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(This is one of a series of briefs written by NCSL, "Protecting Democracy: States Respond to Terrorism.")

States Take Action to Bolster Travel Industry

Shaky state economies were causing worry even before the September 11 terrorist attacks, and since that time state revenues have taken a turn for the worse. Travel and tourism, the third largest retail industry in the United States, has been hit particularly hard by recent events. Airlines alone announced more than 80,000 layoffs in the weeks following the attacks. In response to declining plane sales, Boeing also announced massive layoffs, leaving a large economic dent in Washington state. Other states deeply affected are those that rely on convention and tourism business, such as Nevada and Louisiana. Nevada lost the revenue from more than 78,000 visitors when hundreds of autumn conventions were cancelled. Louisiana's tourism officials say the industry has lost about $150 million since September 11.

The Travel Industry Association of America reports that total airline passenger miles are expected to drop 39 percent in the fourth quarter of 2001. In response, states are focusing on ways to help boost tourism efforts.

The Hawaiian economy relies heavily on tourism, particularly from California and Japan. In 1999, domestic and international visitor spending in the state totaled $14.5 billion. The Hawaii Legislature convened a special session October 22 to consider various economic stabilization measures. An emergency tourism measure passed that will channel $10 million in new money to tourism promotion. The state already had authorized $5 million. Another $5 million is expected from private sources, bringing the tourism promotion total to $20 million.

 Florida--another state that is particularly dependent on tourism--first had sharks, then terrorists and now anthrax to frighten away visitors. In the Tampa Bay area alone, the drop in tourism that followed the terrorist attacks will cost 5,000 jobs and millions in lost revenue in the local economy, according to a new University of South Florida report. Statewide, the forecast is anything but sunny. Hotel occupancy statewide sank 40 percent during the four weeks ending October 17, and attendance at major attractions was down 20 percent, according to the state tourism agency, Visit Florida. This drop translates into approximately a $364 million loss for the state's lodging industry compared with the same four weeks last year. In response, the state tourism agency has launched a new tourism recovery plan and has dedicated its $2 million risk response fund to additional advertising aimed primarily at Floridians and people in nearby southeastern states.

To boost sagging state revenues and lure tourists to the Catskills region, the New York Legislature passed a bill in late October authorizing a significant expansion in legalized gambling. Even some lawmakers who generally are opposed to gaming reluctantly approved the bill in a attempt to find new revenue. The measure authorizes additional Indian casinos, participation in a multistate lottery and installation of gaming machines at horse racing tracks. This new gambling activity could generate about $1 billion in state revenues within three or four years.

In several cases, policymakers and businesses are encouraging residents to travel within the state. After all, more than 75 percent of travel in the United States is by automobile and RV. The North Carolina tourism division has a new $3 million marketing campaign to encourage in-state tourism. The South Carolina tourism agency has a similar campaign funded by a $2 million state loan. In Minnesota, the state office of tourism and the state's hospitality industry joined forces to host a travel fair in early November at the Mall of America in Bloomington. The goal of the fair was to encourage near-term travel throughout the state and alert consumers about special travel deals.

Mandy Rafool
NCSL--Denver
(303) 856-1525, ext. 161
mandy.rafool@ncsl.org

Travel Industry Association of America
(202) 408-8422

Other NCSL Resources:

Other NCSL Briefs "States Respond to Terrorism"

NCSL's Protecting Democracy Page

NCSL's 2002 Legislative Session Home Page

NCSL's Economic and Tourism Development Page