Recreation Matters: Estimating Millennials’ Preferences for Native American Cultural Tourism

Abstract

Millennials (persons born between 1981 and 1996) comprise a substantial and growing proportion of tourism consumers in the US. Rural economies, especially Native American communities, focused on casino revenue are faced with the challenge of sustainable economic growth in a millennial-dominant, post-COVID-19 pandemic economy. We estimate millennials’ willingness to pay for proposed cultural tourism scenarios using a discrete choice experiment on federally recognized tribal land in Arizona, US. We find strong preferences among millennials for guided recreational experiences, including horseback riding, hot spring visits, hiking, and cooking classes. With a changing demographic of potential visitors and a marked need to incorporate indigenous voices for the future of sustainable tourism, our results provide insight for future economic growth opportunities in cultural and natural resource tourism for Native American and rural communities.

1. Introduction

For many communities, tourism is considered a great contributor in generating earnings, creating jobs, and providing tax revenues [1]. Rural areas, in particular, see a heightened interest from tourists due to their cultural, historic, ethnic, and geographic uniqueness [2]. Furthermore, entrepreneurs, small businesses, and many Native American communities benefit greatly from rural tourism because of a lack of substitute revenue streams. One important component of a community’s success in rural tourism involves the tourist businesses available to visitors [2]. Thus, it is imperative for long-term economic sustainability that Native American communities relying on tourism revenue streams recognize and adapt to changes in tourists’ demands and preferences [3].

Millennials, persons born between 1981 and 1996, tend to be optimistic, achievement oriented, and technologically engaged [4,5]. Self-expression is a key defining characteristic of millennials, and they are heavily reliant on the widespread use of the internet. Millennials also tend to adapt rapidly and respond well to challenges, perhaps as a response to the scope and magnitude of economic downturns they have experienced. Relative to other generations, millennials typically seek more actives in their travels and expect prompt response to their wants and needs. Millennials are a growing force in economic expenditure. They currently spend approximately $200 billion per year on tourism and are predicted to represent more than half of all U.S. travel consumption in the near future [6]. According to the United States Census Bureau [7], millennials surpassed baby boomers in population size in 2015 and are transforming all industries [1,6,8,9], including tourism [10,11]. Thus, understanding millennials’ tastes and preferences for businesses and activities compared with those of other generational cohorts is an essential component of successful and sustainable tourism development [12]. For example, millennials have a strong desire for unique and memorable experiences [11], a key distinction from previous generational cohorts. Further research is required to determine the specific activities that appeal to millennials’ desires for unique and memorable experiences provided by rural tourism.

The tribal community of interest (who wishes to remain anonymous), is a community whose tourism economy is primarily composed of the casino industry. They recognize the changes in their visitors’ demographics and corresponding preferences for activities not associated with casino gambling. Bokunewics [10] found that “42% of non-millennials rated gambling as an important activity compared to only 21% of millennials. Out of the list of 28 activities in the survey, gambling ranked 21st in importance for millennials and 7th in importance for non-millennials”. Moreover, nonmillennials reported spending 23.5% of their vacation budget on gambling, compared with 8.5% for millennials. Little guidance exists on offering “unique and memorable” experiences to attract millennials to tribal communities dependent upon casino-based tourism.

Economically viable adaptation to changing tourism preferences and demographics requires knowledge of consumers’ willingness to pay (WTP) for alternative tourism experiences. Choice experiments are a stated preference method of nonmarket valuation, where preferences are elicited through respondent surveys [13]. Choice experiments require respondents to choose their preferred scenario within a proposed state of the world [14]. Scenarios include differing sets of attributes (those that make up the scenario) with the inclusion of cost. Researchers use respondent data from repeated choice scenarios to estimate WTP for different attributes [15,16].

We implement a discrete choice experiment to better understand millennials’ preferences for proposed tourism activities within tribal lands. Specifically, this study estimates WTP for proposed travel experiences to be offered on tribal land in Arizona, US. Our work contributes to the current literature in two ways. First, to the authors’ knowledge, this is the first study to estimate millennials’ WTP for Native American cultural and nature-based tourism using a choice experiment. Second, our results provide practical guidance for potential post–COVID-19 pandemic revenue-generating activities in rural, Native American tourism-dependent economies.

Study Area

There are 22 federally recognized tribes in Arizona [17]. First Nations span the entire state of Arizona (Figure 1) from more rural communities in Northern Arizona including San Juan Southern Paiute, Navajo Nation, The Hopi Tribe, Kaibab-Paiute Tribe, Hualapai Tribe and Havasupai Tribe; rural tribes of Southern Arizona include Tohono O’odham Nation (with the San Xavier District) and Ak-Chin Indian Community; and Central Arizona rural tribal communities include San Carlos Apache Tribe, White Mountain Apache Tribe, Tonto Apache Tribe, Yavapai-Apache Nation, Colorado River Indian Tribes, Fort Mohave Indian Tribe and Zuni Pueblo. Tribes that are in closer proximity (within 50 miles) of metropolitan areas (urbanized area with a population equal to or greater than 50,000) include Fort Yuma-Quechan Tribe and Cocopah Tribe near Yuma, AZ; Gila River Indian Community, Salt River Pima-Maricopa Indian Community, and Fort McDowell Yavapai Nation near Phoenix, AZ; Yavapai-Prescott Indian Tribe near Prescott, AZ; and Pascua Yaqui Tribe near Tucson, AZ. Of these 22 tribal communities, 16 operate at least one Class III casino in Arizona with 24 tribal casinos in total [18].

The ecosystems the First Nations of Arizona are located within are as diverse as the tribal communities themselves. The Tohono O’odham Nation in Southern Arizona is located just to the east of Organ Pipe Cactus National Monument. The White Mountain Apache Reservation ranges in elevations from approximately 2600 feet to over 11,400 feet at the top of Mount Baldy. The diverse ecosystems offer the unique, active recreational activities that the millennials are looking for in their travels.

2. Methods

2.1. Discrete Choice Experiment

We estimate millennials’ preferences for proposed cultural and nature-based tourism experiences using a discrete choice experiment (DCE). Discrete choice experiments involve surveying a random sample of relevant respondents and asking them to choose between proposed scenarios. Respondents are asked to choose between two or more options with different levels of attributes. Each choice also includes one cost attribute. Researchers estimate WTP for the good or service being studied through observing respondents’ choices [15,16,19]. The discrete choice experiment method is beneficial in our scenario because it allows us to control and manipulate the variables of interest [20]. In our case, the discrete choice experiment method allows us to estimate WTP for proposed tourism experiences that may be potential drivers of increased visitation and revenue for the tribal community.

Random Utility Model

The theory behind discrete choice experiments is the random utility model [13,14]. The random utility model is based on the intuitive property that when faced with a choice, respondents will choose the option that provides the highest amount of utility, or satisfaction, therefore maximizing utility [16]. Random utility maximization assumes that utility is a function of both systematic and random components. From a practical perspective, some portion of the respondents’ choice can be predicted, whereas some portion of the choice is random [21]. Since the researcher observes only the response to the choice set without knowing the underlying preferences of each respondent, a portion of the utility function remains random, or unexplained. Assume that the indirect utility (V) of individual n for alternative j is [13,22]:

$${\mathrm{V}}_{\mathrm{nj}}=v_{\mathrm{nj}}\left(x_{\mathrm{nj}},y_{\mathrm{n}}-p_{\mathrm{j}}\right)+{\epsilon }_{\mathrm{nj}}$$

(1)

where:

$x_{\mathrm{nj}}$ is a vector of attributes for individual n

$y_{\mathrm{n}}$ is the income for individual n;

$p_{\mathrm{j}}$ is the price for alternative j; and

${\mathsf{\epsilon }}_{\mathrm{nj}}$ is a random error term with extreme value distribution.

The respondent chooses alternative i if and only if ${\mathrm{V}}_{\mathrm{ni}}\ge { \mathrm{V}}_{\mathrm{nj}} \forall \mathrm{i}\ne \mathrm{j}$. ${\mathsf{\epsilon }}_{\mathrm{nj}}$ is a random, unobservable component of utility. If we assume that utility is linear in parameters [14,23,24]:

$$v_{\mathrm{nj}}={\beta }^{\prime }{x}_{\mathrm{nj}}+\lambda \left(y_n-p_j\right)+{\mathsf{\epsilon }}_{\mathrm{nj}}$$

(2)

$\partial v_{\mathrm{nj}}/\partial {\mathrm{x}}_{\mathrm{nj}}$ for the k-th attribute is equal to ${\beta }_{\mathrm{k}}. \partial v_{\mathrm{nj}}/\partial {\mathrm{p}}_{\mathrm{j}}$ = $\lambda$ and represents the marginal utility of money. Therefore, the marginal WTP for the k-th attribute = −${\beta }_{\mathrm{k}}/\lambda$.

2.2. Method of Estimation

Several methods can be used to estimate Equation (2). A mixed logit relaxes the assumption of independently and identically distributed errors and allows for unobserved preference heterogeneity across individuals [22,25]. Assume that $\mathrm{f}\left(\mathsf{\beta }|\mathsf{\theta }\right)$ is the density function of β. We use Equations (1) and (2) to form the unconditional probability for the mixed logit [22]:

$${\mathrm{P}}_{\mathrm{ni}}={{\displaystyle \int }}^{ }\frac{{\mathrm{e}}^{{\mathsf{\beta }}^{\prime }{\mathrm{x}}_{\mathrm{ni}}}}{{{\displaystyle \sum }}_{\mathrm{j}}{\mathrm{e}}^{{\mathsf{\beta }}^{\prime }{\mathrm{x}}_{\mathrm{nj}}}}\mathrm{f}\left(\mathsf{\beta }|\mathsf{\theta }\right)\mathrm{d}\mathsf{\beta }.$$

(3)

Equation (3) represents the integral of the unconditional choice probability over all choices of ${\beta }_{\mathrm{n}}^{\prime }.$ Marginal utilities derived from Equation (3) remain applicable to the fixed effects in the mixed logit. Mixed logit models allow the estimation of both fixed and random parameters.

We estimate Equation (3) using Bayesian methods. While computationally intensive, Bayesian estimation provides distinct advantages relative to classical estimation techniques, such as maximum likelihood [22,25]. Unlike frequentist methods, parameters are estimated via simulation with limited distributional assumptions; therefore, Bayesian methods avoid problems of nonconvergence. In addition, parameters from Bayesian estimation are consistent for a fixed number of draws.

We follow the estimation process modeled in Train [22] using Stata statistical software [26] code provided in Baker [27]. We assume a diffuse prior for the mean values and implement adaptive Markov chain Monte Carlo simulation for the posterior distribution of fixed and random parameters. The prior distribution on the covariance matrix is assumed to be an identity inverse Wishart. Readers are referred to Baker [27] for a detailed description of the algorithm used to obtain parameter estimates.

3. Data

The experimental design for the choice question was informed by tribal leaders and tribal council members, of pre-millennial generations; the general tribal public, with a wide range of generational cohorts including the silent generation, baby boomers, generation X and millennials; and regional economic experts, following best practice guidelines for stated preference studies [28]. The project was initiated with a meeting with members of the tribe to gather information on economic business ideas that were important to them. Tribal members generated a list of approximately 20 unique business ideas. The initial list of business ideas was presented to the Tribal Council. The Tribal Council, in conjunction with economic experts, reduced the list to 10 business ideas that were incorporated into attributes on the survey (

Table 1. Choice experiment attributes and descriptions.

Attribute	Description
Cultural Center	This facility would be focused around a museum and an amphitheater. The museum would include interactive opportunities to learn more about the history and progression of the Tribe to modern times. This includes interaction with other Tribal Communities within the area. Virtual reality would be used to bring the participant to different, historically significant times of the Federally Recognized Indian Tribe. Artifacts and culturally significant items would be on display within the facility. The amphitheater would be used to put on shows (e.g., music and dance) for visitors to experience.
Contemporary Botanical Garden	Visitors would experience a Botanical Garden of the Southwest United States. In addition to the typical placards stating common and Latin names of plants, information on the plants’ significance to the Tribe would be highlighted.
Southwest Tribal Art Gallery and Retail Shops	The facility would provide visitors the opportunity to interact with local tribal artists. Arts and crafts would be on display and for sale in the gallery. The gallery would include but not limited to metalwork, woodwork, jewelry, pottery, baskets, paintings, and photography.
Stargazing and Storytelling	Visitors would be taken to a lowlight viewing location for optimal stargazing. Culturally important constellations and celestial bodies would be pointed out to visitors by tribal members. Creation stories pertaining to the Tribe would be told while viewing the celestial bodies.
Southwest Native American Cooking Class	The cooking class would provide visitors the opportunity to learn how to prepare cuisine specific to the Tribe of the Southwest. After the class visitors would enjoy their creations.
Southwest Native American Restaurant	This restaurant would offer cuisine from Southwest Native American culture with a focus on foods specific to the Tribe. The dinning atmosphere would be casual.
Wine Tasting	This establishment would offer wine tastings and the opportunity to purchase locally made wines.
Micro-Brewery	This establishment would offer a place to drink inhouse or purchase take home craft beer produced throughout the region.
Guided Hiking	Visitors would have the opportunity to take guided hikes on trails significant to the Tribe. This would include descriptions of the significance of the trail with the opportunity to see pictographs and other culturally significant natural landmarks. The length of time out hiking would be approximately five hours.
Guided Horseback Riding	Visitors would have the opportunity to take guided horseback rides on trails significant to the Tribe. This would include descriptions of the significance of the trail with the opportunity to see pictographs and other culturally significant natural landmarks. The length of time out on horseback would be approximately two hours.
Guided Hot Springs Tour	Visitors would have the opportunity to take a guided tour and soak in the hot springs locations to the Tribe. This would include tribal descriptions of why the given hot spring is significant and what the hot spring does for individual health. The length of time out visiting the hot springs would be approximately two hours.

). The final version of the survey was vetted by a team of regional economic experts. The survey design was completed in the spring of 2018.

The survey was disseminated by Qualtrics^® (Provo, UT, USA) to 200 millennial respondents (aged 18 to 36) across the United States with a 50%/50% gender split. The survey had four main sections. First, introductory information was provided to respondents regarding recreational activities. Second, the attributes of the choice experiment were described. The third section of the survey contained the choice experiment questions. Finally, the survey collected demographic information on each respondent. Surveys were disseminated in the summer of 2018.

The choice experiment section of the survey asked respondents seven repeated choice sets. The choice sets were optimized using the Fedorov algorithm. 75 unique choice sets were generated. Respondents were asked to select one of three options from each choice set (

Table 2. Example choice set.

Activities	Activity Group “A”	Activity Group “B”	Neither
Cultural Center	Yes	No	No
Contemporary Botanical Garden	Yes	Yes	No
Southwest Tribal Art Gallery and Retail	No	Yes	No
Stargazing and Storytelling	No	No	No
Southwest Native American Cooking Class	Yes	No	No
Southwest Native American Restaurant	No	Yes	No
Wine Tasting	No	Yes	No
Micro-Brewery	Yes	No	No
Hiking Tour	No	Yes	No
Horseback Riding Tour	Yes	No	No
Hot Springs Tour	No	No	No
Price	$160	$285	$0

). Two of the options presented in each choice set gave a combination of the business development attributes along with a corresponding price for the set of attributes. The third option was “none of the options” and had a payment amount of $0. Choice sets were designed to provide a realistic combination of single-day recreation activities. Therefore, each choice set included, at most, one of the following activities: hiking, hot springs, or horseback riding. No constraints were placed on other attributes.

Consider the following sets of activities that would be available to you on your visit to the tribe’s land in the Southwestern United States. The cost represents what you would pay to do the activities listed. Please select the activities set (“Activity Group “A”” or “Activity Group “B””) that is most appealing to you and that you would be willing to pay the amount listed to do. Please select “Neither” if you would not do either choice. Please treat each scenario separately.

4. Results

4.1. Attitudinal Information

A total of 31.5% of respondents stated they have previously visited or recreated on any tribal lands. Of the respondents who have previously visited tribal lands, approximately 65% have done so within the Southwest. While more than half of survey respondents have not visited tribal lands within the United States, a vast majority express interest in Native American culture. When asked, “Do you have any interest in Native American culture?” approximately 82% of the survey respondents answered yes. When the focus of the question is narrowed to Southwestern Native American culture, the percent of survey respondents expressing an interest decreases slightly to 79%. Our results, therefore, indicate a strong interest among millennials in Native American culture.

4.2. Location and Income Information

In total, 39 states were represented in the survey. A total of 35% of survey respondents were in Florida, California, Illinois, New York, or Texas. A total of 9% of survey respondents identified as a member of a federally recognized Indian tribe in the United States of America. Our survey respondents had a median income bracket of USD 25,000–USD 49,999. In addition to being the median income bracket, the USD 25,000–USD 49,999 income bracket also had the most survey respondents. A total of 29% of survey respondents were in the USD 25,000–USD 49,999 household income bracket. The other most common income brackets for survey respondents were less than USD 25,000 and USD 50,000–USD 74,999 (Figure 2).

4.3. Mixed Logit Results

We include all survey attributes as fixed effects and Income as our random parameter. We report p-values using the approach described in Gelman et al. [29]. As expected, the mean parameter value for Price is negative and exhibits the Bayesian equivalence of statistical significance. The negative mean parameter value for Price indicates that all else constant, alternatives with a higher price are less likely to be chosen. The mean fixed effect parameter values for all attributes are positive, showing that each attribute is generally desirable to our respondents (

Table 3. Mixed logit model results *.

Fixed	Coef.	Std. Error	t	p > t	95% Cred. L	95% Cred. U
Cultural Center	0.1111	0.0177	6.26	<0.0001	0.0763	0.1459
Contemporary Botanical Garden	0.1660	0.0306	5.42	<0.0001	0.1060	0.2260
Southwest Tribal Art Gallery and Retail Shops	0.5164	0.0298	17.35	<0.0001	0.4580	0.5747
Stargazing and Storytelling	0.3838	0.0244	15.75	<0.0001	0.3360	0.4315
Southwest Native American Cooking Class	0.5850	0.0315	18.55	<0.0001	0.5232	0.6469
Southwest Native American Restaurant	0.3050	0.0395	7.73	<0.0001	0.2276	0.3824
Wine Tasting	0.3296	0.0220	15.00	<0.0001	0.2865	0.3726
Micro-Brewery	0.2147	0.0239	9.00	<0.0001	0.1679	0.2615
Guided Hiking	0.4839	0.0581	8.33	<0.0001	0.3700	0.5977
Guided Horseback Riding	0.4000	0.0170	23.59	<0.0001	0.3668	0.4333
Guided Hot Springs	0.5755	0.0175	32.87	<0.0001	0.5412	0.6098
Price	−0.0042	0.0002	−20.11	<0.0001	−0.0046	−0.0038
Random
Income	−5.1278	2.3527	−2.18	0.0290	−9.7396	−0.5161
Cov_Random
var_Income	4.0866	5.7149	0.72	0.4750	−7.1158	15.2890

* Note that the table shows the Bayesian equivalence of statistical significance [27].

).

4.4. Willingness to Pay

We find a positive WTP for all attributes included in our survey, with the highest estimated WTP for Southwestern Native American Cooking Class at USD 141, followed by Guided Hot Springs at USD 138. WTP for Southwestern Tribal Art Gallery and Retail Shops and Guided Hiking are also over USD 100. While positive and showing the Bayesian equivalence of statistical significance, Contemporary Botanical Garden and Cultural Center show the lowest WTP of all attributes. Our results show a strong preference for hands-on, personal guided activities relative to passive learning about culture through gardens or cultural centers (

Table 4. Willingness to pay estimates.

	WTP
Southwest Native American Cooking Class	USD 141
Guided Hot Springs	USD 138
Southwest Tribal Art Gallery and Retail Shops	USD 124
Guided Hiking	USD 116
Guided Horseback Riding	USD 96
Stargazing and Storytelling	USD 92
Wine Tasting	USD 79
Southwest Native American Restaurant	USD 73
Micro Brewery	USD 52
Contemporary Botanical Garden	USD 40
Cultural Center	USD 27

).

5. Discussion

Our results are similar to previous research on cultural tourism. From Table 4, the WTP for visiting a cultural center is low relative to other activities. Halliday and Astafyeva [30] found younger (16–24 years old) United Kingdom individuals ranked cultural activities such as gallery and museum visits at the lowest level of their rank order. This again highlights the preferences of younger millennials to engage in activities that foster social interaction and novel experiences. Chaminuka et al. [31] found that visitors to Kruger National Park in South Africa were willing to pay USD 24–USD 48 in addition to park entrance fees for the option to visit a local craft market. In a meta-analysis of recreation values, Loomis [32] reported a consumer surplus of USD 31 for hiking and USD 14 for visiting arboretums in the Southeastern US. A key difference between our estimated WTP for hiking of USD 116 and USD 31 from Loomis’ [32] meta-analysis is the guided aspect of our hiking attributes. Guided hiking provides the opportunity for cultural immersion and a unique way to experience tribal lands with a local expert.

For many Native American communities across the US, tourism is considered a great contributor in generating earnings, creating jobs and providing tax revenues [1]. Considerable uncertainty exists for the post–COVID-19 pandemic future of the tourism industry [33] and for the economic well-being of rural, tourism-dependent economies [34]. While the immediate impact of COVID-19 translates to direct losses in tourism revenues, postpandemic recovery provides an opportunity for innovation, including moving towards a community-centered tourism framework [12,35]. For some communities, the postpandemic transition may involve shifts away from dependence upon indoor, casino tourism and towards providing unique cultural and outdoor recreational experiences. This is supported by Carr [36] for indigenous people in New Zealand and the emphasis placed on environmental and social welfare needs being the highest priority. Tourism’s response to COVID-19 cannot be separated from environmental and social welfare needs. In addition, the community-centered framework for Native American identity faces questions regarding how much or what level of the culture is shared with the visiting population. While outside the scope of this research, the balance of sharing an “acceptable” level of cultural identity and offering unique experiences for outside visitors will be a central question within tribal communities for developing cultural and nature-based tourism, and our results support an informed approach [36].

Our results provide estimates of millennials’ WTP for cultural and nature-based recreation activities and show strong preferences for guided, hands-on cultural experiences, such as cooking classes and stargazing; outdoor experiences, such as hot spring tours and horseback riding; and Native American art galleries and retail. In addition, our results support previous research on the preferences exhibited by millennials in the form of higher WTP for unique and experiential tourism activities. Our study focused on millennials, but other generations need to be considered for sustainable tourism development in rural communities. As Native American communities consider their approach to tourism in a postpandemic economy, our results support the development of interactive and culturally immersive programs to attract millennials and expand the tourism industry with a focus on cultural and nature-based activities outside the casino model.

6. Conclusions

With declining interest in casino activities for millennials and younger generations, tourism economies reliant solely on casino activities will have to adapt and offer different activities to attract younger generational cohorts. Our results expand on previous knowledge regarding millennials’ general recreational preferences [4,5,11] and provide statistically significant estimates of WTPs for alternatives to gambling. Unique experiences and active types of tourism activities (e.g., Native American cooking class, guided hot spring visits, guided hiking, and guided horseback riding) had higher WTP estimates, as previous studies would suggest. If additional activities are to be offered in conjunction with casino activities, our research supports offering unique and energetic activities to attract a younger generation. Our analysis focuses solely on the millennial generation, and we acknowledge that other generations’ preferences, such as Generation Z, should be incorporated into the decision making process for future tourism activities. To our knowledge, this is the first study to estimate WTP for tourism activities on Native American lands with a focus on cultural and nature-based tourism. This study serves as a basis for future research that could expand the sampled population to include multiple or different generations. Further studies could also determine whether the location of the tourism activities plays a role in WTP estimates.