Date of Award

1-1-2003

Degree Type

Thesis

Degree Name

Master of Business

Faculty

Faculty of Business and Public Management

First Advisor

Dr Ross Dowling

Abstract

In recent years, natural area tourism has been presented as a more profitable, labour intensive and environmentally sound industry than the traditional extractive industries which have resulted in the depletion of primary resources in many countries (Burr, 1995). However, in order for economic returns from tourism to be maintained over a long period of time, investment in resources and infrastructure that support and encourage sustainable tourism and recreation activity in natural areas is required. The key to sustainability is maintaining the capital stock of resources (Garrod & Fyall, 1998; Russell, 2001). In a society driven by economics, resources are allocated according to their representative worth to the population. However, the true value of the environmental resources, which underpin tourism and recreation in natural areas, is hidden due to the non-price and common-good attributes (Marcouiller, 1998). The application of measurement techniques which capture economic values for these resources provides a decision framework which promotes sustainability in the sector. This thesis estimates the gross economic value of tourism and recreation in the forested areas of the South West of Western Australia. The research utilises an established non-market valuation technique, travel cost analysis. The determination of travel costs by visitors to forested areas is used as a market substitute to estimate the tourism and recreation value of the forests in the Conservation and Land Management's Central and Southern Forest regions in the South West of Western Australia. The findings presented in this thesis provide an order of magnitude estimate of the gross market value of tourism and recreation in the Central and Southern Forest regions in 2000-2001 at between $122 million and $160 million. Primary research at a single forest site in the region, the Valley of the Giants, Tree Top Walk, Walpole, provides an estimate of the annual gross market value at between $27.8 million (intrastate market only) and $28.9 million (entire market) using an attribution factor of 70%. This calculation is based on all visitors to the site, with 70% of their visitor expenditure in the region (Manjimup/ Walpole/ Denmark) being attributable to the Valley of the Giants site. With the inclusion of the opportunity cost of travel time, the estimate increases to $33.16 million (based on the intrastate market only and an attribution factor of 70% ). The consumer surplus value of the Valley of the Giants site, without accounting for the money spent on park entry fees to the site, is estimated at $50.84 million (measure based on the intrastate market only who account for 79% of the market and without the inclusion of the opportunity costs of travel time). With an attribution factor of 70% the consumer surplus value is $35.58 million. Intrastate visitors to the Valley of the Giants spent approximately $760,000 on park entry fees to the Valley of the Giants site in 2000-2001. Therefore with the attribution factor applied, the consumer surplus value, net the park entry fees is approximately $35 million . With a visitation rate of approximately 151,200 intrastate visitors in 2000-2001, the benefits accruing to each individual are $231.48 per person or $83 per person per day spent in the Manjimup/ Walpole/ Denmark region (average length of stay 2.8 days). The findings from this study provides a significant contribution to the management of forested areas in Western Australia providing valuable economic information with which to compare other forest use values. This information can be used to facilitate zoning decisions and multiple-use management strategies in forested areas, particularly when aggregated with other valuation studies. In a climate where public funds are limited, the economic measurement of tourism and recreation in forested areas provides justification for the allocation of government resources to facilitate the sustainable management of tourism in the region. In addition, the methodology adopted will provide a basis for future repeat studies and may also be applicable to other forest regions around Australia.

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