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
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."� , { 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.