Tourism promotion is essential to our economy

Budget cuts could be devastating to NH’s economy

When the NH House voted to cut the state’s tourism marketing budget, they put at risk revenue from tourism, one of the cornerstones of the state’s economy and of the state’s tax base.

Tourism is New Hampshire’s second-largest industry, generating more than $5 billion of economic activity per year in the state. In 2014, it the tourism industry supported 68,000 jobs in New Hampshire.

The number of visitors to the state has been growing steadily, tied to the growth in promotion by the NH Division of Travel and Tourism Development. In 2014, 4.7 percent more visitors came to the state than in 2013, and their total spending increased by 6.9 percent.

In 2009, the Legislature passed a law dedicating 3.15 percent of revenue from the rooms and meals tax to tourism promotion. The Legislature has suspended this law to cut $3.77 million, almost half of the division’s total budget, from the Tourism Development Fund.

Most states, including nearby Maine and Massachusetts, spend more than New Hampshire currently spends on tourism promotion. With cuts of this magnitude, New Hampshire will have one of the weakest tourism promotion budgets in the country.

What happens to tourism after a state stops promoting? When Colorado cut its tourism marketing budget from $12 million to zero in 1992, the state lost 30 percent of its market share within a two-year interval. After Colorado reinstated its promotional spending, it took 11 years to regain the market share it lost.

A reduction in tourism to New Hampshire would be devastating to our economy, and it would severely diminish tax revenue for our state government.

A study by The Institute for New Hampshire Studies at Plymouth State University has determined that the state’s promotional activities generate at least $585 million in tourism spending annually. Losing that amount of spending would result in a loss of $53 million in net tax revenue to the state.

We understand that the Legislature faces many tough decisions as they decide on the state budget. However, cutting promotion for tourism is short-sighted and fiscally irresponsible. In fact, we would argue that an increase in the tourism budget is the more logical path to solving our financial problems.

In fiscal year 2014, state and local governments took in $9.23 of tax revenue for every dollar invested in tourism promotion.

Joined by members of the NH Travel Council and others in the tourism industry, we urge the Legislature to approve a budget that continues to fund tourism promotion at its previous level. It’s an investment that benefits all New Hampshire residents.

Rusty McLear is co-owner and president of Mill Falls at the Lake in Meredith. Alex Ray is owner and founder of The Common Man family of restaurants. Together, they are the principals of Granite State Hospitality, which is building the new state Welcome Centers on Interstate 93 in Hooksett.