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An Economic Evaluation of Snowmobiling in
An Update for 1997-98
Conducted by Stephen Reiling,
Department of Resource Economics
University of Maine, Orono, Maine 04469-5782
For: The Maine Snowmobile Association
Snowmobiling is a popular winter activity in Maine. It also contributes to the
economy of the state as residents and non-residents take to the trails that span
the state. A study of snowmobiling for the 1995-96 season determined that
snowmobiling has a large impact on the Maine economy. Furthermore, it is
generally believed that the sport and its impact on the economy have continued
to grow since the 1995-96 season. Consequently a study was conducted to update
the 1995-96 study for the 1997-98 snowmobiling season.
The update clearly indicates
that snowmobiling has continued to grow in recent years, especially among
non-residents of Maine. It was found that resident snowmobile registrations
increased about 3.7 percent over the two-year period, but non-resident
registrations increased 71 percent over the period. This is a very large
increase and clearly illustrates the recent growth in the sport.
In terms of economic impact, snowmobilers spent $176.3
million on snowmobiling-related expenses in Maine during 1997-98. Expenditures
by snowmobilers increased about.15 percent between the 1995-96 and 1997-98
seasons. The total impact of snowmobiling in 1997-98 is estimated to be $261
million, which is about $35 million higher than in 1995-96. Finally,
snowmobiling accounts for 3,100 full-time equivalent jobs in Maine.
This study does not include some types of expenditures
that are included in other economic studies of snowmobiling, such as second home
and vehicles used while snowmobiling. These items are seldom purchased
exclusively for snowmobiling and, therefore, should not be included. The
exclusion of these items should be considered when comparing the results of this
study to studies conducted for other states.
Snowmobiling is a popular winter recreational activity in Maine. During the
1995-96 snowmobiling season, residents registered over 69,000 snowmobiles in
Maine, and non-residents registered another 6,500 for use in Maine. Furthermore,
a study conducted by the Department of Resource Economics and Policy, in
conjunction with the Maine Snowmobile Association (MSA), found that snowmobiling
accounted for over $150 million in direct expenditures during the 1995-96
season, and over $225 million in direct and indirect impacts. The study
illustrated the large impact that snowmobiling has on the Maine economy. The
study also showed that all areas of the state benefit from snowmobiling
activities, and that snowmobiling is one of the most important recreational
activities in the State during the winter season. It is generally believed that
snowmobiling has continued to grow since the 1995-96 season. Increased promotion
at the State and regional levels seem to have been successful in attracting more
non-residents to Maine for snowmobiling. Poor snow conditions in the Mid-west
last winter also seemed to benefit Maine. Consequently, the Maine Snowmobile
Association requested updated information about the current status of the
economic impact of snowmobiling as it prepares to work with the Maine
Legislature to develop some new snowmobiling programs.
The purpose of this report is to update the
1995-96 study of snowmobiling to the 1997-98 season so that the MSA will have
current information about the recreational activity to present to the Maine
Legislature during the 1999 session. Specifically, this report describes the
direct and total impacts of snowmobiling in Maine during the 1997-98 season, and
the procedures used to update the 1995-96 study to 1997-98. Section II of the
report outlines the procedures used to estimate the economic impact of
snowmobiling in Maine for the 1997-98 season. The economic impacts of
snowmobiling in Maine for 1997-98 are presented in Section III.
The 1995-96 snowmobiling study was based on data collected from snowmobilers.
Three surveys were conducted: a survey of resident snowmobilers; a survey of
non-residents who registered their snowmobiles in Maine; and a survey of New
Hampshire resident snowmobilers. The latter survey was required because New
Hampshire residents can snowmobile in Maine without registering their sleds in
Maine. All three surveys asked respondents to report their Maine
snowmobiling-related expenses on a per-snowmobile basis for the 1995-96 season.
Information was also obtained from the Maine Snowmobile Program Office, and the
Licensing Division of the Maine Department of Inland Fisheries and Wildlife.
This Division operates the licensing program for snowmobiles in Maine. The
International Snowmobile Manufacturers Association (ISMA) also provided
information about the number of new snowmobiles sold in Maine and the average
selling price for the sleds. These sources provided a comprehensive data set for
measuring the 1995-96 economic impact of snowmobiling in Maine
A different approach was used to conduct this
updated study. Similar to the 1995-96 study, information was obtained from the
Snowmobile Program Office, the Department of Inland Fisheries and Wildlife and
from ISMA. These sources provided information about municipal and snowmobile
club 1997-98 expenditures for trail maintenance and grooming, the number of
resident and non-resident snowmobiles registered in Maine during 1997-98 and the
number and average price of new snowmobiles sold in Maine during 1997-98.
However, surveys of snowmobilers were not conducted. Since the expenditures per
snowmobile from the 1995-96 study is only two years old, the data can be
adjusted to describe snowmobiling expenditures in Maine during the 1997-98
To estimate the level of snowmobiling
expenditures in Maine for the 1997-98 season, the expenditures per snowmobile
from the 1995-96 study were multiplied by the number of snowmobiles registered
in Maine by residents and non-residents during the 1997-98 season. Hence, the
1997-98 estimates of expenditures by snowmobilers take in account any increase
in the number of snowmobiles registered in the State between 1995-96 and
1997-98. These expenditures were also adjusted for the level of inflation that
occurred between the two time periods. The Consumer Price Index increased 4.66
percent between January, 1996 and January, 1998. Therefore, the expenditures of
snowmobilers for trip-related expenses, maintenance, repairs and clothing were
increased by 4.66 percent to account for the inflation that occurred between the
two time periods. Expenditures made in Maine by New Hampshire snowmobilers were
only adjusted for inflation. No adjustment was made for the number of
snowmobiles registered in New Hampshire.
It should be emphasized that the procedures used in the study to update the
expenditures by snowmobilers implicitly assume that all of the growth that
occurred in trip-related maintenance, repairs, accessories and clothing expenses
between 1995-96 and 1997-98 is due to the increase in the number of snowmobiles
registered in the State and the rate of inflation. This approach assumes that
the average number of miles traveled per snowmobile and the average number of
snowmobiling trips taken by snowmobilers remained the same in the two time
periods. This is considered to be a valid assumption in that changes in
snowmobiling habits change slowly and should be relatively constant over a
This updated study also utilized information
obtained from businesses that cater to snowmobilers. Snowmobile dealers,
restaurant and lodging operators were contacted to determine how
snowmobiling-related business activity had changed over the two-year period.
This information was used to determine if the estimates obtained in the study
were consistent with the change in business activity that occurred between
1995-96 and 1997-98. The changes in business activity reported by the business
operators are generally consistent with the estimates reported in this study.
Since part of the growth in snowmobiling expenditures is dependent on the number
of snowmobiles registered in Maine in 1997-98, it is useful to examine
snowmobile registration data. Table 1 shows the number of snowmobiles
registered in Maine during the 1995-96 and the 1997-98 seasons.
Snowmobile registrations by Maine residents increased from about 70,000 in
1995-96 to 72,471 in 1997-98 or 3.74 percent. However, as indicated by the
information obtained from businesses that serve snowmobilers, registration of
snowmobiles by non-residents increased quite dramatically. Non-residents
have three choices for registering in Maine. They can register their sleds for a
three-day period, a ten-day period or for the entire season. All three of these
non-resident registration options increased substantially between 1995-96 and
1997-98. Ten-day registrations increased the least, but still grew by over 27
percent over the two-year period. Non-resident seasonal registrations increased
over 40 percent between 1995-96 and 1997-98, and three-day registrations
increased over 500 percent. In total, non-resident registrations
increased by 71 percent. These data clearly indicate that snowmobiling in Maine
has attracted a much larger following of non-resident participants during the
last two years.
After adjusting for inflation, the resident and
non-resident average expenditures per snowmobile were used to estimate the total
expenditures made by snowmobilers during the 1997-98 season. The information
provided by the International Snowmobile Manufacturers Association and the
Snowmobile Program Office of the Maine Department of Parks and Lands was also
used to compile an overall direct impact of snowmobiling for the 1997-98 season.
This information is summarized in Table 2.
Expenditures on new and used snowmobiles in 1997-98 accounted for about $84.6
million, or about 48 percent of total expenditures. Although the number of new
snowmobiles sold in Maine was slightly lower in 1997-98 than in 1995-96, the
increase in the average price of the new snowmobiles and an active market for
used snowmobiles resulted in an increase in expenditures of about $1 1 million
over the two-year period.
Expenditures on snowmobile trailers increased
from about $7.5 million in 1995-96 to about 8.4 million in 1997-98. The average
price of snowmobile trailers has increased as more participants purchase covered
trailers to protect their machines during travel.
Trip-related expenditures increased about
seventeen percent over the two-year period to $44.8 million in 1997-98. A large
part of this increase is directly attributable to the growth in the number of
non-resident snowmobile registrations over the period.
Maintenance, repair and accessory expenditures
were $18.8 million in 1997-98. Clothing and specialty items item expenditures
increased to about $10.5 million. Both of these categories increased about
eleven percent over the two-year period.
Insurance expenditures increased from $4.4
million to 4.8 million or about 8.5 percent. The lower growth rate is
attributable to the fact that the study assumes that only residents insure their
snowmobiles through Maine insurance agencies. Hence, the growth in non-resident
registrations has no effect on insurance expenditures.
Snowmobile registrations collected by the state
increased from $1.75 million in 1995-96 to $2.4 million in 1997-98. This
represents an increase of almost 37 percent and is largely due to the increase
in non-resident registrations. It should be noted that the inflation factor was
not applied to the registration expenditures because these fees are set by the
State. Therefore, any changes in the fees are known.. Municipalities have
substantially increased their level of support for snowmobiling in the last two
years. In 1995-96, municipalities only contributed $37,000 over and above the
amount they received from snowmobile registrations. In contrast, municipalities
contributed almost $550,000 more in 1997-98 than they received in registration
fees. This increase suggests that communities are more aware of the economic
value of snowmobiling, and are contributing more to trail maintenance and
promotion activities to attract snowmobiling participants.
One new category of expenditures was added in
this update that was not included in the 1995-96 study. It is a category for
snowmobile rental expenditures. The snowmobile rental business was in its
infancy two years ago, but has grown quite rapidly in subsequent years. Hence,
people familiar with the snowmobile rental segment of the market were consulted
to derive an estimate of the total expenditures for snowmobile rentals during
the 1997-98 season.
It was determined that there were about 250
rental sleds available in Maine during the ten-week snowmobiling season. The
average rental price was about $135 per day. It is also believed that about 65
percent of the sleds were rented on weekends and 20 percent were rented during
weekdays. Based on these data, it is estimated that $747,500 was expended on
snowmobile rentals during last season. This segment of the industry is expected
to continue to grow rapidly in the coming years.
Total expenditures associated with snowmobiling
in Maine during the 1997-98 season were $176.3 million. This represents an
increase of about $24 million or 15.6 percent over the two-year period. This is
a substantial increase for the time period and confirms that snowmobiling has
continued to grow in recent years. The growth is especially large among
non-residents. This is a positive finding in that non-residents spend more than
residents on trip-related expenses (lodging, restaurants, etc.), thereby
increasing economic activity among the businesses that serve the needs of non-
Expenditures on Snowmobiles
Expenditures on Trailers
Total Trip -
Maintenance, Repair and Accessory Expenditures
& Specialty Item Expenditures
Expenditures (Residents Only)
The $176.3 million represents the direct impact of snowmobiling. The total
impact is determined by multiplying the direct impact by a multiplier that
captures the indirect effect associated with the direct expenditures made by
snowmobilers. In the 1995-96 study the multiplier was calculated to be 1.48.
Hence, the overall economic impact of snowmobiling in Maine during 1997-98 is
$261 million ($176.3 million x 1.48). Compared to 1995-96, the total impact of
snowmobiling increased $35 million or 15 percent. Finally, the economic activity
associated with snowmobiling provides the equivalent of 3,100 full-time jobs for
people in Maine.
The reader is again reminded that the procedures
used to estimate the direct and total impact of snowmobiling in Maine are much
more conservative than those used in several other states. For example, some
states include the purchase of a new truck and even a second home if they are
used for snowmobiling. These procedures are not considered to be valid and were
not used in the Maine studies. A conservative process was also used to estimate
the multiplier associated with snowmobiling. These differences should be kept in
mind when comparing the results of this study with the results of studies
conducted in other states.
Economic Impact Study
Maine Snowmobile Association