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State News: August 2009


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States Depend on Tourism Dollars

In many states, travel powers the economy. And the U.S. Travel Association believes tourism can help states recover from the recession.
“Travel is part of the solution; it’s not just part of the problem that’s out there,” said Geoff Freeman, senior vice president of the U.S. Travel Association.
“When people travel, they don’t just get on the planes, stay at a hotel and rent the car,” he said. “They go to the dry cleaners to get the wrinkles out of their clothes. They go to the drug store to get the things they forgot. They go shopping. They go to restaurants.”
In fact, the U.S. Travel Association estimates travel generates about $740 billion annually in the United States through direct spending by resident and international travelers. The organization estimates that travel and tourism accounted for 2.7 percent of the nation’s gross domestic product in 2007, the most recent figures available.
“It’s the traveler who permeates the American economy,” said Freeman. “Their spending permeates the economy.”
Freeman expects this to be a tough year for the travel industry. And it’s not just the economy.
“Throw on to that the growing perspective that travel is somehow unpatriotic, especially in the business world, as companies are pulling back,” Freeman said. “Some of them took taxpayer assistance through the TARP (Troubled Asset Relief Program). There is a lot of unfortunate rhetoric discouraging businesses from engaging in meetings and events (if they took assistance),” he said.
Also adding to this “perfect storm” of trouble for travel is the recent health scare with spreading cases of swine flu.
“You can’t look at this in a vacuum. They’re all working together to depress travel,” said Freeman.
The U.S. Travel Association is lobbying the federal government to follow the lead of states and cities in promoting tourism. The association, Freeman said, would like to see Congress pass a travel promotion program.
“You can’t fix the American economy if people aren’t on the road,” he said. “You can’t fix the economy if people aren’t staying in the hotels, if they’re not out there getting business deals done.”
That goes for states too. Tourists bring new money into a state economy, Freeman said, and they’re not dependent on state systems like health care and education.
“The same is true when Arkansas attracts that traveler from Missouri, or when California attracts those visitors from Colorado. That is new money that otherwise would not have been spent in their state,” he said.

States Respond to Changing Times

And that’s new money many states need, especially in this economic downturn.
“Following the Gulf War and Sept. 11, there was a substantial decline in tourism,” Uchiyama of Hawaii said. “As a result, we’ve seen how vulnerable we can be to events such as these.”
But states—and the tourism industry—need to recognize that times have changed, Edman of Minnesota said.
“The message I give to my industry is we have to think differently,” he said. “If you think it’s going to be like it was in the last three to four years, it’s not and we’re bound to fail.
“We’re trying to tweak our message a little bit to respond to what’s going on with the consumer,” he said.
Minnesota is also working with neighboring states in the Great Lakes region to promote the area to international visitors. Minnesota also participates in marketing the Mississippi River Country.
“Internationally, people don’t necessarily know political geographic boundaries of states, but they know regions,” he said.
Michigan, too, is finding success responding to changing times. Traffic to the state’s Web site is up more than 16 percent over the same time period last year. And hits from people in such states as Kentucky, Missouri, North Carolina and Tennessee are up more than 100 percent over visitors from the same states last year. It may be awhile before Michigan reaps the rewards from those visits, but Borgstrom expects those rewards to come this year.
“The nice thing about spending money on tourism, the return on investment is usually within the same calendar year,” Borgstrom said. “If tourism numbers are up that means more dollars are coming into our state. That would be a win-win for everyone.”
Hawaii is still searching for that glimmer of hope. But Uchiyama from the state’s tourism authority expects past experiences will help Hawaii deal with the current crisis.
“One of the lessons learned is that we need to be prepared for these situations,” he said. “That means having a plan, having partnerships from both within and outside of the industry to implement those plans successfully and lastly, being flexible and able to adapt to the new world we now live in.”
For their part, state legislators in the most recent session have approved an additional $5 million in marketing promotion for tourism, and enabled the Hawaii Tourism Authority to receive an additional $10 million annually over the next few years for marketing.
Oshiro, the Hawaii state representative, said the legislature is also encouraging the tourism agency to couple marketing with Hawaii’s film industry. “Maybe through that synergy of film and movie industry in Hawaii, we can at the same time promote and market Hawaii’s natural beauty, its people, its culture, along with it being a great place to make movies and film.”
Oshiro said the tourism agency is also looking at “experiential marketing,” a road show of sorts where musicians, hula dancers and food purveyors take the real Hawaiian experience to cities on the West coast.
Hawaiian legislators, along with industry leaders, are also encouraging President Obama and congressional leaders to promote travel within America.
“We should visit our sister states and experience the joys and pleasures they have to offer,” Oshiro said. “It’s important that we invest in ourselves. It’s a good clean industry where we can share what we each have to offer and spend time within our own country supporting our neighbors and local businesses.”
—Mary Branham is managing editor for State News magazine.
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