SALT LAKE CITY — As the saying goes, "To make money, you have to spend money." The Utah Office of Tourism has figured out a way to make lots of money for the state despite spending less than before on marketing.
According to a report released Thursday by the tourism office, its spring and summer advertising campaign generated $222 in economic impact for every dollar the agency spent marketing the state to the rest of the nation — the highest rate of return on investment the state has ever seen.
The 2009 campaign netted $18 in tax revenue for every dollar spent in the tourism ad budget, which translated into more than $56 million in tax revenue for state and local coffers and more than $705 million in overall economic impact for the state.
"Even when the economy was its toughest, we were getting traction," said Leigh von der Esch, managing director of the state Office of Tourism. "It's important we maintain the funding because we're spending it well and the message is resonating."
The state spent nearly $3.2 million on ads last year, down from nearly $4 million in 2008 and 2007. The report stated that tourism tax revenues peaked in '07 at $67.7 million with a tax return of $17 per dollar spent.
In '08, tax revenues dropped to $45.4 million, or $11 per dollar spent on advertising. But last year saw a strong uptick in revenue and return on investment and tax money channeling into state coffers.
Research analyst Denise Miller, vice president of Strategic Marketing and Research Inc., told the Deseret News that the state's innovative marketing efforts achieved exceptional results in spite of major economic challenges.
"With the economy being bad, what would have happened is lots less travel (to the state)," she said. "Through the advertising, there were 800,000 trips that probably would not have happened otherwise, (and) $700 million of economic impact and $56 million in state and local taxes."
While the positive economic impact of the campaign would seem to be evident, Dave Williams, co-deputy director of the tourism office, said he hopes the Legislature will see fit to continue funding the program at least at its current level.
"Tourism is an investment," he said. "Investing in tourism promotion generates revenue for the state. … It's not just one of those areas that keeps draining money.
"It brings in money that can go towards education, roads, health care and all the things that we're dealing with."
He said he hoped legislators see the ad spending as a positive investment and a way to help generate revenue for the state and improve the Utah's image.
"(Building our image) can help with efforts to bring business to the area or expand (existing) businesses," Williams said.
"It's great for economic development."
2009 spring/summer tourism ads
Cost: $3.2 million, down from nearly $4 million in both 2008 and 2007
State and local tax revenue generated: $56.1 million, up from $45.4 million in 2008 but down from $67.7 million in 2007
Taxes generated per dollar of media spending: $18, up from $11 in 2008 and $17 in 2007
Total economic impact: $705.4 million, up from $571.2 million in 2008 but down from $851 million in 2007
Economic impact per dollar of media spending: $222, up from $143 in 2008 and $215 in 2007
Source: Strategic Marketing and Research Inc.
e-mail: jlee@desnews.com