Getting invested in tourism

National tourism marketers believe you have to spend money to make money.
In Rhode Island, however, they’ve found you have to be able to first spend money to spend more on marketing.
A perennial also-ran in state tourism-promotion spending, Rhode Island this past summer commissioned a study to build the case to lawmakers for bolstering its annual Tourism Division budget.
In August, the R.I. Commerce Corporation, which runs the Tourism Division, hired the Radcliffe Co. and Nichols Tourism Group to perform a detailed study of the state’s marketing efforts and the return in economic growth that would come from expanding them.
“We want to give a compelling argument that this is the time to reinvest in tourism in Rhode Island and use national numbers,” Commerce RI Executive Director Marcel Valois told the board of directors this past summer. “The conversation around investing in tourism comes up all the time. I get asked about it in the General Assembly. We have disinvested in tourism marketing.”
The study, which cost $30,000, was finished at the end of October and Commerce RI officials are now using its findings, which have not yet been publicly released, to put together a budget request for 2016.
This isn’t the first time the state has hired Radcliffe and Nichols to put Rhode Island tourism marketing under a microscope.
In 2010, the firms were commissioned to write a strategic state tourism plan.
Their remedy, increasing the state’s profile through a boost in marketing the state outside its borders, however, proved to be a nonstarter in a series of budgets.
Despite proposals by Gov. Lincoln D. Chafee to increase tourism spending and pay for it by broadening the hotel tax, the budget passed by the General Assembly this year kept the statewide tourism budget at $500,000, half of which pays for a two-person staff. The $250,000 that pays for actual advertising is a decades-old low point and more than an 80 percent cut from tourism spending in 1995.
At least partly as a result, Commerce RI officials say Rhode Island’s tourism spending remains 5 percent below the 2007 peak.
“They didn’t say Rhode Island had a bad reputation, but [rather] no image in the consumer market,” state Tourism Director Mark Brodeur said in a phone interview last month about the previous Radcliffe and Nichols study. “This is the next step, justifying what that budget is going to be.” Asked in August how large an investment in tourism marketing would likely be required to generate a worthwhile economic return, Valois told the Commerce Corporation board his “gut feeling” was somewhere in the neighborhood of $3 million to $5 million annually.
Brodeur said that was about average for New England promotion while nationally states average about $11 million in annual tourism spending.
In addition to making a “science-based” recommendation on how much Rhode Island should invest in marketing over the next three fiscal years, the RFP calls for the study to project how much the state should expect back in new tax revenue and job creation.
“For every state tourism dollar that is being spent, we should be able to measure what is happening and how it is happening,” Brodeur told the Commerce RI board.
Of course, the state Tourism Division is not the only organization that uses tax revenue to entice travelers to visit.
Rhode Island also has seven regional tourism councils, which receive a cut of local hotel-tax receipts to promote their respective corners of the state while working together to advance the collective image.
In commissioning the Radcliffe and Nichols study, Valois said he had no intention of restructuring the current system and wanted to boost state marketing on top of the work being done regionally.
“This is not looking at restructuring state tourism,” Valois said. “We are talking about rebranding the whole of Rhode Island and using the new brand to market outside our borders.”
Myrna George, president and CEO of the South County Tourism Council, said the regional councils had contributed their data to the study and supported its goal of boosting statewide promotion without cutting into regional efforts.
“The state division is the umbrella under which we could all benefit,” George said. “[Cutting the budget] is biting our nose to spite our face. We are the boots on the ground that inspire people to come to Rhode Island.” •

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