In 1993, Colorado became the only state to eliminate its tourism marketing function, when it cut its $12 million promotion budget to zero. As a result, Colorado’s domestic market share plunged 30% within two years, representing a loss of over $1.4 billion in tourism revenue annually. Over time, the revenue loss increased to well over $2 billion yearly. In the important summer resort segment, Colorado dropped from first place among states to 17th.
It took until 2000 for the industry to convince the legislature to reinstate funding with a modest $5 million budget. Research tracked the effectiveness of the state’s tourism campaigns over the next few years, and demonstrated an ROI of over 12:1. In 2006, Governor Bill Owens signed a bill upping the tourism promotion budget to $19 million. By 2007, travel to Colorado rebounded to an all-time high, with 28 million visitors spending $9.8 billion enjoying their trips to the state.
The Colorado saga provides a cautionary tale for financial decision-makers who, in these difficult economic times, are naturally looking at major cutbacks in all areas, including promotion. It clearly illustrates that marketing is an essential net generator of revenue and profits to the organization, not a cost.
The Rise and Fall of Colorado Tourism was delivered as a keynote speech at the Nevada Tourism Summit, as the state faces a potential 60% cut in funding.
Read more about the Nevada Tourism Summit on their website or in the News.