Tourism Cuts Hit West

Judi Erickson and Lisa Jennings Western states have cut nearly $10 million in spending on travel and tourism development this year, according to an industry report. In the 2002-03 fiscal year, which for most states ends this month, Western states spent an estimated $187.9 million for tourism office bud

By: Judi Erickson and Lisa Jennings

Western states have cut nearly $10 million in spending on travel and tourism development this year, according to an industry report.

In the 2002-03 fiscal year, which for most states ends this month, Western states spent an estimated $187.9 million for tourism office budgets, down nearly 5 percent from last year, according to the Travel Industry Association of America’s annual survey of U.S. state and territory tourism offices.

The reduced spending overall in the West mirrored nationwide cuts of 8 percent, to an estimated $554.2 million, according to the survey.

The spending cuts were largely a result of the sluggish economy and the downturn intravel-generated revenue, such as lodging taxes. While leisure travel has remained strong over the past year, travelers are spending less. And the number of corporate and incoming international travelers is down.

While the agent community is not directly affected, the drop in promotional dollars and incentive programs for tourism can have a ripple effect through the travel industry.

“It will not help the recovery,” said Bill Maloney, executive vice president and COO of ASTA. “Travel agents are looking for a robust recovery and doing whatever they can to stimulate traffic.”

“Tour operators are spending money and foreign destinations are spending money,” he added. “But we would love to see more from the states.”

Patty Hubbard, vice president of TIA’s national councils, said, “Like every other sector of the travel and tourism industry, state tourism offices are feeling the economic pinch.”

“The challenge to all states is that competition remains fierce. Each of them competes with one another not to mention other countries and other discretionary activities for visitors’ dollars.”

Still, Western states may be faring better than many across the nation. Of 14 Western states, eight reported budget increases.

Montana’s tourism spending grew an estimated 35 percent to $8.2 million, followed by Alaska with a 26 percent increase to $10.5 million, according to the survey.

Among the Western states hardest hit were Oregon, with a drop of 23 percent to $3.1 million, and Hawaii, down 21 percent to $56 million, the survey found. But nationally Hawaii remained the leader in tourism office spending, followed by Illinois with a budget of $49.7 million, down nearly 9 percent from last year.

The survey includes responses from 45 states; not included are Connecticut, New Jersey, New York, Ohio, and Tennessee and the five U.S. territories. Some states revised their budgets after the survey, so actual funding totals may have changed, the association said.

Public sector funds are the primary source of all tourism office funding, and indeed the sole source for 29 of the 45 responding states.

Of the $554.2 million combined total budget, public sector funds represent nearly 95 percent, or $524.2 million.

State Tourism Office Budgets, 14 Western States

(in millions of dollars)

2001-02 2002-03 % change (actual) (projected)

Alaska $8.39 $10.55 25.8

Arizona 10.33 9.00 -12.9

California 16.70 15.70 -6.0

Colorado 7.68 7.69 0.1

Hawaii 70.81 55.98 -21.0

Idaho 5.21 5.51 5.8

Montana 6.09 8.24 35.2

Nevada 9.10 10.14 11.5

New Mexico 14.18 14.34 1.1

Oregon 4.09 3.15 -23.1

Texas 27.43 31.09 13.3

Utah 7.28 7.32 0.6

Washington 3.86 3.52 -8.8

Wyoming 6.40 5.65 -11.7

Total $197.55 $187.87 -4.9

Source: 2002-03 Travel Industry Association of America survey

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