Posted on Fri, Nov. 14, 2003


Hospitality taxes should be focused on results


Guest columnist

The State’s Nov. 11 editorial, “City must make most of limited food tax proceeds,” was right on target. By divvying up restaurant “hospitality” taxes among dozens of eligible groups, it is doubtful any real impact will be made in advancing tourism, not just in Columbia but in any community that has a local restaurant tax. This also applies to state and local accommodations taxes, which are also designed to spur the community and tourism.

The hospitality industry is opposed to these industry-specific taxes, especially when they are not used to advance area tourism and the local economy. When you consider the average visitor to our state in 2002 spent $57.05 per day, and was traveling with three other people, it pays a community to attract as many tourists as it can, and to keep them in town as long as it can.

The combined spending of our state’s tourists generates almost 10 percent of all taxes collected in South Carolina. But what can a community do to lure more visitors?

If tourism-related taxes are carved up a little here and a little there, not much can be done to entice people to visit our area. If, instead, large worthy projects were considered, and the largest portion of these funds was used to advertise and promote the area and all of its attractions and products, people will not only visit, they might return for multiple visits and even consider retirement to the area.

The state is fortunate to have true tourism destinations such as Myrtle Beach, Charleston and Hilton Head, but all areas of the state can attract visitors if the tourism products have value and are marketed properly. Newberry is a great example of having good products — the Opera House, restaurants, retail stores and other reasons to visit — and marketing them.

But why use the majority of the funds for advertising and promotion? Simple: For every dollar that South Carolina Parks, Recreation and Tourism spends on advertising, it generates $23 in the state’s economy. Myrtle Beach generates a $300 to $1 return.

If Columbia were to pool its resources through a unified marketing plan coordinated by the agencies whose purpose is specifically to recruit visitors, business would increase not only for area hotels, but for restaurants, retail stores, gas stations and other merchants in town. At the same time, local tax coffers would increase.

If you look at the return-on-investment numbers and take the low end, $23 for every dollar spent in advertising and promotion, a $1 million ad campaign should generate at least $23 million in our economy. If coupled appropriately with area hotel taxes, a $10 million ad campaign could generate over $230 million in not only Columbia, but also the entire Midlands.

The dollars these visitors spend in the area can generate over $10 million in new state sales taxes, benefiting public education and other state services, all because the area was promoted in a uniform and focused fashion. This might mean developing a marketing piece targeting young families by promoting the zoo, EdVenture and State Museum in one ad. It might mean coupling the lake, the river and Congaree National Park to outdoor enthusiasts; or maybe people interested in history would be attracted with an ad featuring our historic homes, the State House and other historical attractions.

By combining the individual attractions together through a unified program, not only will the area be able to have more purchasing power to buy more advertising space, the unified ad will encourage visitors to see more than one attraction, thereby spending more money in the area economy.

If used as the General Assembly originally intended to spur a tourism economy for all areas of the state, these tourism-related taxes on prepared foods and hotel accommodations can help improve the area’s economy to the financial advantage of all citizens.

To that end, elected officials in our cities, counties and state government should do everything in their power to make sure that as much money as possible is made available for paid-space advertising and promotion to spur tourism.

Mr. Sponseller is president of the S.C. Hospitality Association.





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