The adage “It takes money to make money” proved true in Denver last year when the city’s investment in a new convention center hotel and $4 million in marketing was rewarded by a record influx of tourists.
Tourist visits to Denver grew 13 percent over 2005, according to a Longwoods International study commissioned by the Denver Metro Convention & Visitors Bureau. Visitor spending hit a record $2.76 billion last year, up from $2.43 billion the previous year.
Besides pulling itself up by its own bootstraps, Denver’s hospitality industry also benefitted from a general resurgence of tourism in Colorado, prompted in part by $19 million appropriated by the 2006 legislature to promote tourism. That funding, up from $5.5 million in 2005, was one of the fruits of the passage of Referendum C in 2005.
Tourism promotion had been slashed heavily during the state budget crisis, and Colorado began losing visitors to neighboring states like Utah and Wyoming, which did a better job of advertising their attractions.
The revived state efforts were augmented by the $4 million spent by the city to promote Denver specifically, in part by luring new convention business. That funding was provided by a 1 percentage point increase in the lodging tax approved by voters in November 2005.
Officials also credited tourism growth to the 1,100-room Hyatt Regency Denver at the Colorado Convention Center, which had its first full year in 2006, and the opening of the Denver Art Museum’s new wing.
Overall, the effectiveness of promotional efforts is shown by the fact that Denver’s growth in leisure trips was much stronger than national trends, which have been just keeping pace with population growth, according to Longwoods.
Tourism promotion like that funded through the Denver lodging tax and Referendum C is a sound investment. A 2005 Longwoods study concluded that every dollar Colorado spent marketing for tourism generated $18.10 in tax revenue.
The Denver tax is especially attractive since it is rare for Denver residents to rent hotel rooms in their own city and the tax is thus paid primarily by the very tourists and convention visitors it helps lure here.
The state’s promotional costs are more than offset by sales taxes on the money tourists spend here and income taxes on the jobs they help create.
We’re glad to see the increase in tourist promotion by both the city and the state is paying such swift and handsome dividends.
