The "Miracle Mile" of the North Platte River draws anglers from far and wide and helps support the region's outdoor recreation tourism industry. (AJ Schroetlin/FlickrCC)

With Wyoming’s dire economic and fiscal situation casting a pall over residents, I’m glad to be able to report that there’s cause for optimism: At least one important economic sector promises to rebound in 2021. 

COVID-19 hammered the vacation travel industry in 2020. The pandemic’s arrival in the late winter-early spring months couldn’t have been timed worse. With no comparable recent precedent, uncertainty and trepidation drove would-be travelers to cancel travel plans. Nobody wants to risk falling ill far from home.

Specific indicators, however, point to a pleasant and needed rebound in leisure and travel activities, and a strong Wyoming travel year in 2021. 

First, although the virus is still present, vaccines are now available to allay the fear of illness while traveling. The industry identified vaccine availability as an imperative for full recovery. 

Second, because so many travelers stayed close to home in 2020, there is pent-up demand that will act in the industry’s favor. 

Finally, potential travelers have no doubt developed a distaste for confinement and large crowds, and no place does wide-open spaces better than Wyoming. 

Both the mineral and vacation-travel industries — two of Wyoming’s largest employment sectors — shed jobs in 2020: 5,700 and 6,500 positions respectively. Market conditions beyond the sector’s control were to blame in the mineral industry. A number of factors continue to stack the deck against, at least, a short run recovery in extractives, and perhaps longer. 

When negative conditions persist in one industry, policy makers and analysts naturally look to other sectors of the economy for a lift. Sectors with historically high employment numbers that also exhibit a home-state comparative advantage are the first places they turn to. 

A comparative advantage exists for an industry within a state if the share of employment in that industry is higher in the state than is the case for the nation as a whole. The implication is that the more concentrated an industry is, the more likely it is producing goods or services in excess of its  own needs. It is the exporting of an industry’s goods and services that results in new income and tax revenue from purchasers located outside of the state. 

In Wyoming, travel industry employment as a percent of total state employment is 50% higher than is found in this sector nationally. During normal years, about 40,000 workers are employed in businesses that provide goods and services to the travel industry. Although these are not always high-paying jobs, they do provide crucial income to households that wouldn’t otherwise have it. 

Employment growth in most non-mineral-sector businesses is a net-fiscal loser for Wyoming because of the limited diversification of the state’s tax system. But this Catch-22 is offset when an industry is a net exporter of goods and services, i.e. when the taxpayers reside elsewhere and don’t require the raft of government services provided to residents. Other than the mineral and travel industries, it is typical for exported goods and services in other sectors to be untaxed by Wyoming.

In the travel industry, there is a window of opportunity to recover many Wyoming jobs and also increase sales tax revenue for the state and local governments. Vacation travelers are unique in that they spend time in the state and then return to their home location for general services such as public education. 

In the pre-COVID year of 2019, tourism research determined that visitors spent nearly $4 billion on Wyoming goods and services in connection with their stay, generating more than $200 million in direct tax revenue for the state. Most, but not all, of this revenue came from sales and use taxes. 

As a means of comparison, $200 million in taxes paid by Wyoming travelers equates to 22% of the $900 million in total sales and use tax collected from all sources in Wyoming. The tourism sector is the single largest contributor to the Wyoming sales and use tax. It would contribute even more if there weren’t so many tax exemptions on the services travelers purchase. 

Final reports of the 2020 travel season are not yet available. However, those close to the industry are suggesting an overall drop of up to 30% in spending. That translates to a $60 million drop in state and local tax revenue from the travel sector.

If the travel industry can fully recover from the low spending that characterized 2020, the fiscal benefits to the state would be at least $60 million and probably more due to price inflation. As the travel industry grows, each 10% of added spending volume produces $20 million in added revenue to the state and local governments.

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In the long term, tourism has the potential to grow even more. Although capacity issues are an increasing concern in and around the national parks, there are existing historic and scenic amenities throughout the state that are often overlooked by the traveling public. Local travel associations and privately owned travel businesses are increasingly active in promoting off-the-beaten-path destinations. In addition, the Wyoming Office of Tourism is expected to increase tourism advertising and promotion activities to better compete with surrounding states. The newly enacted and timely tourism tax adopted by the Legislature in 2020 will be instrumental in funding this effort.

There are also opportunities to expand the range of visitor activities into other areas beyond the traditional tourism regions of the state. National conservation and wilderness areas within much of the Bighorn Basin in Washakie and Big Horn counties have garnered fresh attention in recent years. The Red Desert and other areas in central Wyoming have also been identified as under-utilized attractions. As neighboring states continue to grow in population and lose open spaces, new areas for outdoor recreation will become more and more attractive to vacationing visitors.

Michael Madden

Michael Madden served 12 years in the Wyoming House as a Republican representative from Buffalo, including seven years as chairman of the House Revenue Committee. He is an economist and holds a doctorate...

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  1. Madden: “potential travelers have no doubt developed a distaste for confinement and large crowds, and no place does wide-open spaces better than Wyoming.”

    Obviously, Madden hasn’t spent much time in Teton County, our state’s tourism engine. The majority of tourists do not spend much time away from large crowds or confinement.

    We are selling a commodity that has a short season. Utah’s landscapes are just as stunning and open. Wide-open spaces are available in every western state as is wildlife. Great skiing is found all over the world. We have turned Jackson into one of those Hollywood theme-park movie sets with a market-tested “last of the old west” motto that has little resemblance to reality. We need more of that in Wyoming?

    Teton County is overrun with problems created by tourism. When will tourism wages to Wyoming residents ever become commensurate with the cost of living in Wyoming? Never. An overrun Red Desert? This is good for Wyoming residents?

    Perhaps Madden likes the tourism economy because he thinks that imported labor and tourists really don’t “require the raft of government services provided to residents”. Visit Teton County.

    More residents are a bad thing? Wasn’t Wyoming begging old residents to come back just a few years ago?

    Is it wrong to expect Wyoming residents to pay for basic services they receive from our government? Is it wrong to expect currently-subsidized tourists to pay for the true cost of goods and services provided by Wyoming’s residents? Is it wrong for Wyoming residents to receive fair compensation from employers in the industrial tourism sector (sometimes out-of-state entities who extract money from our economy)?

    Of course, 4 million tourists require plenty of government spending in Teton County. And the richest county in the nation rarely has enough money to pay for basic services. Do we design our economy to only keep government functioning in a healthy manner along with a few of the right people? Right now in Wyoming and much of the nation, we have economic model that enriches a few at the expense of the many. Same with our taxes, laws, and regulations. Madden wants more of that for Wyoming?

    In Teton County, the government spends hundreds of millions to support the tourism economy and cater to wealthy residents with non-essential goods and services using federal handouts. Meanwhile, working-class Wyoming residents can no longer afford to live there.

    Who wants to move to a frozen landscape for an unpromising career in the low-wage tourism industry? An overrun Red Desert? Is that Wyoming’s future? Wages so low that none can afford health care, retirement, housing, transportation, utilities, children, etc? Madden’s dream for Wyoming?

    The state used to brag about its low-wages to attract out-of-state businesses looking for cheap labor.

    Madden is looking to put an axe in your back while you’re not looking with his promotion of the tourism economy. Its negative feedback loop on so many aspects of Wyoming’s public spending needs, and the welfare of Wyoming residents is open to debate.. Don’t buy that lottery ticket with a full understanding of the odds..

  2. As a tourist looking to retire in Wyoming, I visited the state twice last year. I had difficulty finding upland bird hunting outfitters/guides and legal locations. I also found it difficult to locate small city rodeos. Tourist information centers and websites only seem to know about the big activities.

    I just did a search for March 2021 activities and there appears to be virtually nothing, Sundance/Devil’s Tower now has no COVID cases. I guess I’ll go there.

  3. what a genuine pleasure it is to read an article from an informed educated man. That is a rare thing to see these days in this state.
    Thank you Mr. Madden.

  4. Mike, I would like to visit with you about housing and taxes. I am to work with our Legislators to correct some gaps in the system. I am the Past President of BHHBA and the National Envoy for NAHB. A reply email, so we can communicate directly, would be greatly appreciated.. Thank you. Ron Patterson Ronhp@vcn.com

  5. Thank you, Dr. Madden, for your discussion on the subject of tourism.
    The BLM public land counties have multiple landscapes and outdoor recreation opportunities that can help the transition to a more sustainable economy.
    As far back as 1989, the City of Rawlins, in order to lessen the impact from the latest energy downturn, proposed a National Recreation Area along the North Platte River reservoirs between Interstate 80 and Alcova.

    The Red Desert as mentioned, has outstanding opportunities for a National Conservation Area in the Northern Red Desert. Likewise, Adobe Town, in the southern portion of the Red Desert was identified by the National Park Service in the mid-1970s as having outstanding qualifications for a National Monument. In addition, both of these areas have been identified by the BLM in the early 1980s as also having wilderness characteristics.

    The message should be clear that there are valid opportunities to utilize public resources for the common good, instead of the energy first policy. There is no logical argument against designating and preserving these large areas for conservation and tourism.

    All three of the areas mentioned are accessible from Interstate 80. The highway is a natural conduit for tourism, if there are areas of interest to visit. Wyoming must spread the tourism economy to somewhere other than the Greater Yellowstone.

  6. agree Mr. Madden, there is a bright spot. Wyoming clearly needs to diversify and look into the real energy future. Having grown up near the Pennsylvania coal fields and going to college in West Virginia University, it takes time, govt support and programs to shift away from coal industry. I have seen coal mines become xmas tree plantations, OHV parks, and elk reserves. Wyoming seems slow and reluctant to face energy truth and make a transition—–tourism and outdoor recreation is a no-brainer to me .

    Thanks for your article