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Letter from Duluth Arena Auditorium_importance of Visistors and Convention Industry_12.15.197644 ra D ULL�'i R R E N R- R U D ITO R i U M y7 JWi' 350 SOUTH FIFTH AVENUE WEST, DULUTH. MINN. 55802 r_ ."� , { TE L, 722-5573 December 15, 1976 Mrs. Jackie Merritt City of Dubuque City Hall Dubuque, Iowa Dear Mrs. Merritt: I really must apoligize for the delay in getting back to you after our meetings here in Duluth. However, I am sure that Ron provided you a sample copy of the questionnaire which we had submitted. After further discussion with Atwood Olson regarding this questionnaire, we feel that if we can get the information re- quested in it, we will be able to give you and your committee the answers that you are looking for. If we may prevail upon you to make copies of the questionnaire and give them to the proper people in your city to complete and return to us, as soon as possible, we would appreciate it greatly. Attached you will find a very good report on the importance of the Visitors & Convention industry to a city and area. I do hope that you find it of use in your project. V ay truly yours, /coseph C. Sturckler, Manager ,/DULUTH ARENA -AUDITORIUM JCS/jfb Enclosure cc. - Ron Bowen - 11 North Allen, Madison, Wisc. 53705 Atwood Olson, Minneapolis Auditorium The Economic Importance of a Visitor to Your City I am going to discuss for a few moments, the importance of the visitor from the dollars and cents standpoint. This is becoming a big business in America today and some cities such as Miami and Las Vegas find it one of their principal industries. In fact, it is so important, that it is now called by many, The Smokeless Industry, bringing to cities, millions and millions of dollars in new revenue. Let's examine the importance of these visitors in three areas. A few years ago, the city of Minneapolis adopted a 3o hotel and entertainment tax which is direct income to the city. The income derived helps pay for municipal services rendered by the city. That's the first important reason. Secondly, visitors in Minneapolis spend money; not only for hotels, restaurants and transportation, but for cultural events and at department stores as well as gift, drug, specialty shops and many others. Finally, there is an indirect benefit to the economy by a visitor who comes to Minneapolis. The business executive may be considering a branch office or moving his business to another location and visits Minneapolis for some reason or another and decides that this is the community in which he would like to locate his business or a branch of his business. Or, that same executive may be influenced to accepting a comparable job in Minneapolis as compared to a similar job in some other city because he likes life in Minneapolis. Or, a young person visiting Minneapolis may 2 decide that this is where he would like to go to school and then he may decide to extend his career in Minneapolis bringing new brain power to our economy. So, there are many good reasons why visitors are important to a city. As you realize, the second and third benefits are really hypothetical because it's difficult to have specific information as to why a person moves his business here or decides to come to school. But these reasons are important. We can, however, discuss the importance of the visitor to Minneapolis by looking at the 3% hotel entertainment tax a visitor pays when he is attending a convention, staying at a hotel, doing business in Minneapolis or who is here for other reasons. The 3% hotel and entertainment tax is not a very large amount. For example: if a hotel room costs $25.00, then there is an additional 3% or 75t added to the room charge. The same 3% tax is also added to the cost of the tickets for all types of entertainment. The best way to demonstrate the importance of the 3% tax is to take one group of visitors, such as persons coming from outside the Greater Twin Cities area to a convention being held in Minneapolis. Because conventions need many rooms plus meeting facilities, much advance planning is required. A very accurate count can be kept on the number of delegates coming to a convention and what whey represent to the city. 3 In 1975 there were approximately 285,000 delegates who came to Minneapolis to attend one of the more than 300 conventions. It is estimated that these delegates paid over $1,000,000 to the city of Minneapolis in the 3% hotel and entertainment tax. That's $1,00o,000 that the residents of Minneapolis did not have to pay for municipal services required. Although these taxes go into the general fund, nevertheless, this $1,000,000 is what it costs to have 50 or 60 policemen or 50 or 60 firemen on Minneapolis' payroll. Or this $1,000,000 paid in to the city of Minneapolis by delegates to conventions, paid for snow plowing all of the streets in Minneapolis three or four times during the winter. And that's a 6" to 10" snowfall. Or, these delegates paid for collecting 20% of all the garbage in Minneapolis. Very few of these services are required by visitors, but, they are being paid for by these visitors who come to Minneapolis as delegates to con- ventions. That's why conventions are important. Now, add to the convention delegates, the number of businessmen who travel to Minneapolis or the number of visitors who come to Minneapolis either to visit friends or relatives or who are passing through to go to some northern Minnesota resort, all leave their impact on our economy. Let's look at one convention. Last summer during July, 8,000 Home Economists attended the annual convention in Minneapolis. First, the 3% hotel and entertainment tax brought in $30,000 to the City of Minneapolis. n But, it is not only the 3% hotel and entertainment tax that produces income. It's also the amount of money these delegates spend at retail stores, at theaters, for sight seeing, for eating and at hotels. The Home Economists also spent a million dollars at hotels, restaurants and stores while they were in Minneapolis and that's a very healthy boost to the economy of any city and when hotels, restaurants and stores do business, they spend money for employees, for improvements and for additional merchandise. It is estimated that any dollar spent by a tourist is increased in value seven times as it flows through various channels of distribution in a city. During 1975, out-of-town delegates spend approximately $45,000,000 in Minneapolis during conventions. This money was spent at hotels and restaurants with over 4 million dollars spent at retail stores. So, everyone benefits from a convention delegate. I have only talked about the delegates to a convention because we know how many delegates attend, but add to these delegates, the number of visitors who come to the city either to see friends or relatives or who have heard about Minneapolis and want to stay a day or two before they go to a northern summer resort. . .And then include the visiting businessmen. Everyone of these visitors adds to the economy of a c_i�y. That's why the Smokeless Industry, or attracting more visitors to Minneapolis can be a direct benefit as well as giving us many indirect benefits that will be for the good of all residents in Minneapolis. 5 In looking at the total visitor dollar, it is estimated that alltypes of visitors including conventioneers and persons who attend corporate meetings, traveling businessmen and other visitors to Minneapolis spent $300,000,000 in Hennep in County during 1975. nd why it's such a signifi- Now you can see why each visitor is important a cant industry for a city such as Minneapolis. Now, here's where you become important. Conventions, sitors and meetin s don't 'ust happen. The Minneapolis vi Convention & Tourism Commission has an excellent staff usually started by a of the details of conventions. But, conventions are local member who encourages the association towhich hicco pa yl on hawing all his Minneapolis for a future convention or to sell of their salesmen meet in Minneapolis. Often, these are the ptopleou ma be talking to. rel s or a to Or, you may influence someone to invite their you speaking rmaydbecome come visit Minneapolis or that person to whom so enthusiastic about Minneapolis that he or she sells some acquaintance they meet on a Carribean cruise to come to Minneapolis. So, when you make your a salesman for Minneapolis. Your talk may very talk, you are actually being a large well influence some person to take the initiative that will bring group of visitors to Minneapolis or will excite someone into selling a friend or acquaintance on Minneapolis. someone And, each visitor, whether it's a delegate to a convention or of a nneapolis who just stops for a day, is a direct benefit to the economy and directly benefits everyone. Your talk can be very important to The Smokeless Industry in Minneapolis.