Shared from Voices of Montana Tourism. Visit http://www.voicesoftourism.com
Tourism Matters to Montana’s Economy
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The tourism industry’s ability to attract visitors is meaningful because out-of-state spending has a significant and positive effect on Montana’s economy. According to the Institute for Tourism and Recreation Research (ITRR), non-residents spent a total of $2.77 billion in Montana in 2011. Traveler spending supports gas stations, restaurants, retail stores, hotels, state parks, outfitters and many other businesses. In turn, travel-related businesses create demand for local professional services, real estate, agriculture products and more — sending a positive ripple effect through the entire economy.
Tourism Creates Jobs
Non-resident travel supports 39,000 jobs in Montana. These jobs employ 7.7 percent of the state’s total labor force, which means that one in every 13 Montana workers is supported by out-of-state travel. The industry provides fertile ground for entrepreneurship and independent small business, and creates opportunities for people in every category of the socioeconomic spectrum. Indirect and induced jobs in professional services, real estate, agriculture, finance, insurance, construction and other sectors of the economy account for more than 25 percent of visitor-supported jobs.
As an industry that has experienced relatively steady growth over time, tourism has helped provide a hedge against boom and bust industries and has contributed to Montana’s economic diversity which is cited as a leading factor in the state’s ability to weather the recent recession.
Tourism Lowers the Tax Burden on All Montanans
Some parts of Montana see more visitors than others, but Montanans everywhere benefit from the lodging taxes paid by by overnight guests. For the 2012 fiscal year, it is estimated that lodging taxes will add $14.9 million to state coffers according to the Montana Office of Tourism (MTOT). Since Montana began allocating portions of the lodging tax to the general fund in 2003, the state has benefitted from approximately $94 million in lodging tax revenues.
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Along with lodging taxes, visitors directly contribute to Montana’s tax base by paying excise taxes on gasoline, alcohol and other goods. Non-resident travelers also indirectly contribute to income, property and insurance taxes by supporting local jobs and patronizing Montana businesses. According to ITRR, non-resident visitors generated $276 million in state and local tax revenues in 2011. Thanks to these taxes, out-of-state travelers reduce the tax burden on residents by approximately $687 per household.
Tourism Supports Montana Communities
The tourism industry works to promote and preserve the qualities that make Montana a great place to live, visit and work. Travelers add to the lifestyle many Montanans enjoy by allowing more air service, restaurants, shops, special events, ski runs, state parks and historical sites to exist than our population could support on its own. Within each town, hoteliers and members of the tourism industry are also often generous supporters of community causes, fundraisers and events.
The Importance of Destination Promotion
In a competitive marketplace where travelers have many options, the Montana Office of Tourism, state tourism regions and local visitor bureaus use lodging tax funds to provide strong representation for Montana. Before the lodging tax statute was created in 1987, Montana ranked towards the bottom in the nation for tourism marketing, and fewer than 3 million travelers came to the state each year. With a stable source of promotion funding, tourism has become a leading state industry over the past 25 years. Visitorship has increased by 260 percent since 1987, and visitor expenditures have grown at an average rate of 6.5 percent annually since the lodging tax was implemented in 1987.
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While many factors influence travel trends, there is no question that Montana would lose market share to competing destinations without promotion — giving up portions of the revenues, taxes and jobs we enjoy to Colorado, Utah, Wyoming, Idaho and other states. A 2011 study by Leisure Trends Group found that travelers are 45 percent more likely to visit Montana if they are aware of destination advertising. The same study estimated that each dollar spent on advertising Montana in fiscal 2010 resulted in $157 in visitor spending.
In addition to funding tourism promotion, lodging taxes benefit Montana State Parks, the Montana Historical Society and the Montana Heritage Commission. Fifty-seven percent of the lodging tax is allocated for tourism promotion and tourism infrastructure, and 43 percent is deposited in the state general fund for the benefit of all Montanans.