Scenic route: National and State Parks in the US Industry Market Research Report from IBISWorld has Been Updated

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Government budgets have tightened, leading to less funding for national and state parks; however, demand is set to improve over the next five years. For these reasons, industry research firm IBISWorld has updated a report on the National and State Parks industry in its growing industry report collection.

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Government funding will fall, but demand for domestic travel will return, aiding growth

An increase in inbound travel to the United States due to a weak dollar has boosted park visits during the five years to 2013. Nevertheless, park budgets are mostly funded from government sources, which are straining to reduce deficits postrecession. Consequently, over the five years to 2013, revenue for the National and State Parks industry is expected to decrease at an annualized rate of 3.1% to $40.0 billion. “In 2013, tight local and state government budgets are expected to funnel funding away from parks, causing some parks to close and others to reduce their services,” IBISWorld industry analyist Radia Amari says. As a result, revenue is expected to decline 0.1% from 2012 to 2013.

Government parks account for the majority of this industry's revenue; public funding is included in revenue because it is incorporated into park budgets and is the major support for most park operations. Self-generated park revenue comes from entrance fees, activity fees, concession franchise fees, special use fees, accommodations and private donations. “Park budgets are often larger than revenue because of government funding for many aspects of park operations, enabling parks to spend more than they earn,” Amari says. Because most parks are nonprofit operations that operate in this fashion, National and State Parks industry profit amounts to 0.0% of industry revenue. Public funding for parks also affects industry operations. For example, visitors are less likely to spend a significant amount of time in parks if facilities are not maintained or parks shorten operating hours because of budget shortfalls. This trend also can result in lower concession fees paid to parks if companies stop operating concessions within parks. Lower government inputs as a result of tight government budgets are expected to decrease funding for parks somewhat in the next five years. State and local governments have already made major cuts, which has inhibited revenue growth.

The National and State Parks industry has a low level of market share concentration. The industry has about 612 operators, with only one, the National Park Service, generating more than 5.0% of industry revenue. In 2013, the top four industry players will account for less than 20.0% of revenue. Over the past five years, the number of operators has fallen. The level of market share is expected to remain steady over the next five years as more operators enter the industry.

As a result of reduced funding, IBISWorld anticipates that the industry will actively seek out new revenue sources. To continue operating without as much government support, parks will need to market themselves to the public. These efforts, supported by more domestic tourism, will bolster industry revenue. Furthermore, rising disposable income will enable greater discretionary expenditure on park fees, souvenirs and accommodations. Consequently, revenue is forecast to increase over the five years to 2018. For more information, visit IBISWorld’s National and State Parks in the US industry report page.

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IBISWorld industry Report Key Topics

This industry includes public and private establishments that preserve and exhibit nature. It includes national, state and city parks, as well as bird and wildlife sanctuaries, conservation areas and natural wonder tourist attractions like caves and waterfalls. Industry revenue is based on park budgets, as opposed to park-generated revenue; as such, it relies significantly on government funding. This industry excludes amusement parks, zoos, botanical gardens, museums and historical sites.
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About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
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