UGA Report: Georgia forests provide $37 billion in ecological benefits to state

 A University of Georgia researcher has found that Georgia’s forestlands provide essential ecosystem services to the state worth an estimated $37 billion annually. This is in addition to the value of timber, forest products and recreation. This is the first time these indirect benefits of Georgia’s private forests have been estimated.

Rebecca Moore, an assistant professor in the Warnell School of Forestry and Natural Resources, studied the 22 million acres of privately-owned forestland in Georgia to estimate the benefits of water filtration, carbon storage, wildlife habitat and aesthetics.

“People value these things,” Moore said, “but because they aren’t like other goods in that people don’t go out and buy them, it’s difficult to estimate just how much we value them. The purpose of our research was to do just that—estimate the value of the ecosystem services provided by private forests in Georgia.”

Moore’s study was conducted with funding from the Georgia Forestry Foundation. The findings of her study were announced at the state capitol on Feb. 9.

“We have had studies for some time that tell us what the economic benefit of wood and fiber manufacturing in the state is,” said Steve McWilliams, executive director of the Georgia Forestry Foundation. “This new study allows us to place a dollar value on those services we receive from the standing forests, and they are many.”

Moore’s final report, which can be found at http://www.warnell.uga.edu/news/wp-content/uploads/2011/02/Final-Report-1-24-11.pdf, focused on six types of ecosystem services forests provide: gas and climate regulation; water quantity and quality; soil formation and stability; pollination; wildlife habitats; and aesthetic, cultural and passive use.

Moore and her collaborators—graduate students Tiffany Williams andEduardo Rodriguez and Warnell Assistant Professor Jeffrey Hepinstall-Cymmerman—analyzed Georgia forestlands by identifying key forest characteristics that affect ecosystem services and estimating per-acre values for each different type of forest.These values were estimated from survey data the team collected and from the results of previous published studies. What Moore found upon concluding her three-year study is that Georgia’s private forests provide an estimated $37 billion annual benefit to Georgia residents. The values can vary widely—between $200 to $13,000 per acre—depending on the location and ecology of the land, Moore said.

“Understanding the value of these benefits of forestland is important,” Moore said, “because it allows us to make better land use decisions. The ecological services forestlands provide are incredibly beneficial to Georgia, and you receive these benefits whether or not you own forestland. Many people think of them as free. But if we lose forestland, we risk losing these benefits.”

McWilliams said he hopes the results of Moore’s study focusing specifically on Georgia will result in public policy decisions that help us conserve Georgia’s working forests. “It carries a lot of weight when we can talk about Georgia forests to Georgia legislators and Georgia opinion leaders,” McWilliams concluded.

The Georgia Forestry Association is a conservation organization based in Forsyth. It works with landowners to adopt sound land management practices so that their forests will help provide clean air and water, soil conservation, wildlife habitats, recreation and timber products.

For more information on the Georgia Forestry Association, see www.gfagrow.org.

For more information on the Warnell School of Forestry and Natural Resources, see http://www.forestry.uga.edu/.

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Shortage of Skilled Workers Primary Reason for Offshoring Jobs

Most American companies engaged in offshoring say a shortage of skilled domestic employees -- not cost cutting -- is the primary reason why they move some job functions overseas.

Also, manufacturers and high-tech/telecommunication companies are less likely to establish offshore operations and are moving increasingly toward the use of third-party providers of offshore labor.

These are among the findings of the sixth annual study on corporations' offshoring trends by the Center for International Business Education and Research's Offshoring Research Network (ORN) at Duke University's Fuqua School of Business and The Conference Board, an independent research association. The study is part of ongoing research into the effects of offshoring trends on American competitiveness and reflects the sentiments of business managers.

"Over half of the participants in our survey say offshoring has resulted in no change in the number of domestic jobs in most functions," said Arie Lewin, Fuqua professor of strategy and international business. "The finding that the U.S. software sector has the highest ratio of offshore to domestic employees -- almost 13 offshored jobs per 100 domestic jobs -- may be a reflection of a scarcity of domestic science and engineering graduates in the U.S."

Survey respondents are broadening the range of factors that influence their selection of an offshore site to include the location of the best service provider and the quality of infrastructure. In spite of placing a high priority on cost savings and labor arbitrage, the survey finds average achieved cost savings offshore have declined at many companies.

For example, IT services and software development have experienced consistent declines over the past five years, while average achieved savings have increased for administrative and innovative functions such as research and development and sales/marketing.

According to the researchers, survey participants have lower expectations than previous respondents for average cost savings in several offshoring functions. Contact center, IT and software development have seen the largest declines among all offshoring functions as companies new to offshoring discover a number of hidden costs involved, including expenses for training, staff recruitment and retention, and government and vendor relations.

"The potential for cost reduction alone is no longer enough to justify moving operations," said Ton Heijmen, senior advisor to The Conference Board. "One survey respondent noted it has taken his company several years to discover the impact of labor arbitrage disappears in fewer than three years. Companies are now shifting from cost-driven offshoring to a multidimensional value proposition in creating a global footprint."

As companies expand offshoring activities by increasing scale or by offshoring more diverse and complex functions, most firms see a decline in the overall efficiency. This may be partially attributed to a loss of managerial control as offshoring operations are expanded, requiring companies to improve coordination and management of their global sourcing.

A published report on the research results is available for purchase. Contact jrussell@duke.edu for details.

The ORN database includes cumulative responses collected through an annual survey conducted since 2004. As of November 2010, the database encompassed 2,000 companies (22 percent large, 35 percent mid-size and 43 percent small) and more than 4,300 different offshoring projects.

Source:  Duke University

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Recession's Effects Intensify in Cities

/PRNewswire/ -- Cities' finances continue to weaken under the strain of the recession, resulting in cities being less able to meet their fiscal needs in 2011 and beyond. According to the National League of Cities' annual report on cities' fiscal conditions, financial officers report the largest spending cuts and loss of revenue in the 25-year history of the survey.

In the research brief, "City Fiscal Conditions in 2010" (http://nlc.staging.10floor.com/ASSETS/AE26793318A645C795C9CD11DAB3B39B/RB_CityFiscalConditions2010.pdf), 87% of city finance officers report their cities are worse off financially than in 2009. City revenues - as generated in property, sales, and income taxes - will decline -3.2% in inflation-adjusted dollars according to finance officers. To compensate, city officials are cutting back spending, with expenditures declining by -2.3%. These are the largest cutbacks in spending in the history of the survey and the fourth year in a row that revenue declined.

Financial pressures are forcing cities to layoff workers (79%), delay or cancel capital infrastructure projects (69%), and modify health benefits (34%). There were also significant increases in the number of officers reporting across-the-board services cuts (25%) and public safety cuts (25%). Public safety is usually reduced only as a last resort option.

"This historic recession has forced city officials to make difficult decisions that impact the social and economic fabric of their communities," said Ronald O. Loveridge, mayor of Riverside, CA and president of NLC. He continued, "This recession is making city officials fundamentally rethink and repurpose the provision of services in their communities. Some are innovating and finding creative solutions but, regrettably, without the necessary resources, cities will continue to have a difficult time assisting their residents through these trying economic times."

The ongoing weakness in the housing market, along with poor retail sales, has reduced the available revenue by significant margins. The responses from the finance officers clearly illustrate that the effects of the economic crash are intensifying in cities. Because most tax revenue is collected at specific points during the year, and since it takes time for housing assessments to catch up to current values, cities will still be feeling the full effect of the downturn in 2011. The national economy's slow recovery to date also means the recession's effects will potentially linger in cities for several more years.

"These stark numbers continue the trend we've been seeing for the past several years: lower revenue and reduced services at a time when there is an increased demand for services," said co-author Christopher Hoene, director of the Center for Research and Innovation for the National League of Cities. He continued, "Unfortunately, because of the loss in revenue, cities will face even more difficult circumstances in the months, if not years, to come."

Cities have been forced to confront low consumer spending, unemployment, and cuts in state aid that have severely affected the types of services and the manner in which they are offered by cities. In response, many cities are revisiting the range of services provided and looking for new service-delivery models in order to balance budgets and minimize the impacts of cuts on residents.

"While certain segments of the economy may be under recovery, cities as a whole are not yet experiencing growth," said co-author Michael A. Pagano, dean of the College of Urban Planning and Public Affairs at the University of Illinois at Chicago. He continued, "As a consequence, cities are facing very serious financial hurdles right now in providing basic public services."

NLC conducts the survey each year in partnership with the University of Illinois at Chicago's College of Urban Planning and Public Affairs, a nationally recognized innovator in education, research, and engagement in support of the nation's cities and metropolitan areas. Michael A. Pagano, Dean of the College, has helped conduct the survey and author the report since 1991.

The National League of Cities is the nation's oldest and largest organization devoted to strengthening and promoting cities as centers of opportunity, leadership and governance. NLC is a resource and advocate for 19,000 cities, towns and villages, representing more than 218 million Americans.

Through its Center for Research and Innovation, NLC develops, conducts and reports research on issues affecting cities and towns. The Center assists cities and their leaders to implement innovative practices by providing qualified information and technical assistance.

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PKF Hospitality Research: More Guests in 2010 --- With a Catch...

PKF Hospitality Research (PKF-HR) today announced that, according to an advance release of the September 2009 edition of Hotel Horizons®, nine consecutive quarters of declining lodging demand will come to an end in the second quarter of 2010.

“With the budgeting process underway at hotels around the U.S., the recovery of lodging demand is an important milestone that will be reached in the year ahead,” said R. Mark Woodworth, president of PKF Hospitality Research. “The catch; however, is that the practice of price discounting has firmly taken hold, and, as a result, room rates are expected to decline once again in 2010.”

Hotels that operate in the luxury, upscale, and midscale without Food & Beverage segments are expected to more customers beginning to re-appear in the fourth quarter of 2009. “While the price paid for the room will remain the most important criteria for most travelers in 2010, the value received will once again factor into the buying decision” Woodworth noted. “Higher-priced hotels have suffered the greatest erosion in pricing power during this protracted contraction and, as a result, offer an abnormally strong value proposition as the industry begins to turn the corner mid-way through 2010. We also believe that those property types that were the best performers before the recession are going to be those leading us out.” The two chain scales lagging the U.S. demand recovery will be midscale with Food & Beverage and economy, which will not see improved performance until the third quarter of 2010.

“Of the 50 markets monitored by PKF-HR, 45 will experience stronger demand in 2010 than in 2009,” Woodworth added. “It is important to note, however that supply increases are still an issue for hoteliers across the U.S., as 25 of our 50 markets will report further declines in occupancy, even with 20 of those 25 experiencing demand increases.” The five lagging markets are Fort Lauderdale, Indianapolis, Miami, Tampa, and Washington, D.C.


Budgeting Accuracy – What We Learned In 2002 & 2003

“During the two budgeting seasons following the post-9/11 period, every forecast and prediction had the business environment improving in the ‘next’ quarter, regardless of whether that next quarter was the second quarter of 2002, third quarter of 2002, or the fourth quarter of 2003. This optimism led to budget shortfalls, which continued until 2005,” Woodworth recounted. “Like times in our recent past, successful hotel owners and operators must be prepared to anticipate additional declines in certain metrics for 2010, which can be extremely difficult without guidance. Hotel Horizons® can help by bringing some clarity to the future outlook.”

Hotel Horizons® is a series of econometrically derived forecast reports developed by PKF Hospitality Research. The reports cover 50 of the largest U.S. hotel markets as well as the nation as a whole, and six chain scales. Economic forecasts by Moody’s Economy.com and historic hotel performance data and future supply pipeline information from Smith Travel Research are used to construct the industry’s most comprehensive forecasts of U.S. lodging market behavior.

Introducing: myShareSM

Since it is budget season, owners and operators are thinking about how their hotel will perform in 2010. Historically, the movement in a hotel’s occupancy and average daily rate from year to year can be largely explained by the movement of the overall market in which the property sits. “Our research over the past 10 years reveals that seventy-five to eighty percent of a hotel’s performance is systematically a function of changes in the larger market in which the property is located,” notes John B. (Jack) Corgel Ph.D., Senior Advisor to PKF Hospitality Research and the Robert C. Baker Professor of Real Estate, Cornell University School of Hotel Administration. “And who is better at knowing that remaining twenty to twenty-five percent than the local property owner or operator? The person in charge of the hotel knows when rooms will come in and out of service, when renovations occur, and when competitors open across the street.”

PKF Hospitality Research is introducing a new tool called myShareSM which helps managers incorporate the current PKF-HR forecast for their market into an estimate of the future performance of any submarket, competitive set, or their hotel. Included as a complimentary addition to all single market Hotel Horizons® reports, the myShareSM tool is an Excel-based application that comes pre-loaded with the respective Hotel Horizons® forecasts for all hotels, upper priced, and lower priced properties within a defined geographic market, as well as historic
submarket data from which to assist the user in calibrating penetrations. For more information, as well as a video demonstration of myShareSM, go to www.pkfmyshare.com

To purchase Hotel Horizons® forecast reports for the United States, or one of 50 individual markets, please visit the firm’s online store at www.HotelHorizons.com, or call (866) 842-8754.

* * *

PKF Hospitality Research (PKF-HR), headquartered in Atlanta, is the research affiliate of PKF Consulting, a consulting and real estate firm specializing in the hospitality industry. PKF Consulting has offices in Boston, New York, Philadelphia, Washington DC, Atlanta, Miami, Indianapolis, Houston, Dallas, Bozeman, Sacramento, Seattle, Los Angeles, and San Francisco.

Forecast Change in Key Metrics, U.S. Lodging Industry

Year Occupancy ADR RevPAR Supply Demand
2009 -9.0% -10.4% -18.5% 3.0% -6.3%
2010 0.4% -3.1% -2.7% 1.2% 1.6%

Source: PKF Hospitality Research, September-November 2009 Edition of Hotel Horizons®
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