The Tourism Value Proposition
by Deborah Garry
Partner, BBG&G Advertising & Public Relations
On February 8-10th, individuals, vendors, and media representatives involved in the tourism industry converged on Albany for a 3-day conference of that name. Put on by the New York State Travel and Vacation Association, The Tourism Value Proposition Conference called its participants to “celebrate” tourism as an industry that can’t be outsourced, “recalibrate” to do more with less, and “invigorate” ourselves by making new friends and contacts. It also left many of us with a decided sense of the need for a critical call to action, because it seems as if the one entity least understanding Tourism’s “value proposition” is our very own New York State.
Myopia
In spite of the fact that Tourism is the number 1 industry in the state, the state is essentially suspending its Matching Funds program – informing county tourism offices that the funds budgeted for last April (2009) will not be forthcoming after all. For tourism offices, that means their advertising and marketing budgets have just been cut in half for 2010.
Three key welcome centers are also slated to be closed – in Beekman, Binghamton, and the Adirondack Park Center. These centers often serve as a gateway and first impression of New York for visitors. They were on the chopping block last year, and were restored. We need to fight for them again.
Why Tourism Matters to New York State
As many of you know, the definition of a “value proposition” (in marketing) is a statement that summarizes why a consumer should buy a particular product or service. In this case, Tourism’s “value proposition” for all of us resides in the fact that it is the number one industry in the state, generating $7 billion annually in tax benefits. Not to mention the number of jobs it sustains (684,000 in 2008), or the widespread beneficial effect it has on businesses that may not consider themselves, at first glance, to be tourism related – like the local video store, gas station, or grocer. Tourism often provides the margin that allows these ancillary businesses to stay in business.
Tourism provides immediate ROI
Tourism, as an industry, gives an immediate cash return on investment. Spend a dollar today on advertising or promotion, and you’ll probably see that dollar come back to you tomorrow – exponentially.
In 2008, the state provided roughly $4.1 million in Matching Funds to its counties, who came up with their own matching $4.1 million to generate $8.2 million. That money was spent on advertising and marketing the Empire State locally, regionally, nationally, and internationally
In return, we received:
• $53 BILLION in direct sales, spent by visitors
• $7 BILLION in state and local taxes
• $7.3 BILLION in Federal taxes
Tourism is an Engine for Economic Development
That $53 billion in visitor spending supports a corresponding number of jobs, wages, taxes, and Gross Domestic Product (GDP) within each sector.
- 473,000 jobs were directly sustained by visitors to New York State in 2008, generating a total associated income of $26 billion
- In all, 684,400 jobs were sustained by tourism, representing 6.2% of all employment in N.Y.S.
When you add up the GDP generated by direct, indirect, and induced impact, tourism generates $45 BILLION in GDP. That is 4.1 % of the state economy.
That kind of return on the dollar is of immediate and critical value to all of us. We need to work to ensure that Matching Funds are restored as a line item on the state’s cash allocation list.
Tourism’s Value Impact in the Hudson Valley
In the Hudson Valley alone (Westchester, Dutchess, Orange, Putnam, Rockland, Ulster, and Columbia Counties), Tourism is a $3.56 billion industry, supporting over 60,000 jobs – about 6% of all employment. Over $444 million in state and local taxes were generated in 2008. The state’s investment? About $300,000 in Matching Funds in the region.
Mary Kay Vrba, Director of Dutchess County Tourism, estimates that the fate of over 4,500 businesses are directly tied to tourism. That does not count the innumerable businesses that experience an indirect or induced impact from tourism.
Tourism Enhances Quality of Life
For those many of us who were NOT born and bred in the Hudson Valley, why did we come here? For the slower pace and scenic beauty, the sense of something different; for a better place to raise our kids, enjoy the outdoors, and yet have access to parks and culture and the arts. Those are also the reasons why we stay.
Those tangibles and intangibles are called Quality of Life, and are created in large part by the tourism industry. The reasons why people choose to visit the Hudson Valley are also the reasons why people live in the Valley. And why corporations choose to move their facilities and their work force here.
Tourism not only generates immediate economic development, but drives long-term growth by creating a working and living environment appealing to manufacturing, research, alternative energy, and other sought-after industries as well.
A Necessary Fight
The Assembly and Senate representatives at the Tourism Conference assured us they are fighting to restore the cash allocations for Matching Funds, keep the welcome centers open, and forestall the closure of certain state parks.
The key words are “cash allocations”. Although Matching Funds appeared on last April’s budget, tourism offices will not receive any actual cash allocation – creating a nightmare for them this year. The same scenario could easily occur again. Albany may write Matching Funds into this April’s budget, but that’s no guarantee that cash will actually be allocated down the road.
Call, Write, Make a Fuss!
We need to remind our representatives and governor of the incredible return-on-investment that Tourism provides our state – in employment, tax revenue, economic development, and Quality of Life.
They need to hear from us as individuals, in hand-written letters, emails, and personal calls, what Tourism means to us as residents, business owners, and employees. They need to understand Tourism’s Value Proposition.
Your voice is important. Please use it.
