Exactly what is marketing? Marketing is every function initiated for sales growth to ensure return on investment and profitability.
With that definition in mind, why would marketing be the first budget line item to be cut in a down business cycle? The answer is not easy to find, and the question has arisen most recently with the State of Illinois’ cuts to the tourism marketing budget across the state.
Since September 11, tourism revenues have taken a direct hit, and the response from many of our competitors has been to augment their marketing programs to regain momentum.
In contrast, Illinois recently announced a mid-year budget cut of 28 percent to current tourism grant programs.
By implementing a mid-year budget cut, many programs already underway will now come to a halt, producing even further losses in employment and tax revenues.
Tourism brings billions of dollars into Illinois. In 2000, the $61 million the Illinois Bureau of Tourism (IBOT) received for tourism marketing generated $32.7 billion in economic activities, along with more than 650,000 jobs and more than $1.6 billion in state and local tax revenues.
Interestingly, IBOT only receives 35 percent of the hotel tax revenue generated, with the remaining dollars being put into the state’s general fund. The 28 percent IBOT budget cut will result in a more than $18 million loss of marketing dollars across the state, virtually eliminating any chance at increasing tourism marketing during a time when the industry needs—more than ever—to provide rest, relaxation and reassurance to the American public.
Although the tourism industry has been deeply affected nationally, the Peoria area has kept a steady pace, with an actual increase in occupancy rates and average daily rates during the months of September and October.
In this instance, our area has weathered the storm with effective marketing that generated group and leisure travel business offsetting, to some degree, cut backs in business travel. Unfortunately, 74 percent of Illinois’ hotel tax revenue is generated from Cook and DuPage Counties—and they were the two hardest hit counties in the state since September 11.
Instead of cuts to IBOT’s budget, now is the time for Illinois to look at the 65 percent of hotel tax revenues going into the state’s general fund, and determine how those dollars would be better spent to stimulate tourism growth through increased, effective marketing.
At this critical juncture, Illinois’ convention and visitors bureaus need to have funding to continue their ongoing marketing programs to make sure tourism remains a growth industry for Illinois and continues to employ thousands of citizens.
It’s time to keep dollars flowing into an industry that has proven itself time and again to be a major economic force for the State of Illinois. IBI