The invisible export.

An ever increasing number of foreign tourists are coming to this country in search of the "real America." That's good news for the states. Although international visitors may be drawn the first time by Disneyland and Sea World, big-spending Japanese and European visitors are just as eager to return to visit a Montana dude ranch or hike to the bottom of the Grand Canyon.

Attracting foreign tourists has become big business. International tourism is an important source of income, foreign exchange and employment. Last year, foreign visitors spent $20 billion more in this country than American tourists spent abroad. In fact, tourism is one of the few industries with a trade surplus. Although tourism is often called the invisible export and its benefits overlooked, the fact is, it generates more export revenue than automobiles and computers. It surpasses agricultural exports by two to one.

Tourism is the world's largest and fastest growing industry, contributing $3.5 trillion or more than 6 percent of the world's gross national product. The World Travel and Tourism Council reports that tourism employs 127 million workers. That's one in 15 jobs or about 7 percent of the world's labor force.

Big Spenders 

In this country, domestic and international visitors spent $71.2 billion in 1992 on air, bus, taxi, cruise ship and rail travel; hotels, motels and camping; food and drink; retail purchases; and amusement and recreation. That amounts to an estimated 6 percent of the GNP. The travel industry is the second largest employer after agriculture, supporting 5.9 million jobs and creating jobs at twice the average rate of all U.S. industries.

Worldwide, the tourism industry is still growing, increasing 6.7 percent between 1985 and 1990. Global events such as the fall of the Berlin Wall and the lifting of travel restrictions in the Soviet Union have increased the numbers of people traveling around the world. Meanwhile, the weakening U.S. dollar has made it less expensive for people from outside the country to visit. The U.S. Travel and Tourism Administration (USTTA), housed in the U.S. Department of Commerce, predicts that by the year 2000 tourism will be the country's leading export.

For many reasons, promoting international travel makes sense for states. But the international market is highly competitive. States are not only competing with each other for the foreign dollar, but with other nations as well. Globally, more than 170 national governments and many states are competing with highly sophisticated and expensive advertising campaigns for the business of the top tourism-generating countries.

Luring Them in

State travel and tourism offices participate in international trade shows, produce informational brochures and take out ads in foreign magazines and newspapers. Some states produce slick television commercials in targeted foreign markets and maintain tourism information offices in foreign cities. In 1992-93 states spent more than $16.6 million on foreign promotion efforts, up from $10.7 million in 1988-89, according to an annual survey of state travel offices conducted by the U.S. Travel Data Center. Hawaii spends the most ($3.9 million); Alaska, Illinois, New York, Massachusetts and Texas each spend more than $1 million per year.

The travel offices of 32 states and territories are represented in foreign countries. The clear preference seems to be for representation in Europe and Japan, although Ohio maintains an office in Africa, and Florida maintains one in Brazil. States report that in the next year they plan to spend a growing percentage of their budgets on international marketing and promotion and less on administrative costs.

Even in the most popular tourist destination states such as California, foreign visitors make up only a fraction of the total number of tourists. Why then are states spending so much time and effort to recruit foreigners? For one thing, international guests spend more than six times as much during their stay as do domestic visitors. Furthermore, the domestic market has increased at an average annual rate of only 1 percent in the last 10 years while the foreign market has been growing at about 8 percent a year. Americans get fewer paid holidays and days of paid vacation than do workers in 12 industrialized European nations, so Americans take shorter and cheaper vacations than many foreign visitors.

Foreign tourists also prop up business through the "shoulder season" when Americans traditionally don't travel as much, the months after Labor Day or spring break. "Everybody seems to forget that Canadians have different holidays than we do," says Matthew Cohen, Montana's state tourism director. "We believe that Canada is a tremendous growth market for us, and we do everything we can to bring them here on their vacations."

Foreign Tourists in the United States (1992)

From:              Arrivals      Total Spent
                (in millions)  (in $ billions)
Canada              18.6               9.3
Mexico               8.3               6.4
Japan                3.7              13.7
United Kingdom       2.8               7.5
Germany              1.7               4.8
France               0.8               1.9
Italy                0.6               1.8
Australia            0.5               1.8

"These visitors bring in fresh currency rather than recycled currency already in the domestic income stream. States and the nation benefit simultaneously from such expenditures because it improves the overall trade balance," says David Edgell, acting undersecretary for Travel and Tourism. Edgell points out that tourism-related expenditures generate indirect or secondary spending as well.

Since foreign visitors have a major impact on state economies, some states are experimenting with new lures.

Louisiana began to offer foreign visitors tax-free shopping in 1989. Visitors who buy products from merchants in the nonprofit Louisiana Tax-Free Shopping group receive vouchers that they later submit for rebates. More than 1,000 merchants participate in the program, and $2.5 million in rebates have been distributed. Visitors (primarily from Mexico, Honduras, Germany, France and Italy) spend an average of $861 each on apparel, photo equipment and small appliances. Even with an average rebate of $60 per visitor, tourism officials estimate that the program has helped generate $35.6 million in revenues.

States are spending big bucks to lure international events, such as a World's Fair or the Olympics. The global competition for these events is fierce, so making a successful bid may take not years but decades. Atlanta's persistence will pay off. As the host of the 1996 Summer Olympics, Georgia expects an economic impact of at least $5 billion over the 16 days. That figure doesn't even include what the visitors will spend when they take a few extra days or weeks to visit other states. Salt Lake City hopes to follow suit by being selected to host the 1998 Winter Olympics. The Legislature has authorized a sales tax to build a $56 million winter sports complex. If Utah is successful in its bid, it will have been 32 years since the state first bid for the Olympics in 1966.

Ads on a Budget

The budget crunch has led to the scaling back or elimination of statefunded advertising, a move that many travel experts see as a big mistake in such a volatile global economy. Some states and individual tourist destinations are priced out of the international advertising market. Most states and individual tourism providers simply can't afford the $60,000 it takes to buy a one-page black and white ad in a Tokyo newspaper.

Still, creative efforts launched by travel officials have let some states do more with less. Budget cuts in California resulted in a scaled-back international marketing budget of $500,000 last year. On that budget, the California Office of Tourism can't afford to advertise worldwide. They concentrate their efforts to promote the state on participating in international trade expositions and sales missions. To help defray the cost, the state gets funds from businesses for promotional efforts. The California tourism industry kicks in $1.7 million in addition to the state's annual $210,000 for targeted foreign marketing costs.

California tourism officials report that business-government partnerships are critical to promoting the state worldwide. "Tourism providers simply can't afford to compete in the international markets," says Carolyn Peterson-Beteta. "Even the big guys like Disneyland need the state to promote California as the destination."

Arizona tourism officials agree that cooperation is the key to success. Renee Levesque, Arizona's manager of international tourism programs, says that most states lack the funds to do major marketing promotions within foreign countries. But by working with the local hotels, restaurants and airlines, Arizona is able to participate in trade shows and do some targeted advertising.

"Last year we took 16 people to a big trade show in London at a cost of $50,000, and the private sector paid 90 percent," says Levesque. "It pays for tourism providers to all chip in and invest in trade shows because they get exposure and have the opportunities to book reservations with travel agents and tour groups that they would otherwise never get to meet."

Arizona places a great deal of emphasis on bringing foreign journalists, travel magazine writers and tour group providers to the state. The goal of these familiarization or "fam" tours is to show off the state and convince travel writers to write about its attractions. Tourism companies, like airlines, bus companies, hotels and restaurants, join with the state tourism office to provide free or discounted meals, transportation and lodging for the visitors.

Next year, the Arizona Office of Tourism plans to ask the Legislature to significantly increase its international marketing budget. Levesque says that with the additional funds they will be able to host more "fam" tours and publish better brochures for the top markets--Canada, Mexico, Germany, Japan and the United Kingdom. "We want to continue to help the entire state, including the more remote areas," says Levesque. "We need more state funds to conduct the tours because the restaurants and hotels in rural areas just can't afford complimentary services."

Montana, too, is jumping into the growing international tourism market. Twenty percent of Montana's visitors are international, most of them from Canada. Matthew Cohen, Montana's director of tourism, stresses the importance of tourism to the state's international trade. "Our economy is almost entirely dependent on trade," says Cohen. "We are relying less and less on trading commodities, such as lumber and other extractive industries, and more on bringing tourists in."

Montana got some priceless exposure by getting the Japanese home video distributors of the film City Slickers to run a promotional commercial for Montana tourism on each video sold or rented. The ads highlighted Montana's many dude ranches and authentic Old West atmosphere--something that particularly fascinates the Japanese. An estimated 2 million Japanese viewers participated in a contest to win a free trip to Montana. Northwest Airlines donated airfare and private companies gave away cattle drive vacations to the winners. This simple effort cost the state only $1,500 but has greatly improved Montana's presence in japan (despite the fact that City Slickers was actually filmed in Colorado and New Mexico).

In competing for the big-spending Japanese visitors "the key is to be as creative as possible and get as much exposure as you can--any way you can," says Cohen.

International Promotion Budgets (1992-93)

Alaska    $25,650  Mont.    273,500
Ala.    1,197,000  Neb.       6,000
Ariz.     250,000  Nev.     320,737
Ark.       50,000  N.H.      60,000
Calif.    585,000  N.J.     200,000
Colo.     750,000  N.M.      67,000
Conn.          NA  N.Y.   1,000,000
Del.       30,000  N.C.      61,529
Fla.      962,244  N.D.     300,000
Ga.       200,000  Ohio      56,000
Hawaii  3,993,466  Okla.     95,104
Idaho     218,500  Ore.     165,000
Ill.    1,000,000  Pa.      182,500
Ind.       60,000  R.I.      76,850
Iowa       15,000  S.C.     747,000
Kan.       20,000  S.D.      85,000
Ky.        40,000  Tenn.     70,000
La.       800,000  Texas  1,000,000
Maine      46,000  Utah     337,800
Md.       530,796  Vt.       98,300
Mass.   1,000,000  Va.      700,000
Mich.      50,000  Wash.     97,000
Minn.     200,000  W.Va.     77,909
Miss.          NA  Wis.      70,000
Mo.        45,500  Wyo.     200,000

Source: U.S. Travel Data Center

Regional Partners

Another promising possibility is for states to cooperate with their neighbors to market entire regions. Regional organizations help add substantial momentum to individual marketing initiatives. Cooperative efforts are effective and economical for promoting tourism abroad. And regional alliances focus on travel literature to help foreign visitors plan trips that usually extend across state boundaries. Organizations such as New England USA and The Real America (Idaho, South Dakota and Wyoming) participate in trade shows and sales missions to the United Kingdom and Europe, host familiarization tours for foreign journalists and travel agents, prepare travel guides and tour-planning manuals, and sponsor consumer advertising. Idaho and Montana split the costs of a booth at an international trade show in Taiwan. The booth, featuring a log cabin, capitalized on the popular Western theme to attract potential visitors to the Rocky Mountains.

The increased awareness of the individual states and regions as tourist destinations has not only helped bring in new visitors, but also enticed others to return. Since 76 percent of international visitors are repeats, they want to leave the major cities and most popualr destinations, such as Disney World, and see the real United States. Visitors from around the world consistently express an interest in seeing the rural parts of America, often to view historic, cultural and natural attractions. States like Illinois, Kansas and Montana are joining the likes of New York and Florida and cashing in on the growing international market.

USTTA Undersecretary Edgell says that when it comes to state success in the international tourism market, it really pays to "think globally and act locally."

Florida Fights a Nightmare Image

International press accounts of the violent crimes against foreign visitors is posing a major threat to Florida's lucrative tourism industry. After the 10th foreign tourist was murdered this year, Governor Lawton Chiles ordered a halt to $2 million in national and international advertising. He also asked President Clinton for $4 million in federal aid to help defray the costs of overtime for state troopers needed to patrol highways and rest stops.

State tourism officials fear a double-digit impact on the state's $33.8 billion industry as south Florida tour operators report that winter bookings are down 50 percent from last year. The state hosts an estimated 8 million international visitors each year, making tourism Florida's No. 1 employer.

State and local governments have stepped up airport security. Increased numbers of police officers, as well as volunteers, are patrolling highways and rest stops. Rental car agencies have pitched in by donating patrol cars, by helping their customers "blend in" by removing company bumper stickers and special license plates, and by developing safety brochures.

Numerous task forces have been established to help repair the state's tarnished image and to think of new ways to help protect its tourists. The Florida Tourism Board has requested an additional $5 million in state funds for advertising to try to salvage the critical winter vacation season. An 800 number has been set up to accept reports of suspicious people at rest stops and to advise potential visitors about safety precautions. But despite these efforts, the perception continues that Florida (especially Miami) is unsafe for foreign tourists.