R M T I EPORT ON THE ONTANA OURISM NDUSTRY J , 2003 ANUARY TRAVEL MONTANA, DEPARTMENT OF COMMERCE T AKING TOURISM INTO 21 THE ST CENTURY Message from the Director Montana’s tourism industry continues to be one of combination of an unbeatable product and a dedicat- the leading sectors of our economy. Hard work, ed source of funding have enabled the tourism indus- resilience, and innovation are trademarks of our try to build a continuing relationship between public- private partnership. Your commitment to Montana and our visitors. Similarly, more and more our future, skill in reading changing patterns and Montanans are becoming aware of tourism’s contri- ability to look and plan ahead will keep tourism bution to the overall well-being of our economy and strong and healthy. our quality of life. The tourism partners’ expenditures of millions of You are adept at integrating and using the good image dollars for a variety of expansion projects have of Montana as a preferred tourism/film destination. I infused significant monies and created jobs in com- am proud to be affiliated with this energetic and munities across the state. When these efforts are com- dynamic team who consistently delivers for the people bined with the our Tourism Infrastructure of Montana. Investment, Community Tourism Assessment, and new Special Events Grants Programs, we send the message Sincerely, that Montana is good for business. This report highlights tourism’s as well as the film office’s past successes and future goals. It also illus- Mark Simonich trates why “stimulating” and “forward thinking” are Director, Montana Department of Commerce often used to describe this vital business sector. The Bob Marshall Wilderness Lake Koocunusa Bitterroot River Anaconda Pintler B S C I G K Y O U N T R Y Message from the Administrator My first year as the new administrator for the matured. This is evident from the fact that over 90 Montana Promotion Division has been an exhilarating stakeholders, some not traditionally considered in and rewarding experience. In my travels across the the tourism industry, participated in the development state I’ve had the distinct pleasure of meeting a wide of this plan. An overriding goal within the plan is to spectrum of Montanans. From business owners and maintain and strengthen statewide tourism promo- farmers in Baker, Montana, to international tour tional efforts as well as develop new partnerships to operators experiencing Whitefish; and from Lewis implement and accomplish its goals and objectives. and Clark enthusiasts in Glasgow to museum curators My hope is that we will be successful in forming these in Butte. The one common thread that unites all of alliances, as there is strength in numbers and the these individuals is the strength of tourism in goals identified will become reality. Montana. It’s the diversity and enthusiasm of the tourism industry that makes it Montana’s leading This annual report is a tool to help you understand industry. It is my privilege to serve you, and I thank our role and objectives in promoting tourism and film you for your encouragement and support. production throughout Montana. I hope it also gives you insight into how closely we work with and rely on We have also faced some challenges in the past a coordinated effort with private business, non profit twelve months. Nationally, the tourism industry was organizations, and other state agencies to strengthen critically injured due to terrorism and economic the economy of our magnificent state of Montana! downturns. Statewide, we faced a looming deficit. However, we have gained an awareness and respect I welcome your involvement and input. of the importance of tourism to foster and maintain a healthy economy. Sincerely, It’s an exciting time for tourism and recreation in Montana. We recently completed our statewide Tourism and Recreation five-year strategic plan. Over Betsy Baumgart the years, the tourism industry has evolved and Administrator, Montana Promotion Division Wi l d e rn e s s G a t e s o f t h e M o u n t a i n s T h e P i o n e e r M o u n t a i n s S c e n i c B y wa y T I : HE NVESTMENT ’ MONTANA S TOURISM FUNDING MONTANA’SSUCCESSFULTOURISMINDUSTRYRELIES In 1988, the year the bed tax was first collected, ON THE “BED TAX.” THIS 4% TAX ON OVERNIGHT $5 million was generated. In 2003, that figure will be ACCOMMODATIONS TAX REVENUE FY 2003 LODGING SUPPORTS MONTANA’S PROMOTION AND over $11.6 million, representing an increase of more Projected Lodging Tax Revenue $11,643,782 DEVELOPMENT EFFORTS, AND ALSO CONTRIBUTES than 100% in just over a decade. Heritage Preservation Commission , (Virginia City) ($400,000) FUNDS TO STATE PARKS HISTORIC SITES AND OTHER IMPORTANT PROGRAMS. IN THE YEAR Bed tax collections are Montana’s source of funding Department of Revenue (Collection costs & reimbursement to general 2003, THE BED TAX WILL BRING IN ABOUT $11.6 for all of its tourism marketing efforts; however, the fund of tax paid by state employees) ($267,807) MILLION, YET IT WILL HELP GENERATE MORE THAN bed tax supports much more than marketing alone. In Available for Distribution $10,975,975 $1.7 BILLION IN NONRESIDENT SPENDING. fact, about 20% of the bed tax currently supports tourism-related infrastructure around the state. This In 1987, Montana’s legislature recognized the impor- includes items such as historic preservation funds for USEOF FUNDS tance of tourism to Montana’s future economy. During Virginia City/Nevada City, maintenance of state parks, (Determined by Montana Legislature) that session, the legislature created a 4% Lodging funding for the Lewis andClark bicentennial pro- State Parks - 6.5% Facility Use Tax, commonly referred to today as the gram, and historic signage. (Operations & Maintenance) $713,438 University System - 2.5% “bed tax.” Lodging facilities (such as hotels, motels, (Tourism & Recreation Research) $274,399 Historical Society - 1% bed & breakfast inns, guest ranches, resorts and (Historical Sites & Signage) $109,760 campgrounds) collect this tax from guests. In turn, Regions/CVBs Marketing- 22.5% $2,469,594 HOW TRAVEL AND FILM PROMOTION these funds are directed to the Montana Historical Department of Commerce FUNDS ARE SPENT Programs - 67.5% Society, the university system, the Department of Fish, (Travel Montana/Film Office) $7,408,783 Visitor Information Wildlife & Parks, Montana’s tourism regions and Publicity (4.2%) Centers (2.0%) Convention and Visitors Bureaus (CVBs), and the Electronic Services (6.1%) TRAVEL MONTANA/FILM OFFICE Department of Commerce for travel and film promo- PROJECTED FY 2003 BUDGET tion. Importantly, no additional money for tourism General Administration Consumer Marketing & Industry Services (7.9%) (35.5%) Funds from Accommodations Tax $7,408,783 funding comes from Montana’s general fund. Fifteen Income from ad sales, co-ops, etc. $470,920 Film Industry Community & Infrastructure Grants ($330,000) years after the legislature created the bed tax, its suc- Promotion (4.9%) L&C Bicentennial Commission ($200,000) cess is evident. Today, tourism is one of Montana’s Tourism Telemarketing Historical Society (L&C Bicentennial) ($111,124) Group Conventions & Development & Fulfillment Overseas Marketing (6.6%) and Superhost (9.7%) Historical Society (Scriver Collection)($125,553) largest and fastest-growing industries in the state. (15.1%) Publications Montana Trade Program ($200,000) (8.1%) Support for Capitol tours and Governor’s Mansion restoration ($75,000) Total Funds Available $6,838,026 2 Bear Paw Battlefield Judith Peak Recreation Area Lee Metcalf, Spanish Peaks W T N : B S C HE ETWORK I TOURISM GORGANKIZAYTIONS O U N T R Y THE STATE’S TOURISM INDUSTRY IS FUELED BY Tourism Advisory Council for approval. Find out more BED TAX COLLECTIONS MUCH MORE THAN TRAVEL MONTANA’S PROGRAMS. about any of the tourism regions on the web: (CALENDAR YEARS 1990-2001) ALL ACROSS THE STATE, PARTNERS CONTINUALLY Custer Country • custer.visitmt.com WORK TOGETHER FOR SUCCESS, INCLUDING THE Glacier Country • glacier.visitmt.com 12 +2% +6% 14680 +$6,062,07011% +$6,922,46014% +$7,583,26610% +$8,109,9837% +$8,543,0805% +$9,053,1536% +$9,359,4453% +$9,750,0374% +$10,248,3015% +$10,658,1034% $11,291,594 $11,551,111 VRTATLHEIOLSGEYUIITRPOOHUINSRUBSMSLNIDBCARAUNAERDNDDEDVSAIUSTPOOSREFNRI(VYACTTOVFEUCUBNSROSEDI)USCE—NMTDCOIRAPLSSRC,. O OWFSNEEIVLXSLESNIAOTTSNOIOALULINRTSIESRI&MN- LikGMRYeeouil slsMldsoso eowWulnslre ttCaios notnR auCei’vn soCe tutrroon yuCu tn•roryt iurrs •nuym ts•r sgry eeoy l•eglldl.i vlomwoinseiwssists,smt to.tovhutin.esrce iiottr.emmvinviste .Cicrt.oomvnmitsv.icetomnmtti.ocno m& ns2 The Tourism Advisory Council (TAC), composed of no Visitors Bureaus market themselves to visitors, and o Milli0 less than 12 Montanans from the travel industry’s pri- must also submit annual marketing plans. 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 vate sector, has a number of important duties. First, Big Sky • bigskychamber.com the Council advises the governor on matters relating Billings • billingscvb.visitmt.com to travel and tourism in Montana. Second, it makes Bozeman • bozemancvb.visitmt.com TOURISM REGIONS recommendations to Travel Montana. Third, it over- Butte • butteinfo.org sees distribution of funds and sets regulations for all Great Falls • greatfallscvb.visitmt.com • Whitefish MISCSOOUUNRIT RRYIVER of Montana’s nonprofit tourism regions and CVBs. Helena • helenacvb.visitmt.com • RUSSELL COUNTRY Kalispell Fourth, it determines allowable administrative Flathead Valley • fcvb.org GLACIER COUNTRY • Great Falls expenses from bed tax funds for the tourism regions Missoula • exploremissoula.com Missoula • He•lena and CVBs. And finally, the TAC oversees the university West Yellowstone • westyellowstonecvb.visitmt.com CUSTER COUNTRY • Butte B• ozeman system’s travel research, approving all projects before Whitefish • whitefishchamber.org YELLOWSTONE • Billings GOLD WEST •B igC SOkUy N TRY they begin. COUNTRY • To find out more about Montana’s tourism organiza- West Montana’s six tourism regions are private, nonprofit tions, including contact information, go to our intranet Yellowstone organizations dedicated to marketing themselves to site at travelmontana.state.mt.us. visitors. Each year, they submit marketing plans to the ilderness Madison Buffalo Jump State Park Cra zy Peak Little Rocky Mountains 3 T M : HE EASUREMENT RESEARCH RESULTS SO HAS MONTANA’S INVESTMENT IN TOURISM lodging. Montana’s tourists go a long way toward PROMOTION MADE A DIFFERENCE? IF NUMBERS keeping malls, grocery stores, service stations, ARE ANY INDICATION, THE TOURISM INDUSTRY restaurants, lounges, and entertainment facilities HAS A HUGE SUCCESS STORY TO TELL. SINCE profitable. So tourism not only brings in new money 1991, MONTANA’S NONRESIDENT VISITATION from outside the state, it also circulates that money HAS INCREASED A HEALTHY 27%; LAST YEAR IT throughout Montana’s economy. $1.75 ATTRACTED BILLION FROM OUTSIDE OUR STATE. It’s also interesting to note why people come to Montana. Of the 9.55 million out-of-state travelers To track the growth of Montana’s tourism industry who visited in 2001, 11% were here primarily for and to help the state make informed marketing business reasons, 49% came for vacation, 22% visited decisions, research is an invaluable tool. And each family and friends, 9% were traveling through year, research continues to illustrate the value of Montana en route to another destination, and 9% tourism to the state’s economy. came for shopping, conventions, and other. An economic review of the state travel industry, What do people do when they’re visiting Montana? conducted by the Institute for Tourism and The six top activities include wildlife watching, Recreation Research (ITRR) at the University of visiting family/friends, nature photography, shopping, Montana, illustrated the impact of tourism on the hiking and visiting historic/interpretive sites. The top state’s economy in a number of statistical categories. destinations include Glacier and Yellowstone National In the year 2001, the study found that the $1.75 Parks, Little Bighorn Battlefield, Fort Peck Lake, billion spent by nonresident visitors supported Bighorn Canyon National Recreation Area, and the 32,200 jobs and resulted in more than $562 million National Bison Range. in personal income. It’s our goal to attract high-quality visitors who And let’s be clear: tourism’s economic impact stretch- spend more time—and money—on their vacation es far beyond “tourism” businesses. In fact, nonresi- experience while they’re here. That’s not only good dent travelers spend more on retail sales, gasoline for the state’s tourism industry, it’s good for the state and oil, and bars and restaurants than they do on in general. 4 Medicine Lake National Wildlife Refuge Hell Creek Recreation Area Bighorn Ca B S C I G K Y O U N T R Y TRAVEL DEPENDENT JOBS THE INSTITUTE FOR TOURISM AND RECREATION Monitoring Economic, Social, and (UP 45% FROM 1991) RESEARCH (ITRR) RECEIVES BED TAX FUNDING TO Environmental Issues in Montana CONDUCT TOURISM RESEARCH FOR THE STATE OF The monitoring completed each year consists of 35 32 32 MONTANA. IN PART, THIS RESEARCH HELPS THE three main components: 1) A yearly phone survey 30 27 29 MONTANA TOURISM INDUSTRY MAKE BETTER (begun in 1991) about resident attitudes toward 26 25 24 24 25 25 25 INFORMED MARKETING DECISIONS. tourism. When attitudes change, the tourism indus- 22 try can address the issues; 2) The quarterly newslet- 20 Each year, Montana’s tourism and recreation indus- ter Vision is mailed to the industry and policy mak- 15 try relies on timely, accurate research information ers around the state, identifying recent research 10 to help plan its marketing programs. To provide results from ITRR or other national tourism some of this data, the Tourism Advisory Council research; 3) Weekly summaries of newspaper arti- Thousands 05 (TAC), along with ITRR, solicits research ideas from cles related to tourism and recreation in the state ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 the industry, policy makers, and land managers are e-mailed to tourism industry people in Montana. around the state. These ideas are prioritized and approved by the TAC. In addition, Travel Montana’s Montana Travel Region Visitor Study programs occasionally contract outside research The study assesses the characteristics of summer NONRESIDENT VISITORS (UP 16% FROM 1992) projects to determine specific marketing needs or visitors, both resident and nonresident, who stop results. Following is an overview of research projects at attractions in each of the six travel regions of 10 9.28 9.43 9.51 9.55 9 8.18 8.36 8.66 8.77 8.70 8.89 for Fiscal Year 2002. the state. 8 Community Tourism Assessment and 2001 Nonresident Travel Study In-Depth Analysis 7 Quality of Life Monitoring This project “mines” the 2001 database and provides 6 This is a continuing research project to examine a deeper look into specific areas of interest related to 5 tourism’s influence on the quality of life for res- the nonresident visitor. 4 idents in the state. This year, the project will 3 examine the Tobacco Valley, Sanders County, and Visitor Decisions and Experiences 2 St. Ignatius to measure their potential and desire The purpose of this project is to explore and fur- Millions01 for tourism development. ther understand the vacation visitor experience and ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 the decision process to visit Montana. nyon National Recreation Area Pompeys Pillar National Historic Landmark Custer 5 : THE LURE MARKETING THE MONTANA MYSTIQUE IT’S HARD TO IMAGINE THAT A PRODUCT LIKE Travel Montana’s 2003 magazine efforts will incorpo- MEDIA DOLLARS SPENT MONTANA WOULDN’T SELL ITSELF. BUT IN THE rate new creative in both the warm season and winter (FY 2002) HIGHLY COMPETITIVE WORLD OF TRAVEL, NAME campaigns. Along with new print advertisements, new RECOGNITION AND CONSUMER AWARENESS IS KEY television commercials have also been developed. Miscellaneous TO SELLING A DESTINATION. THAT’S WHERE Both of these marketing tools promote Montana’s Web $30,000 $486,367 1.3% TRAVEL MONTANA’S CONSUMER MARKETING unique and inviting qualities. 21% . PROGRAM COMES IN Direct Mail Cooperative marketing with neighboring states and $3,267 .1% The program is dedicated to building Montana’s private business entities is another method that $M7a9g5a,z7i6n1e 34.3% image as a vacation destination and targeting markets Travel Montana utilizes to stretch marketing dollars Television with a propensity to travel to the state. And while the and increase reach. These partnerships include a new $1,005,298 43.3% marketing mix strives to provide specific messages four-state Lewis & Clark cooperative with the states of aimed at varied interests, a principal goal is to Idaho, Oregon, and Washington and an enhanced encourage visitors to stay longer and increase over- state cooperative with Wyoming and South Dakota all expenditures. promoting our national parks. MARKETING BUDGET & VISITATION Research has confirmed that over three-quarters of In addition, Travel Montana is expanding its success- (1996 TO 2001) our nonresident visitors have been to Montana ful database marketing efforts. This is achieved before; therefore our message reinforces the through the distribution of a number of direct mail Visitation (in Millions) Montana mystique to entice repeat visitation. While and e-mail messages to interested consumers that Advertising (in $ Millions) 10 Mill. 9.28 9.43 9.51 9.55 Montana continues to market itself to core markets highlight current activities and new web offerings for 8.70 8.89 8 Mill. such as active mature travelers and outdoor enthusi- the season. 6 Mill. asts, the state continues to diversify its advertising 4 Mill. message as well. For example, we have targeted the Throughout the year, the consumer marketing pro- $$22..4274 $2.28 $2.37 $2.40 $2.50 $2.61 2 Mill. western history and culture market by promoting gram will re-evaluate the media vehicles it now uses 0 Montana’s place in the Lewis & Clark Bicentennial. to promote the state while looking at new and inno- 1996 1997 1998 1999 2000 2001 vative advertising campaigns to attract our visitors. 6 Bob Marshall Wilderness Lake Koocunusa Bitterroot River Anaconda Pintler Wil B S C I G K Y O U N T R Y ADVERTISING IS THE INITIAL LURE; IT ENTICES Travel Montana’s publications department works TOTAL INQUIRIES (1995 TO 2001) POTENTIAL VISITORS, CONVINCING THEM TO CALL, closely with other state and federal agencies (such as 2,422,776 WRITE, OR GO ONLINE TO FIND OUT MORE ABOUT the Montana Department of Fish, Wildlife & Parks, the MONTANA. IT’S UP TO TRAVEL MONTANA’S PUBLI- Bureau of Land Management, and the U.S.D.A. Forest 2,165,889 CATIONS AND FULFILLMENT MATERIALS TO HELP Service) to create and update content for all of its TURN THAT INTEREST INTO AN ACTUAL VISIT. guides and materials. Chambers of commerce, 1,552,765 regional tourism organizations and Convention & All the advertising in the world means nothing Visitors Bureaus also provide valuable input and without followup. And some of Travel Montana’s most assistance in the publications process. 975,081 important followup mechanisms are the publications 570,263 it produces. These publications are the materials Currently, Montana produces and distributes more 468,084 352,178 people receive when they request information from than 1.5 million pieces of travel literature each year. the state; as such, they must contain accurate Approximately 2,300 businesses receive free listings 1995 1996 1997 1998 1999 2000 2001 facts and they must be easy to use, of course. But more in the publications, and more than 425 businesses than that, the publications must act as “sales tools” take advantage of advertising opportunities. These FY 2001 INQUIRIES BY METHOD for the state, helping to convince people that Montana publications are distributed in direct response to (ROUNDED TO .1 PERCENT) should be their next vacation destination. advertising inquiries, as well as to leads generated by trade/travel shows and international offices. Guides Reader Service Phone In a state as diverse as Montana, the list of are also distributed at key points throughout the 3.6% 2.6% Mail E-Mail .5% publications should be diverse, as well. Currently, state, including Visitor Information Centers, 1.5% Travel Montana produces a Winter Guide, a Vacation chambers of commerce, airports, and so on. Guide, a Travel Planner, and calendars of events each year. In addition, the publications program oversees The publications program is dedicated to providing production of numerous specialty guides directed at affordable advertising vehicles for Montana’s travel specific interest areas, including a guide explaining and tourism businesses. To do this, the guides are Montana’s Indian reservations, a guide tracing Lewis always adapting and changing to fit the needs of and Clark’s journey through the state, and a users; currently, major guides are evolving to create Internet User Session 91.8% poster/brochure designed especially for kids. more information exchange with the state’s web sites. 7 derness Gates of the Mountains The Pioneer Mountains Scenic Byway Havre Badlands T T : HE ECHNOLOGY INSTANT INFORMATION FOR VISITORS ONLINE GROWTH CONTINUED AT A PHENOMENAL found that of those surveyed who visited Montana, RATE IN THE LAST YEAR. THROUGH AUGUST about 10% stated they were directly influenced by 2002, TRAVEL MONTANA HAD OVER 2.5 MILLION the web site to visit the state. Likewise, nearly half VISITORS TO OUR SITES. OUR PRIMARY SITE of the 701 surveyed selected Montana as their pri- (VISITMT.COM) WAS AVERAGING OVER 6,000 mary vacation destination. , 30% USER SESSIONS A DAY A INCREASE OVER THE PREVIOUS YEAR. Travel Montana’s electronic marketing department received national recognition when Georgia Tech Montana has been a leading state in web technology. University’s Tourism and Regional Assistance Centers This includes designing and maintaining a dynamic (TRACS) presented Travel Montana with a “Best web presence that includes up-to-date information on Practices in Tourism” award for its excellence in web nearly 10,000 tourism-related sites and events and marketing. The web program was profiled in the first over 20 dynamic sites. As a result, we continue to trim edition of TRACS’ best-practices guidebook printed in our printing and fulfillment costs. the fall of 2002. This guide, geared toward tourism- related agencies, industries, and organizations, will In 2001, Travel Montana’s web site, visitmt.com, bridge gaps in information and improve methods to turned web visits into more than 18,000 actual expand the worldwide tourism industry. TRACS’ pri- trips to the state, according to a recent Internet mary goal is to provide innovative economic develop- conversion research report by Strategic Marketing ment assistance focused on tourism. & Research, Inc. (SMARI) of Indianapolis, Indiana. The research was compiled from April Not willing to rest on our laurels, we are looking through December 2001. They surveyed more than for bigger and better things in the coming year, 701 visitmt.com users and found that for each dol- including a complete overhaul of our call center lar spent on marketing, $28 was returned to the system to better serve our customers as well as our state. The report concludes that these visitors tourism partners. spent over $39 million in Montana. The study also 8 Bear Paw Battlefield Judith Peak Recreation Area Lee Metcalf, Spanish Peaks W