NWI bureaus differ in philosophies, funding strategies
JOHN LUKE | THE TIMES Games are in full swing at Blue Chip Casino in Michigan City. The casino is the focal point of LaPorte County's tourism industry. In 2008, 64.4 percent of tourism-related tax revenues in LaPorte County were from Blue Chip, according to a LaPorte County bureau-sponsored economic impact study of 2001 to 2008.
More than $1 billion and countless jobs are at stake in a race to entice tourism money to the region, and three bureaus with divergent philosophies and methods remain at the center of that struggle.
A Times analysis of budgets and stated-funded economic impact statements for Lake, Porter and LaPorte counties' tourism bureaus revealed fundamental differences in how the groups go about attracting tourism money and who makes the final decisions. It also revealed that the biggest benefits to region taxpayers aren't always delivered by the largest bureau.
The Times analysis showed:
Visitors spent nearly $1.4 billion in Lake, LaPorte and Porter counties in 2004 -- the latest year for which standardized statistics are available.
Casinos dominate the tourism industries in Lake and LaPorte counties.
Although Lake County draws the most tourism-related money, LaPorte County's tourism industry saved each of its county residents $168.30 more in taxes than the largest region tourism bureau was able to muster.
The Porter County Council forces that county's tourism bureau to spend $89,100, or about 6.5 percent of its budget, on four county-owned venues every year, something the tourism board has unsuccessfully fought.
Porter County's marketing focus is on the Indiana Dunes, an attraction some tourism officials believe is the best lure for visitors but that others believe detracts from other important economic development.
The Lake County-based South Shore Convention and Visitors Authority allocated more than $386,000, or 8.6 percent, of its budget to the 2009 Gary South Shore Air Show, but officials said only $110,000 was spent because of revenue and private donations generated by the event.
Who controls the tourism bureaus?
Of the three tourism bureaus, only Porter County's is beholden to county government officials. And at least one member of the county's tourism board is at odds with those officials regarding allocation of tourism dollars.
Lake and LaPorte counties' bureaus are managed by independent boards appointed by local government officials. The Porter County Convention, Recreation and Visitor Commission, on the other hand, is a division of county government and must have its budget approved by the Porter County Council.
That distinction impacts how the bureaus spend their money.
Lorelei Weimer, executive director of the Porter County tourism bureau, said the county council requires her office to direct $89,100 in tourism dollars to four county-owned venues each year.
The money is split among the Porter County Exposition Center and Fairgrounds, Parks and Recreation Department, Memorial Opera House and Porter County Museum, the bureau's records show.
Neither Lake nor LaPorte counties' bureaus allocate any funding to attractions in their communities. For example, the Little Red School House in Hammond and the Old Courthouse in Crown Point are funded by private donations and grants, not through tourism dollars.
The Porter County tourism bureau's board of directors attempted this year to reallocate its venue-designated money to bureau Web site upgrades, but the Porter County Council denied that move, said Jeff Good, a tourism board member.
"I'm not against the Porter County Museum," Good said. "We need to preserve it. I just don't think it should be done with tourism dollars."
State law requires the tourism bureau's money -- which is separate from the county general fund -- to be spent on promotion-related activities and advertising. Officials from all four venues said they spend the money -- in part -- on advertising, promotion of shows and other programs.
But Kevin Pazour, executive director of the Porter County Museum and Historical Society, said the $17,820 his group receives from the bureau also is used to pay for part-time staff and to boost his salary as a spokesman for the museum.
"That money is vital to our existence," he said. "It's the only money we get to promote our events."
Weimer said she did not know the tourism dollars were being used for salaries. She told The Times she would be speaking with the bureau's attorney to find out if tourism dollars could legally be spent on salaries.
Porter County Council President Bob Poparad said the council did not want the bureau to cut its support of the county-owned venues.
"We just wanted them to continue the level of support they had given to the venues in the past because we were tight on money this year," he said.
'Heads in beds, cheeks in seats'
Speros Batistatos, president and CEO of the South Shore Convention and Visitors Authority, said his staff's efforts are focused on one goal: "heads in beds and cheeks in seats."
Lake County is one of the top 10 counties in the state for number of employees in the tourism industry, money spent by local hotels and taxes generated, according to a tourism-related study by Ball State University's Center for Business and Economic Research and Building Better Communities.
The Lake County bureau also boasted the state's second-highest amount of visitor spending behind Marion County, according to a 2006 economic impact study of travel and tourism based on 2004 data. Porter and LaPorte counties ranked seventh and 10th, respectively.
Although Lake outpaced its region counterparts in every category, Porter and LaPorte counties' tourism-related commerce actually provided a higher return per resident, a Times analysis of the state-funded study shows.
LaPorte County residents reaped the biggest benefit from the tourism industry.
The county's tourism industry drew $2,032.20 in visitor spending and $433.30 in taxes per LaPorte County resident in 2004, data shows. Porter County generated 1,901.78 in visitor spending and $408.36 in tax revenue per resident.
Lake County brought $1,776.22 in visitor spending and $365.77 in taxes per resident in 2004.
Sales force
Lake and LaPorte county leaders say they aggressively use staff to lure conventions, sporting events and visitors to their communities. Their budgets, which emphasize personnel and travel expenditures, reflect that philosophy.
In 2009, the LaPorte County Convention and Visitors Bureau allocated $677,460, or about 44.3 percent of its $1.5 million budget, to staff salaries and benefits. Another 3.4 percent was slotted for travel expenditures, a Times analysis shows.
Jack Arnett, executive director of the LaPorte County bureau, noted that about 5 percent of the salary cost is reimbursed by the Northern Indiana Tourism Development Commission, a regional group to which LaPorte lends staff. Arnett said he also eliminated one position this year, a move that will be reflected in the 2010 budget.
The Lake County-based South Shore bureau allocated 39.5 percent of its budget to personnel and another 3 percent to travel -- for a total of more than $1.9 million, a Times analysis shows.
Porter County, by comparison, allocated 25 percent of its budget to personnel and less than 1 percent to travel, The Times analysis shows.
Batistatos, head of the South Shore group, said travel -- except for that done by the sales team -- has been slashed because of the meager economy.
Batistatos said his team has provided local hotels with 39 business leads so far in 2009, accounting for 17 conventions and 22 sporting events.
Michael Williams, vice president and general manager of the Radisson Hotel at Star Plaza in Merrillville, said the South Shore sales team's efforts fill 6,000 to 10,000 Radisson hotel rooms every year.
In LaPorte County, Arnett said his sales staff secures business for Blue Chip Casino in Michigan City, smaller LaPorte County venues and the fairgrounds.
Lisa Woodson, events coordinator at Best Western LaPorte Hotel and Conference Center, said the LaPorte tourism bureau has been "extremely helpful" in providing leads for business, including the Midwest Clown Convention and RPM Fest.
Enhancing the product
Weimer said the Porter County tourism bureau's approach has to be different than the other two counties because Porter lacks convention space with attached hotels. It also lacks a sales team.
Instead, the Porter County bureau focuses efforts on enhancing the Indiana Dunes and surrounding communities so visitors will spend the night and stay longer, Weimer said.
The bureau is funding a Beyond the Beach discovery trail that incorporates nature with information about attractions beyond the Indiana Dunes.
But not everyone agrees with the bureau's approach to tourism.
Porter County bureau board member Good, whose company owns hotels in Porter and LaPorte counties, said he believes the tourism bureau is too involved in parks and the Dunes.
"We're spending all this money to market a destination that's only viable for three or four months out of the year," he said. "For things to make my hotels do better in Porter County, it isn't bringing in more tourists in June, July and August. What would help is more economic development."
But Weimer said the Porter County tourism bureau also focuses its resources on advertising and branding its communities.
"We can't sit back as a CVB and just market the area," she said. "It's a critical component of what we do. But at the end of the day, the reason they come here is because of our product."
Marketing and regional tension
Porter County spends 29.4 percent of its budget on marketing -- the most of the three region bureaus, a Times analysis shows.
A portion of both the Porter and LaPorte bureaus' marketing dollars are directed to the Northern Indiana Tourism Development Commission, a seven-county regional partnership that officials say allows them to expand their reach while maintaining their communities' identities. The group is considering a regional Web site.
Batistatos said the South Shore bureau left the Northern Indiana group several years ago because it became too expensive and subsidized South Bend and Elkhart more than Northwest Indiana.
The South Shore bureau's withdrawal from the group -- coupled with the Lake County agency's attempts to merge the three region bureaus -- created tension among the South Shore and LaPorte and Porter bureaus.
"Oftentimes they are an obstacle in (the South Shore's) ability to book regional business," Batistatos said of his eastern neighbors. "We book business in spite of their existence."
Weimer and Arnett said their offices do not work with the South Shore bureau.
"We're pleased with our regional effort and don't think we've put any obstacles in his way in hosting regional business," Weimer said.
Batistatos said marketing a destination is much more than buying advertisements.
The South Shore bureau spends about 12.6 percent of its budget on marketing -- the least of the three bureaus, a Times analysis shows.
But Batistatos said South Shore-sponsored programs including the Gary South Shore Air Show, John Dillinger Museum, "Christmas Story" displays, visitors hall and other special events are marketing-related expenditures by themselves.
About 400,000 people attended the 2009 Gary South Shore Air Show, Batistatos said.
"It put us in the Chicago news for a week straight with positive news," he said. "You couldn't spend $110,000 (on that kind of advertising). ... Bringing people here and changing how they think and feel about Northwest Indiana we feel is at the core of our operation."
Gaming and tourism
Although special events bring in new faces and dollars, it is the region's riverboat casinos that dominate the tourism industry.
Blue Chip Casino is the focal point of LaPorte County's tourism industry.
In 2008, 64.4 percent of tourism-related tax revenues in LaPorte County were from Blue Chip Casino, according to a LaPorte County bureau-sponsored economic impact study of 2001 to 2008.
Arnett, of the LaPorte County agency, said that number likely will be even higher as the casino books more groups for its new convention center.
"It's unequivocally successful so far," he said. "It's changed the whole landscape for us."
Lake County is home to the other four of the region's five riverboat casinos.
Batistatos said the South Shore agency has not measured the percentage of Lake County tourism that can be attributed to the casinos but acknowledges the boats are a major force in attracting outside visitors. He said he would be interested in finding out how that travel lure of the gambling boats affects local restaurants and other businesses.
"I'm not sure anything brings more people to Northwest Indiana than the five riverboats," Batistatos said. "Hands down they are the biggest generator of people from other states and other counties."
Where the money comes from?
Lake and LaPorte counties' tourism bureau budgets are funded by a 5 percent innkeeper's tax and casino admission tax dollars. Porter County does not have a casino and relies entirely on the innkeeper's tax, which is paid by the guests who stay in county hotels.
Posted in Local on Sunday, October 25, 2009 12:15 am Updated: 12:24 am. | Tags: Illinois, Indiana, Lake County, Laporte County, Porter County, Tourism, Nwslttr,
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