On Monday, Gov. Owens signed a bill to increase tourism promotion. The measure is expected to translate into millions more in revenues.
Colorado and communities statewide stand to benefit financially from $19 million earmarked to promote tourism marketing, perhaps generating more than $200 million a year in sales tax revenues, experts say.
On Monday, Gov. Bill Owens signed a bill that boosted the state’s tourism marketing budget from $5.5 million last year to $19 million as of July.
Brian Vogt, director of the Colorado Office of Economic Development and International Trade, said the additional money could generate at least $160 million a year in state sales tax by luring scores of visitors – and their checkbooks – to the state. He said it’s unclear how much additional local sales tax municipalities can expect to receive.
Michael Erdman, senior vice president of Toronto-based Longwoods International, estimates the new tourism marketing money could generate as much as $216 million in state and local taxes.
His market research firm conducts the annual Colorado Visitor Study, which tracks how many visitors come to Colorado and what they spend while they’re here.
Colorado spent $4.9 million on tourism marketing in 2004 and, according to the study, each dollar yielded $18.10 in incremental state and local taxes, a total of $89.5 million.
While the new funding will help attract more tourists, the state’s tourism industry shouldn’t expect to see a proportional increase in revenue, said Eugene Dilbeck, head of the Center for Travel & Tourism at the University of Denver’s Daniels College of Business.
“I don’t think you can say that because our budget is four times greater than what we’ve had, that our return on investment will be four times larger,” he said. “But I do think we’ll see an increase in market share and an increase in longer-haul visitors coming to Colorado.”
Some critics called the bill a form of corporate welfare.
“The Independence Institute has consistently opposed corporate welfare for the tourism business,” said David Kopel, research director at the Golden-based think tank.
The tourism funding bill was part of a $26.5 million economic-development package signed by Owens during a ceremony at the World Trade Center Plaza building in Denver. Five other bills were included in the package.
The additional tourism marketing money comes from gaming revenues that would have gone to the state’s general fund.
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