Estimating the recreational demand for a marine park in southern sri lanka; the case of hikkaduwa marine park

MINISTRY OF EDUCATION AND TRAINING NHA TRANG UNIVERSITY KORALALAGE CHAMINI DINUSHIKA Estimating the Recreational Demand for a Marine Park in Southern Sri Lanka; the Case of Hikkaduwa Marine Park MASTER THESIS KHANH HOA - 2017 MINISTRY OF EDUCATION AND TRAINING NHA TRANG UNIVERSITY KORALALAGE CHAMINI DINUSHIKA Estimating the Recreational Demand for a Marine Park in Southern Sri Lanka; the Case of Hikkaduwa Marine Park MASTER THESIS Marine Ecosystem Management & Climate Change Major: Topic allocation Decision Decision on establishing the Committee: 04th of June 2017 Defense date: Supervisors: Prof OSCAR AMARASINGHE Chairman: Faculty of Graduate Studies: KHANH HOA - 2017 UNDERTAKING I undertake that the thesis entitled: “Estimating the Recreational Demand for a Marine Park in Southern Sri Lanka; the Case of Hikkaduwa Marine Park ” is my own work The work has not been presented elsewhere for assessment until the time this thesis is submitted 03 Date 06 Month 2017Year Author KORALALAGE CHAMINI DINUSHIKA iii ACKNOWLEDGMENT I would like to express the deepest appreciation to the Faculty / Deparment of Graduate Studies, Nha Trang University for providing me with all facilities to broaden my vision and knowledge on the diverse aspects of the management of coastal ecosystems and Climate Change, and assisting me in all respects to successfully complete this thesis My special thanks go to Prof.Oscar Amarasinghe Faculty of Agriculture, University of Ruhuna, Sri Lanka for the continuous support extended to my Msc study and research, and especially for his patience, motivation, enthusiasm, and for expanding our skills through immense knowledge His guidance helped me at all times of conducting research work and writing of this thesis A deep sense of gratitude is owed to the NORHEAD project on Climate Change, for providing me a great opportunity of pursuing my Masters Studies in the field of Marine Ecosystem Management and Climate Change At the same time I would like to express my thanks to all the teachers of this masters’ program who guided me to complete the masters’ program successfully Last but not the least, I would like to thank my family: my parents and to my brothers and sister for supporting me spiritually and morally, throughout the writing this thesis Thank you! 03 Date 06month 2017 year Author KORALALAGE CHAMINI DINUSHIKA iv Table of Contents UNDERTAKING iii ACKNOWLEDGMENT iv LIST OF ABBREVIATIONS vii LIST OF TABLES viii LIST OF FIGURES ix APPENDICES ix Abstract xi CHAPTER INTRODUCTION 1.1 Objectives CHAPTER LITERATURE REVIEW CHAPTER 3: METHOD 15 3.1 Selection of Study Area 15 3.2 Population and sample 22 3.3 Sampling method 22 3.4 Data collection 22 3.4.1 Secondary sources of data 22 3.4.2 Primary sources of data 23 3.5 Theoretical Concepts 24 3.6 Data Analysis 28 CHAPTER RESULTS and DISCUSSION 29 4.1 Selected Socio economic and Demographic characteristics of the local visitors to the Hikkaduwa Marine Park 29 4.2 Detailed Analysis of selected Socio economic and Demographic characteristics of the local visitors to HMP 29 2.1 Age distribution of the local visitors 29 2.2 Average monthly income of local visitors to Hikkaduwa Marine Park 31 Educational standards of local visitors to HMP 31 Visit Characteristics of local visitors to the Hikkaduwa Marine Park 32 3.1 Annual number of visits to the HMP by local visitors 32 3.2 Access time to Hikkaduwa Marine Park by local visitors 33 3.3 Mode of transport to Hikkaduwa Marine Park by local visitors 34 4.3 Main recreational purpose of local visitors to visit Hikkaduwa Marine Park 35 v 4 Selected Socio economic and Demographic characteristics of the foreign visitors to the Hikkaduwa Marine Park 36 4.5 Detailed Analysis of Selected Demographic and Socio economic characteristics 36 5.1 Number of foreign visitors by age class 36 5.2 Detailed analysis of Income of foreign visitors 37 5.3 Educational achievements of the foreign visitors to the Hikkaduwa Marine Park 38 4.6 Visit Characteristics of foreign visitors to the Hikkaduwa Marine Park 39 6.1 Frequency of annual visits by foreign visitors to Hikkaduwa Marine Park 39 6.2 Main purposes of visiting Hikkaduwa Marine Park by foreign visitors 40 6.3 Foreign visitors’ awareness of alternative sites to the Hikkaduwa Marine Park 40 7.1 Opportunity cost of time 42 7.2 Calculation of Travel cost for multiple site visitors 43 4.7.3 Recreational demand of local visitors to Hikkaduwa Marine Park 44 7.4 Recreational Demand curve for local visitors to Hikkaduwa Marine Park 44 Travel benefits 47 Recreational Demand of foreign visitors to Hikkaduwa Marine Park 51 10 Impact of climate change on visitor behavior in HMP 54 11 High impact scenario affecting for visitation rate for local and foreign visitors 55 12 Contribution of estimation of recreational values towards improved management of HMP 56 CHAPTER CONCLUSION 58 CHAPTER REFERENCES 62 vi LIST OF ABBREVIATIONS AGA Assistant Government Agents BV Bequest Value DS District Secretariat EV Existence value FE Foreign Exchange HMP Hikkaduwa Marine Park HP Hedonic Pricing IPCC Intergovernmental Panel on Climate Change ITCM Individual Travel Cost Method IUCN International Union for Conservation of Nature IUV Indirect Use Value LKR Sri Lankan Rupees MD Multi Destination MPA Marine Protected Area NARA National Aquatic Resources Agency NUV Non- Use Value PP Primary Purpose Rs Rupees SP Stated preference TC Travel Cost TEV Total Economic Value UNFCCC United Nations Framework Convention on Climate Change ZTCM Zonal Travel Cost Method vii LIST OF TABLES Table 2.1 Relationship between valuation methods and value types…………………… Table 3.1 Consumer Surplus Estimates for the Whole Recreation Experience Using the ZTCM……………………………………………………………………………………… 27 Table 4.1 Selected socio economic and demographic characteristics of the local visitors to Hikkaduwa Marine Park…………………………………………………………… ……….29 Table 4.2Educational standards of local visitors to HMP………………………….……… 32 Table 4.3 Mode of transport to Hikkaduwa Marine Park by local visitors………… ……….35 Table 4.4 Selected Socio economic and demographic characteristics of foreign visitors to the Hikkaduwa Marine Park…………………………………………………………………… 36 Table 4.5 Model summary and parameter estimates for local visitors’ recreational demand curve for HMP…………………………………………………………….………………….45 Table 4.6 Independent variables and the coefficients that affect the number of visits of local visitors to HMP……………………………………………………………………………….47 Table 4.7 Model Summary and Parameter Estimates for the local visitors travel benefits obtained while on travelling………………………………………………………………… 48 Table 4.8 Model summary and parameter estimates for local visitors’ true recreational demand curve for HMP………………………………………………………………….… 50 Table 4.9 Model summary and parameter estimates for foreign visitors’ recreational demand curve for HMP ………………………………………………………………………… … 52 Table 4.10 Independent variables and the coefficients that affect the number of visits of foreign visitors to HMP……………………………………………………………………….53 viii LIST OF FIGURES Figure 2.1 Total Economic Value framework: Use and non-use values of a marine eco system… Figure 3.1 Map of Hikkaduwa Marine Park………………………………………………………… 15 Figure 3.2 Detailed map of Hikkaduwa Marine Park………………………………………………….17 Figure 3.3 Individual travel cost model – Illustrative demand curve………………………… 26 Figure 3.4 whole recreation experience demand curve……………………………………………… 28 Figure 4.1 Percentage of local visitors to Hikkaduwa Marine Park, by Age Group…………………30 Figure 4.2 Average monthly incomes of local visitors to Hikkaduwa Marine Park………………… 31 Figure 4.3 Annual number of visits to the Hikkaduwa Marine Park by Local Visitors……………….33 Figure 4.4 Access time to HMP by local visitors…………………………………………………… 34 Figure 4.5 Number of visits per year to HMP with the changing access times……………………… 34 Figure 4.6 Main purpose of visiting Hikkaduwa Marine Park by local visitors……………………….35 Figure 4.7 Age distribution of foreign visitors to the Hikkaduwa Marine Park……………… 37 Figure 4.8 Average monthly income distributions of foreign visitors to Hikkaduwa Marin Park………………………………………………………………………………………………… 38 Figure 4.9 Educational achievements of foreign visitors to the Hikkaduwa Marine Park ……………38 Figure 4.10 Frequency of annual visits by foreign visitors to the Hikkaduwa Marine Park………… 39 Figure 4.11 Main purposes of visiting the Hikkaduwa Marine Park by foreign visitors…………… 40 Figure 4.12 Awareness among foreign visitors of alternative sites to Hikkaduwa Marine Park………………………………………………………………………………………………… 41 Figure 4.13 Local visitors recreational demand curve for HMP………………………………………45 Figure 4.14 travel benefits obtained by local visitors with the distance they travelled……………… 48 Figure 4.15 Recreational demand curve with net travel cost for HMP by local visitors………………50 Figure 4.16 foreign visitors recreational demand curve for HMP…………………………………… 52 Figure 4.17 Local Visitors respond for a 50% reduction of the beach area due to Climate Change……………………………………………………………………………………………… 54 Figure 4.18 Foreign Visitors respond for a 50% reduction of the beach area due to Climate Change…………………………………………………………………………………………………54 Figure 4.19 The most important climate change scenario affecting visitation rate – Local visitors …………………………………………………………………………………………………………55 Figure 4.20 The most important climate change scenario affecting the visitation rate- foreign sample …………………………………………………………………………………………………………56 ix APPENDICES Appendices Content Page Survey Form 66 x least a minimal proportion of the total economic value of the HMP Even this value (USD 8.3 million) appears to be quite colossal, justifying investment on a good management strategy Evidently, proper management of HMP offers a good source of income to the country to Hikkaduwa economy through tourism Since HMP consist of both use and non- use values the estimated recreation value could be used as a good indicator to initiate its improved management Further the decision makers could use this study to be aware of the value of this HMP and make a clear case to protect it, improve it and planning proper management strategies The estimated consumer surplus also reveals that the country would definitely lose a value more than this amount, if HMP is not managed properly HMP is a beautiful tourist destination which generates a large number of economic opportunities to the country There are no arguments that the existence of the HMP act as an economic hub to the area Promoting recreational activities here will attract more visitors to HMP and the estimated recreational value will stimulate the improved management of the HMP The estimated consumer surplus will also be used to raise international funds to protect and properly manage HMP According to De Silva (1996) "Research and science alone will not help sustain our coral reefs It is a dedicated and honest effort on the part of everyone involved including the politicians, scientists, managers, technocrats, stakeholders, the tourists, the police, the media as well as departments and institutions concerned that will determine what their future would be We have to stop and think, and be honest with ourselves when we ask the question "are we really interested in sustaining the coral reefs and the communities or are we just using the coral reefs as an excuse to sustain our institutions, self-interests and positions" So a collective effort is a must in the ensuring improved management of the HMP, which necessitates the participation of all relevant stakeholders 57 CHAPTER CONCLUSION This study used individual travel cost approach to estimate the recreational demand for HMP, southern Sri Lanka The average number of visits by local visitors to HMP was 3.72 times per year while a foreign visitor made 0.54 annual visits in 2015 Being located near the main road HMP is easily accessible to all types of visitors Both public transport service (including buses and trains) and cheap travel modes such as three wheels and motorcycles were used by the visitors to reach there The majority of the visitors reached the recreation site in less than two hours The number of visits to HMP was influenced mainly by the travel cost, distance, duration of the access time In respect of both local and foreign visitors, the majority were males and the majority of them were married While local visitors stayed on an average 5.8 hours at HMP the foreign visitors stayed an average 3.32 days Comparatively this is a long time period Hence proper management of HMP could probably increase the foreign visitors’ attraction to HMP more Majority of the local visitors to HMP belonged to the age group 18 to 29 years which is quite different from the foreign visitors as the majority of them belonged to the age group 50 to 59 years This shows the importance of taking into account the age variation of the visitors in designing proper management plans and improving the services offered The majority of the local visitors had an income above the average income of the country while foreign visitors had an income between 2001 to 3000 USD Both local and foreign visitors also had a good educational background These results reveal that those who value recreation are fairly educated and that they receive a good income In respect of both local and foreign visitors, the main recreational purpose in visiting HMP was relaxation, which is closely associated with enjoying the beach and sea environment, which dominate over all other recreational activities taking place at HMP This is very important fact which management has to take into account The estimated Recreational Demand Curve showed that the number of visits to HMP decreased with the increasing travel cost Results showed that for local visitors the individual consumer surplus of was USD 295.45 and, with an estimated 25041 annual visits, the total consumer surplus was estimated as 7,398,363.45 USD per year and for 58 foreign visitors the individual consumer surplus was USD 207.62 and with an estimated 4480 annual visits, the total consumer surplus was estimated as USD million per year This can be considered as the annual recreational value of the HMP As the Total Economic Value consist of a number of values and that recreational value is only a fraction of it, this estimated value of USD 8.4 m could be considered as a minimum estimate of the value of HMP, which can provide a basis for policy making, planning and management strategies for HMP Further for local visitors, it is observed that there is a tendency to take long trips because of the tendency to enjoy longer trips with dear ones Thus they tend to prefer longer travel distances that enhance travel benefits Reworking of the recreational demand function with the Net Travel Cost (adjusted travel cost) revealed a consumer surplus of 9,142,969.92USD, which is 123% of the recreational benefits worked out without taking into account travel benefits Since visitors use different travel modes in the study it was considered a unique cost per kilometer distance for all Due to this reason the estimated recreational demand value may overestimated or may underestimated Further to get precise data on the travel distance and travel time specific web application was used It may help to estimate the travel cost and opportunity cost of travel time more accurately In respect of foreign visitors, a distorted the recreational demand for HMP is likely because of unrealistic variations in airfare for same distance Although an attempt was not made in this, this problem could probably be surmounted by using a measure such an “airfare per mile” for all visits Moreover, countries quite close to Sri Lanka are all developing countries, while developed countries are located quite far from Sri Lanka Naturally one may expect more trips by foreigners who are close to Sri Lanka and fewer trips by those living far away But there is a tendency for the opposite to happen because those who are closer, tends to make fewer trips because they belonged to low income countries Climate change is a long term process and estimating its impact on the visitation rate of the visitors is a complex process Hence this study analyzed how visitors’ behavior (visitation rate) changed with hypothetical climate change scenarios As described above sea level rise is the highly impacting climate change scenario to HMP since it 59 reduces the coast area which currently retains many visitors at the recreational site If beach area reduced by 50% due to climate change local visitors are in a stage where they are going to highly reduce the visitation rate while foreign visitors are in a stage of between moderately reducing the visitation rate and highly reducing the visitation rate Both visitors will reduce their visitation rate to HMP if the beach area reduced Hence when making strategy plans towards improved management of HMP it is very important to pay the attention on the beach area protection too Even the beach area is this much important currently no management process is running in Hikkaduwa Marine Park to protect the beach area Hence the beach protection should be given attention The most important way to this is make people aware on the central value of the beach and what we are going to loss with the absence of proper beach protection This can be done by campaigns, advertisements, newspaper articles etc Further commencing beach protection programs to reduce the urban runoff, mitigate the beach erosion and cleaning the beach would work well Finally as there is no entry fee to HMP it is suggested to raise a suitable entry fee while promoting donations and attract the government budget allocation towards improved management of HMP When calculating the travel cost it is required to have the transport cost to the site for each individual Since there is variety of travelling modes in Sri Lanka it created complexities in calculating the transport cost For the same distance people who used their own vehicles had to bear a cost more than who used public transport modes Hence a common cost per kilo meter was taken for all assuming all the visitors used the same travelling mode Further, a very high variation was found in air fare for the same distance in the foreign sample This has raised certain issues in calculating travel cost as the cost of air travel is not soundly correlated with distance More over after the analysis a positive relationship was found between the distance travelled and the travel benefits gained And the net travel cost was calculated (net travel cost= travel cost - travel benefits) After calculating the consumer surplus using the net travel cost, question arose whether this consumer surplus (using the true net travel cost) reflects the actual recreational demand (or the recreational value) for the HMP The point is that, people coming from longer distances appear to 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Ambio 28:188–196 67 APPENDICES Estimating the Recreational Demand for a Marine Park in Southern Sri Lanka;The Case of Hikkaduwa Marine Park My name is K C Dinushika and I am a Masters student at Nha Trang University in Vietnam I am trying to get background information on the recreation site, Hikkaduwa I am working on a research that looks at the improved management of the Marine Park, Hikkaduwa Date: ……………………………………… Name: …………………………………… Address: …………………………………… Contact Telephone number: ……………… Age :- …………… Civil status: -Married Religion: - Buddhist Sex: - Male Unmarried Non Buddhist Female Nationality:- …………………………… What is your family size? State the number of dependents (Both young and old)? ……………………… What is the highest level of education you have obtained? No schooling Post graduate education Primary (Up to grade 5) Other High school education University education From the following, what best describes your current work status? a Employed full time/part time □ b Unemployed □ c Retired □ d Full time student □ e Home Duties □ f Other (SPECIFY) 10 What is your daily wage/ daily earning? USD 11 What is your average monthly income? USD 12 Do you belong to any environmental or social organization? Yes No 13 If “Yes” what is the organization……………………………………………………… 68 14 Do you know any other alternative site to Hikkaduwa? Yes No 15 Rank the purposes of your visit to Hikkaduwa marine reserve according to your priority i ii iii iv v vi Relaxation Coral watching Diving or other water based activities Sun bathing Swimming Other (Exercising, scenery….etc) 16 Number of visit Hikkaduwa per year? ( Number of visits per year) 17 Mention the average duration of stay (Hours/ Days) 18 What is your traveling mode? Train/bus/van/car 19 Is that a diesel vehicle or petrol vehicle? 20 What is the total travel time? 21 Where are you come from?( Start place) 22 What is the cost for refreshments and meals during the journey? 23 What is the cost for accommodation? (for those staying overnight) Multiple site visits 24 Do you visit only Hikkaduwa in this visit? Yes No 25.If not what are the other places you visit during this trip (state in the given table below)? State the number of hours spent in each destination (as a proportion of the total time spent for the trip) Place From the total enjoyment how much you apportion to each place (out of 100) Time spent on the site as a proportion of total time spent for the trip Hikkaduwa 26.Activity Characteristics in Hikkaduwa Marine Reserve Activity Activity expense 69 Time spent as a proportion Travel Benefits (If relevant only) Following diagram shows how people enjoy the travel while on travelling Being with dear ones Preparing meals on the way Company Travel Benefis Chatting Enjoying road side scenes Singing 27 Have you enjoyed the travel while on travelling? Yes No 28 What are the travel benefits you enjoyed? 1……………… 2…………………… 3…………………… 4………………… 29 How much is your travel benefit comparatively to the travel cost to this destination? ẳ ẵ 30 Could you please state it as a percentage? (10%, 20%, 30% etc) To find out the impacts of climate change on park visitation rates 31 With the climate change if some changes like appear in Hikkaduwa will you reduce the number of visits?Yes No 32 With climate change if the Hikkaduwa beach area reduced by 50% what will happen to your visitation rate? a) b) c) d) e) I will still come to Hikkaduwa I will least reduce the visitation rate I will moderately reduce the visitation rate I will highly reduce the visitation rate I will not come to Hikkaduwa 33 With climate change if corals in Hikkaduwa reduced by 50% what will happen to your visitation rate? a) b) c) d) e) I will still come to Hikkaduwa I will least reduce the visitation rate I will moderately reduce the visitation rate I will highly reduce the visitation rate I will not come to Hikkaduwa 70 34 With climate change if the Fish species in Hikkaduwa reduced by 50% what will happen to your visitation rate? f) g) h) i) j) I will still come to Hikkaduwa I will least reduce the visitation rate I will moderately reduce the visitation rate I will highly reduce the visitation rate I will not come to Hikkaduwa 35 As you think from the above scenarios what is the scenario that will highly impact on your visitation rate? a) Reduction of the beach area due to sea level rise b) Reduction of corals due to climate change c) Reduction of fish species due to climate change 36 How much is your total flight ticket cost to Sri Lanka? ………………….USD 37 After considering all the destinations you visit in Sri Lanka, how much percentage can you allocate to Hikkaduwa from your total flight ticket cost? …………………………… 71 ...MINISTRY OF EDUCATION AND TRAINING NHA TRANG UNIVERSITY KORALALAGE CHAMINI DINUSHIKA Estimating the Recreational Demand for a Marine Park in Southern Sri Lanka; the Case of Hikkaduwa Marine Park. .. visitors to Hikkaduwa Marine Park 74% of the sample was male and 26% of the sample was female, indicating a male dominancy in the sample just like in the case of the local sample 55% of the sample... AMARASINGHE Chairman: Faculty of Graduate Studies: KHANH HOA - 2017 UNDERTAKING I undertake that the thesis entitled: ? ?Estimating the Recreational Demand for a Marine Park in Southern Sri Lanka;