Call to Order and Roll Call
The1st meeting of the Interim Joint Committee on Economic Development and Tourism was held on Thursday, June 21, 2012, at 1:00 PM, in Room 154 of the Capitol Annex. Senator Alice Forgy Kerr, chair, called the meeting to order, and the secretary called the roll.
Members:Senator Alice Forgy Kerr, Co-Chair; Representative Leslie Combs, Co-Chair; Senators Ernie Harris, and Katie Stine; Representatives Julie Raque Adams, Royce W. Adams, Linda Belcher, John "Bam" Carney, Larry Clark, Jim DeCesare, Mike Denham, Bob M. DeWeese, Myron Dossett, Ted Edmonds, Jim Gooch Jr., Keith Hall, Mike Harmon, Melvin B. Henley, Dennis Horlander, Wade Hurt, Dennis Keene, Thomas Kerr, Kim King, Tom McKee, David Osborne, John Short, Fitz Steele, Tommy Thompson, and Addia Wuchner.
Guests: Eric Rose, Executive Director, Newport Aquarium; Barbara Dozier, Vice President, Sales and Marketing, Northern Kentucky Convention and Visitors Bureau; Sherry Murphy, Executive Director, Elizabethtown Tourism and Convention Bureau; Laura Cole, President and Chief Executive Officer, Kentucky Travel Industry Association; Marcheta Sparrow, Secretary, and Hank Phillips, Deputy Commissioner, Department of Travel and Tourism, Tourism, Arts and Heritage Cabinet; Eric Gregory, President, Kentucky Distillers’ Association; and Adam Johnson, Manager, Kentucky Bourbon Trail.
Kentucky Bourbon Trail
Eric Gregory, President of the Kentucky Distillers’ Association, introduced Adam Johnson, who is the newly appointed manager of the Kentucky Bourbon Trail. Mr. Johnson previously served as the executive director of the Danville Convention and Visitors Bureau. Mr. Gregory gave a brief update on Kentucky’s bourbon industry, noting that Kentucky produces 95 percent of the world’s bourbon, with production up 115 percent since 1999. Inventories are the highest since 1977, with a projected assessed tax value of $1.7 billion—an increase of $350 million from 2011. Mr. Gregory noted that Kentucky’s distilleries continue to expand. Wild Turkey’s $94 million expansion includes a new bottling center and warehouse along with 70 new jobs. The Maker’s Mark $54.3 million expansion includes a new visitors’ experience and increased distillation capacity. Jim Beam’s $54 million expansion includes a new visitors’ experience as well as an additional 120 jobs in Frankfort. Alltech is building a $6 million distillery in downtown Lexington, Brown Foreman is investing approximately $4.5 Million in their facility, Heaven Hill $4.2 million, and $2 million at Four Roses for a new visitors’ experience. Total investment since 2011 is $218.5 million.
Mr. Johnson said Kentucky Bourbon Trail participation has increased 30 percent over 2011 numbers. In the past five years, nearly two million people have participated in the Bourbon Trail experience with approximately 12,000 people completing the trail. The bourbon trail is also a tourism driver for area hotels and businesses. New to the Bourbon Trail experience is a line of merchandise available online and at distilleries.
Assisting Travel- and Tourism-Related Businesses in the Commonwealth
Laura Cole, President and Chief Executive Officer, Kentucky Travel Industry Association (KTIA) said the agency’s mission is to promote, enhance, and unite the tourism industry through governmental interaction, awareness, professional development, and education. A nonprofit organization, the KTIA has over 950 members. Ms. Cole said tourism is the third largest industry in Kentucky with a financial impact of $11.7 billion in 2011. The industry employs over 170,000 Kentuckians, generating $3.3 billion in wages and $500 million in tax revenue annually.
Eric Rose, Executive Director, Newport Aquarium told members the aquarium benefited greatly from Tourism Development Act tax credits. Other projects as well have benefited from the program, including Newport on the Levee. Mr. Rose said investment projects drive out-of-state tourism. 80 percent of the aquarium’s revenue is from out-of-state visitors. Every tourism dollar in revenue brought into the state has a return of $1.43 in economic impact. Mr. Rose noted that the Tourism Development Act has allowed companies in Kentucky to compete nationally with other development projects.
Sherry Murphy, Executive Director of the Elizabethtown Convention and Visitors Bureau, explained the function and importance of convention and visitors bureaus (CVBs) whose goal is to help produce a positive economic impact for travel-related businesses.
Ms. Murphy discussed the Elizabethtown Sports Park, which is a 156-acre tournament hosting facility that will open in July. Its goal is to capture sports destination marketing. It is estimated to have an annual $7.7 million economic impact locally.
Barbara Dozier, Vice President of Sales and Marketing with the Northern Kentucky Convention and Visitors Bureau, spoke about the economic impact of meetings and conventions for the state. Tourism enhances Kentucky’s image and draws attention to the state’s other assets, including education and businesses. Ms. Dozier said northern Kentucky recently hosted the Association for Manufacturing Excellence. The 1,500 attendees had access to organized tours of manufacturing facilities around the state. CVBs approach community businesses to help bring conventions to the area. She noted that a 500-person convention has a $200,000 economic impact.
Ms. Cole expressed the concerns that KTIA has for Kentucky’s tourism industry. She said it is important to maintain the integrity of the transient room and restaurant taxes. Other concerns include decreased funding to the Tourism, Arts and Heritage Cabinet and the lack of casino gambling. She noted that one casino in Indiana generated $275 million in revenue, $88 million in taxes, and 1,600 jobs. Also of concern is the lack of alcohol sales in “dry” counties. Counties that sell alcohol are more tourism friendly.
Responding to Senator Stine’s question, Ms. Dozier said when convention attendees book reservations, most of the marketing, including tourism guides, is sent online. Through the reservation system, attendees receive suggested itineraries, the option to receive more planning materials, and other information online. Mr. Rose added that most conventions put out a delegate reception kit that includes state and regional tourism information.
Representative Keene said the community benefits greatly from the Newport Aquarium. He noted that Cincinnati is hosting the World Choir Games and has enlisted northern Kentucky travel-related businesses to assist.
Responding to Representative McKee’s question, Ms. Dozier said that area hotels are booked for the upcoming race at Kentucky Speedway. She said the traffic situation has been addressed. Representative Wuchner noted that the Kentucky State Police will be handling the traffic flow. Mr. Rose added that events at the Speedway have a spillover effect on area attractions.
Responding to Representative Wuchner’s question, Ms. Dozier said the Cincinnati and Northern Kentucky CVBs joined forces and created a regional tourism network to market area attractions such as the Newport Aquarium and Cincinnati Zoo. She noted that many traveler visit areas rather than one specific attraction. She said the Cincinnati/Northern Kentucky area was rated third on Lonely Planet Magazine’s list of great weekend escapes. Senator Kerr agreed with Senator Stine’s point about the importance of getting travel information to visitors before they arrive at their destination.
Responding to Representative Carney’s inquiry, Ms. Murphy said the sports project is unique in that it focuses on sports tournament events. She said the Elizabethtown Tourism and Convention Bureau would be happy to speak with other communities about the project’s development. In response to his question, she said the local restaurant sales tax funded the facility.
“There’s Only One” Marketing Campaign, Kentucky Department of Travel and Tourism
Secretary Marcheta Sparrow of the Tourism, Arts and Heritage Cabinet addressed Representative Clark’s earlier question regarding alcohol sales at state parks. She said there have been no negative incidents since liquor by the drink was introduced in at select state parks. Recent sales data reflects revenue from alcohol sales of over $110,000. The Cabinet continues to work with meeting and convention groups to market the amenity.
Secretary Sparrow said tourism’s economic impact for 2011 was $11.7 billion, up from the previous year. The tourism industry supports over 170,000 jobs in Kentucky.
Secretary Sparrow announced that Mike Mangeot was recently appointed the Commissioner of the Kentucky Department of Travel.
Hank Phillips, Deputy Commissioner of the Department of Travel and Tourism gave a PowerPoint presentation on the cabinet’s “There’s Only One” marketing campaign. Mr. Phillips explained the concept of one-of-a-kind tourism destinations within the Commonwealth. There are now 44 unique destinations featured. A committee of five nonstaff tourism representatives reviews applications to determine which locations can truly be considered one-of-a-kind. Marketing includes television, radio, internet and print publications as well as special events and social media. Deputy Commissioner Phillips noted that the television and radio commercials have been broadcast to states contiguous to Kentucky and print ads have been in 26 publications this spring. The program works in conjunction with local partners who wish to co-op with the department’s campaign.
Deputy Commissioner Phillips said the department is working on the fall marketing campaign. They are also considering marketing to the Chicago area for the first time. He said competition among states to attract tourists is intense. The campaign helps differentiate Kentucky from the competition.
Chairperson Kerr said many notable Kentuckians could be featured in the campaign. Mr. Phillips added that several are, including Muhammad Ali and Abraham Lincoln.
Senator Stine said that prior to visiting Vermont for a conference, she was mailed several detailed travel-related publications. Regarding Senator Stine’s question on National Scenic Byways, Secretary Sparrow said the state does receive federal byways funds that are handled by the Transportation Cabinet. Kentucky is part of the Lincoln Heritage Trail and the Great River Road in western Kentucky. She noted that process is detailed and more projects are in the works. Deputy Commissioner Phillips added that due to limited advertising ability, the state works hard to direct visitors to internet sites.
Secretary Sparrow said the state’s Adventure Tourism Office has a new program called Trail Towns—trail heads for various trails, including horse and biking trails.
Senator Harris commended the cabinet for carrying over the Unbridled Spirit marketing campaign and incorporating it into its new marketing program.
Responding to Representative DeCesare’s question Secretary Sparrow said television advertising co-ops receive funding through the Cabinet’s Tourism Marketing Incentive Program.
There being no further business, the meeting adjourned at 2:30 PM.