WisBusiness: Tourism industry looks to break away from state funding

By Brian E. Clark

For WisBusiness.com

Dissatisfied with Wisconsin’s shrinking tourism budget, industry leaders are seeking ways to raise millions of dollars to better promote the Badger State’s $13 billion travel industry.

One way to do that, they say, might be to break the Department of Tourism off from state government and set up something modeled on the independent Wisconsin Milk Marketing Board.

This non-profit agency promotes the state’s dairy $21 billion industry and is funded by a so-called “check-off,” essentially a self-imposed tax, on dairy producers to advance Wisconsin cheese and milk products.  

Tom Diehl, president of Tommy Bartlett, Inc. and a major player in the Wisconsin Dells, said some members of the state’s Tourism Federation have held discussions and met with Tourism Department Secretary Kelli Trumble to “brainstorm” about what he calls the “resource problem.”

Trumble, head of the state’s tourism department, confirmed that “extensive research and discussion is taking place on how the department is funded and how different models would allow for increased funding to market effectively in a very competitive environment.

“But there’s no plan on the table right now. The industry is just in the infancy stages of putting something together.”

Diehl said the department should “get out from under” general state revenue as a funding source. “Using the (General Purpose Revenue) is too unpredictable because the Legislature views us as an expense, but our industry views it as an investment.”

In 2000, the Department of Tourism had a $16 million annual budget, with nearly $11.6 million going for promotion. This year, in the midst of a deep recession, those figures were trimmed to $13 million and $10 million respectively, according to Trumble.

Diehl said the Milk Marketing Board might be a good model to follow.

“As I understand it, dairy farmers pay a fee (based on the amount of milk they sell) that goes to the board,” he said. “And its responsibility is to promote milk and cheese. To the best of my knowledge, it has nothing to do with the government and I think that would be a good idea.”

Diehl said he did not know how a self-imposed tax would be received by the state’s travel industry.

He said a similar idea was pushed when former Gov. Tommy Thompson was in office.

“That was the direction we were going, but he didn’t support it,” Diehl said. “He felt that tourism, because of all it contributes to the state’s economy, should get tax dollars. And then he boosted the budget, but things have changed since then.”

Diehl said “while nothing of any major substance has come from our discussions so far, there’s no doubt that something like the Milk Marketing Board would be a good idea for tourism.”

Ed Lump, president and CEO of the Wisconsin Restaurant Association, said he, too, is disappointed with the declining budget for tourism promotion.

“Our industry needs a stable source of funding so we can promote the state better and draw visitors here,” he said.

“We are ideally positioned between the major markets of Chicago and Minneapolis. We have a lot to offer and we need to get the word out to drum up more business.”

Currently, he said, state tourism promotion budget is too dependent on the Legislature’s “largesse,” which is subject to political pressure, as well as the financial difficulties Wisconsin is now facing because of the recession.

Lump said he’d like to see a tourism budget of around $25 million, to make Wisconsin competitive with other states in the region.

He lauded Michigan, which has an annual budget of around $30 million, for its plentiful ads on television and even in New York City’s Times Square.  Illinois, for its part, has a tourism budget of more than $40 million, while Minnesota’s outlay to boost its travel industry is comparable to Wisconsin’s.

As for the travel industry supporting a self-imposed tax to fund promotion, Lump said “that’s the question yet to be answered. We don’t know the answer to that, but it certainly is a way to achieve a stable funding source.

“By not being able to promote better, we are giving up market share,” he said. “Some people will come here naturally. But in terms of keeping Wisconsin in front of mind, we could improve. Right now, we’re in a noncompetitive situation.”

Romy Snyder, executive director of the Wisconsin Dells Visitors and Convention Bureau, said she is part of a group of state travel industry leaders who are looking at ways to create a base of sustainable tourism funding.

But she said she would have to see a substantive proposal before she would support breaking off the Department of Tourism from the state.

“We want tourism to continue to be the strong economic driver for the state that it has been,” she said. “Consistent messaging and advertising is critical for that to happen.

“So our concern right now is what models and options that would make the most sense for Wisconsin,” she said. 

Trumble said the primary mission of her agency is to inspire people to travel in Wisconsin and spend their money here, which is “especially important in these challenging economic times.”

Marketing is “truly an investment because it creates and sustains jobs for our residents and helps our economy,” explained Trumble.  

She said the industry supported 310,000 jobs and $7.3 billion in payroll during 2008, making it a major player in the state’s economy and the main employer in many communities.

“It complements agriculture, manufacturing and the knowledge-based sector here,” said Trumble, who added that she would like to have a marketing budget of $20 million annually.

“Just think what we could do?” she mused.  

Trumble argued that her agency’s promotion efforts are highly effective. She said one example is the department’s “joint effort marketing” grant program, which “for every dollar awarded to the industry for sales promotions, there was a nine-fold return to Wisconsin’s economy.”

Though Trumble said she did not know if the Milk Marketing Board model would work for tourism, she said she is confident the industry would back a different funding system.

“When they are given accurate information and see what the benefit would be… I believe there would be support. But we have to do the research first and have a plan.

“However, this idea has been talked about for two decades.”

If the tourism department were to break off and become an independent agency, Trumble said she did not know if she would want to head it.

“That’s way too premature to consider,” she said, chuckling. “My focus right now is completely on our work in front of us and delivering a great product for 2010 and helping the industry in any way I can with this research.”