While the report by the Council of the Future of Vermont did include
some accurate statistics on tourism in our state, the authors, in my
opinion, misread some data and reached the wrong conclusions with their
assertions that tourism is no longer a "robust" industry.
Tourism in Vermont is as strong as ever. Frankly, at this time tourism
is what is propping up our state's budget. Without it, our financial
situation would be even more dire than it currently is.
Over the past few months the revenues generated by Vermont's rooms and
meals tax -- paid largely by visitors to our state -- have been the
most stable of all.
Rooms and meals tax revenues were just $690,000 less than projections
in January, at just over $10 million. By comparison, corporate taxes
were off by over $1 million, sales taxes off by $2 million, and
personal income off by almost $8 million.
Over the past two years, growth in the rooms and meals tax has been
stronger than both the corporate and sales taxes, outperformed only by
the personal income tax.
The study's authors claim that, "Between 1999 and 2007, tax receipts
from lodging increased by just 17 percent.... In comparison, during the
1990s, receipts increased by nearly 50 percent."
So, we ONLY saw a 17 percent increase between 1999 and 2007, a period
that included the massive drop-off in tourism that followed the
terrorist attacks of September 11, 2001?
I guess compared to the 50 percent boost between 1990 and 1999 -- which
included both a booming economy and increases in the tax rate -- 17
percent does seem slower.
However, rooms and meals tax revenues generated $86.9 million in FY99
and $114.9 million in FY07, an increase of over 32 percent. The authors
appear to have overlooked the fact that we increased the rooms and
meals tax rate three times -- and fully three percentage points --
during that period, from 6 percent to 7 percent from 1990 to 1992 and
permanently in 1994, and then to 9 percent in 1997.
So much for the mystery of why tax receipts were up 50 percent in the
1990s as the tax rate was up 50 percent from 6 percent to 9 percent. It
makes the 17 percent increase in receipts, without a rate increase,
look even better.
In fact the authors themselves note that the federal Bureau of Economic
Analysis reports that measured inflation-adjusted dollars in the
"accommodation" sector grew from $451 million in 1997 to $502 million
in 2006, an increase of just over 10 percent during this period.
And the other evidence of tourism's slowing? The authors cited
declining attendance at a market basket of tourism attractions that
includes some well known sites -- Ben & Jerry's and Shelburne
Museum -- but also some lesser known sites, like Vermont Institute of
Natural Science, Middlebury College Museum of Art, Birds of Vermont
Museum, Hildene, and the Park-McCullough House.
These are fine sites, to be sure. But at a time when attendance at
historic sites nationally has been flat or down for a decade -- and
more visitors to Vermont are engaging in recreation activities --
should we be surprised that some relatively small museums and historic
sites in Vermont are seeing fewer visitors?
The study by the Council of the Future of Vermont is broad in scope and
contains many interesting insights. But I would caution against picking
out one or two pieces of data and drawing sweeping conclusions about a
complex issue like tourism.
Bruce Hyde, of Waitsfield, is Vermont's Commissioner of Tourism and Marketing.
