Thursday, September 11, 2008
Don't take tourism industry for granted
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Richard Wells
Wells is a former president of the Roanoke Valley Convention & Visitors Bureau. His company, Leisure Publishing Co. of Roanoke, publishes the Virginia Is For Lovers Travel Guide (which receives no state funding).
In these difficult economic times when revenues are at a premium for the state and localities, I'm gravely worried about the future of the travel industry in the commonwealth. Today, our state, with a long tradition as a top travel destination, is falling behind other states in luring visitors.
Virginia seems to be in full retreat while other states' tourism offices are investing more in this vital economic development engine. The latest comparisons: The current budget ($15 million) is less than it was 11 years ago. That's in real dollars. Adjusted for inflation, it's 43 percent less than it was in 1997.
Twenty-nine states currently invest more to showcase their states than does Virginia.
Virginia's tourism budget is so far behind that it will take an additional $15 million annually to reach the average investment of the other 49 states.
Look at what our direct competitors are doing. This year, the South Carolina legislature increased its funding to $28 million. Pennsylvania increased its funding to $64.5 million. Tennessee budgeted an additional $4.75 million for tourism marketing this year.
When we think of Virginia tourism, most of us think of the big players, the Kings Dominions or Busch Gardens. But in reality, they represent only about 10 percent of the Virginia travel industry. It's the mom-and-pop operations in every town and county across the commonwealth that make up 90 percent of our industry.
Of the 210,000 tourism-related jobs, a vast majority are with small businesses which in most cases cannot market for themselves. They rely on Virginia Tourism Commission and the wonderful "Virginia is for lovers" brand to draw visitors.
But the message of what tourism does for Virginia has not been reaching our legislators in Richmond. Perhaps it's because of Virginia's tradition of tourism achievement.
We're blessed with a coastline and beaches, with mountains, with Revolutionary and Civil War history. And we're in the middle of the major populations centers on the East Coast. Some question whether the state should even be spending public funds on tourism. Some think visitors would come regardless.
But consider Colorado. In the 1990s, its legislature basically agreed with that notion and totally eliminated tourism advertising.
In two years, visitation plummeted 38 percent. The state lost billions in revenues before restoring funding in 2000. This year, Colorado will spend $19.5 million to attract visitors.
The lesson for Virginia? We can't take our historically strong travel business for granted. We must continue to compete and to showcase our state to keep the revenue and exposure to the corporate world coming in. I wonder what would happen to our state budget if the $17 billion in travel spending disappeared?
What if next year the $1.2 billion in state and local revenues that come from tourism were not there?
What new industry could Virginia create that would replace those 210,000 jobs and the $4.2 billion in salaries and payroll that comes from the tourism industry. Imagine what financial incentives the state would provide to a new business considering locating in Virginia -- a venture that promised $17 billion in annual revenues to Virginia businesses and $1.2 billion in direct tax revenues to the state.
We have an opportunity and an obligation to make sure that every decision maker in Richmond understands two things: One, we already have that business here and it needs to be supported. And two: that $1 invested in tourism generates $5 in state and local revenues. That's a proven fact. Could there be any better return on government investment than 500 percent?
Right now, with our state facing an economic slowdown and the resulting budgetary pressures on the legislature, the challenge to convince the General Assembly to invest more in tourism will be particularly difficult. But in some ways it's the perfect time.
What better time to sell our state leadership on the merits of an industry that is a substantial, proven revenue-producer?
In hard times, smart companies don't cut back on their sales and marketing investment, they increase them. Smart businesses know that when they compete more aggressively during these downturns -- as competitors are cutting back -- they can gain a higher percentage of the market share. And studies show that increasing the investment in sales and marketing during downturns pay even greater dividends when market conditions improve.
