Tourism Plan Calls for More State Money, Personnel

August 25, 2011

Investigative Reports

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The NerveTourism is widely cited as South Carolina’s No. 1 industry. But just like manufacturing, agriculture and other sectors of the state’s economy, the tourism industry does not operate totally independent and free of government support.

No, tourism, in fact, receives generous financial backing from the state and from local governments across South Carolina. And a state manifesto for boosting tourism here calls for even more of that largesse from the public treasury.

For South Carolina taxpayers, it is timely to consider as a new fiscal year gets going and the annual summertime tourism season winds down:

Is spending millions of state and local dollars to promote tourism truly necessary? Is doing so really the proper role of government? Are there better uses for the money?

And are the people at least getting a good return on their investment?

To some, the level of tourism subsidies in South Carolina might be surprising.

“The government spent $416 million in support of tourism,” says a report released earlier this year on the industry’s statewide economic impact in 2009. The figure represents state and local spending combined.

Much of the state spending on tourism marketing flows through the S.C. Department of Parks, Recreation and Tourism – nothing less than a full-fledged agency whose main mission is to promote the Palmetto State as a vacation and visitation destination.

The Washington, D.C.-based U.S. Travel Association, a leading industry policy and advocacy organization, conducted the economic impact study. It is available on the Parks, Recreation and Tourism website.

Among other things, the report says:

  • Travel- and tourism-related spending in the state totaled $14 billion, down 8 percent from 2008.
  • Tourism accounted for nearly one in 10 jobs in South Carolina.
  • Tourism generated $1.1 billion in state and local taxes.
  • And the ratio of tax revenue to subsidies was $2.67 to $1.

The latter statistic is the kind of number that supporters of government spending on tourism promotion point to in making their case for it.

“It’s no different from selling Coca-Cola or a product,” says Tom Sponseller, president and CEO of the South Carolina Hospitality Association. “You have to keep your brand out there.”

The association’s website says Sponseller also “serves as the hospitality industry’s main lobbyist at the State House in Columbia.”

Even some state lawmakers who wear a fiscal conservative banner say tourism marketing is a legitimate use of tax dollars.

“The lion’s share of the service delivery (in the tourism industry) comes from the private sector,” says Sen. Mike Fair, R-Greenville.

Fair says the cause-effect of tourism subsidies “is measurable and seems to be money well spent.”

“But I don’t know how much should be spent,” he adds. “That’s just not my area of expertise. It can get out of hand.”

Near the end of this year’s legislative session, Fair introduced a bill dubbed the “Tourism Development Act.” It would allow certain counties to implement an additional 2 percent accommodations tax on hotel room rentals if the counties’ voters approve it in a referendum.

The extra tax revenue would have to be spent on tourism marketing “directed at non-South Carolina residents.”

The bill, S. 952, would apply only to counties in which an international airport is located and which collect at least $2 million in accommodations levies in a fiscal year.

In that sense, the legislation is targeted toward specific counties, and Fair readily admits that he sponsored it to help Greenville County generate marketing money after Southwest Airlines added the Upstate to its flight destinations in 2010.

However, the senator says several Greenville County Council members have since indicated to him that they do not support the bill. “So there’s no interest on my part in pursuing it any further,” he says.

Another Greenville Republican, Rep. Bruce Bannister, similarly introduced a companion version of the bill late in the session in the House. Bannister’s measure, H. 4186, is identical to Fair’s bill except that it does not provide for a public referendum, instead leaving it to county councils to pass the 2 percent tourism marketing tax.

The proposed fee is exactly the kind of expanded government role called for in the state’s plan for increasing tourism.

Weighing in at no few than 601 pages (that’s not a misprint), the three-volume “South Carolina Tourism Action Plan” is as ambitious as it is lengthy.

Implementing the recommendations of the plan “would allow the state to realistically target doubling the growth rate of the industry within five years and deliver $40 billion in annual gross state product by the year 2020,” the executive summary of the treatise says.

The plan, also perusable on the PRT site, was produced by the Tourism Development International consulting firm of Ireland in conjunction with New Carolina.

Also known as South Carolina’s Council on Competitiveness, New Carolina is a mostly publicly funded effort to promote economic development in the state through the formation of clusters, or groups of businesses in the same industry.

From the main recommendations of the Tourism Action Plan:

“The current state tourism office should be reorganized into an entity in its own right which is one level removed from government – a state tourism organization or a public/private partnership body.”

Such an entity would “remove civil service encumbrances and obstacles to operate in a business environment, and facilitate the recruitment and remuneration of experienced personnel,” the manifesto says.

(Remuneration being payment for services rendered.)

Also, the plan counsels, “The state should sharply increase its tourism marketing budget.”

In addition, a “state product development plan” should be put together and it “should include incentives to private businesses to invest in the creation of new, expanded and upgraded accommodation(s) and attractions across the state.”

And one more from the grow-government’s-role soup of suggestions:

“S.C. PRT should add additional staff with specialized technical skills in product development and planning.”

Even without more marketing money and a bigger staff, though, the state tourism promotion agency isn’t looking too shabby.

The Parks, Recreation and Tourism budget this fiscal year totals $59.2 million, with funding for 429 full-time employees.

Of those, 39 earn salaries of $50,000 or more, including PRT director Duane Parrish ($112,500) and six personnel with the title of “economic development manager,” according to the state salary database.

More than one-third of the department’s funding this year, about $20.5 million, is budgeted for tourism and recreation sales, marketing and development.

A big chunk of that money passes through the agency to local and regional groups in the form of grants and matching allocations, some of it via programs the General Assembly has created, according to PRT spokesman Marion Edmonds.

By way of comparison, the agency’s budgeted funding to operate South Carolina’s 47 state parks is not too much more than the tourism marketing total – $22 million.

Reach Ward at (803) 254-4411 or eric@thenerve.org.