If, as the Connecticut Tourism Coalition maintains, every dollar invested in tourism marketing returns at least $3 in tax revenue, why not provide more funds to it?
“For the past several years, tourism has had very unreliable funding,” said CTC Founder and President Stephen Tagliatela, who is also managing partner of the Saybrook Point Inn in Old Saybrook.
“(Connecticut Office of Tourism Director) Randy Fiveash needs a strategic plan, which he can never have until June or July,” due to the wrangling over the state budget that has taken place over each of the past few years, Tagliatela said. “You’ve already lost the season then. And it’s no fault of his – it’s politically motivated.”
Formed last year, the CTC now has 115 members and is growing, Tagliatela said, noting that many stakeholders not necessarily directly involved with tourism – including lawyers, doctors, construction companies and farmers – have joined the group. “It’s much broader than the attractions and hotels,” he said. “We have a lot of different professionals representing the whole supply chain.”
Board members include the Connecticut Marines Trade Association and Connecticut Restaurant Association, while other members include the Bridgeport Regional Business Council, The Business Council of Fairfield County and the Central Connecticut Chamber of Commerce. “We are working all corners of the state,” Tagliatela said.
According to the Office of Tourism’s latest economic impact study, tourism contributed $14.7 billion to the state’s bottom line in 2015, a 4.6 percent increase since the last study in 2013. In addition, tourism generated $1.7 billion in tax revenues, including $910 million in state and local taxes, in 2015.
The bureau has also reported that hotel tax revenues have grown 3.2 percent on a compound annual growth rate basis over the past four years to total $117.8 million in 2016.
While state legislators are aware of the value that tourism brings, securing additional funds remains a significant problem in the era of chronic budgetary problems. However, the CTC has found a friend in state Sen. Paul Formica, who last year formed the bipartisan Tourism Caucus. The coalition met with the Republican from East Lyme and other legislators in Hartford on April 24 on what the CTC dubbed “Tourism Advocacy Day,” seeking to restore 3 percent of the total taxable lodging revenue to promote tourism.
That 3 percent had been added to the 12 percent occupancy tax in 2010, but since 2011 has gone into the General Fund. The coalition estimates the amount to be between $15 million to $18 million.
On May 4, Formica joined Republican lawmakers in presenting a state budget proposal that would create a new marketing, culture and tourism account. The account would be funded by dedicating 1.5 percent of the hotel occupancy tax to tourism needs. Instead of relying on the General Fund to distribute tourism dollars, the account would create a stable fund for tourism needs and award funding on a competitive basis.
Under the proposal, an advisory council made up of tourism experts, representatives from each tourism district in the state, local chambers of commerce and other community members would work with the Department of Economic and Community Development to distribute funding to individual tourism sites and develop strategies to increase tourism.
“In spite of all the stuff going on in Connecticut right now, tourism has consistently been a bright spot,” Formica told the Business Journal. “It’s just a piece of the puzzle in solving our financial situation, but it’s an important piece.”
“I think people on both sides of the aisle will support this,” he said.
“Tourism is one of the bright spots in the state of Connecticut,” state Sen. Scott Frantz said.
However, while calling Formica’s proposal “definitely a solution worth considering,” the Republican senator – whose district includes Greenwich, New Canaan and Stamford – questioned whether it would succeed. “We are facing such a dire set of fiscal circumstances that I don’t know if any program will be funded anywhere near where it was in the past,” he said. “Tourism is caught in that as well.”
“Tourism is a really important priority of the DECD,” said Tim Sullivan, deputy commissioner of the Department of Economic and Community Development.
Noting that Gov. Dannel Malloy’s budget would increase tourism funding from 2016’s $6.4 million to $8.3 million this year, Sullivan also expressed doubt as to whether the CTC’s $15 million was a realistic goal.
Tagliatela maintained that time lost on the question equals money lost.
“We’re losing out to competition from our neighboring states,” he said. “New York has announced $55 million for fiscal 2017, Maine is at $13 million and Massachusetts is at $11 million for fiscal ’16. They’re luring a lot of people out of Connecticut to enjoy their states instead.”
For further proof of tourism’s value, Tagliatela pointed to Colorado, which in 1992 completely eliminated funding for tourism promotion. “They went from a budget of $12 million annually to basically zero, and the results were disastrous,” he said. Though the state eventually restored funding for tourism, it took Colorado several years to recover, he said.
Several students representing the likes of Manchester Community College and Southern Connecticut State University were also present at the April 24 meeting with the Tourism Caucus.
“They’re concerned about their future, what kind of jobs will be available for them after they graduate,” Tagliatela said. “Connecticut has the fastest departure rate of college graduates. There’s a big brain drain going on.”
The state’s tourism industry took another hit in 2016, when nearly $1.2 million in funds earmarked for Connecticut’s three regional tourism districts was cut. As a result, the Western Connecticut Convention and Visitors Bureau in Litchfield laid off its four employees and sharply cut back its promotional outreach.
“We support many of the same basic concepts that comprise the Connecticut Tourism Coalition legislative platform,” said Dan Bolognani, board chairman of the Litchfield bureau, which does not belong to the coalition. “More than 80,000 people in Connecticut work in the tourism industry and lodging tax alone contributes nearly $115 million to Connecticut’s General Fund to support other essential programs.
“In addition to supporting robust financial support for tourism, we also support the tried and true system of a two-tier system that exists in virtually every other state: a statewide office of tourism that works seamlessly with regional tourism bureaus,” he said. “These regional tourism districts make the sale by answering specific questions, providing details, defining authentic experiences and assisting consumers, attractions and businesses at a level which is impossible to achieve at the centralized state level.
“Regional tourism districts and central state tourism is a partnership, an investment and the gold standard of tourism marketing nationwide,” Bolognani said.