COMMENTARY: Tourism is an investment in economic recovery, both nationally and in Kentucky

Published 10:18 am Wednesday, June 17, 2020

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Tourism was hit first and hit hardest by the economic impact of the coronavirus.

Travel industry losses will exceed any other sector. Nationally, they are expected to be nine times the losses after 9/11, with a total economic damage of more than $1.2 trillion. That also translates into more than $50 billion in reduced tax revenue. In Kentucky, 75 percent of workers in our industry were laid off or furloughed.

Tourism must get back to work if the Kentucky economy is going to rebound. Hotel, retail, restaurants, historical and cultural sites, distillery and brewery tours, performing arts — all depend on the tourism industry, which attracts $11.2 billion in statewide spending annually.

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It’s also the recipe for improving government budgets because tourism generates more than $93 million in local tax revenue each year.

Tourism depends on convention and visitors’ bureaus such as ours to market hotels and attractions. This generates sales leads that result in bookings for our hotels and direct spending in our community. Those visitors then need restaurants and activities while they’re here, so we work to brand the community and the region. Local businesses depend on us to market the community.

Our revenue stream — the hotel (transient room) tax — has been decimated. To date we have already have lost more than 90 percent of our hotel room bookings due to the pandemic. That is an economic loss of thousands of dollars in Oldham County.

Our industry needs federal support to bring it back to life. As Congress begins negotiations over the next coronavirus relief package, we need to invest in recovery for the tourism industry.

Local governments and recognition of the central role of tourism will help Kentucky successfully navigate this crisis.

Both local governments and convention and visitors’ bureaus depend on travel taxes to fund their essential operations. This unexpected loss of funding means that tourism may not be fully leveraged as a driver of economic recovery. Our activities are being curtailed just as the community is looking to us to serve a critical role in the recovery effort.

No other economic sector can match tourism’s ability to quickly reengage businesses and put employees back to work. Our office serves an essential role in supporting our community’s diverse range of businesses. Restaurants, hotels and attractions can reopen, but without the support of our office to drive visitors to those businesses, they will not fully rebound.

Unfortunately, like most convention and visitors’ bureaus, our organization is not eligible for CARES Act relief programs, which are available to small businesses or charitable nonprofits.

Three policy proposals would support our community and ensure that tourism is able to reach its full potential as a driver of recovery:

Include another round of emergency funding for state and local governments in the next coronavirus relief package and ensure that the rules are flexible to allow every community to directly address its unique impacts from the crisis.

Amend the CARES Act to ensure that including 501(c) tourism organizations and tourism-related quasigovernmental entities are eligible under the Small Business Administration’s Paycheck Protection Program.

Allow some Community Development Block Grants to be distributed exclusively to official tourism organizations for development and promotion. In previous disasters, states and cities have utilized these grants after receiving a waiver from the Department of Housing and Urban Development.

Brighter days lie head for Kentucky. But to rebound quickly will require smart and targeted investments in recovery.

This column was signed by Kim Buckler Hydes, Oldham KY Tourism & Conventions; Mary Quinn Ramer, VisitLEX; Eric Summe, Meet NKY; Karen Williams, Louisville Tourism; Sherry Murphy, Bowling Green Tourism; Nancy Turner, president, Kentucky Association of Convention & Visitors Bureaus; Hank Phillips, Kentucky Travel Industry Association; Joy Brown, Morehead-Rowan County Tourism; and Erin Carrico, Murray Convention & Visitors Bureau.