Brainstorms to hike tourism promotion dollars

Tourism industry leaders early next year will propose a new way to fund Wisconsin’s Department of Tourism, and it is based on a Missouri model that sets aside a percentage of tourism-generated tax revenue for tourism promotion.

Bill Otto, who chairs the Governor’s Conference on Tourism, has called it a “sustainable tourism funding model that stays out of the legislative process.”

Chet Gerlach, on behalf of the Wisconsin Tourism Federation, says the goal is “a permanent, reliable and hopefully growing funding source to promote tourism.” The federation represents the state’s innkeepers, attractions, restaurants, campgrounds, golf courses and convention/visitors bureaus.

Wisconsin’s tourism promotion budget is $10.9 million, down from $11.6 million last year. Its overall budget is $15 million (compared to $15.9 million last year), the 11th highest in the nation, according to Travel Industry Association statistics.

Despite the effects of Sept. 11 events, tourists spent about $11.4 billion in Wisconsin in 2001, about 3 percent more than in 2000. It is the state’s second largest industry, behind manufacturing and ahead of agriculture.

“The more we promote tourism, the more people will come to Wisconsin and spend money,” Gerlach says. “And that’s more (sales, lodging) taxes collected for the state.”

As an entity “which is revenue-producing versus revenue-taking,” Otto believes state tourism funding “should be legislated, not appropriated.”

The tourism industry is braced for more budget cuts, in light of the state’s $2.5 billion to $4 billion deficit. A change in the way tourism is funded could head off the impact of budget cuts.

Gerlach says the federation’s proposal to legislators will mirror a funding system that Missouri has had since 1994, one that allows the Division of Tourism to obtain up to $3 million annually in new revenue. Its tourism budget has increased from $6 million in 1993 to $14.8 million in 1999.

The present budget of $16.1 million earns Missouri a No. 10 ranking. nationwide, says the TIA.

The allocation is based on a formula that evaluates sales taxes generated by 17 types of tourist activities.

“The plan was based on the conservative assumption that tax revenue generated by traveler-serving business will grow by at least 3 percent per year – considered ‘normal’ growth,” a Missouri tourism report states.

“The Division of Tourism would receive half of any increase in tax revenue above that 3 percent level.”

The plan also phases out state funding from general revenue, initially at a rate of 10 percent per year. The funding change has required no new taxes.

The Wisconsin Tourism Federation’s last big push for legislation resulted in a change to start the school year no earlier than Sept. 1. “A lot of people tried to paint us as anti-education,” Gerlach notes, and that is partly why the federation is working with school superintendents on this new effort.

Gerlach says a goal would be to use an undetermined percent of the new tourism revenue that is collected “for educational purposes.”

“This is one way to grow revenue, but it will be difficult because of the state budget deficit,” he says, acknowledging that the proposal will require Gov. James Doyle and legislators “to take a leap of faith.”

So it’s a hot potato? “Certainly,” says Otto, “but if we do our homework correctly and provide good logic,” changes can occur.

“Tourism is no longer an unquestionable ‘public good’ requiring little or no justification,” the Travel and Tourism Research Association concluded this year, noting the movement toward a private-sector business model for tourism organizations

“Today CVBs (convention and visitors bureaus), state agencies and university programs must be creative in developing funding methods and securing new funding sources.”

TIA researchers predict travel spending won’t return to 2000 levels until sometime in 2004. Business travel is especially depressed, forecasted to fall 4.3 percent this year. The decline was 3 percent in 2001.

Despite the spirals, the TIA also says the average state’s budget for tourism is expected to increase 2 percent from last year to this year.

Otto concludes that, “as a whole,” Wisconsin has benefited from the effects of a weakened economy and the aftermath of Sept. 11, 2001.
“People want to be safe, feel safe and not go far from home,” he said during an event for tourism leaders in Madison this fall. Businesses that attract tourists “Up North, in Door County and the Wisconsin Dells did well this summer.”
With the exception of Madison, though, “we’ve seen lodging occupancy declines in the state’s major cities.” In the Fox Valley, Otto said the decline has been in the double-digits.
As president and CEO of Marcus Hotels and Resorts, Milwaukee, Otto said a part of his job involves “looking for new hotels,” and he has noticed “a lot of deferred maintenance.” He considers that regretful.
“You know the first places where you cut costs – one desk clerk instead of two, or maybe cutting the lawn only half as often,” Otto told his colleagues. “But you have to take care of your assets.”
He encouraged lodging proprietors to “find a reason to add value.”
Noting that it’s commonplace this fall for a meeting planner to book a $125 room for $69-79, Otto advised his colleagues to “make sure your product is exceptional, then not be afraid to charge for it.”
On an entirely different topic, Funjet this week added a second chartered flight to San Antonio, Texas, for the Dec. 28 Alamo Bowl football game that pits Wisconsin against Colorado.
Most travel agencies that offer Alamo Bowl packages are working through Funjet. It’s $799 for airfare, double occupancy lodging, tailgate party admission, a game ticket, T-shirt and souvenir.
Air only is $479; airfare and a game ticket is $529. The new flight leaves at 5 p.m. Dec. 26 and returns at 9 p.m. Dec. 29.
Want to put together your own itinerary? The lowest online Orbitz and Expedia airfare, for the same dates and with one stop, from the Twin Cities is $401; from Madison, it’s $380; from Milwaukee, it’s $404.
Dave Wade, executive vice president of Funjet, says the company added a second charter because it had a waiting list of about 50 people early this week. It handles up to 200 passengers per plane.
These Funjet reservations can only be booked through a travel agent.