Contingent valuation of ecotourism in Annapurna conservation area, Nepal: Implications for sustainable park finance and local development

Abstract

To determine willingness to pay (WTP) for candidate entry fees, contingent valuation surveys were administered to 315 foreign visitors to the Annapurna Conservation Area, Nepal, during April and May of 2006. The results of logit regression showed that the bid amount, family size, visitors' satisfaction, the use of a guide, and group size were the most significant predictors of WTP. Results suggest that most visitors would be willing to pay an entry fee considerably higher than the current fee of 27 U.S. dollars (USD). The mean and median WTP were 69.2 and 74.3 USD, respectively. The most common explanation for WTP by respondents was a desire to better protect the environment. The most common explanation for unwillingness to pay was that the bid was simply too expensive. Two models were developed based upon different predictions of visitor numbers (an optimistic case and pessimistic case) to calculate the expected revenue production and likely gross local economic impact of candidate entry fees. Based on this analysis, we recommend an increase in the entry fee to USD 50. In the optimistic scenario, this higher entry fee leaves a budget surplus. In the pessimistic scenario, it would reduce current budget deficits.