Discussion of results The data presented in this paper indicate that the median daily expenditure of live-aboard dive boat tourists on land-based activities (for example, accommodation, restaurants, etc) is AU$250 per day. Adding in the money spent on boat trips and allowing for the fact that these visitors spend relatively long periods of time on land, between 5 and 6 days, we estimate that this particular segment of the tourism industry makes a substantial contribution to the regional economy: in excess of AU$2,500 per visitor per visit (using median values). These expenditure figures are considerably higher than those reported in the study of Access Economics (2007, p 69), where expenditure per night for overnight visitors to the Tropical Far North during and was listed as being in the order of AU$ per night. The estimates are also much higher than the average daily expenditure estimates of Stoeckl et al (2005) in their study of whale-watchers in Hervey Bay (approximately AU$103 per person per day) and higher than the Suh and Gartner (2004) study of visitor expenditure in Seoul, Korea (between US$150 and US$200 per person per day). But Mules et al (2005) found that overnight visitors to the NSW alpine region of Australia (where there are many opportunities for skiing) spent on average up to AU$523 per person per night almost four times the daily expenditure of non-skiing visitors. McNamara and Prideaux (2008) reported that the average, overall trip budget of visitors to the GBR region was over AU$4,000 for international visitors and close to AU$3,200 for domestic visitors. So, while it will be important to seek to replicate these estimates with further research, when placed in context, they seem plausible.

18 1012 TOURISM ECONOMICS Furthermore, it is clear that the boat trips the primary purpose of which is to view wildlife are responsible for 86% of the total expenditure of this visitor group. In contrast, Parsons et al (2003) found that cetacean-related tourism accounted for just 2.5% of total tourism income in West Scotland although it accounted for almost 12% of regional income in rural areas and Stoeckl et al (2005) found that 20 40% of total visitor expenditure in Gascoyne and Hervey Bay was due directly to the presence of iconic wildlife species (specifically, dolphins in Gascoyne and humpback whales in Hervey Bay). Perhaps not surprisingly, our results show that live-aboard dive boat trips are an essential attractor for these types of tourists. Our analysis also indicates that the tourists who are attracted to this region by the live-aboard dive boat trips generate between AU$16.06 million and AU$27.6 million per annum to the Cairns/Port Douglas region an amount equivalent to all of the GBRMPA s annual funding from the federal government. 11 Importantly, almost one-half of that money derives from non-boat expenditures (for example, on motels and in cafes). Clearly, this is an industry that brings many benefits to the wider community; it is not just the boat operators who benefit from dive boat tourists. Importantly, this research also shows that the diving enthusiasts who go on these trips many of whom are repeat visitors to the region derive a great deal of satisfaction from their interaction with several key species (or species groups). In relative terms, the species which are of most value to these tourists include minke whales (for those on the minke whale trips), large fish, sharks and rays, and for the Far Northern 2006 subgroup, turtles. Respondents also derived a great deal of satisfaction from interacting with a wide variety of different species, particularly in the Far Northern 2007 group and on the trips that included Osprey Reef. As regards WTP for improvements in the resource, the Osprey Reef visitors indicated that they would be willing to pay almost AU$1 million each year for an improvement in the resource, divided as: AU$368,000 for a 100% guarantee of seeing sharks; AU$158,000 for large fish; almost AU$200,000 for sea turtles; and close to AU$220,000 for variety. Interestingly, respondents were willing to pay significantly more for a 100% guaranteed shark sighting than they were for other species despite the fact that the reported levels of satisfaction associated with interactions with many different types of wildlife and with large fish were higher, albeit only marginally, than the reported levels of satisfaction with shark interactions. One explanation for this is that (i) respondents are currently interacting with relatively common reef sharks and that it is those particular species of sharks which are providing current levels of satisfaction (close to satisfaction levels from other species) indeed, passengers on these trips are almost certain of seeing large numbers of white tip reef sharks, some grey reef sharks and silver tip sharks but that (ii) when respondents are asked to indicate their WTP for guaranteed sightings, they are referring to other species of sharks for example, hammerheads and tiger sharks which they are only likely to sight occasionally, but for which they have high hopes of seeing (indeed high expectations, since these species are targeted in some marketing materials). Hence, the apparent difference between average and marginal values may be arising because respondents are thinking about different species when completing the questionnaire.

19 Economic impact of live-aboard dive boats in the Great Barrier Reef 1013 However, there is an alternative explanation. It is possible that under the current status quo, respondents are having numerous encounters with large fish. Each individual encounter may add a relatively small amount of satisfaction to their trip, but the total value of these numerous small encounters is significant. In contrast, the respondents may be having only a few, infrequent interactions with sharks. But each individual encounter may contribute a great deal to their satisfaction. Consequently, the overall satisfaction levels for the two species groups can be (approximately) equal but their marginal values may be quite different. Concluding remarks The live-aboard dive boat industry and by extension, the key marine species targeted by that industry provides an important source of income to persons living in the Cairns/Port Douglas region. Not only are tourists currently paying substantial sums of money to interact with these species, but it seems that they would be willing to pay even more for improvements in the resource, as measured by their WTP for guaranteed sightings. Evidently, this type of tourism can be a lucrative source of income for regional communities. It is clear that individual iconic species are key drawcards to particular types of boat trips such as those targeting minke whales or sea turtles. Indeed, the mean satisfaction level recorded for these whales in this study (9.28/10) exceeded even that reported by Valentine et al (2004) (of 9.00) from 527 passengers sampled in the 1999 and 2000 minke seasons. However, our current study underlines the considerable importance of having a wide variety of species for tourists to view. Not only does variety provide a high level of satisfaction to tourists who dive on the GBR, but a temporal variety of species allows dive boat operators to spread their capital costs across a longer season, targeting different species at different times of the year. The value of maintaining a diverse range of wildlife is clear and supports the Marine Park Authority s ecosystem-based management approach. However, Birtles et al (2001) have highlighted the practical challenges of managing a diverse range of species about which we lack much basic biological information. Our results indicate that there are differences in the marginal values (WTP) associated with different species and this may, at least partially, reflect differences in their scarcity (although there is a need to confirm that with more sophisticated analysis of the WTP data a topic of ongoing research). One implication of this is that operators may be able to increase revenues by focusing their efforts on sharks. This observation is at least partially confirmed in practice: some operators already use images of sharks in their marketing material and some advertise that they conduct shark feeding to increase the probability that passengers will see them (something which can only be done legally on the Osprey Reef trips, outside the GBRMP). Another implication of this is that changes in management of the GBRMP may also be able to impact on tourism revenues. In their study of reefs in and around Townsville, Ayling and Choat (2008, p 5) found that the numbers of reef sharks on reefs that were open to fishing were heavily depleted compared to more protected reefs. Clearly, research of this type also needs to be done in