In Yellowstone, more visitors than ever are packing the trails and campgrounds, hoping to glimpse a grizzly or take in the epic views. The nation’s first national park attracted more visitors than ever last year and is on pace for even higher numbers in 2016.
Just to the south, Jackson Hole Airport is breaking passenger records; July was the second-busiest month in its history.
As tourism is booming in Wyoming’s most popular region, other parts of the state are working to draw more visitors. Last year’s release of Disney-Pixar’s animated film, “The Good Dinosaur” saw visitors flock to tiny Kemmerer and the Fossil Butte National Monument near the Utah border. A total solar eclipse next August will boost travel to towns such as Thermopolis and Casper.
As Wyoming’s energy sector sheds workers and the state reels from the loss of mineral revenue, tourism continues to be a consistent bright spot. The Cowboy State has seen tourism grow every year since 2008, according to the Wyoming Tourism Office.
With Yellowstone and the Tetons nearing their “carrying capacity,” spokesman Chris Miles said the office was looking to distribute visitors around the state.
“While the northwest corner is amazing, there are so many great places along the way that (visitors) can stop and visit,” Miles said.
But tourism alone can’t turn around Wyoming’s economic fortunes. With some experts predicting the slump in oil, gas and coal production is here to stay, the state may find that attracting more visitors won’t meaningfully boost the state’s sluggish economy.
The city of Cody sits near Yellowstone’s eastern entrance and each summer tourists flock to its historic downtown. They watch mock gunfights, sleep in historic hotels and buy souvenirs in the brick and sandstone buildings that line Sheridan Avenue.
Claudia Wade, executive director of the Park County Travel Council, said Cody benefits from a three-pronged economy comprised of extractive industries, tourism and ranching.
“When one of those legs gets knocked out from underneath us, we have others that, while they don’t take the place, they help stabilize,” she said.
While the third economic prong varies across the state — Cheyenne leans on government, Laramie on higher education and Casper on health care — the ability of tourism to pick up economic slack when oil, gas or coal prices drop has long been a mainstay of Wyoming’s economy.
“Our second-largest sector is tourism,” said University of Wyoming economics professor Anne Alexander. “Taxes from hospitality and tourism are a great boon for local economies.”
But a thriving tourism industry still provides only a fraction of what the energy sector offers. That reality is problematic for a state that depends heavily on oil, natural gas and coal to fuel government and provide jobs.
Michelle Foss, the top energy economist at the University of Texas, said there was no reason to think the current energy downturn was simply a blip in the boom and bust cycle that Wyoming has been reared on.
Foss said high oil prices in recent years were aberrations based on one-off events that were misinterpreted as fundamental shifts in the market. While consumers in China and India briefly lifted demand for oil, that was soon balanced by falling demand in developed countries. Meanwhile, the Gulf States’ desperate bid to raise funds to stave off domestic protests during the Arab Spring temporarily forced up oil prices. She said prices pushing $100 per barrel seen over the last 10 years are unlikely to come back on a permanent basis.
“Customers don’t want to pay that much for oil,” Foss said. “They’re willing to pay something that reflects cost plus return, but they’re not willing to pay $120 and $140 bucks.”
She predicted a long-term price band of $40 to $70 per barrel. A barrel of oil was trading for around $47 on Friday.
The same is likely true for coal.
“We’re not predicting much in the way of coal production growth for the next 25 years or so,” said Eric Bowen, a professor at West Virginia University’s bureau of business and economic research. “This is pretty much a new normal.”
No magic pill
Despite the potential for growth in tourism across Wyoming, it is unlikely to provide a comparable substitute for the jobs and tax revenue lost with the contraction of extractive industries. The nature of the tourism industry means the jobs are low-paying, seasonal and that much of the wealth generated is pulled out of state by corporations that tend to take over tourism markets once they reach a certain scale.
It is a problem innate in service-sector industries like hospitality and retail where workers are easily replaced, profits can be razor-thin and government regulation is generally absent.
Replicating industries like mining and manufacturing, which command higher salaries by specially training workers who handle with complex and dangerous machinery, is difficult.
“As a society we’ve really evolved to a service-based economy and tourism is a big part of that,” said Bren Martin, a professor at Middle Tennessee State University and author of “Tourism in the Mountain South: A Double-Edged Sword.”
Martin said that despite the drawbacks, barriers to building a tourism-based economy are relatively low for regions that are naturally attractive to visitors, such as Wyoming with its national parks and frontier towns. But unlike tourist centers built around artificial attractions, like Orlando and Disney World, there is a natural ceiling on how many visitors natural destinations can accommodate. Beyond that threshold, negative side effects drag down any economic gains.
As tourism in the Mountain South soared during the 20th century, environmental degradation and overcrowding grew to frustrate locals and push down the value of visitors. In Great Smoky Mountains National Park, Martin said tourists encounter “an interesting dichotomy” as they drive past built-up commercial strips on their way to see pristine wilderness.
Outsize growth in the tourism sector can also strain the housing market, leading to seasonal laborers coming to town for the low-paying jobs and living in substandard accommodations. In Jackson, an April report in the Teton Valley News described workers living in hallways and pitching tents in crowded apartment living rooms to gain privacy from their housemates.
Then there is the question of what effect an influx of additional tourists would have on the Cowboy State.
“Why everybody in Wyoming would think it’s a good idea to have a bunch of urban-dwelling neophytes running around wildlife and national parks, running around with grizzlies, I can’t say,” Foss said.
Industry boosters in the state do not claim tourism as a replacement for energy, but believe that as mining in Wyoming contracts, visitor growth can help lift the state’s fortunes.
“I feel like at a minimum it’s a stabilizing force,” said Casper Tourism Office director Brook Kreder. She said that while July hotel occupancy rates were down 10 percent in Casper, the city had made progress on attracting business groups and catering to visitors attending youth sports tournaments in town.
Tourism undeniably contributes to Wyoming’s economy. Visitors to the state spent approximately $3.3 billion in 2015 and 32,000 Wyomingites were employed in the industry earning about $863 million during the prior year, according to a report paid for by the state tourism office.
The report also said the state received $170 million in tax revenue from tourism in 2015.
“Without these travel generated tax revenues, each household in Wyoming would have had to pay an additional $730 in taxes per year,” the report stated.
Yet despite tourism sending money to state coffers, in 2015 the Bureau of Labor Statistics reported a median hourly wage of just $10.95 for service-sector employees, including those working in tourism. That was less than half of the $22.37 median wage earned by workers in the construction and extractive industries sector.
“Wyoming has done this before,” said Foss, the energy economist. “This is probably round three or four of seeing states like yours chase (tourism). They’re just not high-paying jobs.”
If Wyoming wants to develop new industries outside the service sector, Alexander, the University of Wyoming economist, said the state will need to develop infrastructure and be willing to invest in connectivity. Good air travel, road and rail networks and internet and cellphone connections are prerequisites for growing manufacturing or high-tech industries in the state — two areas that can sustain high-paying jobs on par with the energy industry.
“We can’t expect that other people are going to make this happen for us,” Alexander said. “I don’t think it’s impossible but it’s not painless and it’s not quick.”
Alexander offered the example of Jackson Hole, which nearly doubled its visitation between 1980 and 1995. A major part of that growth came from a decision by Teton County businesses to levy a commercial tax and use the earnings to guarantee airlines a base revenue if they provided air service to the town.
Instead of requiring a long drive from Denver or Salt Lake City, visitors and second-home owners were able to easily fly into Jackson from major hubs like Chicago and Houston. This change significantly boosted winter tourism, with visitors flying in to ski during weekends and holidays.
Wyoming’s heavy reliance on tax revenue from minerals also makes it hard for tourism dollars to meaningfully replace oil, gas and coal when it comes to funding state services. But Alexander and Martin said that government interventions including hotel taxes and a higher minimum wage could help service-sector tourism jobs contribute more to the state economy.
“We can just throw up our hands and turn into a bunch of ghost towns or you can say we’re… going to direct ourselves toward a different kind of future,” Alexander said.