June 1, 2011

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Tourism Fund Paying Dividends to Utah Communities

Tom Haraldsen

June 1, 2011

Tourists to Utah often leave as the state’s greatest cheerleaders. One view of the state’s awe-inspiring redrock formations or one sweet ride down our celebrated slopes turns even the most skeptical into a Utah believer. The problem is getting new tourists to make that first trip to the Beehive State. Rural counties and smaller communities have even greater obstacles to overcome in attracting visitors. For that reason, the state created a cooperative marketing program that gives local communities a dollar-for-dollar match on money spent drawing visitors to the state. “That money is available to nonprofit organizations and has to be used to generate out-of-state visitors,” explains Nan Anderson, executive director of Utah’s Tourism Industry Coalition. And from all indications, the cooperative marketing fund is doing exactly that—bringing an influx of visitors to all areas of the state. The Investment Tourism is important to Utah’s economy. It generated more than 110,000 jobs in 2009 (2010 figures were still being determined in April), accounted for more than $6.2 billion in visitor spending and reduced the tax burden on every Utah household by an estimated $703. “Tourism is such an all-encompassing industry,” Anderson says. “It overall proves to be one of the largest employers in the state. Most tourists don’t require that we educate their children, or construct additional facilities. In our view, tourism is good for not only generating capital projects that satisfy the tourists (such as road improvements), but also for residents.” Because of tourism’s economic significance, legislators have been more than willing to invest in efforts to promote the state. The year after Utah’s successful hosting of the 2002 Olympic Winter Games, the Utah Travel Council had a marketing budget of just $900,000. That paltry amount for the entire state for one year was equal to what Vail, Colo. had for marketing its winter season alone. Something had to change. Three years later, the state legislature approved creation of the Tourism Marketing Fund, designed to attract out-of-state visitors. “There are three facets to it, and all are predicated on taxes generated related to tourism,” explains Anderson. The bulk of the fund, 70 percent, is earmarked for advertising and marketing for the Utah Office of Tourism (which replaced the travel council). These efforts are probably best identified by the “Life Elevated” campaign highly used in print, broadcast and social media, as well as at trade shows nationwide. The Utah Sports Commission gets 10 percent for attracting and promoting sporting events. The remaining 20 percent is dedicated to funding the cooperative marketing program in all 29 Utah counties. This year’s state legislature appropriated $7 million for the fund, the same amount as over the last three years. “We’ve been very appreciative that the legislature understands tourism and how it works with economic development,” says Anderson. Big Returns So how has it worked? The numbers tell the story: since 2004, traveler/tourist spending has been up about 10 percent, and state and local tax revenues have increased 14.26 percent. Most of that growth has occurred during the five years of the fund’s existence. As reported in Utah Business earlier this year, many hotels and resorts are reporting a decrease in room rates, but an increase in occupancy rates. Bill Malone, president and CEO of the Park City Chamber of Commerce, says Park City has seen an occupancy increase of 8 percent. Taxable room rent revenue has increased by more than 26 percent, and even visitor rates to Utah’s five national parks are up 12.4 percent, compared to nationwide decrease of nearly 4 percent for national parks. Davis County has also seen an uptick in visitors. “The fund’s co-op program has really helped with tourism in our county,” says Barbara Riddle, president and CEO of the Davis Convention and Visitors Bureau. “We have used funds to develop brochures about activities on Antelope Island and about outdoor activities in Davis County, and we’ve distributed them throughout the country. You can have the best destinations in the world, but if you don’t get the word out…” She tells of Ron and Ginger Brown, the concessionaires on Antelope Island who operate R & G Horse and Wagon. The Browns, both of whom are elementary school teachers, share a real passion for horses. Together with family members, they created the business on the 28,000-acre island that sits in the Great Salt Lake. A few months ago, a woman came across a brochure for R & G while she was in Boise, Idaho. She’d been planning a trip to Bryce Canyon and decided that on her way, she’d stop and enjoy a day of riding on the island. “She booked a two-hour ride on a Friday, then came back and rode again on Saturday,” Riddle recalls. “She ended up coming back again on Monday, and on her return from Bryce, came back and stopped for another ride. Clearly, the Browns have seen the impact of just that one brochure alone that is part of this co-op program.” Tourism’s complete economic impact is sometimes hard to track, as tourist expenditures and revenues can come from a lot of directions—restaurants, gas purchases, even shopping. But statistics like a 4.34 percent increase in visitors and business to Antelope Island, and a 19.7 percent growth in visitors since 2005 to tourism-related businesses in Davis County, shows Riddle that more destination visitors are stopping and spending between Salt Lake City and Ogden. Strength in Numbers One reason for the program’s success is not just the co-op, but the cooperation. Nowhere is that more apparent than in Utah’s ski industry. “I’ve got to believe that our industry, and our state, are both unique in doing this program,” says Nathan Rafferty, president and CEO of Ski Utah. “I know other [resorts] don’t work together as well as we do—both from the standpoint of being competitors and from businesses working with a state entity. We don’t have a huge budget, so it’s important that we do bring these funds together.” Often, when a travel writer comes to ski at one Utah resort, they are also encouraged to ski at a neighboring resort. “Working together, we give that writer a much better taste of Utah’s amazing snow than he or she might get from spending a few days at just one resort. And the resorts work together so very well here.” Utah does not have a single ski resort that averages 1 million skier days in a season, says Rafferty. Colorado has six that do, and Breckinridge alone had 1.5 million skier days this year. “We are not a state with large resorts—at best, some are medium to large, and we’ll do about 4 million skier days a year over 14 resorts. When you figure that one out of every five ski lift tickets sold in the United States is sold in Colorado, you can see that we’ve got to remain competitive.” Because of the cooperation between the resorts working with co-op funds, Ski Utah has made major marketing efforts over the past five years in states like New York, New Jersey, Connecticut, Los Angeles, Chicago and parts of Texas. “We focus on areas with dense populations and high incomes, using brochures, print ads, TV in spot markets, as well as online. We also do trade and consumer shows, and get the word out about Utah skiing.” Over the past eight years, ski visits in Utah have increased by 35 percent, while nationally the growth has only been about 8 percent. The number of skier days enjoyed five straight years of record totals through 2008. Though the 2009 season was down a bit from the year before, the recently concluded season, with amazing snow amounts, is expected to be another record. Riddle sees the same kind of cooperation as key to the fund’s success on a county level. “We have eight CVBs that work together in our ‘Meet in Utah’ program,” she says. “We focus on Utah first branding. Our attractions such as Lagoon, Cherry Hill and Boondocks, plus our nine public golf courses and equestrian riding trails, have helped put Davis County on the map for tourism. In 2010, we earned just over $300,000 for [promotional] media for this county. You create a destination, you market it, and people take notice.” “It’s hard for me to overstate how important this fund is to our industry and to tourism in Utah as a whole,” Rafferty says. “Tourists come, often with pockets full of money, they spend it on food and lodging and attractions, and they love being here. We have a term we use here called ‘Rev the Stoke.’ It means, we get people stoked and excited to come to Utah to ski and snowboard. This program helps us do it.” Anderson marvels at Utah’s emergence as a destination locale. “It’s been extraordinary to watch Utah come into its own,” she says. “It’s wonderful to see that we’re getting known for our tourism product. If you were to look at the fact that we are still a cohesive industry, weathering the storm of the recession, I like to think we’ve turned the corner, and we’re cautiously optimistic about the future.”
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