Editorial: Tourism and its return on investment

The state of New York recently released a report detailing how the state’s investment in tourism is paying big dividends. Rough numbers show that since 2011 the state invested $135 million in tourism expenses, and saw a return on investment (ROI) of about 25 percent — moving the total tourism revenue from about $80 billion to $105 billion.
Now, a $25 billion increase on an investment of $135 million is doing well, but it still represents an annual increase of about 5 percent (based on the five years from 2011 to 2016). That’s good, but not beyond expectation.
Which is the point. Modest spending on a continual basis creates sustainable results.
It also translates to real job growth. During that same period, tourism-related jobs increased to a record 780,000 — an increase of 21 percent.
Nor was that increase pegged solely around the Big Apple. Our neighbor Clinton County (the Plattsburgh area and what they have dubbed the Northern Adirondack Coast) has seen a similar, though slightly smaller, jump in tourism dollars and job growth.
New York’s example casts doubt on the wisdom of cuts in spending to Vermont’s tourism budget. In the 10 years from 2005 to 2015, spending on tourism in the state dropped from $4,928,637 to 3,110,149, according to a January 2015 Tourism Funding Study conducted by the Vermont Department of Commerce. The good news is that revenues generated by the tourism industry held firm through much of that time (except for a dip in 2008 during the worst part of the recession) with modest growth.
And state spending on tourism increased slightly in 2014 and 2015, despite tough budget years in which revenue deficits have made such investments difficult. Nonetheless, in a state struggling to find sectors of the economy that provide dependable and sustainable growth, and which can benefit every corner of the state, it would seem that the return on investment is well worth it.
The opposite is also true. In that same state tourism study, it reviewed what happened in Colorado when it cut its tourism funding in 1993 from $12 million the year prior to zero that year. The impact was felt immediately. Over the next two years, Colorado’s domestic market share plummeted 30 percent, dropping $1.4 billion in tourism revenue the first year and then $2 billion each year over the next few years. In the summer resort sector, the state dropped from its previous number one ranking in the nation to 17th.
It wasn’t until the year 2000 that the industry convinced the Colorado Legislature to reinstate tourism funding with a modest $5 million budget, while also implementing strict tracking metrics, which showed an ROI of 12-1; that is for every dollar of state spending, $12 in tourism revenue was generated. In 2006, state spending on tourism jumped to $19 million. In 2007, the state recorded its highest number of visitors at 28 million generating $9.8 billion in tourism-related revenue.
It’s reasonable to wonder how much Vermont’s tourism-based revenue might have grown if its related spending had grown at a modest rate instead of seeing substantial cuts.
The same principle could be applied to Middlebury, Bristol, Vergennes or Brandon. Is there a coordinated effort to promote tourism in Addison County; and how might we do it more effectively?
In Addison County, the natural assets we have to promote include: the wilderness areas along the spine of the Green Mountains; some of the best road biking in all of Vermont in western Addison County, as well as four of Vermont’s best know gap rides (Appalachian, Lincoln, Middlebury and Brandon); two of Vermont’s premier road rides (Kelly Brush and the Grand Fondo); Middlebury’s Trail Around Middlebury; the Moosalamoo National Recreational Area with its expanding mountain bike trails, great hiking, camping (plus snowmobiling and skiing in the winter); the county’s state parks (from Branbury on Lake Dunmore, to Button Bay and Kingsland Bay on Lake Champlain); hiking on Deerleap and Snake Mountain; the Dead Creek Wildlife Management Area in Addison; Rikert Nordic Center and the Middlebury College Snow Bowl; and many historical spots of interest as well as museums, art galleries and, of course, shopping, beverage tours, lodging and food, and events like the recently held Middlebury New Filmmakers Festival, Middlebury’s Opera Company, Festival on-the-Green, Ciderfest, Bristol’s Better L8 and Never Car Show and many others.
If the rule of thumb is anywhere close to a return on investment of 12 to 1, then perhaps focusing on tourism growth is one sure way to attract economic growth — both in terms of dollars generated and jobs created. If economic growth is the objective, it’s money (and effort) well spent.
Angelo S. Lynn

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