By Patrick Anderson
PBN Staff Writer
In the competitive world of state tourism marketing, Rhode Island is struggling more than ever to keep up with its neighbors.
Even as Massachusetts has trimmed its tourism budget since the recession, the Bay State is still spending nearly 20 times as much on tourism promotion as Rhode Island this year.
And to the west, both states are now outspent by Connecticut, which last year embarked on a $15 million marketing campaign that’s become the largest in New England.
Gov. Lincoln D. Chafee has made reviving state-level tourism promotion a priority, but even if his plan to do it by expanding the state lodging tax is approved, Ocean State visitor spending would remain well below pre-recession levels and below all but one other state in the country.
“We compete with our surrounding states who have millions for their budgets and we have done extremely well with what we have,” said Myrna George, president and CEO of the South County Tourism Council, one of seven local tourism boards that works to attract visitors. “But could we do more? Yes we could.”
In fiscal 2012, the R.I. State Tourism Division, which is run by the R.I. Economic Development Corporation, is working with a $330,000 budget, not including the lodging-tax revenue distributed to the regional tourism councils, to promote the state as a whole.
That’s down from $362,890 in fiscal 2011 and less than half of the $685,582 the state spent in fiscal 2008. Approximately $100,000 of the total tourism-division budget pays for Rhode Island’s contribution to Discover New England, the regional organization that markets the six New England states to Europe.
That doesn’t leave much in the way of resources for Rhode Island-specific marketing, especially in expensive national advertising.
“In my 25-year tenure, all I have seen is the state [tourism] budget reduced and I am concerned about it,” said Evan Smith, president and CEO of Discover Newport, which markets Newport and Bristol County to visitors. “Right now they are handcuffed. The local efforts are moving forward, but it leaves a big void. We are losing ground to national and regional competitors.”
According to the U.S. Travel Association, an industry group that tracks public tourism spending in an annual survey, Rhode Island tourism spending peaked in fiscal 1995, when the state spent $3.5 million on tourism promotion. That number was down to $1.6 million in 2005 and $714,000 in fiscal 2010, the last year that the state provided figures to the survey. (The U.S. Travel figures represent state tourism spending, including private contributions.) Maine, New York and the U.S. Virgin Islands also did not respond this year.
In 2010 Connecticut all but eliminated its statewide tourism marketing efforts before coming back with $15 million last summer.
The last time Rhode Island attempted to take the pulse of its tourism industry, a November 2010 study by HIS Global Insight showed visitor spending in Rhode Island had dropped 19 percent between 2007 and the bottom of the recession in 2009.
According to a U.S. Travel Association annual survey released this winter, only Washington state, which recently cut its state spending to $5,000, has fewer state dollars budgeted for tourism promotion than Rhode Island.
The Radcliffe Co. and Nichols Tourism Group, consultants hired by the state to help improve Rhode Island’s tourism marketing, estimate that the state lost 14 percent of its domestic-visitor market share during the same three-year period.
Nichols Tourism Group President Mitch Nichols said with states across the country building back their tourism operations after the recession, Rhode Island now ranks close to the bottom on promotional spending by almost every measure.
“What we found in Rhode Island is that even though you have many attractive products, so do your regional competitors and they have larger budgets,” Nichols said. “They will likely continue to attract new market share at Rhode Island’s expense.”
While international travelers largely see New England as a unit, Nichols said Rhode Island losses visitors in the regional market from New York, Boston and the rest of the Northeast because other destinations market themselves more.
“As most businesses across the country recognize, marketing stimulates demand and the additional marketing resources utilized by competitors allows them to draw market share away from Rhode Island,” said the EDC in a statement on tourism. “If the state would have maintained its 2007 market-share levels, it would have generated an additional $375 million in spending, 6,800 additional jobs and $87 million in new tax revenue.”
Much of what Rhode Island has lost in tourist spending in recent years is connected to the recession and may have happened with or without a stronger marketing campaign. Occupancy rates at Rhode Island hotels have already started to pick up this year even with no new state spending.
Still, Chafee has proposed reversing the slide in tourism-promotion spending by extending the state’s 13 percent lodging tax to vacation cottage rentals and bed & breakfasts and dedicating the new proceeds to visitor marketing.
Under the current hotel-tax distribution formula, $252,398 in additional funding would go to the EDC’s state tourism division while $649,023 in new funds would go to local tourism councils, according to state revenue-department estimates.
Of course, expanding the hotel tax is controversial, especially charging private vacation-cottage rentals, and may not pass the legislature. Without that new revenue stream, the tourism division’s budget would remain at $330,000 for next year.
With a limited budget for statewide promotion, Rhode Island Tourism Director Mark Brodeur said he has focused more in recent years on targeting specific interest groups, travel-press coverage and social media.
At the South County Tourism Council, George said if officials continue to cut tourism funding, they may ultimately realize it is shortsighted.
“Stopping a good marketing campaign to save money is like stopping a good watch to save time,” George said. “It doesn’t work.”