The Niagara Tourism and Convention Corp. had a successful year in 2010, but it can't promise similar results this year, the tourism agency's president and CEO told the County Legislature last week.
The reason, John Percy said, is that the Seneca Nation of Indians has cut off payments of slot machine revenue in a dispute with the state.
Part of the City of Niagara Falls' share of the casino slot machine profits is supposed to be funneled to the NTCC, but that money hasn't been forthcoming because of the Senecas' fight with the state.
Percy said his agency is missing out on more than $1 million, or about 35 percent of its annual budget, because of the casino fight.
"It is pinching us and crippling us," Percy told the Legislature in his annual presentation last week. "We've had to lay off three staffers. All of us took pay reductions."
That included Percy himself, said Mike Murphy, owner of Lockport Locks and Erie Canal Cruises and a member of the NTCC board.
"A lot of guys wouldn't have done it. They're doing a great job," Murphy said.
In an interview, Percy added, "We've had to reduce our marketing and advertising efforts. We had to cut back on trade shows and travel."
In 2010, the NTCC spent more than $2 million on marketing and more than $500,000 on direct advertising, Percy said.
The Senecas are no longer making the slot payments because they claim the state violated the casino compact by allowing the installation of slot machines at horse-racing tracks.
Also, the Senecas and the state have a long-running legal battle over Albany's efforts to tax cigarette sales to non-Indians at reservation stores.
Percy said the last casino cash the NTCC received was in early 2010, which was the final payment on 2008 slot profits. Since then, nothing.
The cutbacks came after a strong 2010 on the Falls tourism front. Percy said the city collected more than $1.5 million in "bed tax," the 5 percent levy on hotel and motel bills, which he said was a record amount.
The reasons were that hotel occupancy rose 6.4 percent in the Falls from 2009 to 2010, according to Smith Travel Research, and that Falls hotels were able to raise room rates.
The average daily rate in the Falls rose 3.4 percent in 2010, and revenue per available room rose 10 percent, according to the Smith firm.
The NTCC receives 80 percent of the Falls' bed tax. It also receives 75 percent of the City of Lockport's 4 percent bed tax and 95 percent of the county's 4 percent tax on hotels outside Lockport and the Falls.