State and Regional Economic Impacts of Snowmobiling in ... · State and Regional Economic Impacts of Snowmobiling in Michigan Daniel J. Stynes, Charles M. Nelson and Joel A. Lynch

State and Regional Economic Impacts of Snowmobiling in Michigan

Daniel J. Stynes, Charles M. Nelson and Joel A. Lynch

Department of Park, Recreation and Tourism Resources

Michigan State UniversityEast Lansing, Michigan

February 1998

This research was supported by a grant from the Michigan Department of Natural Resources,Forest Management and Law Enforcement Divisions. Support from the Michigan StateUniversity Agricultural Experiment Station is also gratefully acknowledged.

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TABLE OF CONTENTS

INTRODUCTIONReview of Related Studies ........................................................................................................... 1

METHODSDays of snowmobiling.................................................................................................................. 3Average spending ........................................................................................................................ 4Multipliers .................................................................................................................................. 5Regional analysis ......................................................................................................................... 5

RESULTS

Statewide Snowmobile Use and SpendingSnowmobile use .......................................................................................................................... 6Spending Patterns ......................................................................................................................... 8Total Spending on Snowmobiling in Michigan, 1996/97............................................................ 10

Regional Analysis

Snowmobile Activity by Region................................................................................................... 12Spending by Region of Origin and Destination........................................................................... 14

Economic Impacts of Snowmobiler Spending

Statewide Significance and Impact of Snowmobiler Spending................................................... 16Regional Economic Impacts of Snowmobiling............................................................................ 19Regional Economic Multipliers ................................................................................................... 20

CONCLUSIONS..................................................................................................................................21

REFERENCES.....................................................................................................................................23

APPENDIX A

Table A1. Spending by Michigan Residents on Snowmobile Trips ........................................................24

Table A2. Spending by Non-residents on Snowmobile Trips to Michigan...............................................25

Table A3. Spending by Michigan Residents on Snowmobile Trips ........................................................26

Table A4. Spending by Non-Residents on Snowmobile Trips to Michigan .............................................27

Table A5. Total Spending by Michigan Residents on Snowmobile Trips ....................................................28

Table A6. Spending by Non-residents on Snowmobile Trips to Michigan ...................................................29

Table A7. Snowmobile Origin-Destination Flows by Trip Type....................................................................30

Table A8. Spending by Origin and Region of Spending by Trip Type.....................................................31

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LIST OF TABLES

Table 1. Most Recent Snowmobile Trip by Residency and Trip Type ..........................................................4

Table 2. Michigan Snowmobile Activity (Winter 1996/97)..........................................................................7

Table 3. Characteristics of Snowmobile Trips ...........................................................................................8

Table 4. Annual Spending by Households with Snowmobiles ($ per household) ..........................................8

Table 5. Average Spending on Michigan Snowmobile Trips by Trip Type and Location ofSpending ...................................................................................................................................9

Table 6. Distribution of Trip Spending by Spending Category .....................................................................10

Table 7. Grand Total Spending on Michigan Snowmobile Trips, 1996/97 ($ millions) .................................11

Table. 8. Total Equipment-Related Snowmobile Expenses, 1996/97 ($ millions) ........................................12

Table 9. Michigan Snowmobile Days by Region of Origin and Trip Type, Winter 1996/97. ............13

Table 10. Michigan Snowmobile Days (000's) by Origin and Destination Region, Winter1996/97. .................................................................................................................................13

Table 11. Snowmobiler Spending by Type of Trip & Origin, Winter 1996/97 ($ per snowmobile day)...........................................................................................................14

Table 12. Snowmobile Trip Spending ($000's) for the Economic Impact Analysisa by Originand Region of Spending, Winter 1996/97..................................................................................15

Table 13. Spending Not included in the Statewide Economic Impact Analysis ($000's)................................15

Table 14. Summary of Snowmobile Spending Flows, Winter 1996/97.........................................................16

Table 15. Statewide Economic Impacts of Snowmobiler Trip Spendinga, 1996/97. ......................................17

Table 16. Distribution of Snowmobile Trip Spending Impacts by Sector......................................................18

Table 17. Statewide Economic Impacts of Snowmobile Equipment-related Spending, 1996/97. ...................18

Table 18. Total Statewide Economic Impacts of Snowmobiler Spending in Michigan, 1996/97....................19

Table 19. Snowmobile Spending as a Proportion of all Tourism Spending in Michigan byRegion ($Millions) ................................................................................................................. 20

Table 20. Economic Impact of Snowmobile Trip Spending on Sub-Regions of Michigan,1996/97 .................................................................................................................................. 20

Table 21. Regional Economic Multipliers for Snowmobile Trip Spending by Region................................... 21

LIST OF FIGURESFigure 1. Michigan Snowmobile Regions.................................................................................................... 5

State and Regional Economic Impacts of Snowmobiling in Michigan

Daniel J. Stynes, Charles M. Nelson and Joel A. LynchFebruary 1998

INTRODUCTION

Snowmobiling has been an important winter sport in Michigan since 1970. Although snowmobile

registrations have declined since the peak of nearly 470,000 machines in 1980, the economic impacts of the sport

today are likely greater than ever, particularly in northern Michigan. Since the 1970's, a significant snowmobile

industry has developed in the state including snowmobile dealers, resorts, snowmobile clubs, and a statewide

system of trails and facilities. Snowmobiles are more sophisticated and expensive today and snowmobilers are more

likely to use them on overnight trips away from home. Snowmobiling has become one of the key components of

winter tourism for much of northern Michigan, particularly the Upper Peninsula.

The 1996/97 Michigan snowmobile survey provides the first comprehensive information about snowmobile

activity and spending in Michigan. Descriptive information about snowmobilers and their attitudes about law

enforcement and other policy issues were also gathered and are addressed in another report (Nelson, Lynch and

Stynes 1998). Here we estimate total spending during the winter of 1996/97 by Michigan snowmobilers and the

economic impacts of this spending on the state and five sub-regions. The research builds on recent snowmobile

economic impact studies conducted in several states and makes use of a general recreation and tourism economic

impact system developed by Stynes and Propst (1996). For Michigan, we estimate spending patterns for distinct

types of trips and estimate flows of money into and around the state due to snowmobiling. Input-output models are

used to estimate statewide and regional economic impacts of snowmobiler spending.

This report covers expenditures of snowmobilers on trips in Michigan as well as annual expenses for

machines, equipment, insurance and storage. Coverage is limited to machines with snowmobile trail permits. There

were 212,000 permits sold between October 1995 and September 1996. Permits are required for machines to use

public lands, except in support of ice fishing. The sample therefore omits some snowmobile activity by machines

that are used only on private lands (generally near home), but it covers the vast majority of snowmobile activity

generally associated with tourism and trips away from home.

Review of Related Studies

The International Snowmobiling Manufacturers Association (ISMA) reports that snowmobilers spend four

billion dollars annually in the United States and two billion in Canada (Klim, 1997). Over a quarter million

snowmobiles were sold worldwide in 1997 at an average retail price of $5,720. There are 2.2 million registered

machines in North America and over a million snowmobiling households (Klim 1997).

Wisconsin (Cooper, Sadowske and Kantor , 1979) conducted one of the first snowmobile studies to focus

on spending and economic impacts. Surveying winter visitors staying overnight in motels, cabins and resorts, they

were able to compare snowmobilers with downhill and cross country skiers. Snowmobilers spent $479 per party on

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trips that averaged four nights. Snowmobilers spent substantially more on a party-trip basis than either downhill

($363) or cross country skiers ($246).

A number of states, including Wyoming, Vermont, Pennsylvania, New Hampshire, and Maine

have conducted snowmobile spending and economic impact studies within the past five years. These studies vary

somewhat in scope and methods, but generally employ end of season surveys of snowmobilers to gather annual

expenses. Expenses are usually divided between durable goods (machines, trailers and accessories) and spending on

snowmobile trips (food, lodging, fuel, etc.). Total spending is calculated by multiplying averages estimated in the

survey by the total number of households, machines or trips. Most states require that machines be registered or

purchase trail permits. In most cases, registration or permit lists provide the sampling frames and totals to which the

sample is expanded.

Maine estimated total spending by snowmobilers in 1995-96 at $152 million, with nearly half of the

spending for new and used machines. Total spending on snowmobiling in New Hampshire during the same season

was $118 million, with 65% for machines and related equipment. Snowmobiler spending in Vermont was estimated

at $83 million in 1993-94.

Snowmobiler spending figures, while impressive, do not provide accurate estimates of regional economic

impacts, as not all snowmobile-related spending is captured by the state economies. Purchases of equipment are

particularly problematic as snowmobiles are generally not manufactured in the states where they are bought. This

means that only retail and wholesale margins on these purchases generally accrue to the state economies. Purchases

of used equipment must also be accounted for as purchases of used machines from households yield no net

economic effect (simply a transfer of income from one household to another). The net gain on used machines

purchased from dealers is just the retail mark-up, not the full sale price.

On the other hand, most snowmobile trip spending does accrue to the state economies, with the notable

exception of fuel purchases. As fuel represents about a quarter of all snowmobile trip spending and retail margins on

fuel are quite small (about 12%), including the full purchaser price of gasoline will exaggerate the economic effects.

Only the retail and wholesale margins on most goods bought by snowmobilers generally accrue to the local

economy, while the full price of services (e.g., lodging, restaurant meals, and repairs) is captured.

Impact estimates will be further exaggerated if regional economic multipliers are applied to snowmobiler

spending in order to include the secondary effects. The New Hampshire ( Robertson 1996) and Vermont (McElvany

1995) studies apply published sales multipliers (ranging from 1.8 to 2.4) to total spending without any margining

for purchases of equipment, fuel or other goods. These multipliers presumably include both indirect (effects on

backward linked industries) and induced effects (effects of household spending of income earned from snowmobile

spending). The Maine study is more careful in computing margins on snowmobile expenses (12% for fuel and 21%

for snowmobile sales) before applying multipliers. Reiling et. al. (1997) make use of an input-output model of the

Maine economy to derive sector-specific multipliers rather than aggregate "off-the-shelf" multipliers that may not

apply well to snowmobile spending. However, the Maine study adds all direct spending (i.e., the full cost of fuel and

snowmobile purchases) to the secondary effects in computing total impacts.

We are aware of no studies of snowmobiling in Michigan that have been conducted since the late 1970's.

Early Michigan studies gathered descriptive information about snowmobilers, their equipment and patterns of use

(Lanier, 1974; Szcodronski, 1978). Agency studies focused on law enforcement and rules and regulations (Mich.

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DNR, 1976 and 1977). Statewide tourism spending in Michigan was estimated at $9 billion dollars in 1995

(USTDC 1997), although no studies have identified what percentage of this spending may be associated with

snowmobiling. The 1996/97 Michigan snowmobile survey allows us to identify snowmobile spending on trips of

100 miles or more and/or overnight, which is comparable to the trips covered in tourism spending studies.

METHODS

Spending and use data were gathered from a representative sample of Michigan snowmobilers using a

mailed survey. The sampling frame for the study was the list of snowmobilers who had purchased one or more

Michigan Trail Permits between October 1, 1995 and September 30 1996. This was the most recent year for which a

complete list was available. The trail permit list excludes machines that are used only on private lands or in support

of ice fishing, but covers the vast majority of snowmobiling that occurs on trips away from home, including trips by

both Michigan residents and snowmobilers from out-of-state that use Michigan snowmobile trails. A systematic

random sample of households with one or more trail permits was selected from the list, after duplicate

names/addresses were eliminated.

The four-page mailed survey instrument gathered snowmobile use and spending information, as well as

attitudes about selected law enforcement and policy issues. Surveys were sent by first class mail on June 3, 1997. A

follow-up survey was sent by certified mail to non-respondents about a month later. Of 3,152 valid addresses,

1,535 (49%) returned completed surveys. No significant non-response biases were identified based on a telephone

survey of a sub-sample of non-respondents. Minor differences in response rates by region are adjusted for by

weighting the sample to the actual regional distribution of permits. These adjustments explain some small

discrepancies between the estimates of activity and spending reported here as compare to those originally reported in

Nelson et. al. (1998). The reader is referred to Nelson et. al. (1998) for further details on survey procedures. Here we

focus on the methods for estimating spending and economic impacts.

The economic impacts of snowmobiling are estimated by the following general equation:

Impact = # of snowmobile days * average spending per snowmobile day * regional multiplier

Total snowmobile days are estimated by multiplying the average days reported per machine by the number of

permits. Spending averages are estimated directly from snowmobiler reports of expenses on their most recent trip.

Spending data were gathered only for overnight trips or day trips of more than 100 miles. Spending at home or on

shorter day trips is generally not included in the impact analysis, which concentrates on spending that takes place

outside of the snowmobiler's region of residence. Multipliers are derived from input-output models for the state and

sub-regional economies estimated using the IMPLAN system. More detailed methods for each step are given in the

following sections.

Days of snowmobiling

Days of snowmobiling in Michigan were measured in "snowmobile days". A snowmobile day is defined as

one machine being used for some part of the day (excluding days solely in support of ice fishing). The number of

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snowmobile days in Michigan in 1996/97 was estimated using the statewide count of trail stickers sold in 1995/96

and the average days of use of these machines from the survey. In expanding spending to all machines with permits

in 1996/97, we assume no change in the total number of permits between 1995/96 and 1996/97.

Respondents reported the number of snowmobile days within Michigan during the winter of 1996/97 for

each of five sub-regions of the state. The average number of snowmobile days per household was computed from

this information and then expanded to state and regional totals by multiplying by the number of households with

snowmobile trail stickers. The count of trail stickers sold was converted to households by dividing the 212,000

stickers sold in 1995/96 by the average number of machines with permits per household in each region (just over 2).

Snowmobile days of use in Michigan are also broken down by origin of the snowmobiler (using the

respondent's permanent home zipcode) and by three types of outings: day trips of less than 100 miles, day trips of

100 miles or more, and overnight trips. These breakdowns permit the estimation of origin-destination patterns of

snowmobile activity in Michigan and regional estimates of activity, spending, and economic impacts. By dividing

snowmobile days into various types of trips, we are able to apply distinct spending profiles to each type of outing

and provide more accurate estimates of spending.

Average spending

Snowmobilers reported trip spending for the most recent trip that was either overnight or greater than 100

miles from home (one way). Spending data were not gathered for trips of less than 100 miles. Forty-three percent of

all snowmobile days are on day trips of less than 100 miles. Over one thousand of the 1,508 respondents reported

an overnight trip or a day trip of more than 100 miles. These trips were segmented into five types : day trips of

greater than 100 miles, and trips involving overnight stays in motels, second homes, homes of friends and relatives

(F&R), or other accommodations (Table 1). A few respondents indicated more than one type of lodging on the trip.

These cases were classified according to the "highest" type listed (i.e., motel, then second home, then F&R then

other). Seventy percent of the trips involved an overnight stay in a motel. Out-of-state visitors were the most likely

to stay in motels (86% of all trips over 100 miles). Fifty-eight percent of trips by Michigan residents involved an

overnight stay in a motel, while 18% involved stays in a second home (18%) and 16% with friends and relatives.

Table 1. Most Recent Snowmobile Trip by Residency and Trip Type

State of ResidenceDay trips

≥ 100 miles

Motel 2ndhome

F & R Other Total

Sample NMichigan Resident 21 331 103 90 25 570Out-of Staters 2 384 22 33 8 449Total 23 715 125 123 33 1019

Row PercentsMichigan Resident 4% 58% 18% 16% 4% 100%Out-of Staters 0% 86% 5% 7% 2% 100%Total 2% 70% 12% 12% 3% 100%

Column percentsMichigan Resident 91% 46% 82% 73% 76% 56%Out-of Staters 9% 54% 18% 27% 24% 44%Total 100% 100% 100% 100% 100% 100%

5Figure 2. Michigan Snowmobile Regions

Trip spending averages were estimated first on a party trip basis for each segment, with separate profiles

developed for Michigan residents (see Table A1 in Appendix A) and nonresidents (see Table A2). Standard errors

for the trip spending averages are about 3%, so the population estimates may vary by plus or minus 6% of the mean

(a 95% confidence interval is two standard errors). Spending patterns did not vary significantly among the five

Michigan origin regions (Figure 1), so the Michigan resident spending profile was applied to all trips from in-state.

Spending averages were then converted to a "snowmobile day" basis by dividing the trip spending average for each

segment by the number of snowmobile days reported on the trip (see Tables A3 and A4). The conversion of

spending to snowmobile days was necessary to expand the spending data to statewide and regional totals, as overall

snowmobile use was measured on a snowmobile day basis, not a trip basis. Spending was reported in seven

spending categories and divided between spending at home, en route and within 20 miles of the destination. Total

spending is obtained by multiplying average spending per snowmobile day by the number of snowmobile days.

Spending categories were chosen to capture differences in spending across segments and to bridge easily into the

economic sectors in the Michigan input-output (I-O) model.

Multipliers

Multipliers and economic impacts are determined using input-output models estimated with the IMPLAN

(Minnesota IMPLAN Group 1993) regional economic modeling system. Input-output models of the state’s economy

and the economy for five sub-state regions are estimated using the IMPLAN system and 1993 economic data for

Michigan. The I-O model describes what each of 528 distinct economic sectors must purchase to produce a dollar

of output. IMPLAN generates a complete system of economic accounts and trade flows for any county or grouping

of counties. By applying the snowmobiler spending as a final demand vector to the model, we can trace the effects

(direct, indirect and induced) of this spending on the region's economy. Snowmobiler spending is also converted to

the associated sales, income, value added and employment using the model. Spending and impacts are estimated

with the MI-REC system (Stynes and Propst 1995) and the DOS version of IMPLAN (Version 91-F). The

multipliers (Type III ) estimated in the DOS version of IMPLAN are modified to compute induced effects based on

income changes rather than job changes. This roughly cuts estimates of induced effects in half for tourism

applications, yielding multipliers that are consistent with most

other models (including RIMS II and Type II multipliers

available in the Windows version of IMPLAN).

Regional analysis

Impacts are first estimated statewide and then for

each of five sub-regions of the state: Western UP, Eastern UP,

Northwest Michigan, Northeast Michigan and Southern

Michigan (Figure 1) . Regional impacts are estimated by

developing a complete regional origin-destination (O-D)

matrix of interregional flows of snowmobile activity in the

state. Snowmobile days are divided among the five in-state

destination regions and six origin regions (out-of-state areas

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constitute the sixth origin region). First a total O-D matrix is estimated using the reported days of snowmobiling in

each destination region and the respondents zipcode to identify origins. The number of snowmobile days from each

origin to each destination region is then apportioned among the three trip types. Snowmobile days are allocated to

day trips <100 miles, day trips ≥ 100 miles and overnight trips by means of trip patterns reported in the survey. Day

trip flows are estimated using a simple allocation scheme and then overnight trips are allocated to balance the

matrices for each type with the overall O-D matrix.

Day trips of less than 100 miles were allocated primarily to the origin region, although small proportions

were allocated to neighboring regions. Out-of-state day trips of less than 100 miles were allocated largely to the

Western Upper Peninsula (UP) and a few to the Southern Lower Peninsula (LP). Day trips of more than 100 miles

were similarly allocated to the originating and adjacent regions, with somewhat higher shares going to adjacent

regions than for trips of less than 100 miles. Overnight trips were then allocated so that the sum of snowmobile days

in each cell across the three trip types equals the corresponding cell in the overall O-D matrix.

Spending averages were compared by segment across the six regions. On a snowmobile day basis, the only

significant variations in trip spending were between Michigan residents and nonresidents, largely due to higher

percentages of trips involving a stay in a motel for non-residents. Spending on overnight trips was slightly higher for

trips to the Upper Peninsula, but this difference was small when spending was converted to a snowmobile day basis.

We therefore used two spending profiles, one for residents and one for non-residents to determine flows of spending.

RESULTS

Results are presented in three major sections. We first estimate total snowmobile use and spending on a

statewide basis. Estimates of average spending on trips and average annual expenses for equipment are applied to

the number of machines and snowmobile days to compute total statewide spending in 1996/97. Activity and

spending from Michigan residents and out-of-state visitors are compared. In part two we allocate snowmobile

activity and spending to five sub-regions of the state to show the flows of activity and spending around the state. In

part three we estimate the regional economic impacts of snowmobiler spending, first at a statewide level and then for

each sub-region. Spending is applied to regional economic models to estimate the direct and secondary impacts of

snowmobiling on sales, income and jobs in each region. Readers are referred to Nelson et. al.(1998) for general

characteristics of snowmobilers and snowmobile trips as well as further details on the survey methods.

Statewide Snowmobile Use and Spending

Snowmobile useAn estimated 212,000 trail permits were sold in 1996/97. Machines with trail permits averaged about 11.4

days of use during the 1996/97 winter, resulting in a total of 2.4 million snowmobile days in Michigan in 1996/97.

Eighteen percent of these days were by out-of-state residents (Table 2). Days in which snowmobiles are used to

support other activities, such as ice fishing, are not included here.

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Michigan residents averaged 14.9 days of use per machine (23 days per household), divided 51% on day

trips of less than 100 miles, 11% on longer day trips and 37% on overnight trips. Out-of-state residents spent fewer

days snowmobiling in Michigan (5.5 days per machine), but took a higher percentage of overnight trips. Eighty-

seven percent of out-of-state trips were overnight compared to 37% for Michigan residents (Table 2).

Seventy-two percent of the snowmobile days on overnight trips involved a stay in a motel. Staying at

second homes (13%) or with friends and relatives (12%) accounted for most of the remaining overnight trips.

Michigan residents were more likely than non-residents to stay in a second home or with friends and relatives.

Snowmobilers stayed an average of 4.7 nights on overnight trips and brought an average of 1.8 machines (Table 3).

They reported 5.2 snowmobile days on overnight trips, indicating they snowmobile on about two out of three days

they are away on overnight trips. Day trips involved slightly fewer machines per trip.

Table 2. Michigan Snowmobile Activity (Winter 1996/97)

Trip TypeMichigan

ResidentsOut-of State

Permit HoldersTotal

SB's with permits 133,057 78,943 212,000Days per machine 14.9 5.5 11.4Total snowmobile days 1,978,224 432,281 2,410,506Percent 82.1% 17.9% 100%

Snowmobile days by trip type (percent)Day trip <100 51% 6% 42.8%Day trip >100 11% 7% 11.3%Overnight trip 37% 87% 45.9%

100% 100% 100%Snowmobile days by trip type (total days)Day trip <100 1,006,290 25,505 1,031,795Day trip >100 240,694 31,557 272,251Overnight trip 731,240 375,221 1,106,460Total 1,978,224 432,282 2,410,506

Overnight trips by lodging type (percent)Motel 60% 86% 72%2nd home 19% 5% 13%F&R 16% 7% 12%Other 5% 2% 3%

Snowmobile days by trip typeDay trip <100 1,006,290 25,505 1,031,795Day trip >100 240,694 31,557 272,251Motel 440,875 322,337 794,2962nd home 137,191 18,467 138,863F&R 119,875 27,701 136,641Other 33,299 6,715 36,660Total 1,978,224 432,282 2,410,506Note: Only includes machines with trail permits and excludes days in support of ice fishing.

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Table 3. Characteristics of Snowmobile Trips

Characteristic Day trips

≥≥ 100 miles

Overnight

trips

Length of stay (nights) 0.0 4.7No. snowmobiles on trip 1.6 1.8Snowmobile days on trip 1.4 5.2

Spending Patterns

A typical household with at least one Michigan snowmobile trail permit spent about $5,700 during the

1996/97 winter season on snowmobiling, divided $4,100 for equipment-related items and $1,600 on snowmobile

trips within Michigan. Out-of-state residents spent slightly more on equipment and less on trips to Michigan, as they

spent fewer days snowmobiling in Michigan. There were about 100,000 households using Michigan snowmobile

trails in 1996/97 with about 40,000 of these households from out-of-state. Equipment-related spending is mostly for

machines and trailers and trip spending is dominated by spending on overnight trips.

Table 4. Annual Spending by Households with Snowmobiles ($ per household)

Spending CategoryMichiganResidents

Out-of-StateResidents

AllHouseholds

Equipment-related ExpensesMachines & Trailers 3,303 4,023 3,576Repair 236 252 242Insurance 220 241 228Storage 28 31 29Total 3,787 4,547 4,075

Trip SpendingDay trips <100 miles 429 19 287Day trips ≥ 100 miles 193 47 156Overnight trips 1,159 1,275 1,203Total 1,780 1,340 1,642

Grand Total (Equipment + Trip)a 5,568 5,887 5,717a. Columns may not sum to totals due to rounding

Spending on snowmobile trips varies with the type of trip. A typical snowmobiler spent $80 on day trips of

100 miles or more in 1996/97 and over $300 on overnight trips (Table 5). Spending was not measured for day trips

of less than 100 miles, but is assumed to be at half the rate for day trips of 100 miles or more. The highest spending

was for trips involving overnight stays in a motel ($662 per trip). Snowmobilers staying in seasonal homes spent

$381 per trip and those staying with friends and relatives (F&R) spent $307 per trip. Over all types of trips, 60

percent of the spending took place at the destination, 25 percent en route and 14 percent at home (Table 5).

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Spending is converted to a snowmobile day basis in order to expand the spending figures to statewide

totals. Spending is also reported on a per day basis in Table 5. The per day spending averages are consistent with

general tourist spending studies. Snowmobile parties spend $40-$80 on day trips, $137 per night if staying in a

motel and about $75 per night if staying in other types of lodging.

Table 5. Average Spending on Michigan Snowmobile Trips by Trip Type and Locationof Spending

Location of spendingSegment At Home En Route At Destination Total

Spending per party per tripDay trip <100 milesa 10.87 16.32 12.74 39.92Day trip ≥ 100 miles 21.74 32.63 25.47 79.84Motel 60.37 123.53 478.07 661.972nd home 71.48 58.63 251.32 381.42F & R 64.88 60.50 182.27 307.64Other 54.03 55.59 250.03 359.66Weighted averageb 33.57 58.77 139.93 232.27Pct 14% 25% 60% 100%

Spending per snowmobile dayDay trip <100 milesa 7.35 11.04 8.62 27.01Day trip ≥ 100 miles 14.70 22.07 17.23 54.01Motel 11.23 22.98 88.94 123.162nd home 13.34 10.94 46.91 71.19F & R 15.58 14.53 43.77 73.88Other 10.88 11.19 50.34 72.41Weighted averageb 10.19 17.84 42.47 70.50

Spending per party per dayDay trip <100 milesa 10.87 16.32 12.74 39.92Day trip ≥ 100 miles 21.74 32.63 25.47 79.84Motel 12.50 25.58 98.98 137.062nd home 16.57 13.59 58.25 88.40F&R 15.49 14.45 43.53 73.47Other 9.30 9.57 43.04 61.91Weighted averageb 11.95 20.92 49.80 82.66a. Spending for day trips of less than 100 miles is assumed to be half that for day trips of 100 miles or more.

b. Weighted for the proportion of trips or days of each type.

On day trips of 100 miles or more, snowmobile parties spent an average of $32 for gas and other

snowmobile-related items (40%). About $36 dollars for food was divided evenly between take out (groceries) and

restaurant/bar expenses. Another $10 was spent for transportation (auto expenses) on day trips. Snowmobilers

averaged $551 dollars per trip on overnight outings, slightly over $100 per day. Almost a fourth of this spending

went for lodging and another quarter for restaurant meals/drinks. Auto, snowmobile and groceries each constituted

about 16% of the trip spending for overnight trips (Table 6). Out-of-staters spent about 40% more per trip and 30%

more on a snowmobile day basis on overnight trips than Michigan residents. Detailed spending profiles for

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Michigan residents and out-of-state visitors by segment are given in Appendix A (Tables A1-A4). These

disaggregated spending profiles were used to estimate total spending in Table 7.

Table 6. Distribution of Trip Spending by Spending Category

Spending Day trips ≥≥ 100 miles Overnight tripsCategory $ Pct $ Pct

Restaurant 17.26 22% 130.90 24%Food 18.79 24% 87.14 16%Lodging 0.00 0% 126.15 23%Other 2.11 3% 24.33 4%Snowmobile 31.68 40% 102.04 19%Sporting goods 0.00 0% 3.42 1%Auto 10.00 13% 76.99 14%

Total 79.84 100% 550.98 100%

Total Spending on Snowmobiling in Michigan, 1996/97

Spending on Trips. Total trip spending is estimated by multiplying spending per snowmobile day in Table

5 by the number of snowmobile days in Table 3. Snowmobilers with trail permits spent an estimated $160 million

on trips to Michigan in 1996/97. One hundred and thirty two million dollars were spent on overnight trips and day

trips of 100 miles or more (Table 7). Assuming that spending on shorter day trips is at half the rate for day trips over

100 miles, $29 million is spent on day trips of less than 100 miles. Of the $132 million on longer trips, Michigan

residents spent $83 million and out-of-state visitors spent $48 million (Detailed spending totals for residents and

nonresidents are reported in Tables A5 and A6, respectively). Almost two-thirds of trip spending takes place within

20 miles of the destination, 22% is spent en route and 13% at home. The largest expenses are for restaurant

meals/drinks (24% of total), snowmobile expenses (21%), lodging (20%), groceries and take out food (17%) and

auto or tow vehicle expenses (14%).

Excluding spending at home, snowmobilers spent a total of $114 million on overnight trips or day trips of

over 100 miles in 1996/97. All but $4 million of this was spent in Michigan (half of the en route spending on trips

from out-of-state is assumed to occur outside Michigan). Eleven million dollars was spent on day trips over 100

miles and $103 million was spent on overnight trips. Spending on overnight trips was split $81 million at the

destination and $22 million en route.

Equipment-related Snowmobile Spending. Snowmobilers spend about $4,000 annually per household

on equipment-related items, mostly for snowmobiles and trailers (Table 4). With households averaging about two

machines per household, this amounts to about $2,000 per machine. This suggests that snowmobilers buy a new

machine about every three or four years. Out-of-staters tended to have slightly newer or more expensive machines

and therefore spent twenty percent more per household than Michigan residents on equipment.

Total snowmobile equipment spending in 1996/97 was about $400 million (Table 8). Michigan residents

spent $235 million and out-of-state residents with Michigan snowmobile permits another $167 million. It was

assumed that Michigan residents bought their equipment within Michigan. Equipment purchased by non-residents is

excluded from the impact analysis as we cannot determine where the equipment was bought.

11

Table 7. Grand Total Spending on Michigan Snowmobile Trips, 1996/97 ($ millions)

Day trips ≥≥ 100 miles or Overnight trips Day TripsSpending Category Michigan

ResidentsOut-of-Staters

Total Pct < 100 milesa

At HomeRestaurant 0.00 0.00 0.00 0.0% 0.00Food 4.85 1.63 6.48 4.9% 2.74Lodging 0.00 0.00 0.00 0.0% 0.00Other 0.46 0.13 0.59 0.5% 0.15Snowmobile 4.63 1.42 6.04 4.6% 3.73Sporting goods 0.05 0.05 0.10 0.1% 0.00Auto 3.06 1.41 4.47 3.4% 1.24

En RouteRestaurant 4.58 1.75 6.32 4.8% 2.70Food 3.65 1.32 4.97 3.8% 2.95Lodging 1.87 0.41 2.28 1.7% 0.00Other 0.62 0.17 0.79 0.6% 0.42Snowmobile 3.57 0.76 4.33 3.3% 3.92Sporting goods 0.09 0.01 0.10 0.1% 0.00Auto 5.96 3.71 9.67 7.3% 1.81

At DestinationRestaurant 14.69 10.06 24.75 18.8% 3.54Food 7.26 3.47 10.74 8.1% 1.10Lodging 12.67 11.22 23.89 18.1% 0.00Other 2.23 1.92 4.15 3.1% 0.19Snowmobile 10.27 7.11 17.38 13.2% 3.80Sporting goods 0.33 0.20 0.53 0.4% 0.00Auto 2.58 1.65 4.22 3.2% 0.57

Total SpendingRestaurant 19.26 11.81 31.07 23.6% 6.23Food 15.77 6.42 22.19 16.8% 6.79Lodging 14.54 11.63 26.18 19.9% 0.00Other 3.32 2.22 5.54 4.2% 0.76Snowmobile 18.47 9.29 27.75 21.1% 11.44Sporting goods 0.47 0.26 0.73 0.6% 0.00Auto 11.60 6.76 18.36 13.9% 3.61

SubtotalsAt Home 13.04 4.63 17.68 13.4% 7.85En Route 20.35 8.12 28.48 21.6% 11.78At Destination 50.03 35.64 85.67 65.0% 9.20Grand Total 83.43 48.40 131.82 100.0% 28.83Percent 63% 37% 100%a. Spending on day trips of less than 100 miles is assumed to be at half the spending per

trip for day trips more than 100 miles.

12

Table. 8. Total Equipment-Related Snowmobile Expenses, 1996/97 ($ millions)

Segment Equipment Repair Insurance Storage TotalMichigan Residents 205.2 14.7 13.7 1.7 235.2

Non-Residents 147.9 9.3 8.8 1.1 167.1Total 353.0 23.9 22.5 2.9 402.3Percent 88% 6% 6% 1% 100%a. Based on 133,057 resident machines and 78,943 non-resident machines with trail permits.

Regional Analysis

Snowmobiling involves considerable flows of people, machines and dollars into and around the state.

These flows may be captured by estimating the number of snowmobile days of activity from each origin region to

each destination region. Days of snowmobiling in each region are then divided among the three trip types so that the

trip spending profiles may be applied and interregional flows of spending may be estimated.

Snowmobile Activity by Region

The number of snowmobile days generated in each origin region is estimated in Table 9 using the same

procedure as in Table 3, but with six regions instead of just the in-state and out-of-state breakdowns. Machine

permits are distributed to origin regions based on the distribution in the mailing sample for the survey. This was a

random sample of 3,325 machines from the snowmobile permit list. The majority of the permit holders live in

southeast Michigan or out-of-state. Snowmobilers from northern Michigan averaged about 20 days of activity per

machine while snowmobilers from southern Michigan (12 days per machine) and out-of-state were less active (5.5

days per machine). Out-of-state residents and snowmobilers from southern Michigan were more likely to take

overnight trips, while trips originating in northern regions were mostly day outings. The distribution of lodging

categories for overnight trips originating in Michigan did not vary significantly by region, so the same percentages

were used for all Michigan origins. Out-of-state snowmobilers were more likely to use motels.

Southern Michigan generated about a million days of snowmobiling in 1996/97. About sixty percent of

these days were on overnight trips, mostly to other regions, while forty percent were on day trips, mostly within the

region. Out-of-staters generated 432,000 snowmobile days in Michigan in 1996/97, 87% on overnight trips.

Snowmobile trips generated in each region were distributed to destination regions using the percentages of

snowmobile days reported taking place in each destination region by snowmobilers from each origin region (Table

10) . The four northern Michigan regions are the most popular destinations for snowmobiling, each receiving over

450,000 snowmobile days of use, mostly from visitors from other regions. Northwest Michigan receives 31% of the

snowmobile days, other northern regions receive about 20% each, and southern Michigan hosts 10% of the

snowmobile days (Table 10). Out-of-staters (mostly from Wisconsin and Minnesota) favor the Western UP, while

southern Michigan snowmobilers favor the Northern Lower Peninsula. Snowmobilers from the four northern

Michigan regions tend to snowmobile within their own region or an adjacent region.

13

Table 9. Michigan Snowmobile Days by Region of Origin and Trip Type, Winter 1996/97.

Region of OriginTrip Type West

UPEast

UPNWLP

NELP

SouthLP

Out-of-State

Total

SB's with permits 10,464 6,377 16,098 11,764 88,354 78,943 212,000Days per machine 22.6 20.0 19.1 20.4 12.1 5.5 11.0Total snowmobile days 236,563 127,397 307,219 239,759 1,067,287 432,282 2,410,506

Shares to allocate days by trip typeDay trip <100 miles 70% 80% 80% 78% 29% 6% 41%Day trip ≥ 100 miles 20% 15% 6% 11% 12% 7% 11%Overnight 10% 5% 13% 11% 59% 87% 49%

Snowmobile days by trip type(000's)Day trip <100 miles 166 102 247 187 304 25 1,032Day trip ≥ 100 miles 47 19 20 26 129 32 272overnight 23 7 41 26 634 375 1,107Total 237 127 307 240 1,067 432 2,411

Shares for allocating overnight trips to segmentsmotel 60% 60% 60% 60% 60% 86% 72%2nd home 19% 19% 19% 19% 19% 5% 13%F&R 16% 16% 16% 16% 16% 7% 12%other 5% 5% 5% 5% 5% 2% 3%

Snowmobile days by trip type (000's)Day trip <100 miles 166 102 247 187 304 25 1032Day trip ≥ 100 miles 47 19 20 26 129 32 272motel 14 4 24 16 382 322 7942nd home 4 1 8 5 119 18 139F&R 4 1 7 4 104 28 137Other 1 0 2 1 29 7 37Total 237 127 307 240 1067 432 2411

Table 10. Michigan Snowmobile Days (000's) by Origin and Destination Region,Winter 1996/97.

Destination RegionOrigin Region West

UPEast

UPNWLP

NELP

SouthLP

Total

Western UP 187 35 7 5 2 237Eastern UP 19 106 0 2 0 127Northwest LP 10 31 245 20 1 307Northeast LP 6 21 66 147 0 240Southern LP 77 160 356 257 218 1,067Out-of-state 224 98 66 30 14 432

Total (000's) 523 450 741 461 235 2,410Percent 22% 19% 31% 19% 10% 100%

14

Spending by Region of Origin and Destination

To apply spending patterns that are estimated for distinct types of snowmobile trips, snowmobile days in

Table 10 were distributed into the three trip types. Detailed origin-destination flows in snowmobile days for each

type of trip are reported in Appendix A (Table A7). As respondents reported snowmobile days by destination region

and trip type separately, a few assumptions were required to break Table 10 into types of trips. It was assumed that

day trips primarily occurred within the originating region, with some allocated to nearby regions. A higher

percentage of day trips over 100 miles were distributed to nearby regions, with the assumption that trips tends to go

northward. Once day trips were distributed among destination regions, overnight trips were allocated to balance the

totals.

Flows of spending are obtained by applying the spending profiles for each trip type to the estimates of

snowmobile days in Table 10. Spending profiles for Michigan residents and out-of-state snowmobilers (summarized

in Table 11) are taken from Tables A3 and A4, with the at home expenses excluded for this analysis. The overnight

profile is a weighted average of the four lodging segments. There were no significant differences in spending on a

snowmobile day basis across the five in-state regions, so the same profile is used for trips to these regions.

Table 11. Snowmobiler Spending by Type of Trip & Origin, Winter1996/97 ($ per snowmobile day)

Type of Trip & Spending Location MichiganResident

Out-of-state

Day trips of 100 miles or moreat home 15.22 15.22en route 22.84 22.84at destination 17.83 17.83Total 55.89 55.89

Overnight tripsat home 12.83 11.07en route 20.31 19.73at destination 62.55 93.48Total 95.70 124.28

Regional flows of spending are summarized in Table 12. This table excludes at home spending, spending

on day trips of less than 100 miles, and half of the en route spending by out-of-staters. The vast majority of the

spending comes from Southern Michigan ($58 million) or out-of-state ($40 million). Most of the spending occurs in

Northern Michigan: $30 million in the Northwest LP, $28 million in the Western UP, $24 million in Eastern UP,

and $17 million in the Northeast LP. The majority of spending in Southern Michigan is by residents of the region.

Snowmobiling therefore generates substantial flows of money from out-of-state and Southern Michigan to northern

parts of the state. In assessing regional impacts, we will examine the economic effects of spending coming from

outside each region (the last row of Table 12). Ninety-four million of the $160 million in total snowmobile trip

spending involves flows of money between regions.

15

Table 12. Snowmobile Trip Spending ($000's) for the Economic Impact Analysisa byOrigin and Region of Spending, Winter 1996/97

Region of SpendingOrigin West

UPEast

UPNWLP

NELP

SouthLP

Total

Western UP 1,952 833 509 395 176 3,864Eastern UP 400 967 0 20 0 1,387Northwest LP 726 426 2,315 411 63 3,941Northeast LP 440 343 1,147 1,404 0 3,335Southern LP 5,600 11,603 19,188 11,864 9,684 57,938Out-of-stateb 18,893 9,767 6,859 3,103 1,097 39,719

Total 28,012 23,938 30,018 17,196 11,019 110,184

Total from outsidethe regionc

26,059 22,971 27,704 15,792 1,335 93,862

a. Does not include spending on day trips of less than 100 miles or at home spending.b. Half of out-of-state en route spending ($4 million) is assumed to be spent out-of-state.c. Excludes spending in each region by residents of the region.

Forty-six million dollars of the $160 million total trip spending is at home spending or spending on day

trips of less than 100 miles (Table 13). This spending is not included in the statewide or regional economic impact

analysis, as it is local spending that in most cases would be made in the local area anyway. Spending data were not

formally gathered for day trips of less than 100 miles. Also, these trips are generally not included within tourism

estimates. The regional impact analyses also exclude all trip spending by snowmobilers within the region where

they live.

Flows of spending are summed up in Table 14. Of the $160 million total trip spending, 36% stays within

the region where the snowmobiler lives, 30% comes into Michigan from out-of-state, and 34% involves

interregional transfers within Michigan. Almost half (47%) of the spending by Michigan residents on day trips of

100 miles or more or overnight trips is made outside the region where the snowmobiler lives. Out-of-state

snowmobilers accounted for 38 percent of the $114 million spent on these trips, with all but $4 million of this spent

in Michigan.

Table 13. Spending Not included in the Statewide Economic Impact Analysis ($000's)Region of Origin/Spending

Spending Category WestUP

EastUP

NWLP

NELP

SouthLP

Out-ofState

Total

At home spending, day tripsgreater than 100 miles 714 288 303 398 1,960 480 3,663

At home spending forOvernight trips 299 89 520 339 8,134 4,155 9,381

All spending on day tripsless than 100 miles 4,649 2838 6895 5,231 8,509 711 28,831

Total excluded spending 5,662 3215 7718 5,968 18,603 5,345 46,510

16

Table 14 . Summary of Snowmobile Spending Flows, Winter 1996/97

FlowSpending on day trips

≥≥ 100 miles & overnighttrips

Incl. spending at home & onday trips of less than 100

miles

$ Millions Pct $ Millions PctSpending in Origin Region (MI regions) 16 14% 58 36%Spending from Out-state 44 38% 48 30%In-state interregional transfers 54 47% 54 34%Total (excluding at home) 114 100% 160 100%

Economic Impacts of Snowmobiler Spending

In this section, we report the economic significance of snowmobiling in Michigan on a statewide basis and

the economic impacts of trip spending for the state and five subregions. The statewide “significance” analysis

includes all snowmobiler spending in Michigan, including trip spending by out-of-staters and both trip and annual

expenses (machines, trailers, insurance, storage, and repairs) for Michigan residents. The term “impact” is reserved

for analyses that only include spending on trips originating outside the region. The statewide impact analysis

therefore only includes spending in Michigan by out-of-state residents. Regional impact analyses include spending

by visitors from outside the region on snowmobile trips to the region. The regional impact analyses therefore

exclude all spending by snowmobilers who live within the given region.

The statewide significance and impacts of snowmobiling are estimated using an input-output model of the

Michigan economy. The statewide significance analysis shows the amount of economic activity associated with

snowmobiling. Not all of this economic activity would necessarily be lost to the state if snowmobiling were not

available in Michigan, as resident snowmobilers would presumably spend some of this money on other activities in

Michigan. To the extent they would go out-of-state, the spending and associated jobs and income would be lost to

the state. On the other hand, out-of-state snowmobilers would likely not come to Michigan on winter trips if

snowmobiling were not available. In the absence of snowmobiling, their spending would largely be lost to the state.

The statewide impact analysis shows the contribution of out-of-state snowmobilers to the state’s economy.

Statewide Significance and Impact of Snowmobiler Spending

Snowmobilers spent $114 million on trips to or within Michigan during the winter of 1996/97 (excluding

day trips of less than 100 miles and at home spending). All but $4 million of this (half of the out-of-state en route

spending) was spent in Michigan. About three fourths of this $110 million in spending is captured by the state

economy as direct sales. All spending on services is captured but only the retail and wholesale margins are captured

for most purchases of goods, including gasoline, as these products are generally made outside of the state. Direct

sales of $84.2 million generates $48 million in income for the state and supports 2,500 direct jobs (Table 15). These

"direct effects" accrue to businesses directly selling to snowmobilers. These businesses in turn purchase goods and

services from other backward-linked industries creating indirect effects. They also pay out wages and salaries that

households re-spend in the area creating induced effects. Secondary or multiplier effects are the sum of indirect and

17

induced effects. Through these multiplier effects, the total contribution to the state of snowmobile trip spending is

$168 million in sales, $93 million in income and about 3,800 jobs.

Snowmobilers from out-of-state spent $40 million on snowmobile trips in Michigan during the winter of

1996/97. The economic impacts of this spending are particularly important as this spending represents “new dollars”

to the state economy. Thirty-two million dollars of spending by out-of-state snowmobilers was captured as direct

sales by the Michigan economy, contributing $18.4 million in direct income to the state and supporting almost

1,000 direct jobs. With multiplier effects, snowmobilers from out-of-state generate $63 million in sales, $36 million

in income and support about 1,500 jobs.

Table 15. Statewide Economic Impacts of Snowmobiler Trip Spendinga,1996/97.

Impact MeasureMichigan

ResidentsOut-of-State

SnowmobilersTotal

Spending ($Millions) 70.4 39.7 110.1

Direct EffectsSales ($Millions) 52.7 31.5 84.2Income ($Millions) 29.7 18.4 48.1Jobs 1,571 990 2,561

Total EffectsSales ($Millions) 105.0 63.4 168.4Income ($Millions) 57.7 35.6 93.3Jobs 2,361 1,477 3,838a. Excludes at home spending and spending on day trips of less than 100 miles

Direct effects of trip spending are felt mainly by hotels, eating and drinking establishments, and retail trade,

while secondary effects accrue primarily to service sectors, manufacturing and retail trade. Snowmobile trip

spending supports 1,240 jobs in restaurants, 975 jobs in hotels, 665 jobs in service sectors and 646 jobs in retail and

wholesale trade in Michigan (Table 16).

Snowmobiler's equipment-related purchases also have economic impacts on the state. As there are no

snowmobile manufacturers in Michigan, only the retail and wholesale margins on snowmobile purchases accrue to

the state economy. A retail margin of 30% and wholesale margin of 12% was used for equipment sales. Several

additional assumptions were required to apply equipment-related spending to the input-output model. We assumed

that two thirds of equipment sales involved new machines and a third of used sales was by dealers. Sales of used

machines between households have no net economic effect as this simply shifts income from one household to

another. Only retail margins are included on dealer sales of used equipment.

With these assumptions, the state economy captured $93 million of the $235 million spent by Michigan

residents on snowmobile equipment in 1996/97 (Table 17). These sales provided $61 million in income and

supported over 1,700 jobs. With secondary effects almost $100 million in income was generated, supporting 2,600

jobs. Direct impacts accrue largely to retail trade, i.e. snowmobile dealers. Equipment purchases by out-of-state

residents are not included in these figures, although some of this equipment is likely bought in Michigan. If half of

the $167 million in equipment purchases of snowmobilers from out-of-state were made in Michigan, it would

18

increase the equipment-related impacts by about a third, i.e., adding $50 million to total sales, another $30 million in

income and 850 jobs.

Table 16. Distribution of Snowmobile Trip Spending Impacts by Sector

Economic Sector GroupDirect

EffectsSecondary

EffectsTotal Effects

Sales Effects ($Millions)Manf/Prod. 7.7 21.5 29.2Trans & Services 5.7 45.3 51.1Recreation 1.4 1.5 2.9Hotel 26.0 0.4 26.3Eat & drink 29.9 3.3 33.2Retail/wholesale 13.2 10.8 24.0Government 0.3 1.4 1.7Total 84.2 84.3 168.4

Income Effects ($Millions)Manf/Prod. 1.9 8.1 10.0Trans & Services 2.2 25.8 28.1Recreation 1.0 0.9 1.8Hotel 19.0 0.3 19.3Eat & drink 14.5 1.6 16.1Retail/wholesale 9.4 7.5 16.9Government 0.2 1.0 1.2Total 48.1 45.2 93.3

Job Impacts (Number of jobs)Manf/Prod. 28 156 184Trans & Services 60 605 665Recreation 55 39 94Hotel 962 14 975Eat & drink 1,116 124 1,240Retail/wholesale 339 307 646Government 2 31 33Total 2,561 1,277 3,838

Table 17. Statewide Economic Impacts of SnowmobileEquipment-related Spending , 1996/97.

Impact measure Direct Effects Total Effects

Sales ($Millions) 93 153Income ($Millions) 61 94Jobs 1,714 2,617a. Includes purchases of machines & trailers, and annual spending on

insurance, repairs, and storage of Michigan residents with trail permits.

19

Combining equipment and trip-related economic impacts of snowmobiling yields a total statewide effect of

$321 million in sales, $187 million in income and over 6,000 jobs (Table 18). Trip spending and equipment related

spending make similar contributions to total sales and income. Trip spending generates more jobs due to the higher

job to sales ratios in tourism sectors. Remember that the job measures include full time, part time and seasonal jobs

and are not full time equivalents.

Snowmobile trip spending (excluding day trips of less than 100 miles) is about 2% of the estimated $6.8

billion spent (excluding airfares) on tourism in Michigan in 1995 (USTDC, 1997). The share of snowmobiler

spending from out-of-state (nearly 40%) is greater than for tourism as a whole. Snowmobiling's relative impact on

the economy is much more evident at the regional level.

Table 18. Total Statewide Economic Impacts of SnowmobilerSpending in Michigan, 1996/97Impact Measure Trip spending Equipment Total

Direct effectsSales ($ millions) 84 93 177Income ($ millions) 48 61 109Jobs 2,561 1,714 4,275

Total effectsSales ($ millions) 168 153 321Income ($ millions) 93 94 187Jobs 3,838 2,617 6,455

Regional Impacts of Snowmobiling

Regional economic impacts are estimated using input-output (I-O) models for each of the five sub-regions

of the state. Regions were defined in Figure 1 as groups of counties. The regional impact analyses include all trip

spending within the region on trips into the region from outside. This includes all spending at the destination plus

half of the en route expenses for trips into the region. En route expenses on pass through trips or for trips leaving the

region are not included. These regional impact analyses give an estimate of the potential economic loss to the region

if it did not attract any snowmobilers from outside the region.

Before presenting the results of the input-output analysis, it is informative to compare snowmobile

spending with estimates of overall tourism spending in each region in 1995. County level tourism spending

estimates are taken from Stynes (1998) which covers all spending within 30 miles of the destination on overnight

trips or day trips of 100 miles or more (Table 19). The regional snowmobile spending estimates from Table 12 are

roughly comparable to these tourism estimates as the en route spending included there that may occur beyond 30

miles of the destination is largely offset by the exclusion of trips of 100 miles or more that stay within the region.

Snowmobile trip spending represents 11 percent of all tourism spending in the Western UP and seven

percent in the Eastern UP. In the Northern Lower Peninsula snowmobile spending is about three percent of tourism

spending in the Northwest and 3.5 percent in the Northeast (Table 19) .

20

Table 19. Snowmobile Spending as a Proportion of all TourismSpending in Michigan by Region ($Millions)

Region Snowmobilea All Tourismb Percent

Western UP 26 233 11.2%Eastern UP 23 331 6.9%Northwest LP 28 887 3.1%Northeast LP 16 456 3.5%Southern LP 1 3,845 0.0%State Total 94 5,752 1.6%

a. Only includes spending on trips into region from outsideb. Tourism spending estimates for 1995 from Stynes (1998), excludes

airline-related spending

Regional economic impacts are directly proportional to the amount of "new" spending in the region from

snowmobiling. Spending on snowmobile trips into the region adds over $10 million in direct income to both the

Western UP and Northwest LP. With secondary effects, snowmobiling adds $21 million to Northwest LP, $19

million to the Western UP, $15 million to the Eastern UP and $11 million to the Northeast LP (Table 20).

Snowmobiling supports over 1,000 jobs in the Western UP and in the Northwest LP, almost 800 in the Eastern UP

and over 600 in the Northeast LP.

Table 20. Economic Impact of Snowmobile Trip Spending on Sub-Regions ofMichigan, 1996/97

Impact MeasureWestern

UPEastern

UPNorthwest

LPNortheast

LPSouthern

LPSum

Visitor Trip Spending($ Millions)

26.1 23.0 27.7 15.8 1.3 93.9

Direct EffectsSales ($Millions) 19.1 16.7 20.9 11.2 1.0 68.9Income ($Millions) 10.7 9.8 12.1 6.4 0.6 39.5Jobs 790 601 703 427 32 2,551Total EffectsSales ($Millions) 34.3 26.0 37.5 19.9 2.1 119.8Income ($Millions) 18.9 14.7 20.7 11.1 1.2 66.5Jobs 1,092 788 1,002 611 47 3,539a. Includes all spending at destination and 1/2 of en route spending for all trips into the

region from outside the region. Excludes spending by residents of the region and "passthrough" en route spending (i.e., spending on trips to other regions).

Regional Economic Multipliers

Regional economic multipliers capture the structure of a region's economy and are used to estimate the

secondary effects of spending. Table 21 summarizes the snowmobile trip spending multipliers for each region and

the state economy as a whole. Statewide, each dollar of direct sales due to snowmobiler spending generates another

dollar in secondary sales (sales multiplier =2.0). Fifty-seven cents of every dollar in direct sales is converted to

21

direct income for the state. Snowmobiler spending supports roughly 30 direct jobs for every million dollars in direct

sales and another 15 jobs through multiplier effects.

The regions are fairly large, so the multiplier effects at the regional level are only slightly smaller than for

the state as a whole. The four northern regions each have sales multipliers of around 1.8 and have similar income

effects as at the state level. Due to lower wage rates and higher percentages of part time and seasonal jobs, the job to

sales ratios are higher in northern Michigan. Each million dollars of direct sales in northern Michigan supports from

35-40 direct jobs and about 50 total jobs with multiplier effects.

The multipliers in Table 21 can be used to estimate the regional or statewide impacts of a change in

snowmobile trip spending. Before applying any of these multipliers to spending data, the spending data should first

be multiplied by the capture rate to estimate the direct sales effects. For example, using the statewide multipliers, a

million dollars in trip spending yields $760,000 in direct sales in the state (one million times 76%), which in turn

yields $1.52 million in total sales ($760,000 times the sales multiplier of 2.0), $836,000 in total income ($760,000

times the total income/sales ratio of 1.1) and 34 total jobs ($.76 million times 45 jobs per million). An increase of a

million dollars in snowmobile trip spending would add to the state or regions sales, income and jobs, while a

decrease would reduce sales, income and jobs by these amounts. It takes about 2,000 overnight trips to generate a

million dollars in snowmobile trip spending.

Table 21. Regional Economic Multipliers for Snowmobile Trip Spending by Region

MultiplierWestern

UPEastern

UPNorthwest

LPNortheast

LPSouthern

LPState

Capture Rate 73% 73% 75% 71% 78% 76%Sales Multiplier (Type III) 1.79 1.55 1.80 1.78 1.97 2.00Direct Income/Sales 0.56 0.58 0.58 0.57 0.58 0.57Direct Jobs/Sales 41 36 34 38 30 30Total Income/Direct Sales 1.0 0.9 1.0 1.0 1.1 1.1Total Jobs/Direct Sales 57 47 48 54 45 45

CONCLUSIONS

Snowmobiling has considerable economic effects on the state and is particularly important to the regional

economies of northern Michigan. About 100,000 households with snowmobile trail permits spent $160 million on

trips and $400 million on equipment-related items during the winter of 1996/97. Snowmobilers from out-of-state

accounted for 37 percent of the $132 million spent on overnight trips or day trips of more than 100 miles.

Snowmobile trip spending is about 2% of all tourism trip spending in Michigan

Excluding spending at home in preparation for trips and en route spending out-of-state, snowmobilers

spent $110 million away from home in Michigan on trips during the winter of 1996/97. This spending generated $84

million in sales to Michigan businesses, $48 million in income and supported about 2,500 jobs. With multiplier

effects, the total economic activity associating with snowmobile trip spending in Michigan is $168 million in sales,

$93 million in income and 3,800 jobs.

A smaller portion of the equipment-related expenses is captured by the Michigan economy. As there are no

snowmobile manufacturers inside the state, only the retail and wholesale margins on snowmobile sales are captured

by snowmobile dealers. Nevertheless, the $235 million spent by Michigan residents on equipment in 1996/97

22

produced $93 million in direct sales, $61 million in direct income and supported 1,700 jobs statewide. With

multiplier effects, equipment purchases produce $153 million in sales, $94 million in income and 2,600 total jobs.

Combining trip and equipment-related spending provides a total impact with multiplier effects of $321 million in

sales, $187 in income to the state, and supports over 6,000 jobs.

Snowmobile travel patterns produce a considerable redistribution of income in the state from southern

Michigan population centers and out-of-state to northern Michigan and especially the Upper Peninsula. Snowmobile

trip spending represents 11% of all tourism spending in the Western UP, 7% in the Eastern UP and between 3 and

3.5 percent in the Northern Lower Peninsula. Of the $160 million spent on snowmobile trips statewide, $90 million

is money coming into northern Michigan from outside the region.

The Northwest LP receives $28 million of snowmobile spending from visitors, the Western UP $26

million, Eastern UP $23 million and Northeast LP $16 million. With multiplier effects this "new money" coming

into each region adds $21 million in income to the Northwest LP economy, $19 million to the Western UP, $15

million to the Eastern UP, and $11 million to the Northeast LP.

Several characteristics snowmobiling make it an important contributor to state and regional economies in

Michigan:

• A high proportion of snowmobilers are from out-of-state - 37% of trail permits are purchased by non-

residents and 37% of all snowmobile trip spending in Michigan comes from out-of-state. Snowmobiling is

one activity that provides a substantial net economic gain to the state, with trips and dollars coming into

Michigan vastly exceeding flows out of the state.

• A high proportion of overnight trips involve stays in motels - 46% of all trips are overnight and 72% of

overnight trips involve a stay in a motel.

• A high percentage of trips and spending go outside the region of residence - $94 million of the $160 million

in trip spending occurs outside the region of residence of the snowmobiler.

• Snowmobiling involves long distance trips within Michigan, many to the UP - UP residents generate 15%

of all snowmobile days, while the UP receives 40% of all snowmobile activity (almost a million

snowmobile days in 1996/97).

• There are high levels of spending on equipment for snowmobiling - equipment-related spending represents

70 percent of household spending on snowmobiling. Although a smaller percentage of this spending is

captured by the Michigan economy, the economic effects of these purchases is roughly equivalent in size

to trip spending impacts. Thus in addition to the usual tourism businesses supported by trip spending,

snowmobiling supports a sizeable industry of dealers and repair shops throughout the state.

• As one of only a couple of major winter activities attracting tourists to the state, snowmobiling plays a key

role in Michigan's winter tourism picture, providing another season of tourism income and jobs for many

northern areas of the state. In many areas, the winter season supplements income generated during the peak

travel season, while in some areas of the Upper Peninsula winter revenues from snowmobiling may equal

or exceed those generated during the summer.

23

REFERENCES

Cooper, R.B., Sadowske, P.S., and Kantor, M.D. 1979. Winter Recreation Visitor Study, Wisconsin 1979. Madison,WI: Recreation Resource Center. University of Wisconsin-Extension.

Klim, Ed .1997. Snowmobilers prepare for a big season as sales continue to increase. Press Release. East Lansing,Michigan: International Snowmobile Manufacturers Association.

Lanier, L.1974. An exploratory study of use patterns and user characteristics of Michigan snowmobile owners. APh.D. Dissertation, Department of Resource Development, Michigan State University, East Lansing,Michigan.

McElvany, N .1995. Snowmobiling in Vermont: an economic impacts study and snowmobiler user survey. Businessand Economics, Johnson State College, Johnson Vermont.

Mich. DNR .1976. Michigan snowmobile use survey 1975-76. Research Section, Law Enforcement Division,Michigan Department of Natural Resources, Lansing Michigan.

Mich. DNR .1977. Analysis of recreation participation and public opinions on ORV’s from 1976 telephone survey.Recreation Planning Section, Survey Report #1, Recreation Services Division. Michigan Department ofNatural Resources, Lansing Michigan.

Nelson, C.M., Lynch, J.A. and Stynes, D.J. 1998. An Assessment of Snowmobiling in Michigan by Snowmobilerswith Michigan Trail Permits. Report to Michigan Department of Natural Resources. East Lansing,Michigan: Department of Park , Recreation, and Tourism Resources, Michigan State University.

Reiling, S., Kotchen, M. and Bennett, R.1997. The economic impact of snowmobiling in Maine. Paper presented atthe Northeastern Recreation Research Symposium. Saratoga Springs, New York.

Robertson, R. 1996. Assessment of snowmobiling in New Hampshire “1996.” Department of Resource Economicsand Development, University of New Hampshire, Durham New Hampshire.

Stynes, D.J. 1998. Michigan Tourism Spending Estimates by County and Market Segment, 1995. East Lansing,Michigan: Department of Park , Recreation, and Tourism Resources, Michigan State University.

Stynes, D.J. and Propst, D.B. 1995. MI-REC: Micro-Implan Recreation Economic Impact Estimation System, User'sManual. East Lansing, Michigan: Department of Park , Recreation, and Tourism Resources, Michigan StateUniversity.

Szcodronski, K .1978. Trends in the characteristics of Michigan snowmobile owners. A M.S. Thesis, Department ofPark and Recreation Resources, Michigan State University, East Lansing, Michigan.

U.S. Travel Data Center. 1997. Impact of Travel on State Economies, 1995. Washington, D.C.: Travel IndustryAssociation of America.

24

APPENDIX A

Table A1. Spending by Michigan Residents on Snowmobile Trips, Winter1996/97 ($ per party per trip)

Day trips ≥100 miles

Motel 2ndHome

F & R Other OvntTotala

N= 19 299 92 84 21 515

At HomeRestaurantFood 7.58 24.36 27.45 22.33 25.48 24.66Lodging 0.00Other 0.42 3.07 4.21 0.95 0.00 2.80Snowmobile 10.32 18.82 15.54 28.92 10.05 19.46Sporting goods 0.00 0.38 0.43 0.12 0.00 0.33Auto 3.42 14.39 18.63 24.00 13.33 16.71

En RouteRestaurant 7.47 30.44 12.12 14.73 6.43 23.33Food 8.16 17.66 12.01 13.56 14.05 15.76Lodging 0.00 22.37 0.00 0.71 0.00 13.60Other 1.16 4.59 0.65 1.10 0.00 3.07Snowmobile 10.84 17.53 3.32 6.44 2.38 12.36Sporting goods 0.00 1.09 0.05 0.00 0.00 0.67Auto 5.00 44.00 24.87 23.42 19.52 35.92

At DestinationRestaurant 9.79 107.06 66.82 67.64 60.95 90.95Food 3.05 45.01 64.18 38.26 30.71 46.85Lodging 0.00 147.41 4.35 4.94 28.81 91.81Other 0.53 18.41 10.89 10.89 1.90 15.02Snowmobile 10.53 73.07 42.60 38.13 29.05 59.62Sporting goods 0.00 2.74 1.29 2.44 0.24 2.31Auto 1.58 17.49 15.75 12.96 9.52 16.06

Total SpendingRestaurant 17.26 137.51 78.93 82.37 67.38 114.28Food 18.79 87.03 103.64 74.15 70.24 87.27Lodging 0.00 169.78 4.35 5.65 28.81 105.41Other 2.11 26.07 15.75 12.94 1.90 20.88Snowmobile 31.68 109.42 61.46 73.49 41.48 91.44Sporting goods 0.00 4.21 1.78 2.56 0.24 3.31Auto 10.00 75.88 59.25 60.38 42.38 68.69

SubtotalsAt Home 21.74 61.02 66.26 76.32 48.86 63.96En Route 32.63 137.68 53.02 59.95 42.38 104.71At Destination 25.47 411.20 205.88 175.27 161.19 322.62Grand Total 79.84 609.90 325.16 311.55 252.43 491.29a. Overnight trip totals at the left are a weighted average of the four overnight segments.

25

Table A2. Spending by Non-residents on Snowmobile Trips to Michigan, Winter1996/97 ($ per party trip)

Day trips ≥100 miles

Motel 2ndHome

F & R Other OvntTotalb

N= 1 356 19 31 8 415

At HomeRestaurant 0.00Food 7.58 21.33 28.42 11.29 27.50 21.05Lodging 0.00Other 0.42 1.98 0.00 0.48 0.75 1.75Snowmobile 10.32 17.28 23.16 10.16 20.25 17.10Sporting goods 0.00 0.84 0.00 0.00 0.00 0.72Auto 3.42 18.39 45.16 11.94 19.13 19.24




SubtotalsAt Home 21.74 59.82 96.74 33.87 67.63 59.86En Route 32.63 111.65 85.79 61.97 90.25 106.33At Destination 25.47 534.23 471.32 201.23 483.25 505.64Grand Total 79.84 705.71 653.84 297.06 641.13 671.83a. The spending profile of Michigan residents is used for day trips ≥ 100 miles as the out-of-state

sample in this category was too small.b. Overnight trip totals at the left are a weighted average of the four overnight segments.

26

Table A3. Spending by Michigan Residents on Snowmobile Trips, Winter1996/97 ($ per snowmobile day)

Spending CategoryDay trips ≥100 miles

Motel 2ndHome

F & R Other OvntTotala

At HomeRestaurant 0.00 0.00 0.00 0.00 0.00 0.00Food 5.31 4.58 5.22 5.49 5.48 4.89Lodging 0.00 0.00 0.00 0.00 0.00 0.00Other 0.29 0.58 0.80 0.23 0.00 0.54Snowmobile 7.22 3.53 2.96 7.11 2.16 3.95Sporting goods 0.00 0.07 0.08 0.03 0.00 0.06Auto 2.39 2.70 3.54 5.90 2.87 3.39




SubtotalsAt Home 15.22 11.46 12.60 18.76 10.50 12.83En Route 22.84 25.86 10.09 14.74 9.11 20.31At Destination 17.83 77.23 39.16 43.09 34.65 62.55Grand Total 55.89 114.55 61.85 76.60 54.26 95.70a. Overnight trip totals at the left are a weighted average of the four overnight segments.

27

Table A4. Spending by Non-Residents on Snowmobile Trips to Michigan, Winter1996/97 ($ per snowmobile day)

Spending CategoryDay trips ≥ 100

milesMotel 2nd

HomeF & R Other Ovnt

Totalb





SubtotalsAt Home 15.22 11.04 16.63 7.66 11.27 11.07En Route 22.84 20.60 14.75 14.01 15.04 19.73At Destination 17.83 98.59 81.01 45.48 80.54 93.48Grand Total 55.89 130.23 112.38 67.14 106.85 124.28a.. The spending profile of Michigan residents is used for day trips ≥ 100 miles as the out-of-state sample in this category was too small.b. Overnight trip totals at the left are a weighted average of the four overnight segments.

28

Table A5. Total Spending by Michigan Residents on Snowmobile Trips, Winter1996/97 ($ Millions)a


Motel 2ndHome

F & R Other Total





SubtotalsAt Home 3.66 5.05 1.73 2.25 0.35 13.04En Route 5.50 11.40 1.38 1.77 0.30 20.35At Destination 4.29 34.05 5.37 5.17 1.15 50.03Grand Total 13.45 50.50 8.49 9.18 1.81 83.43a. Does not include day trips of less than 100 miles.

29

Table A6. Spending by Non-residents on Snowmobile Trips to Michigan,Winter 1996/97 ($ Millions)a


Motel 2ndhome

F & R Other Total





SubtotalsAt Home 0.48 3.56 0.31 0.21 0.08 4.63En Route 0.72 6.64 0.27 0.39 0.10 8.12At Destination 0.56 31.78 1.50 1.26 0.54 35.64Grand Total 1.76 41.98 2.08 1.86 0.72 48.40

a. Does not include day trips of less than 100 miles.

30

Table A7. Snowmobile Origin-Destination Flows by Trip Type (000’s ofsnowmobile days)

Region of DestinationOrigin Region West

UPEast

UPNWLP

NELP

SouthLP

Total

Day trips of less than 100 miles

Western UP155 11 166

Eastern UP 10 91 1 102Northwest LP 20 217 10 247Northeast LP 11 45 131 187Southern LP 65 65 174 304Out-of-state 23 2 25

Total188 133 327 207 176 1031

Day Trips of 100 miles or more

Western UP26 21 47

Eastern UP 6 12 0 1 19Northwest LP 8 4 8 20Northeast LP 8 10 7 26Southern LP 48 48 33 129Out-of-state 25 5 2 32

Total57 54 61 64 35 272

Overnight trips

Western UP6 3 7 5 2 23

Eastern UP 3 3 0 0 0 7Northwest LP 10 3 24 2 1 41Northeast LP 6 2 12 9 0 26Southern LP 77 160 243 144 11 634Out-of-state 176 93 66 30 10 375

Total278 263 353 190 24 1107

31

Table A8. Spending by Origin and Region of Spending by Trip Type ($000’s)a.Region of Spending

Origin Region WestUP

EastUP

NWLP

NELP

SouthLP

Total

Day Trips ≥≥ 100 miles, En Route Spending

Western UP594 308 0 0 0 902

Eastern UP 308 274 92 121 0 796Northwest LP 0 92 85 202 548 928Northeast LP 0 91 202 160 548 1,001Southern LP 0 0 548 548 754 1,850Out-of-state 628 57 0 0 46 731

Total 1,530 823 928 1,030 1,896 6,208

Overnight trips, En route Spending

Western UP116 62 173 117 807 1,274

Eastern UP 62 70 26 14 1,621 1,793Northwest LP 173 26 493 146 2,477 3,314Northeast LP 117 14 146 177 1,461 1,914Southern LP 8,07 1,621 2,477 1,461 220 6,585Out-of-state 4,386 918 655 296 1149 7,404

Total 5,661 2,713 3,972 2,214 7,740 22,300

Day Trips ≥≥ 100 miles, Spending at Destination

Western UP 464 374 0 0 0 838Eastern UP 107 214 0 18 0 339Northwest LP 0 144 67 144 0 355Northeast LP 0 143 171 125 0 438Southern LP 0 0 856 856 588 2,300Out-of-state 446 89 0 0 36 571

Total 1,017 967 1,096 1,147 629 4,841

Overnight Trips, Spending at Destination

Western UP 358 188 438 340 151 1,474Eastern UP 193 215 0 0 0 400Northwest LP 625 163 1517 150 54 2,509Northeast LP 379 94 746 544 0 1764Southern LP 4,817 9,982 15,200 8,999 677 39,675Out-of-state 16,428 8,702 6,205 2,806 939 35,081

Total 22,801 19,346 24,110 12,835 1,826 80,902

a. Does not include spending on day trips of less than 100 miles or at home spending.

Documents

State and Regional Economic Impacts of Snowmobiling in ... · State and Regional Economic Impacts of Snowmobiling in Michigan Daniel J. Stynes, Charles M. Nelson and Joel A. Lynch