The Joint Budget Committee on Friday finalized a plan to give the Colorado Tourism Office $10 million, reversing an initial plan to defund tourism promotion as lawmakers slash more than $3 billion from the state’s COVID-19-ravaged budget.
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The tourism industry rallied last week after committee staff recommended eliminating 87% of the state’s tourism budget. The industry pointed to the 1990s, when Colorado eliminated tourism marketing and the state lost as much as $2 billion a year in visitor spending. On Friday, the beleaguered committee approved about a 47% cut in funding for the tourism office. The proposed budget needs approval from state lawmakers who convene later this month.
“We have to protect the marketing programs that will draw travelers to Colorado next winter and the spring and summer of 2021,” said Colorado Sen. Bob Rankin, a Republican from Glenwood Springs who serves on the committee and fought to restore tourism marketing as a tool to revive rural economies devastated by COVID-19 shutdowns. “We know from experience that we will lose tourism market share if we don’t fund those programs. It’s important that even with our disastrous budget cutting, we remain optimistic for Colorado’s future.”
Cathy Ritter, the director of the Colorado Tourism Office, has spent the last two weeks trumpeting more than 20 years of annual reports showing exponential returns for every dollar invested in tourism advertising and marketing. For the last two years, Colorado tourism has set records, growing at twice the national rate. Travelers to Colorado spent $22.3 billion in 2018, supporting 174,000 workers who earned $6.8 billion. That spending generated $1.4 billion in local and state taxes.
The Colorado Tourism Office spent $6.5 million on marketing last summer and $2.0 million for the 2019-20 winter. Those ads prompted 2.3 million visitors to travel to Colorado. And those travelers spent $3.85 billion, or more than $450 for every dollar invested in the state’s media promotions and “Come to Life” campaign. Those travelers also generated $210 million in state taxes. The return on investment for tourism advertising ranks Colorado among the top 10% of states, Ritter said.
The Colorado Tourism Board meets next week to start planning deep cuts to the budget, which was $18.5 million last fiscal year. Nearly $15 million of that funding came from gaming taxes, but with the state’s casinos closed for more than two months, that revenue stream has evaporated. The JBC’s recommendation directs more than $10 million from the state’s general fund to support the tourism budget.
“Obviously some tough decisions lie ahead,” Ritter said. “Our singular focus in the next year is going to be on supporting activities that have the highest probability of driving immediate recovery for our tourism economies. That is marketing. Marketing will drive our recovery.”
After Joint Budget Committee staff recommended a total blackout on tourism marketing, Ritter had to battle the timeworn notion that Colorado sells itself and ad campaigns are unnecessary. That idea was tested in 1993, when voters declined to support a tourism marketing tax and the state’s tourism promotions went dark. The state’s share of the U.S. vacation market plummeted and it took nearly 20 years for the state to regain its share of American travelers. The collapse of Colorado’s tourism economy made the state a case study for what happens when marketing stops.
“It is a fallacy that Colorado sells itself,” Ritter said. “Colorado is the poster child for demonstrating that investment in tourism promotion is directly related to tourism spending.”
Telluride Town Councilman Tom Watkinson cheered the decision to keep the marketing lights on.
“We went dark in the 90s and we know that it’s a bad idea,” he said. “When everyone opens up to visitors, the market will be flooded with messages and we can’t remove ourselves from that. People will be traveling again and when they do, we need Colorado to be on their minds.”
Watkinson sees his town’s efforts to revive tourism closely aligning with the state’s. He expects more people visiting in their cars. They will want clear policies on how to protect themselves and others. And both Telluride and state are developing those policies with an eye toward safely reviving economies built on visitor spending.
”We are going to ease into it,” Watkinson said. “Health and wellness is also economic. You need to feed your family. You need a job. So the economy is part of our health and wellness. We do not want to do this again, so we are being very careful and we will be doing everything differently. But we are planning for visitors this summer. We need them. Without them we are in real trouble.”