Tourism Can Lead the Way to Recovery – If Budgets are Intact

Published 4/8/20
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COVID-19 has brought the tourism industry to a complete halt in a way that could never have been planned for or expected. In the past, we have seen significant impacts to travel and tourism based on world events, including 9/11 and the Great Recession, and localized impacts due to natural disasters such as hurricanes, fires, earthquakes and tornadoes — but nothing on the scale we are seeing today.

In each of these past situations, we learned lessons about community recovery, federal assistance and future emergency planning. Tourism professionals are reviewing, discussing and analyzing these past lessons to plan for how to recover from the impact of this pandemic. But the key resources we cannot overlook are the case studies about defunding or dramatic funding decreases to DMOs and state tourism offices.

Longwoods International’s white paper on the loss of tourism funding in Colorado showed that the state lost 30% of its market share in just two years of no funding — which represented a loss of $1.4 billion in tourism revenue annually.The struggle to return to previous market-share levels are as pertinent now as ever. Communities will be looking for short-term solutions that support businesses and residents without considering the future impact of these short-term decisions.

While there are certainly going to be short-term funding needs to address in our communities, DMOs must be ready to defend their funding as more than fluffy and unnecessary marketing programs, but as community-management programs that generate real economic growth and development. Taking Destinations International’s lead, it is time to make the case that ROI numbers underpin many of our communities’ shared values, including services, community programming and needs, and local work for local people.

In U.S. Travel’s “Power of Promotion Toolkit,” there are many examples and case studies demonstrating that investment in travel promotion creates a cycle of economic benefit — and now, more than ever, that is going to be essential for community recovery. DMOs spend a fraction of the marketing dollars of large brands such as Proctor & Gamble or Verizon,2 but the impact on communities is far more substantial. Since the Great Recession, the travel industry created nearly 1 million jobs and expanded 18 percent faster than the rest of the economy.3 The rate of job creation was nearly double the rate of manufacturing jobs.4

In 2015, the travel industry generated $67 billion in state and local tax revenue. It would take an additional $1,200 more in taxes per family every year5 to maintain the same levels of essential services. Travel promotion brings visitors into your community who spend money on local attractions, hotels, shopping, dining and transportation. This spending creates additional tax revenue for communities to help provide public services for local people. These additional tax dollars can support community infrastructure, open space, arts and culture, and – above all – locally created jobs.

As DMOs balance the current restrictions with protection of their tourism promotion budgets and the immediate needs of their communities, we need to maintain a long view of the value of destination marketing programs and the significant impact the return of visitor spending will have on the local economy. This spending will start with residents returning to their local restaurants, shops and other businesses, and will be followed by residents traveling around their state, moving spending from their local communities to neighboring cities and towns, and finally the ability to travel more broadly. Travel can be the leading edge of this recovery as it was for the Great Recession — but only if DMOs can maintain their budgets to promote their communities. U.S. Travel is currently pushing Congress to include DMOs that are designated as 501c(6) to be included in the distribution of relief funding through the CARES Act. Access to these critical funds is an essential step for many DMOs to weather the current economic challenges.

Studies show that Americans are still expecting to travel this year but anticipate their timing to change.6 This demonstrates that Americans view travel as a right, and encouraging people to visit, stay the night and explore will be the way communities generate needed revenue to recover from these economic impacts.

1“What Happens When you Stop Marketing?” The Rise and Fall of Colorado Tourism, Web, Dr. Bill Siegel, Longwoods International
2Advertising Age and U.S. Travel Association, 2015
3U.S. Department of Labor and U.S. Travel Association, 2016
4U.S. Travel Association and Bureau of Labor Statistics, 2016
5U.S. Travel Association, 2016
6Destination Analysts, Coronavirus’ Impact on American Travel – Week of April 6 Insights

More Resources

Find clear, timely answers to questions about COVID-19 and travel and tourism in Miles Partnerships' Clarity in a Time of Crisis resource center, including essential insights and recommendations for DMOs and tourism organizations.