Orange County hosted roughly 45 million visitors who left $7.8 billion in local coffers last year.
Visitor-generated tax accounted for 20% of all local tax revenue. The county’s tourism industry supported 132,000 jobs in 2005, according to a report last month from the Los Angeles Economic Development Corp.
At the same time, county funding to promote tourism remains an iffy proposition.
The 8-year-old Orange County Tourism Council has seen its county funding slashed from $700,000 for the 2002-03 fiscal year to $187,000 for 2005-06.
The county, facing cuts in funding from a deficit-strapped state, cut back on nonessential spending. There’s no guarantee there will be funding for 2006-07.
That’s worrisome to some tourism officials.
“We need a revenue stream to brand the county and make an effort with an impact,” said Charles Ahlers, president of the Anaheim/Orange County Visitor & Convention Bureau. “It’s very competitive, so it’s important to keep our name out there.”
It’s a debate that comes up every year between those who believe OC needs to promote vacation destinations and others who say county funds can be put to better uses.
The yearly merry-go-round over county funds also rehashes the question of whether OC needs a single tourism promotion entity at all. Hit TV shows “The O.C.,” “The Real Housewives of Orange County,” and “Laguna Beach: The Real Orange County” generate free publicity every week and companies such as the Walt Disney Co. spend millions of dollars to lure visitors to OC.
Naturally arguing in favor of county funding is Mark Feary, executive director of the OC Tourism Council.
“People think tourism just happens and are oblivious to competition,” he said.
Feary said the organization is the only group that promotes the entire county strictly to vacationers.
“All the other (convention and visitor bureaus) have a split focus,” he said.
The tourism council has partnerships that allow it to run promotions in key markets such as Phoenix, Tucson, Las Vegas and Sacramento. County funding also supports a Web site, www.visitorangecounty.net, and brochures displayed at hotels and airports.
But the funding issue raises a philosophical question: Should government be involved in tourism promotion?
Jack Kyser, chief economist of the Los Angeles Economic Development Corp., said it should be involved to boost revenue during all types of economic cycles.
“Government needs things that generate revenue over and above general taxes,” he said.
Keeping up with the big tourism budgets of Las Vegas and Florida requires government spending, said County Supervisor Lou Correa, who voted to fund the tourism council last year.
But he also acknowledged that limited resources might call for spending cutbacks.
On the other side is Supervisor Chris Norby, whose district includes parts of Anaheim and Buena Park. Norby voted against tourism funding last year.
“Government has no business funding tourism promotion,” he said. “It’s most effective if it’s done by the industry itself. Protecting and serving the public is the job of the county.”
A National Debate
The debate over whether or not to use public funds to promote tourism extends to the state and national level.
The state contributes about $7 million to the California Travel & Tourism Commission’s $14 million budget. The rest comes from funds generated by the industry under the California Tourism Marketing Act.
In some years, the state’s share has been zero. In other years, it has reached $15 million.
Las Vegas, meanwhile, has about $84 million slotted for its marketing budget in the 2006-07 fiscal year.
The on again, off again relationship between government marketing dollars and tourism was reflected in discussions at the recent California Travel Industry Association conference in Anaheim.
Marketing partnerships are becoming more popular as alternative funding sources.
Last year, the Anaheim/Orange County Visitor & Convention Bureau launched a program called “50 Days of Fall” with hotels.com and Expedia. Hotels.com promoted Anaheim in a three-city feature on TV commercials.
The campaign was designed to play on Disney’s 50th anniversary. The fall season traditionally is slow but saw higher hotel occupancy thanks largely to Disney’s promoting as well as the “50 Days” promotion.
In Santa Barbara, local officials took advantage of the wine trail craze following the popularity of the movie “Sideways.” It sponsored tours, books and dinners, among other programs.
Another source of funding could be business improvement districts. Half of Sacramento’s convention and visitors bureau budget comes from fees generated by the city’s business improvement district.
The Anaheim bureau has proposed a business improvement district to fund remodeling at the convention center.
That plan is on hold.
“Times are good, so it’s hard to convince people to do it,” Ahlers said.
OC cities need to collaborate more, said Gary Sherwin, executive director of the Newport Beach Conference & Visitors Bureau.
“Unless we find better ways to market ourselves, we’ll have our lunch eaten,” he said.
