Sustainable Tourism Funding Making the Case
Decision-Makers Skeptical of Value of Marketing
“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” - John Wanamaker, Philadelphia merchant, c. 1900
“Just give me the bottom line”
“We gave you a $10 million marketing budget How much did I get back?”
ROI Now the Number One Issue in Marketing
Accountability is Especially Critical in the Public Sector

Budget cuts

Many politicians do not believe in value of marketing
The Godfather Syndrome
You are a special interest group asking for favors
Politicians read polls:
Tourism marketing not a public priority
The Rise and Fall of Colorado Tourism
The Colorado Story
An iconic case study for the financial value of marketing.
Documented by 20 years of awardwinning research.
Longwoods Travel USA®
Custom Advertising ROI studies
The Rise of Colorado Tourism
1986 Vacation Planning Guide
1986 Vacation Planning Guide
1986 Vacation Planning Guide
1986 Vacation Planning Guide
Longwoods Research Findings
Colorado had a weak image in 1986 as a summer vacation destination:
Beautiful
But an empty mountain wilderness
Devoid of cities, entertainment, culture, heritage
Lacking amenities, good hotels, fine dining
Not enough to see and do
Communications were reinforcing this negative stereotype
Colorado’s Image: “Mountains , Mountains , and More Mountains ”
Recommended Positioning:
“Mountains and Much More �
Recommended Positioning
The “Much More” based on combination of top consumer hot buttons and Colorado product strengths, as determined from research
Close the gap between the perception and reality of Colorado
The Campaign

Major national campaign initiated to tell consumers about the "much more" that Colorado offers 
fine hotels, resorts, and restaurants

many attractions across the state, including museums, galleries, parks, sports and recreation, rodeos, shopping, Western culture and heritage
Building the Colorado Brand
Colorado’s image improves dramatically:
Becomes “Mountains and Much More”
Market share up 50% from 1987 to 1993.
Over $1 Billion in additional spending.
Building the Colorado Brand

Changes from regional drive destination to national fly-in travel generator.

Moves from 14th place nationally as a summer resort destination in 1987, to 1 st position in 1993.
The Fall of Colorado Tourism
The Nemesis: Douglas Bruce
Anti-tax activist
In 1992, voters approve Taxpayer’s Bill of Rights (TABOR) Amendment:
No new taxes or tax increases without referendum
The Problem
Colorado Tourism Board was funded by small but broad tax on tourism related expenditures
20 cents on every $100 dollars
Sunset clause required renewal in 1993
Now required voter approval in referendum
Framed as “new tax,” not renewal
Tourism Industry Mounts TV Advertising Campaign
Talked about themselves:
How big we are
Importance of tourism to the state’s economy
Failed to address voters’ issue:
TAX!!!
Bruce’s Response: 1.Tourists Will Come Anyway
“Rocky Mountains were there long before the Colorado Tourism Board ─ They’ll still be there after”
Bruce’s Response: 2. Leave It to the Private Sector
“If the fat cat ski resorts can afford to spend a million dollars on propaganda advertising ─ ”
Left Brain versus Right Brain

Industry took leftbrain, rational approach

Opposition hit emotional hot buttons
Beware the rational response to the emotional desire!
Disaster Strikes
Bruce’s message resonated with voters on eve of vote
Colorado voters shot down tourism tax in 1993 referendum with 55% opposed
Disaster Strikes

Colorado becomes only state without an official tourism function

Funding cut to zero!
Headline in Newspaper Travel Section:
“Colorado: The Phones are Still Ringing, But Nobody’s Answering Them”
Colorado’s Market Share of Overnight Pleasure Trips
3 2.5
Percent
2
37%
1.5 1 0.5 0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Source: Longwoods TRAVEL USA®
Colorado’s Rank as a Summer Resort Destination
Source: Longwoods TRAVEL USA®
Impact of Loss of Market Share
Over $2 billion annually in lost revenue!
Impact of 30% Loss of Market Share
For Colorado, it was like owning a Ferrari, but not having any money for gasoline
Private-Sector Funding Model Fails
Colorado Travel & Tourism Authority established by legislature to market state with private funds through voluntary self-assessment.
Could not raise sustainable funding.
Free ridership prevailed
Private-Sector Funding Model Fails
Could not create a unified message.
Self interest vs. promoting the state
Internal fights with Colorado Tourism Board over staff, funding, jurisdiction.
Rising from the Ashes
Restoring Tourism Funding
Longwoods hired by two state tourism organizations to prepare White Paper to build the case for permanent funding of state tourism.
Distributed to the industry, legislators, and the media
CTTA and CTO agree to disband.
Restoring Tourism Funding
In 2000 the Colorado Tourism Office is established by the legislature with an initial budget of $5 million.
Awareness of Colorado’s Ad Campaign
Total Aware = 72.1 Million
National Market 53.0 Million (74%)
*Winter ’03/’04 and Summer ‘04
Regional Market 19.1 Million (26%)
Impact of Advertising Campaign on Overall Image
Percent Who Strongly Agree
100
75
50 83
76
75 67
64
62
25
0
2002
2003 Aware*
*Saw at least one ad.
2004 Unaware
Intend to Visit Colorado
50
Percent
40 30 20 27
25
23
10 14
0
Aware* Unaware
2002 *Saw at least one ad.
12
12
Aware* Unaware
2003
Aware* Unaware
2004
The Bottom Line
2002
2003
2004
$ 2.5 M
$ 5.1 M
$4.9 M
Revenue per Ad Dollar
$205
$203
$292
Taxes Returned per Ad Dollar Invested*
$12.74
$12.63
$18.10
Advertising expenditures
A Happy Ending
2006: Owens signs bill raising state's promo budget to $19 million
By Joanne Kelley, Rocky Mountain News June 6, 2006
Gov. Bill Owens signed a bill giving the state's tourism office a fourfold increase in advertising dollars, ranking Colorado among the top 10 states in terms of how much it can spend to entice visitors.
2008: Tourism hits record heights
By Joanne Kelley, Rocky Mountain News June 16, 2008 Last year proved to be a milestone for the state as it hosted an all-time high of 28 million overnight visitors, a 4 percent increase and the fourth straight annual record, according to Toronto-based Longwoods International, which surveys U.S. travelers each year. Spending rose to a record $9.8 billion.
Lessons Learned from the Colorado Case
Lessons Learned
1. Revenues are down! Isn’t everyone else cutting?
Ohio Governor Plans Tourism Budget Increase of 10.5%
Ohio Gov. Ted Strickland’s budget increases tourism funding
Despite high unemployment, financial pressures
Lessons Learned
2. Won’t they come anyway?
“Won’t They Come Anyway?”
“Did you campaign in the last election?”
“Wouldn’t they have voted for you anyway?”
Lessons Learned
3. Why not leave it to the private sector?
Which Nevada organization do you represent?
What state do you live in?
“We must all hang together, or assuredly we shall all hang separately.�
Lessons Learned
4. You don’t get to play the marketing game unless you justify yourself.
Be Accountable
Credible, conservative research is key to proving that tourism funding is a wise investment, not a cost to taxpayers.
Lessons Learned
5. DON”T BE THE NEXT COLORADO!!!
The Rise and Fall of Colorado Tourism