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OPPORTUNITIES LOST
NEVER ADEQUATELY FUNDED, THE TRAVEL AND TOURISM INDUSTRY SUFFERS A BLOW FROM SHORTSIGHTED COUNTY BUDGET CUTS

Which industry has the greatest likelihood of bringing new jobs and taxes to Western New York?

A) Manufacturing

B) Steel

C) Hospitality

If you answered C, go to the head of the class, ahead of county legislators who have drastically cut local tourism promotion programs. Ahead of state legislators and the governor, who have not increased state promotion funding in years.

Despite tourism's ranking as the state's No. 2 industry, New York State tourism promotion has had a long history of chronic underfunding. The state has appropriated $11 million yearly for support of the I Love New York campaign for the past few years. At the same time, neighboring Pennsylvania is spending $25 million on tourism promotion.

Erie County tourism promotion was hit hard by the county budget crisis, going from $3.5 million to $1.7 million. The draconian cuts come at the time of the year when families traditionally start planning their summer vacations.

They also come at a time when travel experts are predicting that 2005 will be a very good year. Last year the U.S. tourism industry grew 6.7 percent. The U.S. Commerce Department said tourism sales in 2004 rose to $960.7 billion from $900 billion in 2003. It marked the third straight increase in sales of travel-related goods and services.

Travel expenditures, in turn, generated more than 7.2 million jobs, with over $158 billion in payroll income for Americans, as well as $94.7 billion in tax revenue for federal, state and local governments.

"Consumers are telling us they have more time and money to take pleasure trips, which bodes well as we near the busy summer season," said Suzanne Cook, Ph.D., senior vice president of research for the Travel Industry Association of America.

Domestic leisure travel has slowly but steadily increased over the years, despite the aftermath of Sept. 11, the lagging economy, the war in Iraq and high gas prices.

"The bright spot has remained domestic leisure travel," Cook said. "While some recent shifts in consumer preferences, such as a desire to travel closer to home, remain valid, Americans are now returning to their more traditional habits. For example, some of the increases in air travel are attributable to domestic leisure trips."

California ranked No. 1 overall in terms of total spending by domestic and international travelers, earning over $68 billion in expenditures. Rounding out the top three were Florida ($54.5 billion) and New York ($34.4 billion). However, half of New York's tourism spending comes in New York City. These rankings are based on 2002 data, the most current year for which comparable data is available.

"This is evidence of what an economic powerhouse the travel and tourism industry continues to be in the U.S., despite the challenges faced by the industry in the past few years," said William S. Norman, president and CEO of the Travel Industry Association of America. "These data show that travel is a valuable commodity in each and every state in the nation."

The New York State Hospitality & Tourism Association, a 1,400-member organization that represents 75 percent of all hotels in the state as well as parks and attractions, has been lobbying hard for a dedicated funding formula for the past four years. So far, the legislation has not passed, although there is still hope for this year.

Both the State Senate and Assembly tourism committees have approved measures that would set aside a percentage of tax dollars generated by the casino industry for future marketing efforts.

"Our neighboring states are outspending and out-hustling us by a big margin," explained Dan Murphy, president of the State Hospitality and Tourism Association, a 118-year-old organization.

"We need to prompt the traveler to come and experience all the wonders of New York State. We need to advertise more and support public relations and marketing efforts in a much greater manner than we are doing now."

Murphy said it could easily be demonstrated that greater spending on tourism promotion immediately brings travelers who spend money and generate more jobs and taxes. He calls it basic common sense.

"It has been penny-wise and pound-foolish to continue to do what we have been doing, when all around us states are passing us by," he said. "New York City has been doing very well, which helps the state's numbers, but if you take the city's hotel occupancy rates out of the mix, the rest of the state's numbers have been flat or down."

Murphy operated a Sheraton hotel in Saratoga Springs for 11 years and knows the economics of hotels. "When you only have 44 percent occupancy, as they do in Niagara Falls," he said, "you can't make money, you can't reinvest in your property, and you find yourself in a vicious downward spiral."

David Hart, chairman of the board of the Buffalo Niagara Convention and Visitors Bureau, also knows the economic reality of operating hotels. As president of Hart Hotels, he operates six hotels in Erie County -- Holiday Inns and a Hampton Inn in Amherst.

"The massive cutback in funding Erie County's tourism promotion efforts is a really dumb idea," he said. "We are fighting a battle with our hands tied behind our backs. Our sports programs and meetings that have come to our area didn't just happen. We had to fight for them.

"This is a very competitive industry. Without the staff and funding for marketing, these events will go elsewhere, taking the money and taxes with them."

In 2004 there were 2 million hotel room nights in Erie County, with each room averaging 1.5 people per room.

"These 3 million people generated $125 million in room revenue and additional spending of $225 million for restaurants, shopping and event tickets," Hart said. "The local payroll for tourism jobs exceeds $100 million. In addition, the visitors generated $30 million in sales tax.

"People in this country love to travel, and they will travel somewhere, but if we aren't in the promotion game, they will go elsewhere," he added.

Richard Geiger, president of the Buffalo Niagara Convention and Visitors Bureau, saw his yearly budget cut from $3.5 million to $1.7 million as a result of the Erie County budget crisis. The bureau lost 10 staffers, and remaining staff, including Geiger, had their pay cut by 10 percent.

"This was a drastic reduction to an already low budget compared to our competitors," Geiger said. "Pittsburgh has an $.8.9 million budget for our work; Cleveland has $7.3 million, Columbus, Ohio, has $6 million and Milwaukee has a $5.7 million budget, so even before our cutbacks, we had a very low budget."

Geiger said it is important for everyone to realize that the funding for his organization is not on the backs of Erie County taxpayers but instead is paid for by travelers through the bed tax, a tax on hotel rooms.

"Last year we brought in 228 conventions and meetings with 105,000 attendees generating 107,000 room nights," he said. "We also brought in 256 group tours with 12,000 people and 10,000 room nights. This is real money coming to our community and adds to our job and tax base."

Neighboring Rochester has not suffered any cutbacks in funding for the Greater Rochester Visitors Association Inc. In fact, funding is guaranteed for two years to assist planning efforts.

"We consider our funding of $3.16 million to be an adequate level," explained Gregory Marshall, vice president and director of marketing for the Rochester organization. "We bring a significant return to our community.

"It is certainly a fair question to ask how we can show value for our efforts," he said. "Of the 1.6 million visitors to the Rochester area in 2004, we estimate that 300,000 came as a direct result of our efforts."

This year is a big one for Rochester promotion. The Visitor Association will be hosting a meeting of the Freelance Council of the Society of American Travel Writers for five days during the popular mid-May Lilac Festival. In addition, writers and photographers will be able to take pre- and post-meeting trips to the Finger Lakes, Adirondacks, Thousand Islands, Hudson Valley and Niagara Falls.

Buffalo is noticeably absent. Originally, Erie County and Niagara Falls had planned to team up to host a two-day trip to Buffalo and Niagara Falls for the group after the Rochester meeting. Faced with county cutbacks, Buffalo pulled out of hosting and Niagara Falls stepped forward to handle both days.

Niagara Falls also will be hosting the Travel Media Showcase in September. This meeting brings representatives from 150 of the country's attractions, states and cities together with about 100 travel writers from throughout the country and some foreign countries.

"We are excited about hosting this meeting," said David Rosenwasser, president and CEO of the Niagara Tourism & Convention Corp. "We are also happy we were able to step up to the plate for the Freelance Council post trip.

"We feel badly about what has happened in Erie County. It is not good news for any of us. We had been working on marketing the entire region, since Buffalo has many attractions that we don't have here in Niagara County."

He also laments the lack of respect for tourism among elected officials.

"The industry is made up of many small businesses, and the industry has not stood up on its legs and demanded more support," he added. "We are suffering from inadequate funding here in Niagara Falls and on a state level. As a destination in transition, we need to reintroduce the world to Niagara Falls and Niagara County. We are on our way up, but we need to tell everyone what is happening here."

Travel and tourism is big business in New York
In 2003 New York welcomed more than 55 million travelers, according to the New York State Hospitality & Tourism Association. While here they spent money, lots of it -- $35.7 billion. In detail, they spent:

$9.9 billion in restaurants

$8 billion in malls, shops and boutiques

$6 billion in theaters, nightclubs, sports arenas, stadiums and racetracks

$5.5 billion in the state's hotels

$2.6 billion at gas stations, railroad and bus stations and airports

$2 billion in the mom-and-pop shops that sells papers, cigarettes and trinkets
The spending generated:

$4 billion in state and local sales and occupancy taxes

327,000 jobs for New Yorkers throughout the state

These workers earned more than $9.96 billion in salaries and an estimated $2 billion in benefits

It is estimated that the industry also supported another 350,000 jobs in the thousands of banking, trucking, construction, maintenance, linen, furniture, wholesale and other businesses that service New York's travel and tourism industry.

Deborah Williams is a freelance writer who specializes in travel issues.