Despite fix-ups, fewer show up

Officials seek ways to increase appeal, business

By John Cheves

JCHEVES@HERALD-LEADER.COM

Charles Bertram

The Hemlock Lodge overlooks the swimming pool and Hoedown Island in Natural Bridge State Resort Park at Slade. Photo by Charles Bertram | Staff

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Kentucky has spent more than $300 million over the past decade maintaining and enhancing its state parks to attract paying customers who -- so far -- haven't shown up, State Auditor Crit Luallen said Wednesday.

In recent years, the number of rooms and cottages occupied, meals served and rounds of golf played at state resort parks has dropped, reducing revenue growth at the Parks Department well below its aggressive spending growth for enhancements. The Parks Department recently asked for, and got, an extra $5 million for this fiscal year to help balance its budget.

"We're right to be very concerned if we're investing hundreds of millions of dollars to improve the facilities, but our numbers are actually going down every year," said Luallen, who released her office's review of the Parks Department for the years 2000 to 2007. "We have literally spent $55 million on our golf courses during this period of time, but we have seen 16,000 fewer rounds of golf being played, and that's with five new golf courses."

In early 2004, a few months into Gov. Ernie Fletcher's administration, then-Commerce Secretary Jim Host pledged to make the state parks profitable, even though no state parks system in the United States turns a profit. Host adorned Commerce Cabinet offices with bright red stickers that had the number 29 with a slash through it, proclaiming his plan to end the annual $29 million subsidy to state parks from the General Fund.

With Fletcher's blessing and some bond funding, Host plowed tens of millions of dollars into the parks to clean and renovate old lodges, buy new furniture, upgrade the food and add Starbucks coffee, improve golf courses and tennis courts, retrain employees, rebuild the department's public Web site and hire an outside firm to handle reservations. He raised prices across the system, although he did not establish an entry fee for parks, which some states charge.

Since then, parks spending has jumped from $81 million to $88 million.

But revenue -- including money raised through food and lodging sales and golf fees -- nudged only from $55 million to $57 million. Some activities that earned a modest profit in 2000, such as dining halls and golf courses, were actually losing money by last year, Luallen said.

The state's subsidy remains $29 million a year. Next year, it's set to hit $30 million.

Too many battles

Host on Wednesday acknowledged that fixing the parks was a tougher challenge than he first realized.

It took four years to restore all 17 resort parks to credible condition, Host said, and news of the improvements might not have spread. People who had bad experiences at Kentucky parks must be aggressively coaxed back with marketing and possibly discounts, although it's not clear where that money will come from, he said.

Host, who made a fortune in sports marketing, said state government proved inflexible to several money-saving changes he wanted to make, such as shuttering some resort parks during the slow off-season months and closing some unprofitable golf courses. Every park has state merit workers, local citizens and elected officials who fiercely defend every dime it gets, he said.

"I'd say 'We need to get rid of these 220 people or close this facility,' and my people would go off and then come back to me and say, 'No, there's a law. You can't do this.' And I had so many battles to fight, I just had to drop it," Host said. "It was a very, very, very difficult environment."

Commerce Secretary Marcheta Sparrow, who inherited the situation when Gov. Steve Beshear appointed her in December, said she found Luallen's audit report "constructive."

"I think the problem is we have a generation of Kentuckians who may never have stayed at a state park. We have got to get the word out," Sparrow said.

Higher priced rooms

Luallen concluded that the Parks Department must somehow rein in daily costs while boosting its marketing to attract more visitors.

Sparrow said she agreed. However, she did not agree that the state's 1 percent hotel/motel tax, which Luallen said generated $7.5 million last year, is a good source of funds to promote the parks. The hotels and motels that provide that money probably would resent its being used to advertise their public-sector competitors, Sparrow said.

Sparrow said she also disagreed with Luallen's concern that higher prices, particularly at lodges, seem to chase away parks customers. Average room prices based on the highest lodge rate for resort parks rose from $62 a night in 2000 to $94 a night in 2007, a 52 percent increase, according to Luallen's report. However, Sparrow said, given the discounts available and cheaper prices at off-peak times, the prices are comparable with the private sector.

But once you charge more than $90 a night, you're entering a different territory than state parks traditionally occupy, said Mary Ann Squires, a member of the non-profit Kentucky State Parks Foundation, which privately raises money to enhance the parks.

"Then they would be in competition with the bed and breakfasts, and, at that point, some people would rather do that. You're a pampered pet at a B&B," said Squires, who owns Kentucky Horse Tours in Versailles.

As Kentuckians prepare for the summer travel season, the Parks Department soon will advertise itself to them with the slogan "Discover Your Own Back Yard," Sparrow said. Local tourism officials said the idea has merit, and added that it could just as effectively be named "Discover $4-a-gallon gas."

"State parks could prove a more popular holiday destination this summer with gas prices going so high," said Christopher Oakford, spokesman for AAA Blue Grass/Kentucky. "If people want to stay closer to home, they're going to perceive the state parks as a good value."

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