Tourism funding frustration grows

The fiscal 2018 budget finally signed into law by Gov. Gina M. Raimondo Aug. 3 again shifts tourism funding, and some regional council directors are not happy.

A year ago, funding from Rhode Island’s 5 percent hotel tax to the state’s six regional tourism councils was bumped up, from 42 percent to 47 percent of the total collected for all regions save Providence and Warwick. The new budget, however, reverses that move, shifting the difference to R.I. Commerce Corp. to support statewide tourism marketing.

Bob Billington, Blackstone Valley Tourism Council president, said the cut will hit his region, including Pawtucket, Central Falls and Woonsocket, hard. In 2016, local hotels were closed for renovation and the cut back to 42 percent means he won’t make up revenue lost last year.

Louise Bishop, South County Tourism Council executive director, said international marketing is now off the table.

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Evan Smith, Discover Newport CEO and president, said moving funding from the councils to the state was “illogical.” He said he would cut trade show and advertising budgets before laying off staff.

The shift in tourism funding began in the weeks after the unveiling of Commerce’s much criticized “Cooler & Warmer” marketing campaign in April 2016. Rep. Lauren H. Carson, D-Newport, successfully lobbied then for a restoration of hotel-tax funding for regional councils to pre-Jan. 1, 2016, levels. Carson, who chairs a House tourism study commission, explained the move was designed to keep the industry “stable” during Commerce’s tourism leadership restructuring.

But that change wasn’t intended to be permanent, she said. The new budget goes back to the January to June 2016 levels of 42 percent of the hotel-tax revenue generated from their respective communities to four of the councils.

The Providence Warwick Convention & Visitors Bureau is a special case, with the allocation of hotel tax in Providence following a difficult and more complex formula. What is simple, however, is the fact that the PWCVB, which used to receive 7 percent of all hotel tax revenue in the state, will now receive 5 percent.

The Warwick Department of Tourism, Culture & Development also follows a different allocation formula, falling to 28 percent of the tax collected in the city from 31 percent, with the difference going to Commerce.

According to the regional groups, Discover Newport lost more than $300,000; the PWCVB lost $250,000; South County lost $138,000; the Warwick tourism office lost $75,000; the Blackstone council lost about $40,000 and the Block Island Tourism Council about $35,000.

Commerce, meanwhile, saw its percentage of statewide hotel-tax revenue rise from 21 percent to 28 percent of hotel tax collected in all regions aside from Providence and Warwick. A Commerce spokesman declined to estimate how much additional funding the agency might receive. The fiscal 2018 budget includes $3.15 million earmarked for state tourism marketing.

Lara Salamano, Commerce’s chief marketing officer, in a statement said the latest switch in the funding formula “stands to benefit all of the tourism regions.

“A rising tide lifts all boats,” she said, noting Commerce will use the additional funding to promote the state in new markets.