The Future of Tourism Funding: DMO Data & …...tourism funding, a survey was sent to leaders of...

The Future of Tourism Funding: DMO Data & PerspectivesFindings from the 2020 Survey of Tourism/Destination Marketing Organizations

The Funding Futures StudyThis important project is made possible by the generosity of these organizations:

andWendy Kheel, Kheel Consulting

Overview

This research is a component of a larger “Funding Futures” study on tourism funding options being conducted by a collaboration of Miles Partnership, Civitas, Tourism Economics, and Destination Analysts with support from the US Travel Association Destinations Council, Destinations International, and the Destination Marketing Association of Canada. The Funding Future study assesses the likely impact of the COVID-19 crisis on tourism funding with the goal of providing revised and future funding options for those organizations responsible for destination marketing.

To gather information and opinions related to current and future tourism funding, a survey was sent to leaders of U.S. and Canadian Destination Marketing Organizations and U.S State Tourism Offices. Between July 20th and August 3rd, 2020, surveys were completed from representatives of 43 State Tourism Offices, 58 U.S. DMOs and 14 Canadian DMOs*.

Following is an Executive Summary of the key learnings from this survey, as well as Infographic Summaries, and the complete survey results broken out by organization type and budget size.

*Note: U.S. DMOs surveyed for this project were selected based on their participation in a previous survey conducted by Civitas. Budget data for State Tourism Offices was collected by US Travel Association

EXECUTIVE SUMMARY

• American state tourism offices and DMOs are likely to have managing one or more Visitor Information Centers as part of their organizational responsibilities. The majority of these organizations report being charged with tourism industry education and training, as well. Canadian DMOs are more likely to be responsible for destination management functions compared to U.S. based organizations.

Current Organizational Responsibilities

• A critical first step in assessing the best paths forward for tourism funding is inventorying what functions and responsibilities these tourism/destination marketing organizations are currently tasked with. In addition to tourism marketing, destination branding/brand management and supplying tourism research and data are all critical functions of many of these organizations.

EXECUTIVE SUMMARY

• The tourism/destination marketing organizations with the largest budgets (over $30 million) are likely to own sales functions for bringing convention and group meetings to their destinations. Relative to those with smaller budgets, these organizations are more likely to maintain responsibilities for air service development, sustainability initiatives and membership support. Those with smaller budgets (under $5 million) are relatively more likely to be responsible for economic development and bids to bring in sports, cultural and other public events.

• With the undertaking of group meeting and event sales, American DMOs are, on average, responsible for 10.1 of the 16 functions tested, and Canadian DMOs 8.2. State Tourism Offices are typically responsible for 5.9 of these functions. The organizations with both the largest and smallest budgets report the highest average number of functions that fall under them (9.0 and 8.4 out of 16 tested, respectively).

Current Organizational Responsibilities (continued)

• City/regional level destination marketing organizations in Canada and the U.S. commonly serve as their community’s sales team for city-wide and self-contained conventions and meetings, as well as sports, entertainment and other events. Over 60 percent have programs of work to support a membership. In addition, American DMOs are often charged with public/cultural development events and support. These functions are currently less likely undertaken by state tourism offices.

EXECUTIVE SUMMARY

• State Tourism Offices are most likely to be currently funded through their state’s government budget (69.8%). Hotel transient tax is the next most common funding source at 41.9%, distantly followed by advertising revenue (18.6%) and partnerships/sponsorships (11.6%). Few receive money from other revenue streams.

• U.S. and Canadian DMOs have more diversity in their funding sources, as do the largest budget tourism/destination marketing organizations. American DMOs surveyed are largely currently funded by hotel transient tax (82.8%), followed by partnerships/sponsorships (55.2%), membership fees (50.0%), and advertising revenue (44.8%). Just under one-third (31.0%) receive government funds; a similar proportion are funded by a Tourism Improvement District. 27.6 percent of U.S. DMOs surveyed are currently receiving funding through taxes levied on AirBnB type rentals.

Pre-COVID-19 Crisis Budgets, Funding Sources and Staffing Levels

EXECUTIVE SUMMARYPre-COVID-19 Crisis Budgets, Funding Sources and Staffing Levels (continued)

• Canadian DMOs are most commonly funded by partnerships/sponsorships (85.7%), membership fees (71.4%), city/municipal (57.1%) or provincial (35.7%) government funding, and Municipal Accommodations Tax (42.9%).

• Prior to the COVID-19 crisis, American DMOs reported an expected 2020 annual budget of $21.9 million and 50.7 employees on average. Canadian organizations reported an expected 2020 annual budget of $7.7 million CAD and 26.6 employees on average. State Tourism Offices reported an average 2019 annual budget of $21.1 million and 43.6 employees. Those tourism organizations with a budget above $30 million had an average staff size of 99.2.

99.2Average number of employees at

Tourism/Destination Marketing OrganizationsWith budgets greater than $30 million

Executive Summary of Key Findings

• Nearly 90 percent of U.S. DMOs and 85.7 percent of Canadian DMOs surveyed reported that their current year budget has/will decrease. This reduction will be by 45.1 percent on average for U.S. DMOs and by 59.4 percent on average for Canadian organizations.

• About half of U.S. and Canadian DMOs expect their 2021 annual budget to decrease, as well—by an average of 35.7 percent and 41.4 percentrespectively. Approximately one-third are unsure of the impact on their budget right now.

• When asked which of their current funding sources would be reduced as a result of the COVID-19 crisis, the majority anticipate an impact to each of their top funding sources

The Impact of the COVID-19 Crisis


• While nearly two-thirds of state tourism offices reported having no impact to their staff due to the pandemic, almost 70 percent of U.S. DMOs and 86 percent of Canadian DMOs have laid off employees. Half of U.S.DMOs have also furloughed employees and reduced employee salaries. Over one third of Canadian DMOs have furloughed employees and/or reduced working hours.

• Among State Tourism Offices whose staff size was impacted by the crisis, these organizations let 7.2 employees go and furloughed 5.5 employees on average. Among U.S. DMOs whose staff size was impacted by the crisis, these organizations laid off 19.3 employees and furloughed 25.8 on average. Among Canadian DMOs whose staff size was impacted by the crisis, these organizations laid off 10.3 employees and furloughed 11.6 on average. Note: The chart at right shows the average number of lay offs across all of these organizations, including those who did not have staff impacts

The Impact of the COVID-19 Crisis (continued)

0.9Average # of layoffsdue to COVID-19

STATE TOURISM OFFICES

13.2Average # of layoffsdue to COVID-19

AMERICAN DMOS

Average # of layoffsdue to COVID-19 8.9

CANADIAN DMOS


• Due to the COVID-19 crisis, destination marketing organizations in the U.S. and Canada are likely to be currently reviewing changes in their primary roles and responsibilities. State Tourism Offices are not as commonly doing so. Over 90 percent of Canadian DMOs who are reviewing their primary functions are examining having an increased role in destination management in the future. More than seven-in-ten U.S. DMOs who are reviewing their functions are doing the same. About two-thirds of State Tourism Offices who are reviewing their primary functions anticipate an increased role in both destination management and economic development. Over half of destination marketing organizations in Canada and the U.S. are looking at an increased role in economic development in the future.

• In looking out at other resulting impacts of the pandemic, State tourism offices most commonly agree that their organizations will “seek alignment with key partners, economic development, state/city government, etc” and “strive to return to pre-COVID crisis relative to responsibilities, funding, staffing, etc.” They are much less likely to agree that their organizations will be “smaller, more focused and more efficient.” American DMOs are generally likely to agree with all the potential impact statements tested. Canadian DMOs are, as well, with the exception of their organizations striving to return to a pre-COVID crisis normal. The smallest budget DMOs are likeliest to feel that the crisis will create a “new normal” for their operations.

Looking Ahead

Executive Summary of Key FindingsLooking Ahead

• As it relates to seeking and developing new and more sustainable sources of funding, US DMOs were the likeliest to agree that this would happen (70.7%). Just under two-thirds of Canadian DMOs anticipate seeking new sources of funding. Just 40 percent of state tourism offices agree. Those seeking new funding models are more likely to be city level DMOs, whose organizations have a greater number of responsibilities, a more diverse set of existing funding resources and who anticipate having an increased role in economic development in the future.

Findings on Tourism Funding’s Future

Data & Perspectives by Organization Type

Infographic Summaries + Complete Survey Results

STATE TOURISM OFFICESTop 5 Organization Functions

Summary of Their Organizations

Destination Branding

Reviewing an Increased Role in

Destination Management

69.8%

41.9%18.6%

0%20%40%60%80%

100%

Stategovernment

funding

Hoteltransient tax

Advertisingrevenue

In Addition to Destination Tourism Marketing

DMO Future Fundings Research—August 2020

(90.7%)

Tourism Research & Data(90.7%)

Visitor Information Center(67.4%)

Industry Training/Education(62.8%)

Economic Development(51.2%)

5.9Average # of functions they are responsible for

39.5% 60.5%

0% 20% 40% 60% 80% 100%

Yes No

Reviewing Changes to Primary Roles/Responsibilities


Economic Development

64.7% 64.7%

Top 3 Current Funding Sources

Top 3 Funding Sources Being Reduced

State government funding (51.2%)

Hotel transient tax (39.5%)

Advertising revenue (14.0%)

Average 2019 Annual Budget

$21.2 M

Avg 2020 Budget Impact of

COVID-19 Crisis

Not Available

STATE TOURISM OFFICES Summary of Their Organizations


Average 2021 Budget Impact of COVID-19

Average # of Full-Time Staff Prior to COVID-19 Crisis

Not Available

Average Staffing Impact of COVID-19 Crisis(among those organizations impacted)

The COVID-19 crisis will result in a “new

normal” relative to my organization’s responsibilities,

funding, staffing, etc.

My organization will seek and develop

new and more sustainable sources of

funding.

7.0%

44.2% 48.8%

0%

20%

40%

60%

80%

100%

More than 75 25 - 75 Less than 25

44on

average7.2 5.5

Number of lay offs

Number of employees furloughed

67.4%agree

39.5%agree

Sports/Entertainment Event Bids

UNITED STATES DMOTop 5 Organization Functions





82.8%

55.2% 50.0%

0%20%40%60%80%

100%

Hoteltransient tax

Partnerships/sponsorships

Membershipfees



(93.1%)


City-wide Convention Sales(93.1%)


(84.5%)

Average # of functions they are responsible for

74.1% 25.9%

0% 20% 40% 60% 80% 100%

Yes No




72.1% 55.8%




Partnerships/ Sponsorships (55.2%)

Membership fees (44.8%)


$17.0 M


COVID-19 Crisis45.1%

Reduction10.1










funding.

15.8%

47.4%36.8%

0%

20%

40%

60%

80%

100%


51on

average 19.3 25.8

Number of lay offs


87.9%agree

70.7%agree

UNITED STATES DMO Summary of Their Organizations

35.7%Reduction

CANADIAN DMOTop 5 Organization Functions





85.7%71.4%

57.1%

0%

20%

40%

60%

80%

100%


Membershipfees

City/Municipalgov funding



(100%)

City-wide Convention Sales(92.9%)

Destination Management(78.6%)



85.7% 14.3%

60% 80% 100%

Yes No




91.7% 58.3%





Municipal Accommodation Tax (42.9%)


(CAD)

$9.2 M


COVID-19 Crisis

Sports/Entertainment Event Bids (78.6%)

59.4%Reduction










funding.

0.0%

35.7%

64.3%

0%

20%

40%

60%

80%

100%


27on

average10.3 11.6

Number of lay offs


92.9%agree

64.3%agree

CANADIAN DMO Summary of Their Organizations

41.4%Reduction

In addition to tourism marketing, destination branding/brand management and supplying tourism research and data are all critical functions of many of these organizations.

American state tourism offices and DMOs are likely to have managing one or more Visitor Information Centers as part of their organizational responsibilities. The majority of these organizations report being charged with tourism industry education and training, as well.

Canadian DMOs are more likely to be responsible for destination management functions compared to U.S. based organizations.

City/regional level destination marketing organizations in Canada and the U.S. commonly serve as their community’s sales team for city-wide and self-contained conventions and meetings, as well as sports, entertainment and other events. Over 60 percent have programs of work to support a membership. In addition, American DMOs are often charged with public/cultural development events and support. These functions are currently less likely undertaken by state tourism offices.

With the undertaking of group meeting and event sales, American DMOs are, on average, responsible for 10.1 of the 16 functions tested, and Canadian DMOs 8.2. State Tourism Offices are typically responsible for 5.9 of these functions.

Organizational Functions & Responsibilities (chart follows on next page)

Question: Which of the following functions is your organization responsible for? (check all that apply)


STATE TOURISM OFFICES


CANADIAN DMOS

Average # of functions they are responsible for 10.1

AMERICAN DMOS

Organizational Functions & Responsibilities


100.0%

90.7%

90.7%

67.4%

62.8%

51.2%

100.0%

93.1%

93.1%

89.7%

70.7%

41.4%

100.0%

100.0%

71.4%

50.0%

42.9%

21.4%

0% 50% 100%

Destination tourismmarketing

Destination branding

Tourism research anddata

Tourism/Visitorinformation center(s)

Industry training andeducation

Economicdevelopment

37.2%

30.2%

14.0%

14.0%

9.3%

70.7%

60.3%

84.5%

29.3%

10.3%

78.6%

35.7%

78.6%

21.4%

7.1%

0% 50% 100%

Destinationmanagement

Public/cultural eventdevelopment and

support

Sports andentertainment event

bids

Airport routedevelopment

Sustainability initiatives

4.7%

4.7%

4.7%

0.0%

0.0%

7.0%

93.1%

82.8%

60.3%

15.5%

10.3%

6.9%

92.9%

50.0%

64.3%

7.1%

0.0%

0.0%

0% 50% 100%

City-wide conventionssales

Self-contained hotelmeetings/conferences

sales

Membership support

Convention centermanagement

Other public facilitiesmanagement

Other

City and regional destination marketing organizations in the U.S. and Canada are likely to be currently reviewing changes in their primary roles and responsibilities. State Tourism Offices are not as commonly doing so.

Reviewing Changes to Primary Roles & Responsibilities

Question: Is your organization reviewing changes in its primary roles and responsibilities?

39.5%

55.8%

4.7%

74.1%

24.1%

1.7%

85.7%

14.3%

0.0%

0% 25% 50% 75% 100%

Yes

No

Don't know

State Tourism Offices U.S. DMOs Canadian DMOs

Over 90 percent of Canadian DMOs surveyed who are reviewing organizational changes are examining having an increased role in destination management in the future. More than seven-in-ten U.S. DMOs who are reviewing organizational changes are doing the same.

About two-thirds of State Tourism Offices who are reviewing organizational changes anticipate an increased role in both destination management and economic development.

Over half of city/regional level destination marketing organizations in Canada and the U.S. are looking at an increased role in economic development.

Changes Being Reviewed

Question: What changes to your organization are being reviewed? (check all that apply)

64.7%

64.7%

5.9%

72.1%

55.8%

23.3%

91.7%

58.3%

8.3%

0% 25% 50% 75% 100%

Increased role in destinationmanagement

Increased role in economicdevelopment

Other


State Tourism Offices are most likely to be currently funded through their state’s government budget (69.8%). Hotel transient tax is the next most common funding source at 41.9%, distantly followed by advertising revenue (18.6%) and partnerships/sponsorships (11.6%). Few receive money from other revenue streams.

U.S. and Canadian DMOs have more diversity in their funding sources. American DMOs surveyed are largely currently funded by hotel transient tax (82.8%), followed by partnerships/sponsorships (55.2%), membership fees (50.0%), and advertising revenue (44.8%). Just under one-third (31.0%) receive government funds; a similar proportion are funded by a Tourism Improvement District. 27.6 percent of U.S. DMOs surveyed are currently receiving funding through taxes levied on AirBnB type rentals.

Canadian DMOs are most commonly funded by partnerships/sponsorships (85.7%), membership fees (71.4%), City/Municipal (57.1%) or provincial (35.7%) government funding, and Municipal Accommodations Tax (42.9%).

Current Funding Sources (chart follows on next page)

Question: What are your organization’s funding sources? (check all that apply)

69.8%

41.9%18.6%

0%20%40%60%80%

100%

Stategovernment

funding

Hoteltransient tax

Advertisingrevenue

STATE TOURISM OFFICES: TOP 3 FUNDING SOURCES

85.7%71.4%

57.1%

0%

20%

40%

60%

80%

100%


Membershipfees

City/Municipalgov funding

82.8%

55.2% 50.0%

0%20%40%60%80%

100%

Hoteltransient tax


Membershipfees

U.S. DMOs: TOP 3 FUNDING SOURCES

CANADIAN DMOs: TOP 3 FUNDING SOURCES

Current Funding Sources


69.8%

41.9%

18.6%

14.0%

11.6%

9.3%

7.0%

4.7%

4.7%

13.8%

82.8%

44.8%

19.0%

55.2%

10.3%

6.9%

50.0%

10.3%

42.9%

85.7%

71.4%

7.1%

0% 50% 100%

State government funding

Hotel transient tax (bed tax)

Advertising revenue

Other non-tax sources


Other taxes

Foundations/trusts

Membership fees

Conferences &/orEvent revenue

5.2%

3.4%7.1%

42.9%

35.7%

21.4%

21.4%

14.3%

7.1%

7.1%

0% 50% 100%

Tourism Improvement Fee(TIF)

Public/cultural events

Municipal AccommodationTax/Levy (MAT)

Provincial government funding

Municipal & Regional DistrictTax Program (MRDT)

Self-directed DestinationMarketing Funds (DMF)

Provincial AccommodationTax/Levy

Airbnb levy

Voluntary “tax”contributions from hotels

4.7%

2.3%

2.3%

2.3%

0.0%

0.0%

0.0%

0.0%

27.6%

31.0%

31.0%

10.3%

10.3%

21.4%

57.1%

0.0%

21.4%

7.1%

0% 50% 100%

Sales tax

Airbnb tax

Federal government funding

Licensing revenue

City/Municipal government funding

Tourism ImprovementDistrict/Tourism Marketing District

Commercial income (ticket sales,merchandise, city cards, etc.)

Regional government funding

State Tourism Offices largely operate on Fiscal Year budget. Two-thirds of American DMOs report the same.

Conversely, nearly 80 percent of Canadian DMOs operate on a Calendar Year budget.

Annual Budget: Fiscal vs Calendar Year

Question: Is your annual operating budget based on the calendar year or a fiscal year?

95.3%

4.7%

65.5%

34.5%

21.4%

78.6%

0% 25% 50% 75% 100%

Fiscal Year

Calendar Year January-December


All Canadian organizations who reported being on a Fiscal Year budget said this was defined as April to March.

Over 85 percent of State Tourism Offices on a Fiscal Year budget are July to June. This definition is most common for U.S. DMOs, as well, although about one-third are on October to September.

As shown on the subsequent page, American DMOs surveyed reported an average 2019 annual budget of $17 million. State Tourism Offices reported an average 2019 annual budget of $21.1 million. Canadian organizations surveyed reported an average 2019 annual budget of $9.1 million CAD on average.

Fiscal Year Definition & Budgets

Question: What is your fiscal year?

85.4%

7.3%

2.4%

4.9%

63.2%

34.2%

0.0%

2.6%

0.0%

0.0%

100.0%

0.0%

0% 25% 50% 75% 100%

July to June

October to September

April to March

Other


2019 Annual Budget

Question: What was your total annual operating budget for last year (CY 2019 or FY 2019/2020)? In US Dollars

15.4%

35.9%

33.3%

15.4%

18.4%

15.8%

36.8%

28.9%

0% 20% 40%

Over $30million

$15m - $30m

$5m - $15m

Under $5million

State Tourism Offices U.S. DMOs

Mean 2019 BudgetSTOs = $21,175,051 USDDMOs = $17,016,971 USD

7.7%

15.4%

23.1%

53.8%

0% 20% 40% 60%

Over $30million

$15m - $30m

$5m - $15m

Under $5million

Canadian DMOs

Mean 2019 Budget = $9,173,846 CAD

2020 Annual Budget Pre-COVID-19 Crisis – US & Canadian DMOs

Question: Prior to the COVID-19 crisis, what was your total annual operating budget for this current year (CY2020 or FY2020/2021)? In US Dollars

16.7%

11.1%

41.7%

30.6%

0% 20% 40% 60%

Over $30million

$15m - $30m

$5m - $15m

Under $5million

U.S. DMOs

Mean = $21,948,368 USD

0.0%

23.1%

15.4%

61.5%

0% 20% 40% 60% 80%

Over $30million

$15m - $30m

$5m - $15m

Under $5million

Canadian DMOs

Mean = $7,753,846 CAD

Prior to the COVID-19 crisis, American DMOs reported an expected 2020 annual budget of $21.9 million on average. Canadian organizations reported an expected 2020 annual budget of $7.7 million CAD on average.

Nearly 90 percent of U.S. DMOs and 85.7 percent of Canadian DMOs surveyed reported that their current year budget has/will decrease. This reduction will be by 45.1 percent on average for U.S. DMOs and by 59.4 percent on average for Canadian organizations.

2020 Budget Impact of COVID-19 – US & Canadian DMOs

Question: What is or will be the impact of the COVID-19 crisis on your current year (CY2020 or FY2020/2021) budget?

89.7%

2.6%

5.1%

2.6%

85.7%

7.1%

7.1%

0.0%

0% 25% 50% 75% 100%

Current budget will decrease

Current budget will increase

No change

Don’t know

U.S. DMOs Canadian DMOs

Current Budget will Decrease by:U.S. DMOs – 45.1%

Canadian DMOs – 59.4% When asked which of their current funding sources would be reduced as a result of the COVID-19 crisis the majority anticipate an impact to each of their top funding sources (shown on next page).

Reduced Funding Sources Due to COVID-19

Question: Which of the following funding sources will be reduced as a result of the COVID-19 crisis?

51.2%

39.5%

14.0%

7.0%

4.7%

4.7%

4.7%

4.7%

10.3%

75.9%

44.8%

55.2%

44.8%

10.3%

8.6%

6.9%

35.7%

64.3%

64.3%

7.1%

0% 50% 100%



Advertising revenue


Membership fees

Conferences &/or Eventrevenue


Other taxes

2.3%

2.3%

2.3%

25.9%

27.6%

22.4%

6.9%

6.9%

21.4%

14.3%

0% 50% 100%

Airbnb tax


Sales tax

Tourism ImprovementDistrict/Tourism Marketing

District

City/Municipal governmentfunding

Commercial income (ticketsales, merchandise, city cards,

etc.)


5.2%

3.4%7.1%

42.9%

21.4%

21.4%

14.3%

14.3%

7.1%

0% 50% 100%

Tourism Improvement Fee(TIF)


Municipal AccommodationTax/Levy (MAT)

Municipal & Regional DistrictTax Program (MRDT)

Self-directed DestinationMarketing Funds (DMF)

Provincial AccommodationTax/Levy

Provincial government funding

Voluntary “tax” contributions from hotels

About half of U.S. and Canadian DMOs expect their 2021 annual budget to decrease—by an average of 35.7 percent and 41.4 percent respectively. Approximately one-third are unsure of the impact on their budget right now.

2021 Budget Impact of COVID-19 – US & Canadian DMOs

Question: What do you anticipate will be the impact on your annual operating budget next year (CY2021 or FY2021/2022) compared to your anticipated post-COVID-19 crisis current year budget?

48.7%

15.4%

5.1%

30.8%

50.0%

0.0%

14.3%

35.7%

0% 20% 40% 60%

Next year's budget willdecrease

Next year's budget willincrease

No change

Don’t know

DMOs Canada

2021 Budget will Decrease by:DMOs – 35.7%Canada – 41.4%

Canadian tourism organizations were most likely to report expecting to receive COVID-19 recovery funding. Only about a third of US tourism organizations reported having this expectation.

Recovery Funds Expected

Question: Does your organization expect to receive any COVID-19 recovery funds?

30.2%

23.3%

46.5%

37.9%

24.1%

37.9%

71.4%

21.4%

7.1%

0% 20% 40% 60% 80%

Yes

No

Don't know


The Federal government is the most anticipated source of recovery funds. Half of Canadian DMOs expect funds from their provincial government—about twice the number of U.S. DMOs expecting the same. Just over one-in five U.S. DMOs anticipate recovery funds from their city/municipality.

Source(s) of Recovery Funds

Question: Which of the following recovery funds does your organization expect to receive? (check all that apply)

84.6%

23.1%

0.0%

0.0%

0.0%

77.3%

22.7%

22.7%

9.1%

9.1%

90.0%

50.0%

10.0%

10.0%

0.0%

0% 25% 50% 75% 100%

Federal governmentrecovery funds

State/Province governmentrecovery funds

City/Municipality governmentrecovery funds

Regional governmentrecovery funds

Other


Prior to the COVID-19 crisis, State Tourism Offices had 43.6 employees on average, U.S. DMOs 50.7 employees and Canadian organizations 26.6.

Note: Those organizations who had staff levels impacted by the COVID-19 crisis (shown on next page) had average staff sizes of: State Tourism Offices—35.0 employees; U.S. DMOs—56.0 employees; Canadian DMOs—27.1 employees.

Number of Full-Time Staff Prior to COVID-19 Crisis

Question: What was your total number of full-time equivalent employees prior to the COVID-19 crisis?

7.0%

44.2%

48.8%

15.8%

47.4%

36.8%

0.0%

35.7%

64.3%

0% 20% 40% 60% 80%

More than 75

25 - 75

Less than 25

State Tourism Offices DMOs Canada

Mean:STOs – 43.6

U.S. DMOs – 50.7Canadian DMOs – 26.6

Nearly two-thirds of state tourism offices reported having no impact to their staff due to the COVID-19 crisis while almost 70 percent of U.S. DMOs and 86 percent of Canadian DMOs have laid off employees. Half of U.S.DMOs have also furloughed employees and reduced employee salaries. Over one third of Canadian DMOs have furloughed employees and/or reduced working hours.

Impact of the COVID-19 Crisis on Staffing

Question: What has been the impact on your staffing so far due to the COVID-19 crisis? (Select all that apply)

62.8%

14.0%

14.0%

11.6%

9.3%

4.7%

4.7%

10.3%

69.0%

50.0%

34.5%

50.0%

0.0%

0.0%

7.1%

85.7%

35.7%

35.7%

21.4%

0.0%

0.0%

0% 25% 50% 75% 100%

No impact

Laid offemployees

Furloughedemployees

Reduced workinghours

Reduced salaries

Don’t know

Prefer not to say


Only 7.0 percent of State Tourism Offices reported either laying off or furloughing more than half of their staff because of the pandemic; meanwhile 41.4 percent of U.S. DMOs and 35.7 percent of Canadian DMOs had more than half of their employees impacted.

Among State Tourism Offices whose staff size was impacted by the crisis, these organizations let 7.2 employees go and furloughed 5.5 employees on average. Among U.S. DMOs whose staff size was impacted by the crisis, these organizations laid off 19.3 employees and furloughed 25.8 on average. Among Canadian DMOs whose staff size was impacted by the crisis, these organizations laid off 10.3 employees and furloughed 11.6 on average.

Tourism/Destination Marketing Organizations with Staff Impacts Due to COVID-19: Proportion of Staff Impacted

Question: Please enter the number of employees that have been laid off to date; How many employees have been furloughed so far?

93.0%

7.0%

58.6%

41.4%

64.3%

35.7%

0% 25% 50% 75% 100%

Under 50% StaffImpact

50% or more StaffImpact


Mean # Laidoff:STOs – 7.2


Mean # Furloughed:STOs – 5.5


In looking out at other resulting impacts of the pandemic, State tourism offices most commonly agree that their organizations will “seek alignment with key partners, economic development, state/city government, etc” and “strive to return to pre-COVID crisis relative to responsibilities, funding, staffing, etc.” They are much less likely to agree that their organizations will be “smaller, more focused and more efficient.”

American DMOs are generally likely to agree with all the potential impact statements tested. Canadian DMOs are, as well, with the exception of their organizations striving to return to a pre-COVID crisis normal.

As it relates to seeking and developing new and more sustainable sources of funding, US DMOs were the likeliest to agree that this would happen (70.7%). Just under two-thirds of Canadian DMOs anticipate seeking new sources of funding. Just 40 percent of state tourism offices agree.

Other Anticipated Impacts of the COVID-19 Crisis

Question: Thinking of the future and the impact of the COVID-19 crisis, how much do you agree or disagree with the following statements:

83.7%

69.8%

67.4%

81.4%

39.5%

25.6%

84.5%

87.9%

87.9%

82.8%

70.7%

74.1%

100.0%

100.0%

92.9%

57.1%

64.3%

78.6%

0% 25% 50% 75% 100%

My organization will seek alignment with keypartners, economic development, state/city

government, etc.

My organization will have a central role in improvingtourism focusing more on sustainability, resident

and local business engagement, etc.

The COVID-19 crisis will result in a “new normal” relative to my organization’s responsibilities, funding,

staffing, etc.

My organization will strive to return to pre-COVIDcrisis normal relative to responsibilities, funding,

staffing, etc.

My organization will seek and develop new andmore sustainable sources of funding

My organization will be smaller, more focused, andmore efficient


Findings on Tourism Funding’s Future

Destination/Tourism Marketing Organizations by Budget Size

Infographic Summaries + Complete Survey Results

BUDGET UNDER $5MTop 5 Organization Functions

Summary of Their OrganizationsReviewing an

Increased Role in Destination Management

70.6%47.1% 41.2%

0%20%40%60%80%

100%

Hoteltransient tax

Partnerships Stategovernment

funding



Tourism Research(88.2%)

(82.4%)



58.8% 41.2%

0% 20% 40% 60% 80% 100%

Yes No




80.0% 70.0%




Partnerships/sponsorships(47.1%)


Average Annual Budget

$3.1 M


COVID-19 Crisis



Sports/Ent. Event Bids(64.7%)

43.7% reduction

BUDGET UNDER $5M




Average Staffing Impact of COVID-19 Crisis (among those organizations impacted)






funding.

0.0% 5.9%

94.1%

0%

20%

40%

60%

80%

100%


13on

average7.3 7.7

Number of lay offs


94.1%agree

76.5%agree

46.7%Reduction


BUDGET OF $5-15MTop 5 Organization Functions


Increased Role in Destination ManagementIn Addition to

Destination Tourism Marketing


(96.3%)



66.7% 33.3%

0% 20% 40% 60% 80% 100%

Yes No




55.6% 72.2%




State govt. funding (44.4%)



$9.5 M


COVID-19 Crisis




40.0% reduction


55.6% 48.1% 44.4%

0%20%40%60%80%

100%

Hoteltransient tax

Stategovernment

funding

Ad revenue

BUDGET OF $5-15M










funding.

3.7%

55.6%40.7%

0%

20%

40%

60%

80%

100%


46on

average11.4 8.4

Number of lay offs


74.1%agree

55.6%agree

26.9%Reduction


BUDGET OF $15-30MTop 5 Organization Functions


Increased Role in Destination ManagementIn Addition to

Destination Tourism Marketing


(100.0%)



50.0% 45.0%

0% 20% 40% 60% 80% 100%

Yes No I don’t know




80.0% 40.0%




State govt. funding (30.0%)



$20.1 M


COVID-19 Crisis




40.7% reduction


50.0% 45.0%25.0%

0%20%40%60%80%

100%

Hoteltransient tax

Stategovernment

funding

Ad revenue

BUDGET OF $15-30M










funding.

15.0%

65.0%

20.0%

0%

20%

40%

60%

80%

100%


58on

average26.6 35.3

Number of lay offs


65.0%agree

40.0%agree

33.3%Reduction


BUDGET OVER $30MTop 5 Organization Functions





76.9%

46.2% 46.2%

0%

20%

40%

60%

80%

100%

Hotel transienttax


Membershipfees



(84.6%)





53.8% 30.8%

0% 20% 40% 60% 80% 100%

Yes No Don't know




71.4% 42.9%






$58.6 MAvg 2020 Budget

Impact of COVID-19 Crisis


42.3%Reduction











funding.

38.5% 38.5%23.1%

0%

20%

40%

60%

80%

100%


99on

average 42.9 53.1Number of

lay offsNumber of employees furloughed

100%agree

53.8%agree

36.7%Reduction

BUDGET OVER $30M Summary of Their Organizations

• The tourism/destination marketing organizations with the largest budgets (over $30 million) are likely to own sales functions for bringing convention and group meetings to their destinations. Relative to those with smaller budgets, these organizations are more likely to maintain responsibilities for air service development, sustainability initiatives and membership support. Those with smaller budgets (under $5 million) are relatively more likely to be responsible for economic development and bids to bring in sports, cultural and other public events. The organizations with both the largest and smallest budgets report the highest average number of functions that fall under them (9.0 and 8.4 out of 16 tested, respectively).

• The largest budget tourism/destination marketing organizations have the most diverse revenue sources and are currently most commonly funded by hotel tax, sponsorships and memberships. Nevertheless, more than 40 percent feel these top funding sources will be reduced due to the COVID-19 crisis. Those with the biggest budgets are likeliest to be on a fiscal year; those with the smallest a calendar year.

• Larger budgets correlated with a larger staff pre-COVID-19 crisis. Those with a budget above $30 million had an average staff size of 99.2, while those with a budget below $5 million had an average staff size of 13.6. However, the largest budget organizations were most impacted by staffing changes due to the crisis. Nearly 85 percent of these organizations had some impact, laying off 42.9 employees on average.

Summary of Key Findings by Organization Budget Size

• Those with budgets under $15 million were likeliest to be reviewing changes in their organizations primary roles and responsibilities. These changes are likely to include increasing their role economic development, and 80.0 percent of those organizations with budgets under $5 million anticipate and increased role in destination management.

• The smallest budget tourism/destination marketing organizations are the likeliest to say their organization will seek and develop new sources of funding. They are also very likely to feel that the COVID-19 crisis will create a new normal in terms of their functions and responsibilities. The organizations with the largest budgets, on the other hand, are the relatively least likely to say they will be pursuing new funding sources, instead agreeing they will strive to return to pre-crisis levels of responsibility and staffing and taking a central role in improving tourism through sustainability, local engagement and more.

Summary of Key Findings by Organization Budget Size (continued)

Organizational Functions & Responsibilities


100.0%

82.4%

88.2%

82.4%

70.6%

58.8%

100.0%

96.3%

96.3%

92.6%

59.3%

44.4%

100.0%

100.0%

100.0%

70.0%

70.0%

35.0%

100.0%

84.6%

84.6%

76.9%

76.9%

61.5%

0% 25% 50% 75% 100%

Destinationtourism marketing

Destination branding

Tourism research and data

Tourism/Visitorinformation center(s)

Industry training andeducation

City-wideconventions sales

35.3%

5.9%

5.9%

11.8%

11.8%

5.9%

33.3%

14.8%

11.1%

3.7%

3.7%

3.7%

15.0%

20.0%

5.0%

10.0%

5.0%

46.2%

38.5%

30.8%

15.4%

7.7%

15.4%

0% 25% 50% 75% 100%

Membership support

Airport routedevelopment

Sustainability initiatives

Conventioncenter management

Other public facilitiesmanagement

Other

58.8%

64.7%

41.2%

52.9%

58.8%

48.1%

44.4%

48.1%

37.0%

44.4%

55.0%

35.0%

30.0%

50.0%

40.0%

69.2%

46.2%

61.5%

38.5%

46.2%

0% 25% 50% 75% 100%

Destination management

Sports and entertainmentevent bids

Self-contained hotelmeetings/conferences sales

Public/cultural eventdevelopment and support

Economic development

Reviewing Changes to Primary Roles & Changes Being Reviewed

Question: Is your organization reviewing changes in its primary roles and responsibilities? And Question: What changes to your organization are being reviewed? (check all that apply)

58.8%

41.2%

0.0%

66.7%

33.3%

0.0%

50.0%

45.0%

5.0%

53.8%

30.8%

15.4%

0% 20% 40% 60% 80%

Yes

No

Don't know

Under $5 million $5m - $15m $15m - $30m Over $30 million

80.0%

70.0%

10.0%

55.6%

72.2%

11.1%

80.0%

40.0%

30.0%

71.4%

42.9%

14.3%

0% 20% 40% 60% 80% 100%

Increased role in destinationmanagement

Increased role in economicdevelopment

Other


Current Funding Sources


11.8%

5.9%

7.4%

3.7%

3.7%

3.7%

11.1%

5.0%

5.0%

5.0%

5.0%

7.7%

7.7%

7.7%

0% 20% 40% 60% 80%

Foundations/trusts

Commercial income(ticket sales, merchandise,

city cards, etc.)


Sales tax

Federal governmentfunding

Regional governmentfunding

11.8%

41.2%

17.6%

0.0%

35.3%

18.5%

48.1%

7.4%

11.1%

14.8%

5.0%

45.0%

20.0%

20.0%

5.0%

23.1%

15.4%

15.4%

7.7%

7.7%

0% 20% 40% 60% 80%

Airbnb tax



Other taxes

City/Municipalgovernment funding

70.6%

47.1%

23.5%

35.3%

17.6%

55.6%

29.6%

29.6%

44.4%

11.1%

7.4%

50.0%

20.0%

15.0%

25.0%

15.0%

10.0%

76.9%

46.2%

46.2%

23.1%

23.1%

23.1%

0% 20% 40% 60% 80%



Membership fees

Advertising revenue


District


11.8%

5.9%

3.7%

3.7%

7.4%

3.7%

5.0%

7.7%

7.7%

0% 20% 40% 60% 80%

Commercial income (ticketsales, merchandise, city cards,

etc.)




Sales tax

Reduced Funding Sources Due to COVID-19

Question: Which of the following funding sources will be reduced as a result of the COVID-19 crisis?

11.8%

35.3%

23.5%

29.4%

18.5%

44.4%

3.7%

44.4%

3.7%

11.1%

5.0%

20.0%

5.0%

30.0%

15.0%

23.1%

15.4%

15.4%

7.7%

7.7%

7.7%

0% 20% 40% 60% 80%

Airbnb tax

Advertising revenue



Other taxes

City/Municipalgovernment funding

64.7%

23.5%

47.1%

11.8%

51.9%

25.9%

29.6%

11.1%

7.4%

50.0%

15.0%

15.0%

10.0%

10.0%

76.9%

46.2%

38.5%

23.1%

23.1%

0% 20% 40% 60% 80%


Membership fees



District


Expectation of Recovery Funds & Sources

35.3%

11.8%

52.9%

44.4%

22.2%

33.3%

25.0%

20.0%

55.0%

30.8%

38.5%

30.8%

0% 20% 40% 60%

Yes

No

Don't know


100.0%

16.7%

16.7%

75.0%

16.7%

16.7%

8.3%

8.3%

60.0%

20.0%

20.0%

75.0%

50.0%

25.0%

0% 20% 40% 60% 80% 100% 120%

Federal governmentrecovery funds

State/Provincegovernment recovery

funds

City/Municipalitygovernment recovery

funds

Regional governmentrecovery funds

Other


Question: Does your organization expect to receive any COVID-19 recovery funds? And Which of the following recovering funds does your organization expect to receive? (Check all that apply)

Number of Full Time Staff Prior to COVID-19 Crisis

Question: What was your total number of full-time equivalent employees prior to the COVID-19 crisis?

5.9%

94.1%

3.7%

55.6%

40.7%

15.0%

65.0%

20.0%

38.5%

38.5%

23.1%

0% 20% 40% 60% 80% 100%

More than 75

25 - 75

Less than 25


Mean Staff Size<$5m – 13.6

$5-15m – 45.6$15-30m – 57.7>$30m – 99.2

Impact on Staffing of the COVID-19 Crisis + Proportion of Staff ImpactedIn Those Organizations

Question: What has been the impact on your staffing so far due to the COVID-19 crisis? (Select all that apply)

47.1%

23.5%

17.6%

35.3%

23.5%

40.7%

29.6%

29.6%

40.7%

25.9%

25.0%

15.0%

20.0%

50.0%

20.0%

5.0%

10.0%

61.5%

61.5%

61.5%

15.4%

23.1%

0% 20% 40% 60% 80%

Laid offemployees

Furloughedemployees

Reducedsalaries

No impact

Reducedworking hours

Don’t know

Prefer not tosay


64.7%

35.3%

81.5%

18.5%

90.0%

10.0%

53.8%

46.2%

0% 20% 40% 60% 80% 100%

Under 50%Staff Impact

50% or moreStaff Impact


Mean # Laidoff:<$5m – 7.3

$5-15m – 11.4$15-30m – 26.6>$30m – 42.9

Mean # Furloughed:<$5m – 7.7

$5-15m – 8.4$15-30m – 35.3>$30m – 53.1

Other Anticipated Impacts of the COVID-19 Crisis

Question: Thinking of the future and the impact of the COVID-19 crisis, how much do you agree or disagree with the following statements:

82.4%

76.5%

94.1%

88.2%

76.5%

52.9%

88.9%

85.2%

74.1%

85.2%

55.6%

37.0%

85.0%

70.0%

65.0%

85.0%

40.0%

35.0%

84.6%

92.3%

100.0%

100.0%

53.8%

84.6%

0% 20% 40% 60% 80% 100%

My organization will seek alignment with keypartners, economic development, state/city

government, etc.

My organization will have a central role inimproving tourism focusing more on sustainability,

resident and local business engagement, etc.

The COVID-19 crisis will result in a “new normal” relative to my organization’s responsibilities,


My organization will strive to return to pre-COVID crisis normal relative to responsibilities,


My organization will seek and develop new andmore sustainable sources of funding

My organization will be smaller, more focused, andmore efficient


For questions or more information on these survey findings: [email protected]

Thank you to all organizations who participated in this study

The Future of Tourism Funding: DMO Data & …...tourism funding, a survey was sent to leaders of...

Documents

Transcript of The Future of Tourism Funding: DMO Data & …...tourism funding, a survey was sent to leaders of...