Tourism marketing in Phila. faces budget cuts

It's a one-two punch the Greater Philadelphia Tourism Marketing Corp. says will cripple its ability to sell the city to tourists and, ultimately, will hurt state programs that rely on tourism dollars flowing in.

First, the agency says, its share of funding from the city's hotel tax is down $700,000 from last year because occupancy is down. And now, the state plans to slash tourism funding 33 percent to 49 percent in the 2010 budget, effective July 1.

"How long can any of us sustain this?" asked Meryl Levitz, head of the Tourism Marketing Corp.

A statewide lobbying effort to fight the cuts is being intensified as lawmakers in Harrisburg work toward a balanced budget, Levitz said yesterday.

Lost funding for her agency amounts to $1.72 million in Gov. Rendell's proposed fiscal 2010 budget and $2.4 million in the Senate's version. The two proposals are to be reconciled before the July 1 deadline.

"This is not a [Philadelphia] thing," Levitz said. "It's the entire hospitality and tourism industry of the state. We're all in the same position."

The Senate's proposed $2.4 million cut, if it stands, could result in $264 million less in visitors' spending and almost 4,000 fewer jobs in the Philadelphia area, the agency says.

Wanda Paul, senior vice president of finance and administration at the Philadelphia Convention and Visitors Bureau, said her agency stood to lose about $1 million a year in grants for luring international visitors to the city.

Last year, visitors spent $5.8 billion in the Philadelphia region and helped support 87,000 jobs, according to the Tourism Marketing Corp.

Friday, Levitz sent Rendell a letter, signed by all 15 members of the agency's board, opposing the proposed cuts.

They would come at a time when hotel occupancy has slid below 70 percent in Center City hotels, and the average daily room rate is down about 10 percent.

The Tourism Marketing Corp., like the Convention and Visitors Bureau, also relies on the city's 15.2 percent hotel tax for its funding.

Proceeds from a January increase in the tax is paying for the 18-month "With Love, Philadelphia XOXO" ad campaign, which debuted last month.

Harrisburg insiders respond that the state is facing a $3.2 billion shortfall, and that cuts are being proposed across the board.

"It's the reality of the times, said Sen. Jake Corman (R., Centre), who chairs the Senate Appropriations Committee. "The only other way to pay for their program is a significant personal-income-tax increase.

"That doesn't help the tourism industry either because people will have less money to travel," he said. "Unfortunately, the recession is demanding [we] make some very difficult decisions."

Rendell spokesman Chuck Ardo echoed the sentiment: "We don't argue with the benefits of tourism, and we agree that it is a economic plus. But having said that, we have to live within the constraints of a very difficult budget and have to make choices that we would rather not make."

Tourism and hospitality officials, however, say the reductions would undercut efforts that have yielded results. After the 9/11 attacks, for example, the state didn't stop marketing itself, and the efforts paid off, officials say.

"The danger is we will not be able to market effectively and capture the market share we have in the past," said Barry Wickes, president of the Pennsylvania Tourism and Lodging Association.

He and others are lobbying Harrisburg to maintain this year's funding statewide, Wickes said.

Visitors' spending in the five-county Philadelphia area accounted for about 34 percent, or $9.5 billion, of the $28 billion tourists spent statewide in 2007, including food, shopping, and entertainment, according to the Pennsylvania Tourism Office.

The Hershey/Lancaster/Gettysburg area came in second, generating $6.5 billion, or about 23 percent. Pittsburgh was third at $5.4 billion, or 19 percent.

"The funds that tourism and hospitality generate . . . are used as the state sees fit to pay for social programs, from education to safety," Levitz said. "Tourism is a hospitality generator, a tax generator. It gives back more than it costs."