Hartford Business Journal

www.HartfordBusiness.com June 6, 2016 • Hartford Business Journal 3 Tourism industry shares in CT budget pain By Matt Pilon mpilon@HartfordBusiness.com A s we head into the summer tourism season, Connecticut officials will have less money to spend marketing the state's attractions, while individual museums, nonprofits and arts groups will also see less state funding as a result of budget cuts negotiated by lawmakers. Most organizations, ranging from the Con- necticut Science Center, Mystic Aquarium, and Greater Hartford Arts Council, are see- ing 10 percent reductions in state funding, but the statewide marketing budget lost nearly a third — or $3 million — of its original $9.5 million funding allocation for fiscal year 2017. As a result, the state Department of Eco- nomic and Community Development (DECD) has for the first time since 2012 cut television advertising from its marketing campaign typically launched in late April, said Timothy Sullivan, the agency's deputy commissioner who oversees the state's tourism programs. DECD has instead increased its focus on less expensive and more trackable digital advertis- ing, he said. That trend will continue in the year ahead, when adver- tising will comprise a larger percentage of the marketing budget. The budget cuts finalized by state law- makers in special ses- sion are for fiscal year 2017, which begins July 1, but some of the state's marketing and tourism cutbacks have already begun due to mid-year rescissions and deficit- mitigation efforts. Sullivan said DECD will also be forced to cut its contribution to the Connecticut Conven- tion and Sports Bureau (CTCSB), a public-pri- vate partnership that markets the state's sports and convention venues to tournament organiz- ers, industry associations and other groups. CTCSB's funding from DECD fell to $655,000 this year, down from $800,000 in 2013 — the year after it was created. Sullivan said the size of CTCSB's cut for fis- cal 2017, which will come from DECD's market- ing budget, is still being discussed. CTCSB reported signing contracts for 109 area events and 73,000 room nights in fiscal year 2015. Among its recent wins was luring USA Cycling's cyclo-cross national champi- onships, which will take place at Hartford's Riverside Park in January. Also on the chopping block for the coming fiscal year is DECD's Marketing Challenge Grant program, which will be put on indefinite hiatus, unless state funding is increased, Sullivan said. The program, which has helped spread Connecticut's "Still Revolutionary" campaign, provided grants as large as $50,000 to nonprofit tourism entities that proposed projects that demonstrate economic and innovation impacts. Spared a worse fate? Spending several million dollars less on advertising will hurt the tourism sector and impede its economic impact, observers say. "Planting your image in somebody's mind subliminally is part of it," said John Lombardo, general manager of the Saybrook Point Inn and Spa and a board member of the fledgling Con- necticut Tourism Coalition. "How do you do that? Well, you don't do it by not advertising." But in a session in which the legislature was struggling to close a nearly $1 billion deficit next year, the outcome could have been more severe. Lombardo said he credits the efforts of the new coalition, which includes hotel and restau- rant industry associa- tions, for saving tour- ism spending from "a far worse fate." The coalition pushed legislators, ultimately unsuccess- fully, to allocate a por- tion of the hotel tax to a dedicated tourism fund. Though the bill didn't pass, Lombardo said the effort was worthwhile, and may have helped stave off a bigger tourism cut. "I think the challenge now is the state has to spend [the $6.5 million it does have] as wisely as it can," he said. While declining state spending on advertis- ing won't help, Cindy Lovell, executive director of the Mark Twain House & Museum, shares the sentiment that things could have been worse. "Absolutely there was relief," Lovell said of the moment she learned the museum's ear- mark would be cut 10 percent. "It could have been zeroed out." The Mark Twain House has benefitted from the Marketing Challenge Grant pro- gram, which is being cut entirely. Lovell said the museum used some of the funds to pay for advertising in Metro North train stations. That's a location where Saybrook Point has also advertised, but both the hotel and the museum, like DECD, have forged ahead with a largely digital marketing strategy heavy on social media. Among its initiatives, for example, Say- brook Point has cultivated a list of more than 40,000 desirable customers that receive emails about upcoming events and promo- tions. Lombardo said the emails have high open rates and have allowed the hotel to get more granular data on what its customers and potential customers want. Lovell said spending on advertising isn't the only marketing option. The Mark Twain House has been fortunate to get positive coverage from major media outlets, includ- ing a May article in The New York Times detailing a new exhibit about Twain's daughters. In 2013, National Geographic ranked the museum a top 10 historic house. That same year, a spread in Time Magazine described it as "Downton Abbey's Ameri- can Cousin." "You can't buy publicity like that," Lovell said. Venues, arts groups, to see individual cuts The state's tourism and nonprofit ecosys- tem has known since January or earlier that cuts were on the way. That month, during a speech before a nonprofit audience in New Haven, Malloy's budget director Benjamin Barnes warned of impending budget pressures and said he supported a higher level of accountability for nonprofits that receive state funds to ensure that grant money is spent on programs that produced economic benefits for the state. Malloy's first budget proposal, released the following month, proposed reducing a $21.3 GREEN SOLUTIONS…ONE SOURCE The company that builds and installs the critical systems in virtually every type of facility is the same company you can rely on to maintain them. For 50 years, our clients have trusted us to provide sustainable, more efficient, greener facilities. We are experts in: Energy Systems & Incentives Building Automation Technologies Sustainable Design & Operation 860.871.1111 Toll Free: 800.741.6367 nemsi.com License #'s: E1-104939 • S1-302974 • P1-203519 • F1-10498 • SM1-192 • MC-1134 MECHANICAL • ELECTRICAL • PLUMBING • SHEET METAL • BUILDING AUTOMATION • FACILITIES SERVICES 196 6-2016 196 6-2016 Largest CT Tourism State Budget Cuts Original Budget New Allocation Overall Cut % Cut Statewide Marketing $9,500,000 $6,500,000 $3,000,000 31.6% Tourism Districts $1,295,785 $1,133,345 $162,440 12.5% Performing Arts Centers $1,298,792 $1,164,559 $134,233 10.3% Arts Commission $1,622,542 $1,543,606 $78,936 4.9% New Haven Festival of Arts and Ideas $683,574 $612,926 $70,648 10.3% Connecticut Science Center $550,000 $492,810 $57,190 10.4% Mystic Aquarium $531,668 $476,719 $54,949 10.3% Performing Theaters Grant $505,904 $453,586 $52,318 10.3% Maritime Center Authority $500,842 $449,079 $51,763 10.3% Art Museum Consortium $473,812 $424,842 $48,970 10.3% S O U R C E : S T A T E D E P T . O F E C O N O M I C A N D C O M M U N I T Y D E V E L O P M E N T Continued P H O T O | C O N T R I B U T E D Hartford's Mark Twain House and Museum is among the arts and tourism groups facing state funding cuts.

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