Montana Innkeepers Association

1
Montana Innkeepers Association

• The purpose of the Montana Innkeepers Association
  is to enhance the quality of life of all
  Montanans through the promotion of the
  hospitality industry and to foster sustainable
  tourism.

2
State of the State

• Cuts in Medicaid
• Cuts in ChiPs
• Failed School Bond Issues
• Cuts in our University System
• Increased Student Tuition
• Fire-fighting budget shortfalls
• Debate over Tax Reform
• And more

3
Cuts in needed government spending, coupled with
increased taxes, deliver a balanced budget today.
But, they solve few problems facing our state
and its citizens tomorrow.
4
Economic Development

• Global demand cannot be driven by State Government

5
One Major exception

• TOURISM PROMOTION

6
Source CEIC
Includes the Tourism Industry
Source Montana Dept of Commerce
7
Impact on Montana - Proven
Source ITRR University of Montana
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Non-resident Expenditures
Source ITRR University of Montana
9
Workforce and Jobs, 2001

• 41,900 jobs
• 8 of all jobs

Source ITRR University of Montana
10
Industry Output, 2001

• 2.61 billion in direct, indirect and induced
  economic impact.

Source ITRR University of Montana
11
Tax Facts, 2001

• Nonresident income added 130 million to
  Montanas tax revenues.
• 20.1 of total state and local taxes collected in
  Montana was the result of nonresident
  expenditures.

Source ITRR University of Montana
12
Impact on Montana - Tested

• Bed Tax passed in 1987

1987 July through December collections only
Source ITRR University of Montana
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Visitors to Montana
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Impact on Montana - Tested
Source Travel Montana Department of Commerce
15
Travel MontanaAdvertising Budgets
Source Montana Promotion Division
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Impact on Montana

• Tourism is discovered as key economic growth
  component.
• Bed Tax are increasingly being diverted into
  non-promotional efforts.

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Distribution

• The original legislation provided for
  advertising, promotion, research, Dept. of
  Revenue admin, the local Tourism Regions and
  CVBs and the Historical Society.

18
FY2003/04Diversions added to original allocation
of Bed Tax statute
Source Montana Promotion Division
19
About 22 of the total Bed Tax collections are
being used to advertise the state of Montana.
About 31 if Region and CVB advertising is
included.
20
Advertising Expenditure Comparison
With 2004 deviations
Without 2004 deviations
21
Colorado Example

• In 1993, Colorado was the 1 tourism destination
  in the nation, and elected to do away with the
  statutory funding for tourism promotion.
• They believed that Colorado sells itself, so no
  promotional efforts were necessary.

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Colorado Example

• In one year they dropped to 17th place.
• In two years they had lost 1.7 billion from
  state revenue.
• Private business tried to step in, but could not
  match the monetary contribution of the state.

23
Colorado Example

• In 2003, the Colorado legislature appropriated 9
  million from their general fund just for tourism
  promotion of the state.
• 1 in promotion generates 210 in tourism
  spending.
• 1 in promotion generates 12.75 in state and
  local taxes.

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Montana Economic Development - Affordable

• No General Fund only Bed Tax funds have been
  used.
• Self-sustaining, grows the economy and grows the
  General Fund.
• In 2002, an investment of 6.6 million returned
• 130 million is tax revenues.
• 563 million in personal revenue.
• 41,900 jobs.
• 2.61 billion in total industry output.

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Investment in Montana

• If an additional 3 million were to be invested,
  experience and math indicate the potential for
  more nonresident visitors could increase the
  amount of state taxes by 43.3 million to 170
  million, and an additional 13,900 jobs could be
  created.

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Impact on Montana - Acceptable

• Creates Jobs.
• Creates Tax Revenues.
• Creates Economic Growth and Personal Income.
• Creates Opportunities for Diversification.

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To Grow the Industry

• Bed Tax must be maintained and grown.
• Tourism Industry must have recognition as key
  component of economy.
• Continue to increase numbers of new visitors
• 2002 75 of non-resident visitors were repeat.
• Montana must mine new markets and demographics.

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Current Market Map
Winter
Spring
Summer
Fall
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Prospective Market Map
Winter
Spring
Summer
Fall
Potential New Markets as identified by the
5-year Strategic Plan.
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What can you do?

• Support the Bed Tax and the Tourism Industry.
• Explore the possibility of dedicating General
  Fund monies for economic development through
  additional tourism promotion.
• Appropriate the new, additional 3 Bed Tax
  portion of the New Sales Use Tax exclusively
  toward advertising our state.

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Tourism is an industry that benefits all Montana
residents in a variety of ways.

• Lets recognize the value of tourism to our way
  of life.
• Will you join our effort of economic, cultural,
  and recreational development in Montana?
• Support economic development through Tourism.