Tourism tax examined

Tourism leaders point to Colorado, which lost an estimated $2.4B in visitation following tax defeat
Editor's note: This is part of an ongoing series regarding the 1 percent Tourism Community Enhancement District sales tax and the efforts underway to renew the tax in April.

Local tourism authorities are hoping voters will approve the renewal of a 1 percent TCED sales tax in April to avoid putting Branson in marketing restraints, much like what happened in Colorado at a state level in the early 1990s.

In 1993, Colorado became the only state to eliminate its tourism marketing, cutting the $12 million budget to zero. The voter decision resulted in more than $2 billion in lost tourism, according to marketing research company Longwoods International.

Branson/Lakes Area Chamber of Commerce and Convention & Visitors Bureau President Ross Summers said a reduction in tourism marketing funds in Branson could be equally devastating.

'I think Colorado is a cautionary tale,' he said. 'It graphically illustrates what happens when you don't market an area — in this case an entire state. It also illustrates that marketing your destination works.'

According to Longwoods International, Colorado was long thought of as an outdoors-lovers destination, but not much else beyond mountain scenery.

In the late 1980s, a 0.2 percent tax was extended into the early 1990s to change that perception, and to showcase the state's attractions, restaurants, et cetera.

'While Colorado ranked No. 1 among U.S. states in the ski resort category, it ranked only 14th in the summer resort segment,' Longwoods International Chairman and CEO Bill Siegel wrote in a report. 'Upscale resort communities like Aspen and Vail were world-renowned among skiers, but suffered for business after the snow melted.

'We recommended featuring the resort experience in the summer campaign to demonstrate that there were amenities like golf, spas, excellent hotels and fine dining up in the mountains, not just empty wilderness.'

Longwoods International reported Colorado was ranked first among states in the summer resort category by 1992.

One year later, the tourism tax was defeated by a vote in light of new legislation that gave citizens the power to approve or deny taxes by referendum. Colorado became the only state without an official tourism function.

According to Longwoods, Colorado lost 30 percent of its market share of tourism within two years. By the late '90s, annual loss from lack of tourism was estimated at $2.4 billion.

Summers said Branson could face a similar decline if the TCED tax fails renewal.

'We spend about $7.5 million in marketing — direct marketing or trade shows, anything that has to do with marketing,' he said. 'If we didn't have that, we would be dependent solely on the city tourism tax. That only amounts to about $2 million. You're taking $5 million to $5.5 million, it's not enough. The $2 million does not give us the traction we need to get the word out.'

Colorado eventually passed legislation to reinstate tourism marketing funds in 2006.

'The health of our community rides on this vote,' Summers said.

Jim Barber, chairman for the Branson Area Regional Tourism Committee, said he doesn't know the impact of funding reduction would be as great in Colorado, but the history of Colorado's tourism serves as a great example of what could happen.

'There are similarities in that Branson is one of the primary tourism marketing areas in the state and if our budget was cut, we would see similar effects,' he said. 'Probably not as extreme, but a decline in the number of visitors.

'I don't want to say that is what will happen because it's an estimate, but I feel assured our tourism numbers would decline.'

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