Organizational and Financial Perspectives on State Parks
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1 Organizational and Financial Perspectives on State Parks Lowell Caneday, Ph.D. Hungling (Stella) Liu, Ph.D. Hung Ju (Jacky) Chien, Ph.D. Kaowen (Grace) Chang, Ph.D. Oklahoma State University, Leisure Studies
2 Learning Objectives Gain an understanding of the factors that define state park systems and the importance of such definition Gain an understanding of current selfsufficiency status of state park systems Gain insight into pricing and willingnessto-pay for services and amenities within state parks
3 Advent of State Parks Richard Lieber and Stephen Mather 1916 to property acquired by Georgia that later becomes Indian Springs State Park Response to the requests of the National Park Service for local parks 1921 First national conference on state parks in Des Moines Less than 100 years of history
4 Richard Lieber s Definition 1926 A state park must have either scenic or historic value or both, and is dedicated to the public for the intelligent use of its leisure time.
5 Other Federal Motives Funding and personnel 1933 Emergency Conservation Work program and Civilian Conservation Corps 1936 State Park Act - planning and financial aid
6 Missions and Purposes Variation by state Enabling acts define agencies Agency names are descriptive and meaningful Parks and Natural Resources Parks and Tourism Tourism and Recreation
7 Preparation for the Benchmarking Study 2004 ANALYSIS OF STATE PARK SYSTEMS CONDUCTED BY CANEDAY & LIANG PRESENTED BY DR. LIU
8 2004 Analysis Benchmarking Partner Identify systems across the nation as comparable to Oklahoma State Park system Cluster Analysis The task of assigning a set of objects into groups so that the objects in the same cluster are more similar (in some sense or another) to each other than to those in other clusters. K-means cluster Minimize the difference within groups Maximize the difference between groups
9 Cluster Analysis Utilized NASPD s Annual Information Exchange (AIX) Approximately 40 measures of operations Property characteristics: types of property, acreage Amenities characteristics Visitor characteristics Operating characteristics: revenue, budget, funding sources Personnel characteristics (numbers, types)
10 NASPD 6 7
11 CA FL, IL, MI, MO, OR, TX, WA NY AK, AZ, AR, CT, DE, HI, KS, LA, ME, MA, MN, MS, NE, NV, NJ, NM, NC, PA, RI, SC, UT, VT, VA, WI, WY NASPD AL, GA, IN, KY, OH, OK, SD, TN, WV CO, ID, MT, NH, ND IA, MD
12 California Populous Resource New York Traditional Resource NASPD Developed and Staffed for Tourism Rural Western Decentralized Day Parks
13 Based on 2011 AIX data Same variables and a 7-factor solution 2012 UPDATE OF STATE PARK SYSTEMS PRESENTED BY DR. LIU
14 cluster solution (50 state park systems) 3 5 4
15 IA AK, AZ, CT, DE, HI, ID, KS, ME, MD, MS, MT, NE, NV, NH, NJ, NM, NC, ND, RI, SC, UT, VT, WI, WY CA AL, AR, GA, IN, KY, LA, MI, MO, OH, OK,SD, TN, VA, WV 7-cluster solution (50 state park systems) NY FL, MA, MN, TX CO, IL, OR, WA, PA
16 Scientific Areas Traditional Resource Park System Diversity with Trails Developed and Staffed for Tourism 7-cluster solution (50 state park systems) Concessioned Diversity Property & Resources Natural with Dedicated funding
17 Scientific Areas New definition Traditional Resource Park System Diversity with Trails Developed and Staffed for Tourism 7-cluster solution (50 state park systems) Concessioned Diversity Property and Resources Natural with Dedicated funding A new cluster
18 CHANGES 2004 TO 2011
19 Changes 2004 to 2011 Group change No more rural western state park 2004: Colorado, Idaho, Montana, North Dakota, and New Hampshire Each changed to new peer group New group: Natural with dedicated funding Colorado, Illinois, Washington, Pennsylvania, and Oregon Individual state movement
20 Examples of change 2004 to 2011 Arkansas Colorado Louisiana Maryland Massachusetts Michigan Minnesota Missouri Virginia Washington Selected States
21 Arkansas State Parks Swimming Pool and Skycrest Restaurant at Mount Magazine State Park, AR
22 Arkansas Traditional Resource to Staffed and Developed for Tourism Development: 113 cabins to 199 cabins Day users: 25% decline in attendance Overnight users: 20% increase $20 million increase in operating budget Tripling of dedicated funds (to $19 million) Added 340 staff
23 Colorado State Parks Eleven Mile Canyon Trinidad State Rec. Area Mueller State Park
24 Colorado Rural Western to Natural with Dedicated Funding 30% increase in properties, mostly natural areas 150% increase in overnight visitors Doubled operating budget ($68 million) Eliminated general funds Quadrupled dedicated funds ($22 million)
25 Daily Tour of Oakley House and Living History at Audubon State Historic Site, LA Louisiana State Parks Cabins at Poverty Point Reservoir State Park
26 Louisiana Traditional Resource to Staffed and Developed for Tourism Development: added 6 lodges, 1 golf course 40% increase operating budget ($31 million) 500% increase in generated funds ($1.3 m) $13 million reduction in capital expenditure Major realignment of staff
27 Maryland Decentralized Day Use to Traditional Reclassified multiple properties to parks Decrease in operating budget & generated revenue Eliminated general fund appropriation Now $22 million in dedicated funds Significant reduction in staff
28 Massachusetts Traditional to Property and Resources 50% increase in number of properties; added historic areas, environmental, scientific 600% increase in number of trails Added cabins and lodges 50%^ in operating budget; doubling of generated revenue; tripling of capital expenditure
29 Michigan Populous resource to Developed and Staffed for Tourism 20% increase in cabins 2 million fewer day visitors; 1.2 million fewer overnight Decline in dedicated funds offset by increase in entrance fees ($6 million offset) Major staff realignment
30 Minnesota Traditional to Property and Resources Increase from 270 to 1,783 properties Doubled number of cabins Tripled operating budget (now $77 million) Doubled generated revenue (to $16 million) 1200% increase in dedicated funds (now $37 million)
31 Missouri Populous Resource to Developed and Staffed for Tourism Tripled generated revenue Eliminated general funds Doubled full-time field staff Major reduction in other staff and part time staff
32 Virginia Traditional to Developed and Staffed for Tourism 20% increase in properties, especially miles of trails 50% increase in cabins 50%^ in day visitors; 40%^ in overnight Doubled operating budget (now $34 million) Quadrupled capital budget (now $12 million)
33 Washington Populous Resource to Natural with Dedicated Funding 25% reduction in number of parks; 50% reduction in acreage; added miles of trails 6 million decline in day visits 50%+ in operating budget; 700%+ in dedicated funds; eliminated entrance fees
34 SELF-SUFFICIENCY ANALYSIS ANALYSIS BY DR. CHIEN PRESENTED BY DR. CANEDAY
35 The Issue 2008 to present > economies of states Political pressures State systems: SC, AZ, ID, and more Oklahoma Individual parks vs. statewide system Self sufficiency? What is it? Is it possible? Is it desirable?
36 What is Self-Sufficiency? The state of not requiring any aid, support, or tax revenue, for operations of an agency Able to generate enough on-site revenue to cover operating expenses Not capital, not dedicated and not donation
37 What is Self-Sufficiency? The state of not requiring any aid, support, or tax revenue, for survival for an agency Able to generate enough operating revenues to cover operating expenses Not capital, not dedicated and not donation PPPP ggggggggg ooooooooo rrrrrrr OOOOOOOOO eeeeeeee 100%
38 Individual State Self-Sufficient Rate (Based on FY2011 AIX Data) Greater than 80%: NH (100%), WI (85%), SC (84%), AL (83%) and IN (83%) Total 5 states Between 60% and 80%: MI (74%), NE (68%), FL (66%), UT (66%), SD (66%), GA (65%), MS (64%) and KY (62%) Total 8 states
39 Individual State Self-Sufficient Rate (Based on FY2011 AIX Data) Between 40% and 60%: WV (58%), DE (56%), AZ (55%), OK (54%), VA (52%), KS (52%), MT (50%), VT (48%), AR (47%), CO (46%), OH (46%), HI (42%), TN (42%), NY (41%), ID (40%) and WA (40%) Total 16 states Between 20% and 40%: ND (39%), OR (37%), MD (34%), NJ (32%), NM (31%), IA (28%), CA (27%), TX (25%), MO (25%), AK (24%), PA (24%), and IL (22%) Total 12 states
40 Individual State Self-Sufficient Rate (Based on FY2011 AIX Data) Less than 20%: NC (19%), MN (19%), MA (12%), NV (4%) and LA (4%) Total 5 states CT, ME, RI and WY utilized no park generated revenue in operating expenditures
41 Self-Sufficiency Trend (Oklahoma) 60.00% 50.00% Self-sufficient rate (%) 40.00% 30.00% 20.00% 10.00% 0.00% FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 Fiscal Year
42 Oklahoma State Park System Financing Dollars Park generated revenue General fund Dedicated fund Federal fund Other FY2007 FY2008 FY2009 FY2010 FY2011 Fiscal Year Note: Based on 2011 dollars.
43 Park Generated (Operating) Revenue The main financial sources of the park generated (operating) revenue: Entrance fees Camping fees Cabin / Cottages Lodges Group facilities Restaurants Concessions Beaches / Pools Golf courses
44 Background Push for self-sufficiency of state park operations Need to review Public willingness to pay Public perception of value Acceptability of prices for specific services National trend with Oklahoma action Self-sufficiency defined Revenues earned on-site cover cost of operation Not park-by-park, by across the system
45 PRICING STUDY HUNG JU (JACKY) CHIEN, PH.D. HUNG LING (STELLA) LIU, PH.D. CATALINA PALACIOS FATEMEH (TANNAZ) SOLTANI LOWELL CANEDAY, PH.D.
46 Selected methodology Source: marketing and business Online survey (using OSU Qualtrics) Choice-Based Conjoint Analysis Model campers choice behavior and preferences Estimate maximum willingness to pay Goals in the study Offer a pricing mechanism Provide cost-coverage pricing strategies Analyze price elasticity Analyze market segments
47 Choice-Based Conjoint Analysis Conducted on Day visitors: issues Golfers: issues Campers Cabin guests Lodge guests Reporting on campers
48 Campsite study basics Survey features: Section A: park use Section B: choice combinations by attributes and levels Section C: demographics
49 Campsite study (section B) Attributes affecting campers decision Types of campsite: Modern: paved pad, electrical service, water and sewer Semi-modern: hard-surface pad, electrical service and water Primitive: parking spur and natural surface for camping Location: Near lake/river or Away from water
50 Campsite study (Cont.) Attributes affecting campers decision (Cont.) Amenity: Shaded or Not shaded Wi-Fi service: Yes or No Seasonality: In-season or Off-season Price: $15, $25, $40, $55 and $65 per night
51 Survey design example Question 1. Please choose one combination that you most prefer. Option 1 Option 2 Option 3 Option 4 Type Modern (Include paved pad, electrical service, water and sewer.) Semi-modern (Include hardsurface pad, electrical service and water.) Primitive (Include parking spur and natural surface for camping.) Location Near lake/river Near lake/river Away from lake Amenity Shaded Not shaded Not shaded Wi-Fi Service No Yes Yes Seasonality In-season Off-season In-season Price $65 per night $55 per night $25 per night I would choose. I d rather have nothing than have one of these combinations.
52 Results Maximum willingness to pay for each attribute: A modern campsite near lake, shaded and in season is about $ A semi-modern campsite near lake, shaded and in season is about $ A primitive campsite near lake, shaded and in season is about $25.81.
53 Results (Cont.) An average camper is willing to pay extra $27.13 per night for a modern campsite compared to a primitive campsite. An average camper is willing to pay extra $27.11 per night for a semi-modern campsite compared to a primitive campsite. An average camper is willing to pay extra $0.02 per night for a modern campsite over a semi-modern campsite.
54 Results (Cont.) Minimal difference in willingness to pay Sewer at site; weekend visitation pattern An average semi-modern-campsite camper values the sewer at $0.02 per night. An average camper is willing to pay extra $10.29 to camp near lake/river than away from lake. An average camper is willing to pay extra $15.37 to camp in a shaded site than a non-shaded site.
55 Results (Cont.) Effect of Wi-Fi service on campers choice? Negative in the analysis. WTP = - $0.46 per night Conclusion and rationale? Campers desire to get away from Wi-Fi service while they camp in a state park An average camper is willing to pay extra $9.60 to camp in-season than off-season.
56 Results (Cont.) Demonstrate Excel simulator
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