Impact of Marijuana Legalization on Travel to Colorado: Update

Patrick Surry - Jan. 31, 2016

Summary

  • Flight search demand for Denver has been 4.7% above the national average since December 1st.
  • Demand peaked at a 14% increase during the first week of January, and has since been slowly trending back toward the national average.
  • Last year, the search demand to Denver during the same time period tracked at or below the national average.
  • Eight of the top 50 origins for Denver have seen  search traffic rise at least 25% in February and March as compared to the US average since December, with Milwaukee and Minneapolis leading the pack.
  • Since the end of January Houston, Tampa, Kansas City, and Indianapolis have dropped off the map as the demand  no longer shows at least a 25% increase since December.
  • Demand increases appear to correlate with stricter drug legislation

Changes in Travel Demand to Colorado

Sale of marijuana for recreational purposes started in Colorado on January 1st and the state reported sales of over $5 million in the first week (1) and a $140 million is estimated for the first 18 months of sales (2).  In January, Hopper showed the jumping searches for travel to Denver following the start of marijuana sales.  In this report, we investigate whether the increase in travel has been sustained since the initial jump in january or if the trend is slowing down.

Figure 1 compares search for flights to Denver (solid line) to search for travel to any location in the US (dotted).  The scales are normalized to equate demand through November.  Through most of December, Colorado had similar relative popularity to the rest of the US, but starting at the end of December the popularity of Colorado started to increase. On average, the relative demand for Denver has risen by 4.7% since December 1st, with a peak of 14% higher during the first week of January. Since the January peak, Denver popularity has been trending toward the national average.  For comparison, Figure 2 plots relative demand for flights to Denver early last year when Denver was slightly below national search levels, suggesting this year’s spike is not just a regular seasonal effect.

Figure 1: Comparison of weekly search demand from all US origins to Denver vs. all US destinations.  The ratio of the two axes are set by equating total demand prior to December 1st.  Overall, demand for Denver has risen by 4.7% since December 1st, with a peak of 14% relative demand in the first week of January.

Figure 2: Last year flight search to Denver trended at or below US average in the early part of the year.

In order to further rule out the possibility that the popularity of Denver is increasing due to the skiing season, we looked at search patterns to similar destinations.  Specifically, we looked at Albuquerque, Salt Lake City, and Jackson Hole.  Denver saw an increase in traffic from 2013 to 2014, but all three comparable cities saw a decrease during the same time frame (Figure 3).

Figure 3: While 2014 relative demand has been lower than 2013 relative demand for similar cities, Denver’s demand has remained consistently above 2013 levels.

Figure 4 shows all origins where flight search to Denver has increased at least 25% relative to average national demand since February 16th chosen from the top 50 largest origins to Denver, namely Milwaukee (64% increase), Minneapolis (57%), Cleveland (41%), Detroit (37%), Nashville (29%), Cincinnati (29%), Omaha (28%), and Madison (26%). With the exception of Minneapolis, the locations of increase demand appear to correlate with stricter drug legalisation (3).   Since the end of January, Houston, Tampa, Kansas City, and Indianapolis have dropped off the map.

Figure 4: 8 most popular origins are shown, with solid lines representing those with at least 25% increase in search rates to Denver compared to the US average, and dashed lines showing those below 25%.  Circle size shows search increase (Milwaukee up 64%, Minneapolis 57%).

The top 10 cities by search volume to Denver are shown in Table 1 along with the relative increase or decrease in recent travel demand to Denver compared to the US average.  It can be seen that out of the top 10 only Chicago and Minneapolis show an increase in searches for travel to Denver.  The remaining cities all saw a decrease in demand.

City

Airport

Change in Popularity

New York

LGA

-7%

Newark

EWR

-17%

New York

JFK

-10%

Chicago

ORD

+10%

Minneapolis

MSP

+57%

Los Angeles

LAX

-11%

Chicago

MDW

+6%

Washington

DCA

-7%

Dallas

DFW

-7%

Baltimore

BWI

-6%

Table 1: Top 10 origins to Denver showing the relative change in search rates for Denver in February and March as compared to December.  Adjusted for the change in search rates over all US origins.

1. http://www.huffingtonpost.com/2014/01/08/marijuana-sales-colorado_n_4552371.html

2.http://denver.cbslocal.com/2014/02/22/colorado-may-soon-see-benefits-of-recreational-marijuana-sales/

3.http://norml.org/laws/

Data and Methodology

The data presented in this analysis comes from Hopper’s combined feed of Global Distribution Service (GDS) data sources which includes about 10 million queries and 1 billion trips per day.  Demand is represented as the number of queries not actual ticket purchases, and is calibrated across all GDS sources for each market.

Popularity counts are based on the last month (Feb 16-Mar 16) as compared to December.

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