Speaking at the South Carolina Governor's Conference on Tourism & Travel on Hilton Head Island, Sanford called the industry "an absolute priority" and promoted his plan to shift more state money to marketing tourism.

The three-day conference began Monday and is expected to draw some 500 industry leaders to the island. Tuesday's agenda was filled with discussions on everything from the state's accommodations tax law to e-mail marketing strategies.

In his speech, given to about 400 people at The Westin Resort, the governor said tourism is one of the few industries in the state that has weathered the globalization storm that has drastically altered South Carolina's economy.

The state, he said, used to draw companies because of its reputation for having cheap land and cheap labor.

With more companies moving jobs overseas, that's no longer the case, Sanford said.

He cited the 44,000 jobs, mostly in manufacturing, that the state has lost in the past couple of years.

"One of the few anchors that has held up job numbers in this state is, in fact, tourism," he told the lunchtime crowd.

The governor also touted his coastal roots -- he spent part of his youth in Beaufort County -- as helping him understand tourism's importance to the state's economy.

For too long, the governor said, the industry "has been the red-headed stepchild in terms of economic development."

The crowd responded with loud applause.

Facing budget shortfalls, the Sanford administration has aggressively cut staff at the state Department of Parks, Recreation and Tourism. At the same time, the department this year increased its marketing spending from $9.6 million to $11 million.

Sanford's latest plan is to privatize many of the agency's parks and recreation functions and shift even more money to tourism marketing.

The governor, during Tuesday's speech, called increasing marketing spending "a Herculean effort in these budget times."

Giving the conference's keynote address Tuesday was Horst Schulze, former president of the Ritz-Carlton hotel chain.

He delivered an impassioned plea, asking hotel industry leaders to focus wholeheartedly on service.

"The problem is right now we in the industry don't know we're in the service business," said Schulze, current president and CEO of the newly formed West Paces Hotel Group, which operates luxury hotels.

The company recently signed a consulting deal with the Sanctuary at Kiawah Island, a 255-room hotel and spa that plans to open in March.

Schulze said there are too many accountants and lawyers in corporate offices who care about nothing but cutting costs.

"Any fool knows how to cut costs," he said. "Hospitality means opening your hearts and holding people in your arms and making them feel well."

The conference continues today with an 8:30 a.m. student awards program; a 9:45 a.m. session on the findings of a South Carolina competitiveness study; an 11:15 a.m. discussion on open space technology; and an industry awards luncheon at noon.