Tourism in Pierce County
February 29th, 2008 by Republican By DefaultWednesday’s Business Examiner Daily had an entry saying that 2007 was a banner year for tourism in Washington. New numbers were out from the Washington Tourism Office and the Department of Community, Trade and Economic Development (Washington State Travel Impacts & Visitor Volume 1991 – 2007p - PDF).
I’ve been interested to see how the city’s efforts to increase tourism have worked out, so I called around to find the report and downloaded it. The numbers looked pretty good but I didn’t see the comparisons that I was wondering about. So I copied the data to a spreadsheet and set it up to calculate the data that would tell me what I wanted to know, or at least give me a close approximation. Since I was most interested in Tacoma I looked for that. Nothing there so I went with the counties data, focusing on Pierce (of course).
First I wanted to see how much money was coming into the county for tourism. Well, everything is about ‘travel’, not specifically ‘tourism’, which means that it includes business travel and a lot of recreation that wouldn’t be considered tourism by most people. But, you work with what you have.
I created a spreadsheet that ranked counties by percentage of visitor-generated sales (Tourism Rankings for Washington State Counties). Hoping to see Pierce ranked near the top, having heard the push for tourism for years now and being that Pierce has coastline, interstate highways and mountain areas. But I was very disappointed. It was ranked 35th for percentage of revenue from local taxes and lodging, and 36th for revenues where state sales tax applies. Not good at all, considering what we have to work with.
But I did find this qualification on the data (you can read more in the PDF linked to above):
While travel impacts are typically greater in absolute terms in urban counties (e.g., King), they are often greater in relation to the total economy in rural counties (e.g.,Chelan , San Juan, Pacific). The tables on pages 27 and 28 of this report provide three indicators of the relative importance of the travel economy on counties:
- Travel-generated earnings as a proportion of total earnings.
- Travel-generated employment as a proportion of total employment.
- Travel-generated sales and lodging tax receipts as a proportion of total sales and lodging tax receipts.
Next I wanted to see growth expressed as a percentage over the time that the city has been pushing for more tourism. They had the totals from 1991 to 2006, but didn’t show any percentages. So I created another spreadsheet that did those comparisons (Annual growth of travel revenues by county). At first it looked good. Pierce went from $423.1 to $852.8 million, that’s 101.6% increase in that time-frame. But I was relatively certain that wasn’t adjusted for inflation and I knew that it didn’t reflect a comparison of other areas within the state. So I calculated those.
Compared to the rest of the state our growth in this area was 1.7% less than the state average, and 5.8% less than Seattle. Since Seattle tends to skew numbers like this I also calculated the percentage of growth for 38 counties, leaving King county out. We fared slightly better by beating that average by 2.1%. A less than impressive performance, in my opinion.
In reading some of the explanations in the report I noticed this statement:
The Western Region has the highest proportion of travel spending by those staying in the private home of a friend or relative — a function of the high population density of this region.
What this says to me is that people tend to come to Pierce County (and other Western Region counties) not to see a tourist attraction but rather to see friends or family, and then take in the sights and attractions while they’re here. I guess that says that Tacoma has not yet become a tourist destination. But that’s definitely not news. A visit to downtown will tell you that.
Then there was this statement:
Spending by day travelers is roughly similar in all four regions of the state. This is a reflection of the urbanized areas that generate day travelers to the other regions (Seattle-Tacoma; Portland, OR; and Vancouver, B.C.) and the fact that King County is itself an area that attracts day travel.
This confused me a little. First they lump Tacoma in with Seattle, then talk about Seattle separately. Does this mean that Tacoma doesn’t attract day travel?
Looking at the building of the Convention Center and Link Light Rail, both touted as tools to make Tacoma a tourist destination and both coming online in 2004, I looked at growth from 2004 to 2006 (the latest data available in this section of the report). While there was growth (17%) it didn’t actually keep pace with the state average (19.0%, 2% better than Pierce) or Seattle (21.8%, 4.8% better than Pierce). If you compare Pierce with the rest of the state without Seattle included in the total it looks a little better (16.4%, Pierce beating it by roughly 0.5%, the difference is a rounding issue).
So where are the gains we’re supposed to be getting from our $164 million investment?
The anemic ‘04-’06 growth raises another question. With the convention center drawing business while there’s no growth in the travel dollars spent in the county (in relation to the rest of the state), where is the money coming from? Did the convention center draw business away from other Tacoma/Pierce venues such as the Tacoma Dome? I know this isn’t a zero-sum-gain issue, meaning that if one thing gains another loses, but that is one possibility considering the data is probably not adjusted for inflation.
Now I want to compare the numbers for the Dome and the Convention center and see if the Dome dropped, and if so, by how much? I’m wondering if we spent $84 million just to move some meetings a half-mile into downtown. But that will be the subject of another post.
I thought I found some good news in comparing Pierce County growth to the State and Seattle in from 1999 to 2006. We beat the State average by 4% and Seattle by 7.5%. Then I looked at how we fared compared to the State when Seattle was left out and it the difference was only 1.4%. Then I realized what happened. It wasn’t that our travel income grew so much, it was that Seattle slowed down. Remember that these number are travel, not just tourism. Business travel to Seattle after the dot com bust dropped off sharply. While King County had experienced steady growth through the 90’s, it dropped off 2 years in a row, then resumed it’s growth again. So, that’s not really a bump for Pierce County, we just looked better next to the big loser. I believe that also accounts for our beating King County in growth in ‘99-’00. We simply lagged Seattle in the economic downturn.
So now I’m wondering, are we as a city wasting money by trying to turn Tacoma into a tourist destination? How long have we been trying? I remember in 2000 when I first got involved in the business community here that it was a big issue. It was supposed to be the next big thing for Tacoma. I guess we’re still waiting on that.
Maybe I’m reading this data incorrectly. Am I comparing apples to oranges? Is it even possible to use this data in the way that I did? Did I miss something? Did I make wrong assumptions? If you see any flaws let me know. I’ll be happy to correct them.
Or Maybe it’s time to step back and take another look at the issue. We’ve been trying for a while, spending a lot of time and energy on it, and yet it has little perceivable results.
February 29th, 2008 at 4:16 pm
Your question about paying $84 million for the convention center is right on. I’d refer you to some of Peter Callaghan’s writing during the building of the convention center, who questioned the wisdom of building it when there were 11 others being expanded or built in Washington at the same time. I don’t question the wisdom of building it, I question the wisdom of having the City run it. The Bellevue Convention Center is probably a better model, or even Seattle, where the CVB handles the bookings.
The measurement for the success of the convention center is not in the number of events booked. The measurement you want is how many room nights each event books. Anyone who you can convince to stay in a hotel overnight will drop hundreds of dollars a day between their room, their food, entertainment and alcohol, transportation, etc. And they are frequently more willing to do it as the money is frequently covered by their business.
In many ways the day-tripper tourism that we think of when we think of tourism pales in comparison to the bonanza of 100 visiting business people in town for 3 days. I would even go so far as to argue that selling Tacoma as a tourist destination is really a game of trying to convince an organization’s meeting planners rather than families.
Since the original question you asked was “what kind of return are we getting for money spent on tourism marketing and sales” we need to figure out how much we spend on it. The number is tricky. Some things like the convention center were created largely with bonded funds. A lot of ours was funded by bonding 20 or 30 years of hotel-motel tax revenue in Tacoma and other local cities (one of the reasons it’s called the “Greater” Tacoma CTC). The hotel-motel tax can really only be used for generating tourism (by law, I believe) although you can shove a bunch of stuff under that banner.
In some cities, a board of concerned citizens actually designate or recommend to their councils where that tax money is spent (ie, $25,000 promote tourism, $75,000 to the CVB, $25,000 to the Sports Commission, etc etc.)
Then you have to add the cost of running the CVB, the Sports Commission, etc. I would guess that in terms of an annual expenditure that tourism promotion is no more than a few million (the CVB’s contract with the City of Tacoma when I was there in 2002/3 was around $600,000).
As a final aside, the Convention Center pulling events from the Tacoma Dome does have at least one advantage: events like this weekend’s state high school basketball tournament can be more easily booked if more local events are held elsewhere. And sports events like this even put the business travelers to shame. Picture the teams, their families, their friends and fans who book blocks of rooms. The numbers that get spent in Tacoma from events like this from out-of-towners (a word I figure you’ll like better here than tourist) is astronomical.