The Complementary Effect of National Park Fee Increases on Visitor Spending in Gateway Communities

In 2017, the US National Park Service faced a nearly $12 billion maintenance backlog. To address this backlog, they announced plans to increase entrance fees in 17 of the most visited parks. As fees are a component of the travel cost, we consider price change effects on demand for park entry. Demand for the 17 parks is shown to be inelastic. Recognizing that spending in gateway communities is complementary to national park visitation, we use Yellowstone National Park as a case study on entrance fee increase effects on gateway communities. We estimate a $3.4 million annual loss in gateway community spending by visitors as a result of reduced visitation by those visitors who choose not to purchase a 7-day pass. Acknowledging the diminishing effect of the fee increase on travel costs, we further explore alternative means of structuring fees based on examples of other countries.