State Tourism Cuts Elevate Local Concerns

OCEAN CITY – As predicted, Governor Martin O’Malley included significant cuts to the state’s tourism budget when he announced this week he had slashed roughly $280 million from the state’s general budget, but the impact of those cuts on Ocean City and Worcester County remain uncertain.

O’Malley on Tuesday announced $280 million in budget cuts as the first phase of an attempt to address the state’s burgeoning $1.4 billion structural deficit. The cuts were deep and across the board and effected every department in the state government with some hit more than others. Two weeks ago, O’Malley told resort business leaders the amount of state funding for tourism marketing would likely be reduced before it ever went forward again, and his prediction came true this week when over $870,000 in cuts to the Office of Tourism budget were announced.

O’Malley announced his proposed budget cuts on Tuesday and the state’s Board of Public Works, which includes the governor, Comptroller Peter Franchot and State Treasurer Nancy Kopp, approved the cuts on Wednesday. No state agency was spared and some were hit harder than others, but the cuts to the state tourism department are particularly alarming in Ocean City and Worcester County where competing with other resort areas has become a challenge.

With a tourism marketing budget of around $1.7 million, Ocean City spends far less promoting itself as a destination than many of its rival tourist towns along the east coast, and without an injection of local and state funding, business leaders are growing increasingly concerned about the resort’s ability to remain competitive with its neighbors. Of the town’s $1.7 million tourism marketing budget, a mere $165,000 comes from the state.

Over the last few months, resort business leaders have urged local and county officials to increase the funding earmarked for tourism marketing and in late June, got the ear of O’Malley during a breakfast meeting at Harrison’s Harborwatch in Ocean City. O’Malley said he understood the importance of funding tourism marketing, but told business leaders there would likely be cuts in the tourism budget before any new funding could be added.

On Tuesday, his $280 million across-the-board cuts included over $870,000 from the Tourism Office. Most of the cuts are directed at improving efficiency and eliminating waste, but some of the bigger chunks are directed specifically at marketing and advertising. For example, over $485,000 was cut from the state Tourism Board budget, which provides grants to local jurisdictions for site-specific marketing. Also cut was $50,000 from advertising and another $50,000 from promotional contracts.

Resort business leaders this week voiced concerns the cuts went beyond streamlining and bit into funding used to market the state and locations like Ocean City and Worcester County.

Ocean City Hotel-Motel-Restaurant Association Executive Director Susan Jones said she was concerned the cuts would directly affect the amount of state dollars directed to the resort.

“If he’s cutting things that make the government more efficient, I wouldn’t be opposed to that,” she said. “My big concern is the grant money that trickles down to Ocean City for marketing and advertising.”

Jones said the $50,000 cut from tourism advertising was a drop in the bucket in the big scheme of things and said local businesses should worry more about the $485,000 cut from the Tourism Board.

“That $50,000 is like one ad in the New York Times,” she said.

Ocean City Assistant Tourism Director Debbie Travers said town leaders anticipated cuts to the tourism budget after the meeting with O’Malley late last month.

“We knew they were coming, we just didn’t know to what extent,” she said. “We heard some preliminary figures that said the grant pool would be cut by about 10 percent.”

Travers said because of the uncertainty surrounding Maryland’s financial situation, the resort does not count on tourism marketing grants from the state when the budget is prepared. She said it remains uncertain what the cuts announced on Tuesday will mean for those grants.

“This is still very much a work in progress,” she said. “We never budget the grant money in because we can’t rely on it. We never really count on that until we receive it.”

During the meeting with O’Malley two weeks ago, resort business leaders pointed out an investment in tourism returns a rate of about three to one across the state with a figure closer to 20 to one in Ocean City.

Carousel Hotel managing partner and former Maryland Tourism Development Board Chairman Michael James said this week for that reason, the state should be injecting more funding into tourism marketing rather than cutting an obvious money maker.

“Every bit of data supports that,” he said. “I think they need to take a closer look at the benefits. We’ve told them over and over and we’ve supplied them with the data, but I don’t think they believe the argument.”

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