Funding for state tourism departments in the Western U.S. is
holding steady for the current fiscal year, even as many
legislatures deal with significant budget deficits that will strain
Early projections by the Travel Industry Association, which
tracks the tourism budgets of all 50 states, shows that Western
states are bucking a nationwide trend of tourism budget cuts.
Patty Hubbard, the association’s vice president of national
councils, said that, nationally, “It’s hard to generalize, but it
looks as if half are down by varying degrees.”
But Western states including Idaho, Montana, Hawaii, Washington,
Texas, Wyoming, Nevada, Alaska and Arizona have approved budgets
that remain close to those of the previous year, most with slight
increases. The fiscal year runs from July 1 through June 30.
Only a couple of Western states expect to see their tourism
budgets cut for the current fiscal year, although some states
haven’t finalized their budgets.
The news is positive for a hard-hit travel industry. In the last
fiscal year, Western states cut nearly $10 million in spending on
tourism and travel development.
The ripple effect of promotional dollars and incentive programs
for tourism has widespread effects across the travel industry,
although the direct effects on the agent community can be
For many tourist-dependent Western states, promotion of their
brand images is viewed as a proven method to increase or maintain
market share, as well as a way to significantly increase state and
local tax revenues.
Colorado, for one, is banking on tourism to help ease its budget
deficit of more than $800 million.
It is the only Western state to substantially increase funding
for tourism marketing and advertising, with a one-time $9 million
allocation that will allow the state to air its first national TV
In fiscal 2002, Colorado reported a $32 million boost in local
taxes from a $2.5 million advertising campaign. The state hopes to
replicate that success and reap even more revenues this year.
"Tourism is Colorado's second-largest industry," said Gayle
Brody, deputy director of the state's Office of Economic
Development and International Trade. "With the $9 million, we
anticipate that we will get a dramatic increase in revenues."
In some cases, budgets can reflect regional competition for
As a result of Colorado’s increase, New Mexico legislators
decided to add $1.5 million to the state’s tourism budget as a
one-time appropriation to prevent the Rocky Mountain State from
stealing market share.
“We want to stay competitive in the marketplace,” said Jon
Hendry, travel and marketing director with the New Mexico
Department of Tourism.
New Mexico, subsequently, is one of the few Western states
without a deficit.
Oregon is also hoping to increase tourism funding, though the
state’s tourism budget had not been approved late last week.
In past years, the state had one of the lowest tourism budgets
in the nation, at roughly $3 million; this fiscal year it could add
$2 million if a lodging tax is approved.
Though state tourism budgets that rely on lodging taxes remained
relatively stable last fiscal year, budgets that depend on
appropriations have been the most at risk.
This vulnerability ultimately prevents a state from being able
to make a long-term marketing strategy, according to Hubbard.
“They never know how much they are going to have,” said Hubbard.
“To have a marketing plan that is effective there needs to be a
long-term vision. If you don’t know what the budget is going to be,
you can’t make a commitment.”
Hubbard also contends that states that increase their marketing
budget one year will lose the investment if they don’t maintain the
same funding in following years.
“If you don’t market, you don’t get tourists,” she said. “It’s a
very competitive market out there, not just between states, but
also globally. You have to stay in the market and have a consistent
message out there. “Otherwise, it is very easy to lose market
Officials in Utah and California fear that is what will happen
with cuts in their tourism budgets.
Utah’s budget has been cut by roughly 6 percent. In years
following the Olympics, Utah approved $4 million in supplemental
funding to promote tourism while the exposure from the Games was
still fresh in the hearts and minds of the public.
The appropriation for the next year was gradually chipped away
during a series of special sessions dealing with the state’s $117
million deficit. The budget that was eventually approved fell far
short of the $20 million originally requested by the Utah Division
of Travel Development, leaving the state with $4 million to promote
Dean Reeder, the director of travel development, believes the
state has lost an opportunity to further capitalize on Olympic
“The proposal to raise the budget by a factor of 15 would have
returned $80 million to the state,” he said. “That’s what’s
disappointing. The window of opportunity is closing and will be
totally closed when the torch goes to the Greek Islands. It’s a
California legislators were grappling with a multi-billion
dollar tax cut last week, but the state tourism budget will be cut
by at least $2 million, said Terri Taylor-Solorio, president of the
California Travel Industry Association.
The California Travel and Tourism Commission, the state’s
tourism marketing arm, received $7.3 million from the state last
year, in addition to roughly $8 million from an industry
This year, in the frenzy of dealing with such a large overall
state deficit, spending allocated for tourism has varied as the
state budget makes its way through the legislative process.
Regardless, some cuts are expected.
“The bottom line is if advertising revenue goes down, revenues
will drop and market share will drop,” said Jennifer Jasper, deputy
director of the California Travel and Tourism Commission. “Without
our branded message, it will definitely impact business.”