Alive and (barely) kicking

After months of lobbying to retain the state Department of Tourism following Gov. Gray Davis' recommendation that its entire budget be eliminated, industry

But funds to advertise the state as a tourism destination will be slim. And travel destinations such as Orange County and cities like San Diego, which have been able to expand the effectiveness of their marketing budgets by following the state's campaigns, will lose that luxury.

Included in the $99 billion state budget was $929,000-money to pay about eight staffers to administer roughly $7 million in self-imposed industry assessments used to operate the private sector California Travel and Tourism Commission.

It's a small but important fraction of the $7.2 million budget that was initially proposed for the current fiscal year, said Terri Taylor-Solorio, president and chief executive officer of the California Travel Industry Association.

The advocacy group had lobbied since January to have the department's budget retained.

"With the $929,000, there still is a state Department of Tourism," Taylor-Solorio said. "It's disappointing, because we had champions in the Legislature who understand that funding tourism is one way to help restore the deficit," Taylor-Solorio said. "But with the enormity of the deficit, they had to make cuts everywhere."

One of those champions was Assemblyman John Campbell (R-Irvine), who in April helped draft a deal that would have reinstated funding with only a 10% cut.

"The number of visitors (this program) brings to California is more than the money expended," Campbell told the Orange County Business Journal in May.

Legislators' budget cuts were aimed at shoring up a $38 billion budget deficit.

The funding left in the tourism department budget is about 6% of last year's total tourism budget of $15.7 million for the 2002-2003 fiscal year.

Even at that figure, California ranked eighth in tourism budgets among U.S. states.

Hawaii was No. 1 with $56 million, followed by Illinois with $49.7 million. Even West Virginia out-spent California, with a budget of $17 million.

Kerri Kapich, vice president of marketing for the San Diego Convention & Visitors Bureau and a member of the commission's marketing committee, said most of the funding would go to maintaining the department's "infrastructure."

That includes visitor information centers, a travel guide, Web site and research.

"So there's not much left for advertising and public relations," Kapich said. "They're looking at under $350,000."

In the past, the state has conducted aggressive tourism advertising campaigns.

Charles Ahlers, president of the Anaheim Orange County Visitor & Convention Bureau, has repeatedly said a lack of funding at the state level would be detrimental to Orange County.

Typically, cities and regions outside the major metropolitan markets have relied more heavily on state promotions to bolster their marketing budgets.

"Now it will be harder in those markets, in terms of getting the same impact. It's going to be harder for all cities-for San Francisco and Los Angeles, as well," Kapich said.

Reint Reinders, chief executive officer of the San Diego Convention & Visitors Bureau, said the problem of promoting San Diego as a tourism destination is compounded by the fact the bureau's budget has been cut, as well.

Slimming Down

For the current fiscal year, the San Diego bureau has a budget of $16.2 million, down from $14.9 million last year.

The bureau, like other recipients of hotel-room tax revenue, saw a cut from the city, which administers such funds and faces a budget deficit of $30 million.

In Anaheim, Ahlers said the budget is $7.6 million, versus $8 million last year.

"We're down a little bit because TOT (the 'bed tax') is down," he said. "It's down everywhere 6% to 7%."

As of June 30, Anaheim's bed-tax collections for 2003 totaled $56.2 million, about 14% below original projections.

Reinders said while the travel industry has suffered in the wake of the Sept. 11, 2001 terrorist attacks, it would have been smarter for California to spend more on advertising to lure visitors.

Some Western states have beefed up their promotional budgets.

"The state had been making good progress in expanding visitor market share," Ahlers said. "With the budget cut, we will lose share back to states that are more aggressive than California. This will affect Orange County and our attractions, hotels and other visitor-industry related businesses. It means jobs to the county. For every $1 million in visitor spending in the county, another 26 jobs are created."