By Carrie Abner, CSG Marketing Coordinator
Like many programs, state tourism efforts took a significant hit during the Great Recession.
Thirty-one states cut tourism advertising and marketing funds by a total of $52.7 million, or 13 percent, between 2008 and 2009, the U.S. Travel Association reported in its 2009 annual Survey of State Tourism Budgets.
Washington was among those states. Facing a $5 billion budget deficit, the Evergreen State cuts its tourism marketing program, then totally eliminated its state tourism office in 2011. The decision had consequences. While travel and tourism revenues were up 5.2 percent nationally in 2012 over 2011, Washington’s growth was just 2.1 percent that year.
“Substantial cuts to destination marketing programs are counterproductive and will have long-term negative consequences,” U.S. Travel Association President and CEO Roger Dow said in announcing the findings from a 2011 study that showed reducing state marketing programs to save tax dollars actually hinders economic growth.
“Travel and tourism is a very busy, very competitive space,” said Nan Marchand Beauvois, the U.S. Travel Association’s senior director of national council relations. “When you’re trying to generate awareness about your destination, you have to invest in marketing. When you invest more—even in down market times—you actually gain market share.”
Washington is trying to regain some of the market share it lost. In July 2013, the Washington State Legislature provided $1 million to the Washington Tourism Alliance to promote tourism to the state as it pursues more permanent funding solutions.
“We’re grateful for the legislature’s support of our marketing programs with interim funding and now are focused on securing passage of our long-term funding legislation, which is the next step on our path to industry-led, sustainable long-term funding,” Louise Stanton-Masten, executive director of the alliance, said in a press release.
Economic Impact of Tourism
Travel and tourism generated $129 billion in tax revenues to all levels of government and $58.4 billion to state and local governments in 2012, according to a 2013 U.S. Travel Association report.
Travel and tourism have played an important role in the economic recovery, said David Huether, senior vice president for economics and research at the U.S. Travel Association.
“Since the overall employment recovery began in early 2010, the travel industry has been adding jobs at a 9 percent faster rate than the rest of the economy,” he said in a press release.
The travel industry made up 99 percent of the jobs the industry lost during the recession between March 2010 and December 2013, according to data released by the U.S. Travel Association in January. During the same time period, the rest of the national economy recovered just 86 percent of jobs lost during the recession.
While tourism lures people who will visit the state and spend money, experts say that’s not the only reason policymakers should care about tourism promotion. Such promotions—from states and municipalities—also can be a powerful tool for recruiting businesses and industry. The same attractions that can lure tourists to a state are also important factors for industries and businesses as they determine which sites will maximize their ability to recruit and retain qualified workers.
“Companies look for a creative, vibrant community when deciding where to locate,” said Sujit CanagaRetna, senior fiscal analyst for The Council of State Governments’ Southern Legislative Conference. “They want to locate where they can recruit an employee base that has the potential to take their business to the next level.”
Half the respondents to a 2013 survey of corporate executives classified quality of life factors, such as cultural and recreational opportunities, as either very important or important in site selection decisions.
Since 2001, Maryland has been working to harness the power of its cultural assets for economic development and tourism promotion through arts and entertainment districts, the first such statewide program in the country. Through the program, local jurisdictions, municipalities and counties are able to apply for designation as an arts and entertainment district based on unique cultural, historic and artistic assets. The program offers tax incentives to businesses and attractions within designated districts.
Initial evaluations demonstrate Maryland’s success. An assessment of the program’s economic impact by Towson University found that new businesses in the designated districts generated more than $6.6 million in tax revenues, created an estimated 864 jobs and supported nearly $26 million in total wages between 2008 and 2010, at the height of the recession.
At least 11 other states have created statewide cultural district programs.
States Get Back to their Roots
In addition to arts and cultural resources, states increasingly are turning to their unique natural resources to draw visitors and these efforts are paying off.
Michigan suffered from inconsistent tourism promotion for decades. That changed with the development of the Pure Michigan campaign. Started in 2006 on a regional basis and expanded nationally in 2009, the campaign is now one of the most highly acclaimed travel campaigns in the country and is often described as the gold standard for state tourism marketing.
The campaign spotlights Michigan’s natural splendor, promoting the state’s freshwater shorelines, inland lakes, rivers and streams, and the largest state forest system in the nation, as well as its mild summers, in television, print, radio and billboard ads.
“The campaign tries to evoke an emotion, the experience of visiting our state. It talks about the natural beauty that only Michigan has to offer,” said Michelle Grinnell of Travel Michigan. “The campaign is putting Michigan on the radar.”
The efforts are paying off.
According to Travel Michigan, Pure Michigan drew 3.8 million out-of-state visitors in 2012. These visitors spent more than $1.1 billion at Michigan businesses, a record high for the state, and generated $79.1 million in new state tax revenues. For every dollar the state has spent to market Michigan as a destination, it has received $4.10 in tax revenues.
“That’s a really great return on investment,” said Grinnell.
As a result, Gov. Rick Snyder invested an additional $10 million in state funding for the campaign in 2011, despite facing a $1.4 billion budget deficit and cuts to core state programs that year, stating simply, “It brought in more tax revenue than it has cost our state.”
Alaska, Montana, Oregon and South Dakota also are touting their natural resources in an effort to boost tourism. Even states traditionally known for their urban areas are promoting rural regions and natural assets. Take New York, where the Big Apple is a big draw, but it isn’t the only thing the Empire State has to offer.
Gov. Andrew Cuomo at a state tourism summit last year announced plans to expand tourism promotion efforts to market upstate New York, which includes the Finger Lakes region.
“How do we get the 50 million tourists, who are in New York City, north?” Cuomo said at the summit. “They are coming from all across the world, they are coming to see the greatest city in the world, fine. How do we get them to see the rest of the greatest state in the world?”
During the summit, Cuomo announced an increase in state tourism funding of $60 million in 2013, triple the level of funding allocated in 2012.
The U.S. Travel Association’s Beauvois believes states should take advantage of any opportunity to market their attractions, cultural assets and natural resources in a way that translates the experience of their state to the rest of the world.
“The mentality of ‘build it and they will come’ is over,” she said.