Well, the city slickers working with the things like the Dallas Union Terminal won't appreciate this, nor will some Class I executives, but some other places will; this is part of what is keeping Wolsztyn, Poland alive, at least according to this Australian story from 2009:

http://www.youtube.com/watch?v=LSyJzhZjJJg

And while we're there, a look at current news as supplied by the Wolsztyn Experience:

http://thewolsztynexperience.org/news_events.php

If you've read the latest TRARM newsletter, an editorial talked a lot about this issue.

Its thesis was basically "Look, the rail/trail people are doing all these economic studies to prove how many millions of dollars of business their rail-trail is bringing to their community. Of course they are using trickle-down/multiplier economic theory that would make John Maynard Keynes blush... But the editorial's point is that the rail-trail guys are throwing around these numbers, and we're not.

And that puts us in grave risk. Because we can't show how our organizations benefit the economy.

I personally can't bring myself to lie about money like that... but maybe we can hire someone to do our lying for us. Just like those guys do.

That's one of the many things we do here at Stone Consulting - the economic impact analysis of existing and proposed excursion operations, and its pretty much of a standard part of a normal feasibility study.

Many of these studies are paid for by EDA money, or this portion of the study, so they are public documents. It's not a 'one size fits all' either, as the multipliers and various factors are sensitive to the county level. It's a pretty formalized procedure. What makes that 'good' is that you can compare your rail project with a competing project, and because of the capital budgets, rail often comes out ahead for jobs. Many operations know intuitively what they contribute, but can't state it in any meaningful way that gets any attention. That can be fixed.

What's bad is that the industry as a group is just now catching on to this and is starting late out of the gate, and there are no industry-wide numbers generated, just select individual operations. While you yourself may be skeptical of the methodology, if it is done right (and we always stop our analysis at one secondary jobs impact, not three or four) then it's a pretty comparable tool. I've got a tourism economist as a subconsultant and we've been working together since 1992 on these. He speaks train and has been all over the US recreational rail operations as well.

Not to mention that many grant givers want you to give them estimated numbers as to what economic benefit do you give to the industry. In my case I have asked several dinner train operators around the country and got some ideas from each of them. In some cases they will say "for every dollar spent on us, $X is spent in the community" or "X% of our passengers extended their stay in the area by a day to ride with us". With the help of our local tourism bureau I have been able to come up with some estimates that sound reasonable.

By the way, I highly recommend joining the local tourism board or bureau in your area. In our case they have a very reasonable rate for non-profits plus they help us promote special events, plus they promote us as part of their overall promotional message for the area.

Big city aquariums had become pretty common by the 1980s, but when the Monterey Bay Aquarium opened in 1984, it was a smash hit in a small town and was key to the rejuvenation of Monterey and its Cannery Row as a tourist destination. Suddenly, every town near a body of water had to have an aquarium, and the architects for Monterey's aquarium (their first) were suddenly amongst the go-to experts for these projects. Today the Monterey Bay Aquarium is still a must-see attraction and hosts 1.8 million visitors a year.

The California State Railroad Museum initially opened in 1976 during a significant wave of interest in history and national pride. In 1981, the museum was significantly expanded with the opening of what is now known as the Railroad History Museum. The economic impact on Sacramento has been significant, and the museum is Sacramento's biggest draw. Yet, it is still not at Monterey Bay Aquarium levels. Their attendance numbers are hard to come by, but CSRM, which claims to be the most visited rail museum in the country, has fluctuated between 300,000 and 500,000 visitors per year and anchors the Old Sacramento State Historic Park.

So, is there an argument that could be made for economic development? Absolutely, but we need to be real about the kind of impact our rail-related attractions can have. I am sure that Orange Empire does something for Perris, and Illinois probably does something for Union, but these contributions may not be happening at the level that would merit significant civic investment, nor could the communities of this size offer much to these institutions.

I think it would be a good use of ATRRM's time to quantify these impacts, but I suspect it will show that the museums that have been designed and sited to be attractive to families have higher rates of attendance and therefore have greater economic impact.

Here is the 2010 visitor survey for CSRM, which was conducted as part of the process for developing a new master plan for the Old Sacramento State Historic Park and the Museum of Technology. It is well designed, and shows some interesting results, such as the need to do even more the engage visiting families with children.

Clicking this link should send you to a PDF:
http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CDMQFjAA&url=http%3A%2F%2Fwww.parks.ca.gov%2Fpages%2F21299%2Ffiles%2Fosshp_app_e-g.pdf&ei=JqBQUc2iLoqUiQKE7IHQCw&usg=AFQjCNE8S7k3VmabaLa84Eg0zsz-MaBNFQ&bvm=bv.44158598,d.cGE

For years IRM has gotten financial support for printing brouchures, etc.from the Illinois Department of Tourism. In return IRM must provide a breakdown of the home zip codes for all visitors. That is why everyone is asked for their zip code when entering. Sorry I don't know the current percentages of out-of-state visitors.

BTW thank you Randolph for posting the visitor survey report from CSRM. It makes it crystal clear that museums should be spending much of their effort on activities for kids if they want to increase attendance and revenues.

One thing any organization can do to help itself - in so many different ways - is to organize or identify one key element that's needed in economic impact analysis:

Overnight stays

That's one of the big items. What percentage of your riders are staying overnight in the area? And how do you know that?

Well, you can survey. You can also take zip codes. With the prevalence of credit card and internet sales, the data is likely out there to do a decent sampling, but you have to think about how you are going to get it.

I've developed reverse-lookup software by zip code zone so if I have a table of total riders by zip code, I can correlate that back to mileage. But if I don't have that data compilation or a decent sampling series of zip codes, there's not much to work from.

While there's a lot of nice things to survey, just knowing where your riders comes from benefits so many areas of marketing that it should be a given data item anyway. Unfortunately, for too many, it's not. I'm just piling on with the reasons why to do it.

This all falls under the banner of heritage tourism which has been a growth area for awhile.

Some of the most rudimentary data is never collected by museums or operators, and Randy is correct that only recently has this even begun to change. This data is extremely important when asking for funds by government bodies and foundations to rebuild cars, engines, and facilities.

Even if data is gathered, you may still have a Board which questions the validity of the data, then puts it on a shelf. One museum Board I worked with refused to believe the attendance numbers were so high that they "dumbed down" the numbers in their annual appeal letter. So, there may be an institutional bias when it comes to the actual numbers a museum attracts.

My issue is that these people blatantly exploit the fallacy of the broken window.

Baker: A vandal came by and broke all my windows! It'll cost 20 grand to fix.
Hayek: What a calamity!
Government Keynesian: No no, it's a good thing. See, he'll give 20 grand to the contractor.
Contractor: And I'll use the money to employ local people.
Butcher: Who will buy meat from me, and I'll buy more stock from the farmer.
Farmer: With that money, I'll hire the mechanic to fix my other tractor.
Mechanic: It's ingenious! Let's break all the windows in town!

Basquiat: STOP. You are overlooking the UNseen. What else that money wasn't spent on.
Baker: Thank you. I ALREADY PAID the contractor my $20,000, he was about to build a coffee bar.
Contractor: No coffee bar now?
Baker: Can't afford it.
Mechanic: Aw man, we could've used a coffee bar in this town.
Government Keynesian: And we could really use the tax base from a coffee bar.
Butcher: I'd rather have a coffee bar in this town than a few lousy meat sales.
Farmer: You'll have the meat sales. The money will trickle down to us either way.
Butcher: But this way... no coffee bar.

Now we apply that to our bike path.

PRE-bike path. Joe is a resident of the town. He spends $10,000 a year on local purchases, of which $0 is bike path related.
Now a bike path. Joe is a resident of the town. He spends $10,000 a year on local purchases, $2000 of which is bike path related.

The difference to the town? NIL. Every dollar the bike shop gains, the archery club loses. The money moves... next door... and then has the same trickle-down effects as before.

All we've done is moved the furniture around and made it seem like progress.

But in those silly reports, the bike path people tally up the $2000, and out come the contractor, butcher, farmer, mechanic and tax man to claim a bunch of multipliers. All attributable to the bike path. They deny the "unseen", the parallel effects of the guy next door losing that same $2000.



But it shouldn't be comparable.

Joe lives in Walled Lake MI, which recently removed their train ride to install a bike path. As discussed, Joe spends his money at the bike shop instead of the archery shop next door, for a nil effect on the town. However, Joe habitually spent $100/year on a train ride.

He's not doing that in Walled lake anymore. He's going to Tecumseh MI. He would have never, ever gone to Tecumseh (or Lenawee County) for any reason, except there is a train ride there. As discussed, this has nil net effect on the MIchigan economy, but it's a very big effect for the Tecumseh economy. And this happens specifically because train rides are scarce.

Tecumseh also has a bike path, but nobody drives from Walled Lake to Tecumseh to ride a bike path. At least not often enough to be economically significant.

Now you damn well SHOULD be accounting for that when you do economic analysis for tourist railways. The accounting should not be equivalent. $100 is train ride revenue is NOT $100 in bike path revenue, because the train ride revenue came from much farther away, and was not simply ripped out of the hands of a different local business.

A friend and I discussed this at dinner tonight, and he sent me the link to this article, on a similar theme:

http://www.thedailybeast.com/articles/2013/03/20/richard-florida-concedes-the-limits-of-the-creative-class.html

And their #1 blunder was not naming themselves the U.S. National Aquarium of the United States, in Monterey. See below.


I agree we should all be real about our impact. Here, bike path guys, you go first.

As far as "contributions not happening at a significant level", I don't know. The Southern Michigan Railroad has tiny ridership compared to Union, but an outsize impact on Tecumseh because it comes right downtown and has a layover. Every rider steps into at least one local business, and on average probably spend more on the town than on the train ride. That being the whole point of the Ride to Dine train.

Like most museums, WRM is isolated and doesn't bring customers to any online businesses. But I guarantee lots of WRM visitors make pitstops in the several shopping districts along Hwy. 12 or I-80. I can't say all of them spend more in Solano County than at WRM proper, but I bet a lot do. We honestly don't know because we'd need to call them after they got home.

Does your museum passively help your community? Of course it does. Probably more than they help you.

Which leads me to my rant. It's very common for a railroad museum to be 50 miles from the urban center. So you have "Large Regional Railroad Museum" in "Rural County". Some of its riders come from Rural County. Rural County politicos feel the museum doesn't do enough to be relevant to its community. My response to that is "We are the Large Regional Railroad Museum. We just happen to be located in Rural County."

Similarly, the National Museum of the US Air Force happens to be in Dayton Ohio. Not surprisingly, locals are a huge fraction of total museum attendance. How do you think Dayton politicos feels about this national museum? Darned lucky!

Back to my thing about local economies. I don't focus on attendees from Rural County because we'll get those no matter what, and because they already spend their money in Rural County. I care a great deal about getting visitors from Urban County, because that is where your customer base can expand, and those people bring interest and revenue to Rural County that would not be there otherwise.


Bathrooms.

Edited for clarity.

The Association of Tourist Railroads & Railway Museums just held its Spring meeting in Savannah and creation of industrywide economic impact stats was widely discussed. ATRRM is committed to creating such stats, both to explain our importance to communities and policymakers, and to provide useful info to our members. Doing so affordably is the real challenge.

Pieces of the puzzle are already available. Most museums and tourist railroads are non-profit, and their revenues, expenses and assets are publicly posted on the IRS Form 990. Some also list the number of employees and volunteers. Similar data is available for Canadian non-profits as well. The FRA even tracks some ridership.

Data is available for government owned attractions, although not always apples-to-apples with the 990 data. The real challenge is getting economic data from the for-profit tourist railways, because of privacy concerns.

Using existing sources, I've been able to find hard numbers that put museum and tourist railroad annual expenses at $200 million. I estimate that if the for-profits are added, that number would increase to $250-300 million annually. If one assumes even modest recirculation of those dollars, I believe that North American rail preservation is a $1 billion industry.
Aaron Isaacs, editor
Tourist Railroads & Railway Museums

Ouch! That's awfully small, when you think that Hollywood, hardly the most essential of businesses, is worth $9 billion per year to the state of California alone.

Of course, it's even more embarrassing to admit the (hack, cough, cough) "adult" movie biz in nearby Burbank is worth $13 billion per year. . .

Please, no jokes on what we may need to get more customers. . .family friendly places are hard enough to find these days as it is. . .

It seems to me that we have a perfect case study of the economic impact of a tourist railroad, just waiting for someone to do the work, along the Route 522 corridor between Mount Union and the Pennsylvania Turnpike. Ask the restaurants, motels and convenience stores in that vicinity how much their business has been affected by the closure of the East Broad Top Railroad. That should answer many questions.