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Hospitality revenue shaky

State tourism advertising cuts cost the Gulf Coast

MISSISSIPPI GULF COAST – With state revenues declining, on the surface of things it might make sense to cut tourism advertising. But Coast tourism officials say that just makes the situation worse by decreasing tourism visits, which translates into lost sales and hence lower sales tax revenues.

The Harrison County Tourism Commission said by a “conservative” estimate, the decrease in tourist visits that resulted from a drop in Mississippi Division of Tourism advertising cost $12 million in gross hospitality revenue for the last quarter of 2000. That translates into $900,000 in lost state sales tax revenues.

Limited fourth quarter advertising by the state resulted in a 96% drop in state advertising referred inquiries. Referrals generated by state advertising declined from 26,329 in 1999 to 955 in 2000.

“The Harrison County Tourism Commission, which operates the Mississippi Gulf Coast Convention & Visitors Bureau (CVB), is joining other hospitality industry leaders to encourage members of the state Legislature to maintain level funding for the Mississippi Development Authority and its tourism division,” said Stephen Richer, executive director of the Mississippi Gulf Coast CVB. “If funding is cut, the state can expect similar losses in economic impact and tax revenue both statewide and on the Coast. Other corresponding results in levels of both visitation and even employment could occur.”

The economic loss figures were estimated by a study done by D.K. Shifflet and Associates, which conducted state-sponsored research into the issue.

Richer said tourism funding approved for this year should match 2000.

“Each dollar spent has been documented to produce $54 of state general fund tax revenue, higher multiples of economic impact, and, most importantly, a continuation of the trend which is establishing Mississippi as a top vacation destination,” Richer said.

The Coast has been making progress recently in another key area necessary for increasing the number of tourism visits to the state: improvement in air transportation.

Beau Rivage entered into an agreement in March 1999 with Air Tran to provide subsidized flights into the Gulfport/Biloxi Regional Airport. Recently Grand Casinos joined that effort.

“Now you have three partners and that has solidified the support for the upside as well as any potential for downside in revenue for the airline carriers,” said Bruce Frallic, executive director, GulfportBiloxi Regional Airport. “So that makes it much stronger. And we are delighted because the low air fares that are available from Air Tran are influencing the fares of our other carriers, keeping fares down and keeping all the carriers competitive which results in considerable stimulation in demand.”

Since 1992 boardings at the airport have grown almost 500%, and in 1999 the airport was the fastest growing in the country. Frallic said indications are boardings will grow at a more normal rate of 5% to 8% until another major casino project comes on in the future.

Frallic said good air service is essential to growing the casino industry.

“They have to bring people in from outside because the Coast has pretty much tapped out the rubber tire market,” he said. “So we have to reach out farther. And that is what air service does for you.”

Another effort to attract more tourists to the area involves attracting a cruise ship to locate in Gulfport. A cruise industry task force is planning meetings in Miami this month with an alliance of 13 cruise lines called the Florida-Caribbean Cruise Association. The task force also plans to attend the Seatrade Cruise Shipping Convention in Miami in March, and is hoping to get some visibility by being featured in the March issue of Cruise Business Review.

Lori Baer of Gee & Jenson, a West Palm Beach, Fla., marketing firm has been hired by the Mississippi State Port Authority to do a $29,500 marketing study of Gulfport as a cruise destination.

It is estimated that attracting a cruise ship to Gulfport would generate about $1.5 million annually in passenger taxes and parking fees. Activity at the local airport would also get a boost.

Experts say that cruise ships are running out of room in East Coast ports, so the Gulf of Mexico is an increasingly popular alternative.

The size of the port in Gulfport is considered an advantage because the port is large enough to handle the new, very large cruise ships which carry up to 3,000 passengers.

Contact MBJ staff writer Becky Gillette at mullein@datasync.com or (228) 872-3457.

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