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Part 1 of 2 - The debate over marketing dollars: Can tourism be bought?

A couple takes a look around the visitors center in downtown Beaufort on Thursday afternoon.
A couple takes a look around the visitors center in downtown Beaufort on Thursday afternoon. Jonathan Dyer/The Beaufort Gazette

Editors Note: This is the first of a two-part look at tourism marketing in the Lowcountry. The second part will appear Saturday online and Sunday in the print editions of the Island Packet and Beaufort Gazette.

For half a century, tourism has been the elemental force powering Beaufort County's economy.

Now, though, tourism leaders warn that without more public money for advertising and marketing, they'll be hard-pressed to keep up with other vacation destinations that outspend them.

If the region doesn't spend more, it could lose visitors to places that more aggressively pour money into advertising and public relations campaigns, they say.

Nonetheless, wresting more public money for marketing hasn't been easy.

The people deciding who can dip into the big pots of public money -- accommodations and hospitality tax revenues -- aren't always satisfied tourism marketers do enough with what they already are given.

Further, much of the money from those pots is devoted to groups that will fight hard to keep it -- local government and arts and cultural organizations, for example. Whether such groups attract visitors has long been debated, but supporters say there's no doubt they enhance the area's quality of life, an essential attribute for a tourist destination.

The debate comes down to this: Does the Lowcountry spend enough money to market itself?

Over the next two days, The Island Packet and The Beaufort Gazette will examine this question. Interviews suggest three schools of thought:

MARKETERS: MORE MONEY SORELY NEEDED

In trying to win the attention of travelers, South Carolina promoters start at a disadvantage, local marketers say. They receive about 12 percent of all accommodations taxes collected, while the average is about 55 percent, according to a 2009 study by Destination Marketing Association International, a Washington-based group of destination marketing organizations.

"That says it all," said Carlotta Ungaro, president and CEO of the Beaufort Regional Chamber of Commerce.

Local marketers believe they deserve a larger share because the businesses they promote are the ones that attract visitors and collect the accommodations taxes in the first place.

Ungaro's colleagues at the Hilton Head Island-Bluffton Chamber of Commerce say the benefit of marketing isn't merely conjecture. They say proof is in the handful of destinations, such as Colorado and Bermuda, that stopped promoting -- then started it again -- after seeing tourism plummet.

Further, because the primary source of additional marketing funds -- accommodations and hospitality taxes -- are paid primarily by tourists, the burden of promotion doesn't fall on residents and is self-sustaining, marketers say.

Their case: More money for marketing means more visitors and visitor spending, which means more accommodations and hospitality taxes, which means more money for marketing.

Simon Hudson, who leads the Center of Economic Excellence in Tourism and Economic Development at the University of South Carolina, said the state has untapped tourism potential.

"Generally, my answer would be no, we don't spend enough," Hudson said. "Given that it's such a competitive marketplace out there, I think we need to shout even louder than we are."

People outside the state and overseas often aren't familiar with South Carolina -- for example, some mix up the two Carolinas, said Hudson, who arrived in January from the University of Calgary andspokeat a Hilton Head Island-Bluffton Chamber of Commerce event in May.

People who have been to South Carolina usually have favorable impressions, however, leading Hudson to conclude more marketing could make a difference.

"It's up to the tourism industry to prove it's worth the investment," he said.

In an effort to do that, the Hilton Head-Bluffton chamber hired Don Schunk, a former research economist at Coastal Carolina University in Conway, to estimate the benefit of more tourism marketing to the regional economy. His work should be available soon, chamber officials said.

ANOTHER VIEW: IT DEPENDS

Some say the answer hinges largely on how much tourism communities want to attract.

In the case of the Lowcountry, more tourists could lead the economy out of recession, they say. On the other hand, if communities aren't enthusiastic about bringing more visitors, amping up marketing need not be such a priority.

In the words of David Anderson, president and CEO of Anderson Communications Group on Hilton Head Island: "It depends on what you want to be when you grow up."

Such a decision is complicated in the Lowcountry because real estate sales and new development, which combined with tourism to drive Hilton Head's economy for decades, have dramatically slowed during the recession. That means a stool that once had three legs now has only one.

"If you want (tourism) to stand like a tree, you better feed it," said Anderson, whose firm the chamber hired to be the primary marketing agency for Hilton Head from 1986 to 2006.

If the region wants tourism to grow, it's best to simultaneously advertise and add or enhance tourist attractions, said Taylor Damonte, director of the Clay Brittain Jr. Center for Resort Tourism at Coastal Carolina University.

"If you're not getting the results you need to achieve, then increases in advertising should be part of a broad-based strategy to change that," Damonte said. "The question is, do you have all the visitors you want in the shoulder seasons as well as the peak season?"

SKEPTICS: IS THERE 'A BETTER WAY?'

Some are unconvinced more spending on marketing brings more visitors and more tax revenue.

Some -- like Ashley Landess, president of the S.C. Policy Council -- say government has no business in tourism marketing at all.

"Government advertising is not what attracts people to South Carolina," Landess said. "It doesn't work."

The leader of the Columbia group that advocates limited government said tourism marketers cannot prove that more public investment attracts more visitors, creates more jobs or spurs higher per-capita income. Moreover, businesses that benefit most directly from tourists can and should do their own advertising, Landess said.

Willis Shay, chairman of Hilton Head's Accommodations Tax Advisory Committee, says the number of tourists coming to Hilton Head has declined in recent years, even though the budget of the Hilton Head-Bluffton chamber's marketing arm, the Visitor & Convention Bureau, was increasing before the recession.

Chamber officials estimate 2.4 million visitors came to the area in 2000. The number of visitor has dropped below that level for several years during the past decade, although other factors such as length of stay and spending per party have increased, they say.

Shay's committee advises Hilton Head Town Council on how best to allocate state accommodations tax money. The VCB receives about $1 million from that tax as Hilton Head's designated marketing organization and also annually receives six-figure supplemental grants to do more marketing.

Many visitors say Hilton Head Island was recommended to them by friends or family, Shay said. Therefore, tourism is best served by ensuring travelers enjoy their experiences and make repeat trips. That means accommodations-tax proceeds should also be spent on things like festivals and arts groups, he said.

"We have to do all we can to take care of (tourists) once they're here," said Shay, also a board member of the Hilton Head Symphony Orchestra, which often receives accommodations tax grants. "It's not going to be done by advertising in a magazine in Chicago."

Shay said he might call for a hearing and "management audit" of applicants, including the chamber. With such an audit, Shay said his committee could compare competing destinations, study best practices and review applicants' personnel and qualifications.

The town would probably need to enlist a third party to conduct such an audit, he said.

Beaufort City Councilman Mike Sutton said he has had informal discussions with city and county officials about forming a joint group to study the region's tourism marketing, which he thinks involves too many parties given its size.

"How many people does it take to market the whole region?" he asked.

Sutton said some of the groups that receive public money for tourism promotion have "huge overhead" costs.

"Are we providing jobs to people, or are we marketing Beaufort?" he asked.

Sutton, who recently defeated Larry Holman, the president and CEO of the Beaufort County Black Chamber of Commerce, and another candidate to win re-election, also repeated a criticism of the black chamber that he leveled during the campaign. He questioned why that group, which receives marketing money from the city, displayed what he said was an image of Beaufort, N.C., on its website.

Sutton said no group that receives money for tourism promotion does an adequate job of measuring the return on its expenditures.

"I know one thing: I will be asking harder questions next time around," said Sutton, who has been in office for four years. "I will be demanding more accountability next time."

Beaufort County Councilman Steve Baer has expressed similar concerns. He wants the county to stop "pouring more money on the same old machine."

He wonders why the county allocates money to three separate chambers to do tourism marketing, and he wonders whether state law would allow the county to maintain control over more of the money or do some of its own marketing.

He would prefer more money go to emphasizing historic sites in the county and marketing in outlets -- such as alumni, military and professional magazines -- that would do more to attract permanent residents than visitors.

Baer suggested a small group of tourism marketers and other interested parties brainstorm to improve the system.

"There's got to be a better way," Baer said. "We're dispensing millions of dollars."

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