One of the pleasures of being on the central waterfront in Seattle is seeing all of the activity. As you walk to a restaurant, the sculpture park, or the Aquarium, you see people enjoying the scenery, the Space Needle, the market — families and vacationers here to visit the place we are lucky to call home.
Visitors to the Seattle waterfront aren’t just a welcome diversion from the workday, however. Tourism is big business — and it’s a very important business to Seattle and the entire state.
The Port of Seattle finished our eleventh cruise season last year with record numbers. Over 930,000 cruise passengers visited Seattle. Between ship provisioning (foodstuffs, liquor, linens, floral arrangements, fuel, and other items supplied by local vendors) and the dollars tourists spend while in the region (hotel stays, eating out, souvenirs, etc.), the 2010 cruise season put nearly $424 million into the local economy.
And we’re working to increase that number. We are teaming with partners across the state to encourage cruise passengers to spend just one or two more days and nights in the area. Maybe visit the Ellensburg Rodeo, Mount Rainier, or a winery in Woodinville or in Eastern Washington. Take a whale-watching trip out of Friday Harbor. Or maybe stay in Seattle, visit a museum and take in a ball game, or take a trip across the lake to Bellevue for world-class shopping.
Tourism has a huge effect on the state’s economy. In 2010, travelers to Washington spent $15.2 billion here, and state and local tax revenues directly generated by travel spending were nearly $1 billion. And 85 percent of the travel-related businesses in the state are small businesses, with fewer than 50 employees. Those employees account for over $4.3 billion in payroll in Washington — wages that feed families and keep the economy moving.
That’s why we should be working hard to convince people to come to Washington — and when they come, to stay awhile. Because, to borrow a catchphrase from Seattle's Convention and Visitors Bureau, “Tourism Matters.” It matters to our state’s economy in a big way. But right now, we’re not making the investments to keep those visitors and dollars coming.
Other states are: our neighbor California invests over $58 million annually in developing tourism. Washington was 48th in the US in spending on tourism promotion at $1.8 million. Now, if Washington Gov. Chris Gregoire’s proposal to eliminate the State Tourism Office is enacted, we will be dead last.
For the past 26 years, the port has worked with our partners at the Seattle Convention and Visitors Bureau and the Washington State Department of Tourism to leverage the investments we are making. Together, we have hired tourism consultants in China, France, Germany, the United Kingdom, and Japan. Without the resources of states like California (which spends $3 million a year just in the UK market) or Nevada (which spends $1 million a year just in China), we’ve relied on “guerilla” marketing. Our consultants specialize in tourism promotion and focus on travel media and tour operators in their overseas markets to encourage tourism to our area. For example, in the first ten months of 2010, $4.5 million in media coverage value was achieved in the Japan market with an investment by the partnership of $87,500 — that’s a 5,100 percent return on our investment.
So far, this low-key approach has been successful, but we can’t continue to depend on guerrilla marketing to capture the largest tourism market to open in generations: China.
As China emerges as an economic power, some of her citizens are enjoying new wealth and new purchasing power. They now have opportunities to travel to destinations that even five years ago were not possible. Visitors from China to the U.S. in 2010 are projected to increase by 40 percent, and to continue to break records each year at least until 2015. Washington has a long relationship with China and we are poised to be a premier destination for those travelers. We now have two airlines flying nonstop routes from Beijing to Sea-Tac Airport. Additional nonstop routes from Seattle to other Chinese cities, such as Shanghai or Hong Kong, would certainly be attractive.
Traveling through China last year, it was clear to me that the Northwest is a very recognizable “brand” to the Chinese, whether it’s Starbucks coffee, seafood caught by the North Pacific fleet based at Seattle’s Fisherman’s Terminal, or movies such as Sleepless in Seattle. We need to invest now to protect and grow that brand, leveraging public dollars with private investments to put ourselves in a position to capitalize on a market and opportunity that won’t come around again.
Our state’s financial crisis could not have come at a worse time for tourism promotion. The governor‘s proposal to eliminate the State Tourism Office completely was not unexpected and is understandable, especially in light of the need to protect critical government services. But if we as a state are going to capitalize on the growth in tourism from markets like China, we need to develop a sustainable program to bring tourists here. A new funding model is needed, and needed now.
Hotels in the Seattle downtown core are considering seeking the authority to establish a local “Business Improvement Area” and raising funds to promote tourism to Seattle. Such districts have already been implemented across the country in cities comparable in size to Seattle. The funds would be raised by imposing a flat fee on hotel stays, and importantly it would be a more stable model, insulated from the vagaries of government support. In addition, the Washington State Convention Center was granted the authority in the last legislative session to establish an independent public facilities district to govern its operations. I believe that both these moves are steps in the right direction in establishing more sustainable funding sources from the private sector for tourism promotion.
But these aren’t just the right steps for Seattle — they should be replicated across the state, so that areas like Walla Walla, Spokane, and the Tri-Cities also can benefit from the economic benefits of tourism. Tourism-related organizations from across the state already are beginning to organize a nonprofit organization (Washington Tourism Alliance) and trying to hammer out a proposal that would, in effect, privatize tourism promotion.
We might do well to borrow a model statewide from a nearby state and a tourism powerhouse: California. There, industry sectors that depend on tourism assess themselves a fee, and most of the funds generated are used for tourism promotion to the state. While the state government plays a role in collecting those fees, the state cannot touch the private assessment or divert it to other uses.
In 1996 another tourism powerhouse, Florida, turned the state’s tourism promotion functions, previously handled by the Florida Department of Commerce, over to the Florida Commission on Tourism, a private/public partnership charged with increasing tourism in the state. The Commission’s marketing arm, Visit Florida, is mandated by the state to match public funding, dollar-for-dollar, with private funds. The private funds come primarily from Visit Florida’s tourism industry partners. Their expected budget for 2011 is $67 million, a far cry from our state’s $1.8 million that likely will be eliminated in June.
Building a new future for an industry that is an important export for our state will not be easy, and the fix will not be quick. There will be issues of how the funding should work, what the governance structure will be, and how to ensure the model is sustainable. But the time to solve the problem is now. China alone offers a huge opportunity that our state, of all states, should capitalize upon.
