We have been hearing a lot in the news lately about how governments are struggling to balance their budgets. During these hard times, public officials are sifting through their budgets with a fine tooth comb, trying to trim any unnecessary expenses (called “gravy” in Toronto) in order to keep their city or country in good fiscal health.
This is an extremely difficult task, and anyone who finds themselves in this position will undoubtedly face scrutiny as they cut public services that will certainly impact someone negatively along the way. Public officials must make very difficult decisions as to which parts of the budget stay, and which parts must go.
One area that is often looked upon as a place to get rid of some gravy is tourism marketing. To the outsider, spending money on tourism marketing is unnecessary, speculative, and difficult to measure its impact on a community, region, or country.
But hold on a second… maybe spending money on tourism marketing pays for itself….
Recently, the U.S. Travel Association published a report that examined the public costs and benefits associated with destination marketing campaigns. They found that these campaigns actually generate more tax revenue than they cost by increasing visitation numbers and spending.
An example of this was seen in the Pure Michigan marketing campaign that came to Canada two years ago. This campaign stimulated a dramatic increase in tourism spending and also generated $138 million in new tax revenue for the State of Michigan. Not bad, considering they spent less than one third of that on the marketing campaign.
Evidence like this not only points out the effectiveness of destination marketing campaigns, but also suggests slashing tourism marketing budgets during hard times can actually make the economic situation worse. If we cut tourism budgets, it is likely that less people will visit, people will spend less money, and tourism operators and local businesses are left struggling.