The underestimated

Our view: From Old Hilltop to Ocean City inlet, one of Maryland's most lucrative industries is at risk of being taken for granted

May 17, 2010

With the pageantry, pomp and parade of the Preakness Stakes now past, it's tempting to toss aside thoughts of tourism dollars like so much Pimlico infield debris. The Triple Crown event is a red-letter day on the visitors calendar, but the reality is that the horse race and all its attendant ceremonies and celebrations are only a small component of Maryland's lucrative tourism trade.

A report by a travel and marketing consultant released last week found that the number of visitors to Maryland rose 3.5 percent in 2009, a year when tourism fell 5.5 percent nationally. Maryland is one of only a half-dozen states where tourism increased. That is a remarkable success and is no doubt fueled, in part, by a recession that has caused some travelers to stay closer to home.

But there's more at work. Baltimore-Washington International Thurgood Marshall Airport saw a modest increase in passengers last year, one of only two major airports in the country that recorded growth. There are several reasons for this, from the success of major carrier Southwest Airlines to the relative strength of the region's federal government-fueled economy. But the net result was this: All those visitors needed local services, from transportation to food and lodging.

Maryland isn't known for having a lot of corporate headquarters, but in the hospitality trade, the state has few rivals. Marriott International, Choice Hotels and HMS Host (the airport concessionaire) are all based here. And despite the economic downturn, their business is starting to look up. Marriott recently reported their North American bookings rose 16 percent in the first quarter from one year ago.

All together, the state's hotels, restaurants and attractions account for $14.5 billion in economic activity. That makes tourism a substantial employer, but one that doesn't always get a lot of respect from elected officials and the general public.

Over the past three years, Maryland's budget for marketing has been reduced from $7 million to $5.3 million annually. Even the level of investment in 2007 was a piddling sum compared to the massive number of jobs at stake. Local governments collect more than 10 times that much from taxes on admissions and amusements each year.

Occasionally, officials will talk about making major new investments in a convention center or hotel or perhaps bringing racing to downtown Baltimore. Such developments are generally welcome, of course, but too often tourism is seen merely as a means to generate tax revenue (on hotel stays, for instance) without directly taxing those who live (and vote) here.

This lack of respect given tourism is foolish at best and self-destructive at worst. Studies have shown that cutting state promotional budgets may save money in the short term but can be quite costly overall. After Colorado trimmed promotions in the 1990s, travel there fell by more than 8 percent (far worse than competitors), and it took three years to reverse the trend when the state later restored the cuts. The result? According to one analysis, about 2.6 million fewer visits, at a huge cost for the economy.

Tourism supports about 146,000 jobs in Maryland (95 percent in small or minority businesses), and the $1.8 billion in taxes paid by visitors saves the average Maryland household about $500 in state and local taxes each year. The question we should be asking is not how to milk the tourists for more but how we might be of greater service to them.

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