To borrow a phrase, consider this “the rest of the story” to accompany the excellent Jan. 22 article about the explosion of bourbon tourism. The complete picture, with bourbon as its centerpiece, is that all tourism in Kentucky is experiencing significant success. Tourism has emerged as a major Kentucky industry, one of the state’s most important and valuable.
In 2014, tourism contributed $13.1 billion to Kentucky’s economy with growth occurring in every region of the state. Tourism supports nearly 180,000 Kentucky jobs. The mix of those jobs includes highly skilled, highly paid technical, managerial and professional workers. Tourism activities also are especially suited to entrepreneurs.
Tourism also generates employment opportunities for less skilled workers, and many tourism jobs provide income and an excellent training ground for young workers.
An important byproduct of a thriving industry’s infusion of money and jobs into the economy is that it also generates significant tax revenue. Kentucky tourism accounts for $1.37 billion in state and local taxes, far exceeding the amount of public funds invested in tourism marketing. Every dollar spent on state tourism advertising results in $15 in tax revenue, making tourism a major source of funds for non-tourism government services and operations.
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Kentucky tourism’s contributions result from a superb industry and the experiences we offer visitors. Along with bourbon, Kentucky’s portfolio of tourism assets includes horses, outdoor adventure, historical and cultural offerings, Bluegrass music, our special version of Southern cuisine, folk art and craft, and authentic small towns and urban excitement. This is a mosaic of experiences unlike anyplace else in the world.
So all is rosy with Kentucky tourism, right? It is not.
Here is the rest of the rest of the story: Kentucky’s tourism success is both fragile and falling far short of its full potential. Both stem from the illogical fact that Kentucky’s tourism marketing funding is dead last among southeastern U.S. states and is one of the lowest among all states.
Without adequate funding to compete with other states, we will continue to see Michigan and Tennessee commercials on our televisions with travelers in those and other states hearing little or nothing about Kentucky.
Despite the acute need for additional funding and the dividends it would pay, in recognition of the overall fiscal challenges facing the state, Kentucky’s tourism industry is not currently asking for more money. However, there are no-cost actions that legislators and local elected officials can and should take to bolster tourism and expand the benefits that come with it. One is to not divert existing tourism funds to non-tourism purposes.
This happened in 2014 when $9 million in hotel tax revenue restricted by law to tourism marketing was swept into the state’s General Fund budget. As Gov. Matt Bevin said during his campaign, this is “eating our seed corn.” At the local level many tourism commissions are often pressured to divert funds to non-tourism purposes.
Another action that would significantly bolster tourism would be passage of Senate Bill 50, which would delay the start of schools until late August. This would extend Kentucky’s peak tourism season and in turn extend the jobs and tax revenue generated during that peak. Passage of SB 50 can also reduce schools’ cooling costs and, as research from other states demonstrates, would not adversely impact student performance.
Another beneficial step relates to the growth of the shared economy with operations such as AirBnB. People who engage in commercial lodging services, albeit in their homes, should be required to abide by the same rules as traditional hotels, including paying the taxes that hotels pay. Those taxes represent the sole funding source of state tourism marketing.
Cheers and thank you to our bourbon tourism partners. Just as their success fully justifies action to support and further their efforts, so too does the current and future success of the total Kentucky tourism industry. That is the rest of a very good story.
Hank Phillips is president & CEO of the Kentucky Travel Industry Association and former deputy commissioner of the Kentucky Department of Travel and Tourism.
At issue: Jan. 22 Herald-Leader article, “Kentucky Bourbon Trail tourism up double digits to nearly 900,000”