Washington Tourism

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It has been a year since Washington state’s tourism office closed and here is George Sharp, executive director of the Olympia-Lacey-Tumwater Visitor and Convention Bureau, leading a rallying cry: “Heads in beds! Butts in seats! Feet on the street! To make the cash register ring! All right! Give each other high fives.”

Sharp wears a yellow and brown plaid tie and a tan suit. He refuses to use a microphone because his voice booms across the hotel ballroom where 400 Washington business owners and managers are gathered to discuss the future of tourism without the benefit of state-supported marketing.

Sharp hops across the stage, pointing out people in the crowd and shouting each person’s business: Ride the Ducks! Salmon fishing! Skagit Valley Tulip Festival!

The room is electric with energy. But those at the Hilton Hotel in SeaTac on this rainy Thursday in April have heard repeatedly that they are competing with neighboring states and Canadian provinces that have robust tourism budgets to market their assets. Sharp’s voice can carry only so far as figures flit ominously across a projection screen: British Columbia spends $65 million on tourism; Montana, $18 million; Oregon, $10 million; California, $51 million; Alaska, $12 million; Idaho, $7 million.

Washington: $0 million.

Roger Dow, president of the U.S. Travel Association, speaks after Sharp and puts it plainly: “You need to get the word out. Otherwise, Idaho, Montana and California are going to eat your lunch.”

An expensive lunch at that. In Washington, tourism is a $16.1 billion industry that generates $1.1 billion a year in tax revenue.

When the state tourism office closed last summer during a wave of legislative budget cutting, a private group called the Washington Tourism Alliance (WTA) decided to pick up the pieces. It is hosting this summit and its aim is to persuade conference goers to adopt a new business model. Boiled down: Industries that benefit from tourism would pay dues to support promoting the state.

The WTA has a board, a paid executive director, a fiercely enthusiastic base of volunteers, a vision and $400,000 in its bank account. Those things have been enough to keep the lights on.

In the lobby outside the ballroom, Dan Moore, chief outings officer for EverGreen Escapes, explains why he became a WTA board member: “I have a zillion things going on,” he says. “I don’t have the resources to lobby or hire a lobbyist.”

It would be simplistic to say Washington gradually chipped away at its tourism office budget. In truth, the state had trundled along with a relatively paltry $3 million until 2007, when the state swept in an additional $4 million from the hugely successful Washington State Convention Center, which it oversaw.

With the extra money, Washington State Tourism launched a multiyear plan and a $2.25 million website, ExperienceWA.com. But as the state faced its budget crisis, it directed tens of millions of dollars from convention center revenue into other pots, infuriating hoteliers who said the money should be spent on tourism. The hoteliers sued and won. As a result, the convention center “seceded” from the state in 2010 and became its own public facilities district.

That year, with just $1.6 million remaining for tourism funding, Marsha Massey, the former state tourism director, convened an ad hocl committee to study how other states pay for promotion. Some market tourism through their general funds, but that approach wasn’t working for Washington. Oregon markets tourism entirely through a hotel tax. The study group decided that also wouldn’t work for Washington, which already has a high sales tax. (Oregon has none.) The California model stood out. In California, the state collects dues from businesses in 10 industries that benefit from tourism, including rental car agencies, tour companies, retail establishments and restaurants. How much a business pays in dues is based on its total revenue. Equally appealing: The state of California contributes less than $1 million per year to the effort.

As the group studied the options, the 2011 legislative session loomed and lawmakers faced a $5 billion shortfall. There were no sacred cows, Massey says. Besides, she adds, “There was a certain thought [that], ‘Heck, they [tourists] will come anyway.’”

Tom Norwalk, president and CEO of the Seattle Convention & Visitors Bureau, says the budget was so desperate that saving tourism would have meant pinching from schools or police protection. “Tourism is a nice thing but it’s not essential is how some people look at it,” Norwalk says. “It’s seen as fun and a little frivolous. Yet you look at states that are doing it well and it’s viewed as an investment because of the tax dollars that are generated from tourism.”

On June 30 last year, as the state closed its tourism office, Metro buses around Seattle carried billboards with a picture of a grizzly bear accompanied by a single word: “Montana.” Montana Governor Brian Schweitzer says that when he heard the Washington state tourism office was shutting down, his response was simple: “Yippee!”

“It gives us greater advantage,” Schweitzer says. “When Washington was spending money, it had an effect.”

Montana, whose robust tourism promtion budget is generated from a hotel tax, calculates it receives $65 for every dollar it spends on promoting travel in the state, Schweitzer says. For the past three years, Montana’s Office of Tourism has targeted Seattle and Minneapolis, two cities that have direct flights into the state, with its simple campaign. The payoff has been noteworthy: 10 percent of Montana’s tourists come from Washington state.

The reaction in another “competing” state was less gleeful, but also worth noting for its unusual perspective. Karen Ballard, administrator for Idaho State Tourism, says Idaho benefits from “a collective awareness of the Pacific Northwest.”

“It was very hard when we were at the Olympics in Vancouver or (the world travel trade show) in Berlin, and Washington state was not there in a meaningful fashion to help us create a sense of place and a desire to visit,” Ballard says. “You may think it odd that I am defending a competitor’s ability to compete, but a high tide raises all boats.”

Idaho and Montana tourism campaigns, as seen in local magazines, left, and on Seattle buses

Knowing this, Norwalk and Tammy Blount, former president of the Tacoma Regional Convention & Visitor Bureau, helped come up with the structure for the WTA. With others, they formed a board that represented each of the state’s regions, including the native tribes, as well as every facet of tourism.

As CEO of the Seattle Convention and Visitors Bureau, Norwalk was in an interesting position. “We’re a little different in Seattle as a gateway city, a port city,” Norwalk says. “Our bureau is funded quite well and aggressively. We’ve seen growth happening from the standpoint that international air routes have been added.”

Seattle markets itself worldwide, particularly in Asia (Beijing, Tokyo and, soon, South Korea) and in Europe (Frankfurt, London, Paris). But to attract the huge national conventions that draw thousands of participants, Seattle must also market the region. Thirty percent of people coming here for business stay 2.4 extra days for sightseeing, Norwalk notes. Chinese visitors stay an average of 12 days when they visit Seattle, and when they come they tend to spend a lot of money.

Norwalk persuaded Suzanne Fletcher, who had worked in the corporate travel industry for 30 years, to apply for the position of executive director of the WTA. Together with the board, they articulated these goals:

1. Promote the state through cooperative advertising through trade shows.

2. Complete a long-term funding model and get buy-in from state leaders.

3. Get the state Department of Revenue to collect funds and create a collections algorithm.

There were hiccups, as one would expect. ExperienceWA.com, for example, was costing $368,000 a year to maintain. Fletcher assigned a committee to renegotiate the site’s contracts; the alliance has budgeted $150,000 to maintain the website next year. One paid employee now staffs a call center during regular business hours; last year, three employees fielded 10,000 calls in the state’s previous call center.

Fletcher currently works from her home, an airy, minimalist space carefully decorated with Asian art. There is also an original Alexander Calder print that a former boss planned to stow in his garage until Fletcher persuaded him to give it to her. She took a pay cut of nearly 50 percent and now earns $120,000 flat—no benefits. But she says it’s worth it, and when she talks about her volunteers, her eyes fill with tears.

“The trust, the spirit, the attitude, the momentum are light years ahead of where we were,” Fletcher explains. “A year ago, people were scared, negative and in panic mode.”

But there is hope, and even the state seems willing to become involved again. Nick Demerice, director of government affairs at the Washington State Department of Commerce, says the state would be interested in supporting a private-public marketing partnership.

“If the state could figure out a way to fund tourism other than [through] the general fund,” he says, “I think the state would be interested in that conversation.”

Back at the tourism summit, speakers repeat the story of Colorado, where the tourism office went dark in 1993. Al White, the director of that office today, says Colorado had 2.7 percent of the national hotel market in 1993. Within a few years of the office’s closing, that figure dropped to 1.8 percent.

It took seven years for the state to get back the state funding, White says, and it has taken nearly 20 years for Colorado to climb back to a hotel market share of 2.7 percent. “We’re the poster child for what not to do,” he says. White mentions a study that calculated that for every $1 invested, Colorado receives $3.26 in taxes.

Washington commissioned a study that yielded even higher results. But social service agencies have long had similar slogans. For every $1 invested in early education, for example, the state saves $8 in prison costs.

“I think it’s a matter of educating the Legislature,” White says. To the Democrats who worry about funding K-12 education, “You say, ‘You know, I can give you a return. We’ll get that money back in six to 12 months.’” And Republicans, White says, must be told why the government should subsidize private markets.

This argument is not lost on state officials. “This year is the 50th anniversary of the [Seattle] World’s Fair,” Demerice said. “There’s the largest permanent display of [Dale] Chihuly’s glass at the foot of the Space Needle. King Tut is here in Seattle, the last stop before it goes back to its permanent home in Egypt. All these interesting things are happening, but if you don’t have the money to get that message out, people will make other decisions.”

The WTA intends to go to the Legislature next year with a long-term funding idea similar to California’s. The final plan for how it will collect tourism dollars hasn’t been determined, but the goal is immediate: to be ready by the end of this year for a Legislature that has already cut them out of the picture once.

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