The last bust place? 

Montana tourist trade could face tough 2009

For much of the past year—as the subprime tsunami grew and the nation’s economy tanked—Montanans have basked in some comparatively good news. The state’s all-important travel trade was growing steadily, experts reported, and the 2009 tourism outlook was rosy.

Thorny might have been more like it.

While some players in the travel industry say business is good, others are worried—and for good reason. According to a recent study by the University of Montana’s Institute for Tourism and Recreation Research (ITRR), state tourism suffered some notable setbacks from July through September, a downturn that could worsen if the nation enters a prolonged recession.

The ITRR’s September survey compared 2005 and 2008 third-quarter expenditures made by “non-resident vacationers” and found declines in nearly every category. In terms of average daily expenditures, the 2008 tourists spent 67 percent less on guides and outfitters; 54 percent less on auto rentals and repairs; 44 percent less on licenses and entrance fees; and 36 percent less on retail purchases.

“We’re seeing quite a drop in what people are spending once they’re here,” says Norma Nickerson, the ITRR director. Nickerson cautions that the decrease for guides and outfitters is “likely to be a bit inflated” because the 2008 survey did not poll people in airports, where high-end guided trip-takers are often found. But the overall survey paints an accurate picture, she says.

“In the past, when there have been recessions, they’ve hurt others a lot more, and hurt us less,” Nickerson notes. But today’s crisis is impacting everything from housing and banking to jobs, credit, stock portfolios, and beyond. “Add in the losses people are seeing in their retirement savings, and now you’ve included most everybody in the country who’s being affected. So this time around, I don’t think we’re going to be immune.”

If the meltdown continues, Nickerson foresees more job losses of the type announced Oct. 13 at the luxurious Resort at Paws Up in Greenough, where about 70 employees will be laid off amid a closure for much of the fall and winter. Nickerson also predicts a 5-to-10 percent decline in non-resident visitors next year and sees a continuing trend toward “stay-cations” close to home. Those who do travel to Montana might spend fewer days and fewer dollars, she adds.

“Hotel costs have gone up, gas prices have gone up, grocery costs have gone up, so what you do is stop buying things you don’t absolutely need,” she says.

Not everyone is feeling the pinch, of course. Some local guides say 2008 has been golden, and think 2009 will shine.

“I’ve just had the best year I’ve had in 15 years,” says fishing guide Stacy Jennings, who works for the Kingfisher in Missoula and runs her own fly-fishing school. “Perhaps our trips are meeting the experience and joy on the river that people are needing more than ever, because the rest of their life is feeling precarious? I don’t know, but my experience is that the time with nature is incredibly renewing in people’s lives.”

Prospects look similarly sweet for some ski areas. Whitefish Mountain Resort recently broke its season pass sales record for the second year running; on September 30, it sold a record 1,200 passes in a single day.

“As of a month ago, advance bookings for lodgings were down, and we were starting to get worried,” says resort spokesman Donnie Clap. Today, the resort is almost fully booked through New Year’s. “We’re not worried any more,” he says.

Clap believes the ski area is well-positioned because it caters to local powder hounds—“people who live here, live here to ski”—and because the resort is more affordable than some of its swankier competitors. (The resort’s early-bird season passes, for example, cost $535. By comparison, pre-season passes from Aspen Skiing Company cost $1,299 and aren’t selling as well as last year, news reports say.)

“We’re consistently in the top 25 ski resorts, and compared to the other 24, we offer a considerably better value,” says Clap.

How much do things like this matter? Plenty, state analysts say. The travel industry is a cornerstone of Montana’s economy. In 2007, 10.7 million vacationers spent more than $3 billion, according to Travel Montana, the state tourism office. Tourism and recreation supports 44,830 jobs; visitor spending provides $888 million in worker salaries, Travel Montana says.

Even a small downward blip in tourism can have ugly consequences, observers say. That’s particularly the case for hunting guides, according to Mac Minard, executive director of the 300-member Montana Outfitters and Guides Association.

“What people don’t understand about the outfitting industry is that probably half of the people on the hunting end of it are ranchers or farmers,” Minard says. “For these people, it’s add-on income they need to get by. If they can’t make a living, they’re going to start thinking about selling their land.”

As a result, valuable agricultural land and open space can be lost to development, says Minard, who fears tough times ahead. If families usually take two trips per year—one for the hunter, one for the whole clan—it’s going to be the hunter who cancels, he says.

The retail world can’t help but be nervous, too. Fishing fans, for example, will always find a way to get on the river. “No matter what happens, they’re going to come out and fish,” says David Baker, retail manager, buyer and guide for Grizzly Hackle in Missoula. But instead of buying a high-end fly rod, “they may bring their own stuff, or just buy a T-shirt or two.”

There’s no cause for panic, says Baker, echoing nearly everyone these days, from Wall Street to Front Street in Missoula. “But you’re always a bit worried when stuff like this is going on.”
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