As the end of the school year approaches and an absurdly long winter is relegated to folklore, it is time to start planning for summer vacation. Across America, families are undertaking their annual ritual of collecting vacation guides, finding some 12-year-old neighbor to mow their lawn one or two times, and figuring out how to put their mail delivery on hold for two weeks.
In most years, summer marks heady economic times for northern Colorado, as tourists flock to the region. In 2006, an estimated 3 million visitors descended on Rocky Mountain National Park. And when these vacationers open their wallets, they generate hundreds of jobs in Estes Valley and beyond. For example, in July 2005 the city of Estes Park had nearly 5,000 jobs in hotels, restaurants and retail. By comparison, in the winter season, the tourism economy hibernates with these sectors employing fewer than 2,300 workers.
This year, however, there is concern that the summer economic boom may not be so substantial. With gas prices expected to stay above $3 per gallon for the foreseeable future, the fear is that rising prices at the pump will put the brakes on summer travel plans. Given the importance of tourism to the Estes Park economy – it supplies 64 percent of all local jobs in the summer – even a small dip in visitor numbers can have tremendous repercussions.
The question, then, is what effect, if any, will rising gas prices have on the northern Colorado tourism economy? Generally, we expect that increasing fuel prices should alter travel plans. While families may still go on vacation, the jolt induced by a $50 tank of gas may keep them closer to home. For example, a family from central Pennsylvania may decide that a car trip to the Rockies is prohibitively expensive, and travel to the Maine coast instead. Such substitution can have important implications for Rocky Mountain National Park, where out-of-staters account for nearly 60 percent of all visitors.
Yet research shows that these fears are most likely unfounded. While some families will certainly rethink their destination, most will simply reallocate their vacation expenditures. For example, those Pennsylvania travelers will pay for gas by spending less on food, checking into budget accommodations instead of higher service-oriented hotels, and buying fewer T-shirts. And when not scrimping on other expenses, they will likely resign themselves to a larger credit card bill than was previously anticipated.
Coloradoans will also be more likely to stay closer to home. The flip-side of the RMNP visitor profile is that 40 percent of the park’s guests call Colorado home. Denverites concerned about gas prices may not want to travel to the Grand Tetons, instead taking a new look at the mountains in their own backyard.
For Choice City residents hoping that high gas prices will mean less congestion at Rocky this summer, that’s the bad news: The parking lot at Bear Lake will still be full this summer, just expect to see more Colorado license plates.
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Martin Shields is an associate professor of economics at Colorado State University. His research on Northern Colorado’s economy is sponsored by a partnership between the Northern Colorado Economic Development Corporation and CSU’s Office of Economic Development. He can be reached at Martin.Shields@colostate.edu.