Golden opportunity for Maine businesses

I want to call to your readers’ attention an opportunity that has the potential to add $2 billion to the sales of Maine businesses and create thousands of new jobs.

Gov. Angus King’s Jan. 5 budget message to the Maine Legislature contains a proposal to increase the state meals and lodging tax from 7 percent to 7.5 percent, and to use the proceeds to fund the promotion of Maine tourism. It is projected that this increase would add tax revenues of $3.5 million in FY 2001-2002 and $6.8 million in FY 2002-2003, the lion’s share of which would be provided by the tourists themselves.

These added funds will enable the State Office of Tourism and its private sector allies to implement long-term marketing plans to help Maine compete for and win its fair share of spending by tourists, both domestic and foreign.

As a marketer of travel, tourism and hospitality services, I want to share with your readers why I think our Legislature should enact this proposal, and what the impact on the Maine economy might be.

First, consider that in 1999, only 20 percent of visitors to Maine were aware of our tourism advertising, and Maine’s share of the New England tourism market was down 16 percent from 1994. In my opinion, these two facts are not unrelated. Effective advertising creates name recognition and a desirable brand, leading in turn to market-share growth.

Maine’s small promotion budget, and the resultant fact that our state is advertised less than its competitors, gives them a clear competitive advantage, and an opportunity to increase market share at Maine’s expense.

Then, consider that in 2000, of the six New England states, Maine had:

. The least favorable change in hotel room occupancy (down 1.3 percent; by comparison, New Hampshire was up 3.9 percent), and

. The smallest increase in total room revenue (4.1 percent versus 17.1 percent for New Hampshire) (Source: Smith Travel Research)

These numbers tell me that Maine hotel room revenue increased from 1999 to 2000 only because an increase in average price outweighed a lower occupancy rate. Despite an economy that continued to be vibrant, tourists spent fewer nights in Maine hotels in 2000 than they did in 1999.

Finally, consider that in 1999, each dollar invested in Maine tourism advertising yielded $199 in tourist spending and $17 in state taxes. (Source: market researchers Longwoods International) Based on that, spending an additional $10.3 million on marketing in 2001-2003 would increase sales of Maine businesses by more than $2 billion.

Accordingly, I most strongly encourage your readers to write or call their state legislators in support of Gov. King’s proposal to increase the rooms and meals tax rate by one-half of 1 percent.

David H. Boggs of ACRO Global Marketing lives in Richmond.