2012-03-29 / Top News

TOURISM MATTERS

Local bureau weathers financial challenges as it works to sustain tourism-dependent Charlotte County
BY BOB MASSEY
Florida Weekly Correspondent


To boost tourism, the Charlotte Harbor Visitor & Convention Bureau helped get Punta Gorda promoted as one of Visit Florida’s “Downtowns and Small Towns.” Many of the area’s attractions depend on the VCB for marketing support. 
PHOTOCOURTESY/COMCHARLOTTEHARBORTRAVEL.WWW. To boost tourism, the Charlotte Harbor Visitor & Convention Bureau helped get Punta Gorda promoted as one of Visit Florida’s “Downtowns and Small Towns.” Many of the area’s attractions depend on the VCB for marketing support. PHOTOCOURTESY/COMCHARLOTTEHARBORTRAVEL.WWW. “PEOPLE THINK OF TOURISM AND THEY THINK we just have a visitor information center and we give out brochures,” lamented Charlotte Harbor Visitor & Convention Bureau director Lorah Steiner. “They think, ‘How difficult can that be?’”

This perception is not restricted to the general public. It sometimes leaches into government, as well. And it usually rears its head at budget time, when the question is posed: “Does the visitor bureau really need to spend so much money on marketing?”

The implication is that by divine fiat, visitors would somehow ignore the bombardment of advertising luring them to other national and international destinations — including neighboring counties — and that they would still make their way to Charlotte County, with or without the VCB’s efforts.


This once-pristine sign welcoming visitors from the north to Charlotte County, has — like the visitor bureau itself — weathered its share of storms. 
BOB MASSEY / FLORIDA WEEKLY This once-pristine sign welcoming visitors from the north to Charlotte County, has — like the visitor bureau itself — weathered its share of storms. BOB MASSEY / FLORIDA WEEKLY Years of third-party data, research and statistics don’t seem to silence the critics.

“What they don’t realize is that we touch on so many different things,” Ms. Steiner said. “It’s more diverse, more demanding, more complex than many people would imagine.”

Hazel Crouch of Place in the Sun Vacation Rentals says it succinctly: “I’ll tell you how important the visitor bureau is: It’s essential.

“We seriously could not survive without the bureau,” Ms. Crouch said, listing several categories of tourismrelated businesses bolstered by the VCB’s efforts.


The county’s natural beauty, depicted here by Charlotte’s canoe/kayaking trails (above), and Don Pedro Island (right) make it logical to promote the area as an eco-tourism destination. 
WWW.CHARLOTTEHARBORTRAVEL.COM / COURTESY PHOTO The county’s natural beauty, depicted here by Charlotte’s canoe/kayaking trails (above), and Don Pedro Island (right) make it logical to promote the area as an eco-tourism destination. WWW.CHARLOTTEHARBORTRAVEL.COM / COURTESY PHOTO “They work tirelessly with such a small budget.”

A small budget means a small staff. If the VCB were a turnip, the county has squeezed a lot of blood from this one, receiving services and performance equal to bureaus many times its size.

But there comes a point when it’s not enough, and that point has arrived.

For the first time in more than a decade, budget constraints have forced the VCB to radically narrow its marketing focus.

And that might mean fewer tourists.

That’s no cause for concern — until you realize how much Charlotte County depends on tourism for its financial sustenance.

Fewer tourists means that fewer dollars are flowing into county businesses and coffers. It means higher property taxes and the potential failure of service-based businesses. Consider the number of shops and restaurants that depend on an annual boost from tourism to survive — and the number that have closed their doors over the years.

Yet as critical as the role of the VCB is in attracting visitors who generate all that income, few people outside the industry seem to know how the organization is funded, how it operates and why the challenges it’s facing may affect the county’s financial future.

Funding: the catch-22

Tourism is big business. In Florida, it’s the biggest — and getting bigger.

Statistics released by Visit Florida, the state’s official marketing organization, show that tourism in 2011 shattered all previous records.


Palm Island is a resort destination promoted by the VCB. 
WWW.CHARLOTTEHARBORTRAVEL.COM / COURTESY PHOTO Palm Island is a resort destination promoted by the VCB. WWW.CHARLOTTEHARBORTRAVEL.COM / COURTESY PHOTO “As the state’s No. 1 industry, tourism was responsible for welcoming 85.9 million visitors in 2011 (who) spent more than $67.3 billion, generating 23 percent of the state’s sales tax revenue and employing more than 1 million Floridians,” reads a Visit Florida statement.

By last count in the 2009 VCB annual report (numbers have varied only slightly), tourism rings up total related expenditures of more than $313 million a year. The monies generated by the industry — roughly $18 million in sales tax revenues — go right into county businesses and coffers.

And none of that goes toward funding the VCB.

“When you talk about the budget to the average taxpayer, you have to tell them that none of the money that’s spent on tourism is from the tax they pay annually,” said County Commissioner Robert Skidmore, “The property tax they pay every year doesn’t go to tourism services. It goes into their essential services that we deliver day in and day out — roads, public services, utilities.”

Rather than costing residents tax money, tourism saves it. Industry expenditures result in an annual tax savings of more than $250 per household.

The VCB and its tourism initiatives are instead funded by a tourist development tax — commonly called a bed tax — levied on visitors when they stay in hotels, motels, apartments, condominiums, mobile home parks or rental properties for no more than six months. At present, Charlotte’s bed tax has peaked at the maximum 5 percent allowable by state statute for an area its size. Each year, these revenues amount to more than $2 million. (Larger areas, such as Orlando, are eligible for an extra penny for “convention development” and “high tourism impact” taxes.)

“That’s the best part, that tourism has continued to pay for tourism,” Mr. Skidmore said. “The tourism bureau lives and dies on the health of the tourism economy,” he added. “It’s really a great system. It’s got a built-in report card, so you know if you’re doing an effective job or not.”

But economics are rarely that simple, and the system has its flaws. What it actually creates is a conundrum, a funding catch-22: The VCB’s budget won’t increase unless there are substantially more tourists, yet it can’t attract those tourists without a substantially bigger budget.

The VCB reports that tourism numbers are up over last year. In fact, the percentage increased by double digits in the last eight months, except for October and November. But that’s not enough to significantly increase the bureau’s advertising budget, partly because not all of the bed tax goes toward tourism.

Batted out of the ballpark

Mr. Skidmore sits with Ms. Crouch on the Tourist Development Council, the advisory body created by state statute to recommend how bed tax revenues are spent. Mr. Skidmore believes the county commission has always been supportive of tourism.

“The board that sits today has made that much greater an investment in tourism and its promotion and Charlotte County as a destination, not only as a retirement community but as a place that’s great to visit,” he said.

Such solidarity hasn’t always been the case.

In 2006, opportunity came knocking in the form of professional baseball. Charlotte Stadium, once called Ranger Stadium, built in 1986 to accommodate the Texas team, remained vacant of pro ball after Rangers relocated to Arizona in 2002. Then the Tampa Bay Rays expressed interest, requiring a $27 million renovation to seal the deal at Charlotte Sports Park. When former County Administrator Bruce Loucks approached the TDC, the proposal was met with some reticence about spending so much to fund a baseball team’s spring training in Charlotte that is so close to its home city and was having trouble filling its own stadium on game days.

Plans blazed forward anyway, and the county commission added the fifth and final penny to the then 4-cent bed tax. But commissioners also created an ordinance ensuring that 2 percent of the tax would go toward paying the debt service for the stadium’s renovation, as well as maintenance and other associated costs.

That, of course, left only the three remaining pennies to dedicate to tourism. The stadium’s two pennies add up — to about $850,000 every year.

Ms. Steiner’s predecessor, Becky Bovell, was critical of the commission’s decision. At the time, commissioners found it difficult to justify the bureau’s then $450,000 advertising budget, and wondered whether advertising could be done from within, or reduced — or cut completely. Their logic at the time: The number of visitors had dropped from the previous year. But even with the decrease, the bureau’s efforts had helped generate $193 million for the local economy — an amount nearly 430 times the investment. That would be the equivalent of a business spending $45 in marketing to generate about $19,300 in revenues.

When we interviewed Ms. Bovell shortly before her retirement in 2010, she counted her budget conflicts with the county as one of the things that had made her years in Charlotte County the most challenging of her career. She balked when the bureau’s advertising budget was cut in half at a time, she said, when the county should be spending more. “That’s not sustainable tourism,” she said.

“The commissioners have it in their mind that the bureau’s mission is to generate room tax,” Ms. Bovell said. “That’s not so. That sustains us, sure. But our mission is to generate economic impact.”

It’s a philosophy shared by Ms. Steiner.

“Our bottom line is economic development at its very core. We bring revenues into the county.”

But as the business adage goes, it takes money to make money. And for the last five years, the VCB has been forced to try to do more with less.

A budget that cuts

“We have a market that has international and national visitation,” Ms. Steiner said. “Yet we have a marketing budget that’s really the equivalent of a bureau that has a statewide pull. In fact, it’s even less than most bureaus that have a statewide pull — not a regional, national or international pull.”

The VCB’s current marketing allocation of about $230,000 includes public relations and creative services, which cost about $75,000, costs that eat into the budget’s ad placement.

“What’s really left to actually do the advertising part of it is somewhere in the neighborhood of $155,000, which is nothing,” Ms. Steiner said.

She contrasts that to her last job as director of the Convention and Visitors Bureau in Columbia, Mo., a position she held from 1987 until her arrival in Charlotte early last year. To cover a statewide market, she was allotted more than $400,000 a year.

“Even the ad budget for Fishermen’s Village (in Punta Gorda) is a quarter of a million dollars a year,” Ms. Steiner said. “If you look at what it costs to buy one ad, and you look at the budget, and you look at how many different places we need to be advertising, it’s overwhelming.”

She rattles off a list of areas the VCB should be trying to reach: the Midwest, Germany, the United Kingdom, in-state visitors from areas such as Orlando and the Miami and Tampa areas.

“We could — given the right budget — increase our market share substantially,” Ms. Steiner said. “For the most part, the German market doesn’t know we’re here. The UK market doesn’t know we’re here. Germans tend to go south. They tend to be in the Fort Myers-Naples area. The Brazilian market could also be developed.

“But with only $230,000, what do you do?”

That was exactly the question posed at the VCB’s annual staff retreat earlier this month.

Getting off the porch

“If you can’t run with the big dogs,” a popular saying goes, “stay on the porch.”

In terms of tourism marketing budgets, Charlotte County can’t run with the big dogs, but it’s trying its best to stay off the porch, too.

“We are the image purveyor for Charlotte County — and that’s another big responsibility,” Ms. Steiner said. “The (VCB’s annual staff) retreat is our intimate, get-down-in-the-trenches discussion on how we’re going to do that.”

Given the budget constraints, VCB staff decided one solution is to change the area’s marketing targets.

“The consensus is that we need to really focus our efforts inside the state of Florida because our budget is so small,” Ms. Steiner said. “We also need to increase, as best we are able, our exposure to the German market. But we think we can get a bigger bang for our buck staying in state with the budget that we have.”

It’s still a long shot, considering how significantly Charlotte’s budget is dwarfed by those of its neighboring counties.

To the north, Sarasota’s Convention & Visitors Bureau boasts a $4.1 million budget this fiscal year, an increase from last year’s $3.8 million. The county increased its bed tax two times by a half-penny in order to increase its tourism promotion. The Bradenton Area CVB’s $5.9 million budget allocates $2.1 million for marketing and promotion, an increase of about $500,000 from last year.

To the south, Collier County’s tourism bureau took a $1 million hit from last year — which still allows it $1.8 million for advertising, as well as an additional $1 million for public relations, research and reaching out to and responding to visitors, thanks to a 4 percent bed tax. The Lee County Visitor & Convention Bureau has maintained its marketing budget from last year,whichcomesfroma5percentbed tax. According to news reports, Lee County has $6.3 million to spend.

The fact that the Charlotte VCB is funded with just $230,000 doesn’t decrease the demand for its services.

Help wanted

“Tourism is an integral part of our way of life in Charlotte County,” Ms. Crouch said. “There’s not one area that is not touched in some way by tourism.”

How does the county and VCB entwine? Let Ms. Steiner count the ways.

“If it touches on the beaches or beach preservation or restoration, it touches us,” she began. “If it’s on signage, way-finding, it touches us. If there’s road construction that affects tourism, it touches us. The airport touches us — we deal with the airlines and with the airport. Hurricane preparedness touches us. There are so many things that touch us in terms of involvement, information. It’s sometimes a bit overwhelming.”

One look at the VCB’s annual visitor guide, Ms. Steiner said, and you begin to understand how many people within the county interact with the bureau: accommodations, fishing guides, restaurants, car rental agencies, transportation and service businesses, ad infinitum. It’s limitless.”

In addition, many organizations reach out to the VCB for help. Perhaps it’s a group wanting to market boating in Punta Gorda, another wanting to create bicycle trails, still another needing help in promoting an event. The requests are as varied as they are many.

“You just have to determine with a small staff what it is you’re going to get involved in,” Ms. Steiner said. “We try to do what’s important, and it’s still an overload.”

According to Visit Florida website,“direct travel-related employment in Florida also rose to a near record high of 1,013,100, adding more than 38,000 jobs” in 2010. Unfortunately, none of those were added to the VCB’s staff of four full-time and one part-time employees. As a result, staffers frequently have to stretch their job descriptions and increase their workloads to accommodate the bureau’s many activities.

But additional staff is not an option. The skeleton crew must do its best within its limited resources.

That may not be good enough when you realize the bureau’s marketing plan is missing a foundational piece that only money can buy.

Flying blind

Tourism, as with any business, relies on statistics — particularly those that reflect return on investment, the Holy Grail of marketing metrics. Currently, the bureau receives statistics from two sources. One is Smith Travel Research, which specifically measures how hotels are faring. Condos, apartments and individually owned accommodations are not sampled — which is a problem in itself, since those accommodations are also key. The other source is simply the aggregate information coming from the county tax collector’s office that shows how much tourism tax revenue was generated, which can then be compared to the previous year’s figures.

When asked if that information is enough, Ms. Steiner responded, “Oh, gosh, no.”

In 2008, the direct and indirect revenue impact from in-county tourism expenditures totaled $313,631,806. Also worth noting is that the VCB could say with confidence that for every $1 spent on tourism advertising $30 was generated in visitor expenditures — a 30-toone return on investment.

What’s telling about the numbers — is that they last appeared in the bureau’s 2009 annual report — the last time those statistics were available. They were compiled by the Tampa firm Research Data Services, which specializes in tourism research, once under contract of the VCB prior to budget cuts.

Today, Ms. Steiner has no way of fully measuring what the return on investment is for each $1 spent on advertising.

“We operate blind to a certain extent,” she said, “because we don’t know how many of our visitors are coming from Europe, how many are coming from the Midwest or from Canada, which is a market for us, or from the northeast. I wish I knew.”

Ms. Steiner wishes she could survey the people coming off planes at the Punta Gorda Airport. To do that professionally, however, would probably cost about $15,000.

So the VCB must operate on a certain amount of guesswork, based on the information it can gather — not knowing exactly where visitors are coming from or the most effective expenditures of its advertising dollars.

Even though statistics show tourism is up from last year at this point, Ms. Steiner believes that the number of visitors could be higher, given the right tools.

If the county wants to multiply money flowing into its coffers, it needs to increase tourism. And that requires a well-funded visitor bureau working to attract those tourists. ¦

Tourism challenges

In addition to budget constraints, the Charlotte Harbor Visitor & Convention Bureau faces unforeseen challenges. Only time will tell how these factors will affect tourism this year.

 The rising price of gasoline’s impact on in-state visitors.

 Cancellation of Direct Air’s flights out of Punta Gorda at least until May 15. Direct Air is one of two airlines flying out of Punta Gorda Airport.

 Trying to recoup an estimated $466,500 loss over the last five years by online travel sites, such as Expedia and Orbitz, which circumvented the county’s bed tax.

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