Vail Daily letter: Colorado’s tourism efforts an economic driver
Two weeks ago in this space we reviewed Colorado’s “opportunity gap.” As a refresher and for those who missed it, Colorado in 2014 had the second largest “opportunity gap” of any “aspirational destination” in the continental U.S. This means that of the 25 percent of people in 2013 who said they wanted to visit Colorado, only 9 percent actually visited. A Strategic Marketing & Research Inc. analysis provides an outline to Colorado’s Legislature showing that an increase of $10.7 million to the state tourism office budget would result in $1.2 billion in incremental spending from new visitors.
Investing in tourism from a state level will help our state reach our goal to become one of the top destinations for domestic and international travelers. Research shows we’re already a top aspirational destination and that people want to visit here, yet the statistics also show that we’re only reaching a fraction of our possible audience with our limited marketing budget.
Building on our brand recognition, our strength as an aspirational destination and the success of the “Come to Life” campaign make this the right time to re-invest in state level tourism efforts to reduce the opportunity gap. Our state tourism efforts are already showing great performance results. Recent successes include:
• Record overall visitation: Total trips in 2013 jumped to 64.6 million, a 7.3 percent increase over 2012 and the highest total ever reported.
• Record overnight trips: Surpassing 30 million for the first time, overnight trips in 2013 were up 5 percent over 2012 and totaled 31 million.
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• Record visitor spending: Surpassing $17 billion for the first time, visitor spending totaled $17.3 billion, up 5 percent over 2012.
• Stays in commercial lodging critical: Visitors staying in commercial lodging generated about 60 percent of all spending.
This visitation and tourism success resulted in positive economic impacts to our state. While we inherently understand this in the mountain region where we depend upon tourism, the economic impacts of tourism benefit our entire state. Economic benefits of tourism include:
• Highest tax revenues ever: A total of $976 million in state and local taxes created in 2013 from visitor spending, up 6.3 percent over 2012.
• Saves every Colorado resident approximately $199 in taxes annually.
• Saves a family of four about $796 in taxes annually.
• Most industry related and earnings recorded: More than 150,700 jobs supported in 2013, up 3.8 percent.
• Industry earnings (wages and salaries): Totaled $4.7 billion were generated by 2013 visitor spending, up 6.8 percent over 2012.
Sources: Longwoods International, Visitor Study, 2013; Dean Runyan Associates, Colorado Travel Impacts, 2013.
Tourism and outdoor recreation have been spotlighted as one of 14 key industry segments in the Colorado Blueprint, our state economic development plan. While other segments such as aerospace, technology, energy and defense capture the most attention and press, tourism and outdoor recreation are woven through the fabric of Colorado’s culture and help define who we are as a state.
Tourism — unlike many other industry segments — provides a tangible return to the state for every dollar invested. SMARI research shows that every dollar invested in state tourism marketing returned $344 in visitor spending, a $344 to $1 return on investment. This equates to approximately a $25 to $1 return in state and local taxes for each marketing dollar invested. Any good business mind would tell you that is an investment worth making.
Government, like households or businesses, can raise revenues or cut expenses in order to increase their bottom line. Government typically increase tax rates to grow their revenue (an option not available to the standard household or business) and governments are not well known for reducing expenses as the expectations from citizens don’t often support lower level of services.
Fortunately, there is a better answer to growing revenue in Colorado’s general fund: Increase investment in state tourism funding. Tourism marketing is one of the few areas outside of new or increased taxes or fees where government can increase an expense line item in order to grow the revenue line item.
Investing in tourism promotion through the Colorado Tourism Office is among the best ways to grow revenue in Colorado’s general fund and support small businesses throughout the state. Investing in tourism marketing and the Colorado Tourism Office returns more money to the general fund, thus allowing our state government to address other areas of focus, from roads and bridges to early childhood development programs and higher education.
Chris Romer is the president and CEO of the Vail Valley Partnership.