Why does one of Virginia’s top industries only receive $27M in funding?

Tourism is big business in Virginia.

Last year, Virginia tourism brought in $22.4 billion in revenue – $1.5 billion of it in taxes that went straight to the state and localities – and employed 213,000 residents.

But despite being one of Virginia’s top five industries, the tourism industry only received $27 million in funding, according to Virginia Hospitality & Travel Association (VHTA) President Eric Terry.

According to the United States Travel Association, a tourist is defined as someone from at least 50 miles away that spends money on food, lodging or entertainment.

“I think one of the important factors is that it is not necessarily on the agenda of the economic development folks within the states. That’s one of the things that does hinder the industry a little bit,” said Terry.

Virginia tourism doesn’t have a stable source of funding

Money for the tourism industry comes from the general funds that are allotted by the General Assembly during the budget cycle, each year. This means that the VHTA and other tourism organizations need to lobby for funds each year in Richmond.

“One of the things that we’ve advocated for is the ability to really have a dedicated, sustainable tourism funding mechanism around the state. On a long term state basis, you don’t necessarily know what your tourism funding is going to be,” said Terry.

Virginia faces competition, challenges

Terry stated that Virginia is really falling behind, when compared to other states.

“Comparatively, Myrtle Beach – and we’re talking just Myrtle Beach on its own, not South Carolina – has a $32 million marketing budget. Because we don’t have a sustained mechanism for tourism funding, I just don’t think we’ve quite kept up with the rest of the country,” said Terry.

Some localities, like Virginia Beach, have created their own funding mechanisms, in order to spend additional funds on tourism marketing, said Terry.

Even in Prince William County, the county’s tourism organization – Discover Prince William & Manassas – has seen some challenges.

With $1,162,782 from the county budget, and $65,000 from Manassas’ TOT (Transit Occupancy Tax) funds, the organization has had to look at places to find cost savings – one being the Occoquan Visitor’s Center.

In addition to fierce competition from other states, Virginia has been negatively impacted by sequestration and cutbacks in government travel.

“Historically, government travel has really been the thing that has supported the travel and tourism industry in the state. But when that dropped dramatically, we’ve had to recover that in different areas,” said Terry.

Next steps

Terry said that there are ways that the tourism industry can secure funding and continue to grow the industry.

“There’s two opportunities within tourism – one is tourism investment…[and] creating a more dedicated source of taxes that would go toward tourism…The budget cycles over the past couple of years have been difficult, because we have seen some declines around the state. And I think that we’re just now seeing the increases that are happening – so as we go forward, I think it’s a more favorable climate,” Terry said.

The VHTA intends to lobby again in Richmond during the General Assembly’s budget cycle in January.