Utah’s Improbable Pandemic Tourism Boost From State Support and Higher Tax Revenues

From the most visited national parks in the nation to skiing and urban escapes, Utah’s tourism industry was continuing to grow at a record pace pre-pandemic, increasing by 5.1 percent every year since 2015.

In 2019, Utah tourism saw $10 billion in visitor spending — approximately eight percent of that from international visitors, according to the Utah Office of Tourism — and $1.34 billion in tourism tax revenue, while state and national parks also experienced record visitation.

Now just weeks shy from the close of its fiscal year 2020, after a full pandemic year and in spite of a big hit to tourism, Utah ranks among six states in the nation that reported increased tax revenues, with its gross domestic product projected to grow by 6.2 percent.

This budget surplus has placed Utah’s visitor economy in a position of strength heading into the recovery year. And it’s all thanks to the legislature’s early support of the state’s tourism industry, the rare case when many states found themselves flat-footed against the impact of Covid to tourism.

Despite initially cutting the Utah Office of Tourism’s $24 million marketing budget in half right after Covid struck, the state quickly reallocated $12 million from $60 million in CARES Act funding. This meant that while other destination marketing organizations (DMOs) faced severe cuts and lobbied their governments for CARES funding, Utah was able to keep its marketing messaging running locally and internationally.

Small businesses in tourism, including hotels, restaurants and outfitters, were also prioritized with $25 million in grant funding, while a $9 million cultural assistance grant program went to cultural, botanical, and zoological organizations that boost tourism in Utah, thus helping museums, theaters and art galleries.

“Our legislature has consistently supported our industry,” said Vicki Varela, CEO of Utah Office of Tourism. “The overall philosophy of the state was to try to both keep people safe but also keep businesses from having to shut down altogether. Evidence is that that strategy has worked really well for us as a whole.”

Varela said that Mother Nature playing favorites also meant an increased demand for Utah’s outdoor spaces. But Utah’s recovery did vary significantly across the state, with urban areas struggling to recover, particularly Salt Lake City. With state funding, however, the recovery is set to begin this summer for Utah’s convention cities as groups slowly return, while Utah’s red rock outdoors are already seeing an ongoing surge in visitation numbers.

“We’re pretty optimistic from the promotions we’ve been doing and the bookings that we’re seeing that there will continue to be a lot of demand for Utah outdoor recreation,” said Varela, adding that her office’s focus would be on responsible visitation.

Patchwork Recovery With Signs of Rebound

While data for 2020 spending and tax revenues won’t be available until late May, estimates from the U.S. Travel Association and Tourism Economics, place direct visitor spending at $6.7 billion or a 34 percent decline — which is still better than the overall U.S. travel industry’s 42 percent fall in visitor spend. Tourism tax revenues are expected to reach $870 million or 20 to 30 percent below 2019 revenues.

As of this year, Utah’s travel spending for February 2021 is just 23 percent less than in 2020, outperforming the overall U.S. travel industry’s tourism spend as well as that of neighboring states such as Arizona, California, and Colorado.

Varela said hotel occupancy rates showed the patchwork recovery across Utah — at below 10 percent in April 2020 across the state during the initial Covid shutdown, to weekly occupancy rates near 90 percent in the Zion National Park and Arches National Park areas for the week ending April 3, 2021. Downtown Salt Lake City, however, saw occupancy rates during this same period at below 50 percent. The city experienced a $357 million loss in conventions in 2020.

Eric Thompson, vice president of marketing at Visit Salt Lake, said that CARES Act funding received through the Utah Office of Tourism helped the state’s convention center cities bear the storm. Visit Salt Lake focused on offering incentives for groups that did book in 2020 and 2021. “We were offering $40 a night incentives for groups that were willing to book in that shorter window, and we blew through 1.2 million dollars really quickly,” Thompson said.

Groups will begin returning in June, and projections are looking more positive going into the second half of the year.

Tax Surplus Boosts Marketing and Infrastructure

Funding boosts from the state have translated into continuous marketing messaging from Utah tourism to keep it top of mind among international visitors, including in New Zealand and Australia, who were big national park spenders.

“We’ve continued to work with operators, public relations, so that there have been some great travel stories about when the time is right think about coming to Utah,” Varela said.

More recently, Utah Office of Tourism also received a $1 million EDA grant, which will go towards in-state and regional “Forever Mighty” responsible visitation communications, encouraging travelers to support local businesses, immerse rather than opt for Instagram shots and bucket lists, and hire outfitters. “It’s not so much about ‘come here,’ it’s about when you’re here, be responsible in these ways,” Varela said.

The state’s propensity to invest in outdoor recreation infrastructure is also placing Utah ahead of the pack in terms of the recovery year. At the March 2021 legislative session, with unexpected tax surpluses, the state allocated in part $110 million for renovating existing parks, creating new trails, recreation and quality of life, plus $36.5 million for the creation of two new state parks.

Varela said that a new East Zion gateway entrance to Zion National Park, which includes new trails, was also made possible through funding from the legislature. The Bureau of Land Management is working with private landowners to build out 40 to 50 miles of trails, thus offering future visitors more options to space out and enjoy areas outside the park.

“It’s remarkable that there isn’t any place else in the country that is as popular a national park with expansive land on the east side of the park that private landowners and public entities are willing to come together and think through a gateway arrival experience,” Varela said.

Salt Lake City is also using this time to rebrand, with a new “West of Conventional” tagline launching on June 3. “Our overall branding effort is to showcase the juxtaposition of Salt Lake, which is the city and the outdoors, and the same thing with our people,” Thompson said, noting the destination’s Mormon religious population and its strong LGBTQ community. “Somehow these diverse cultures coexist very well in Salt Lake.”

Major infrastructure projects are also underway, including the completed first phase of a new $4.1 billion SLC International Airport, opened last Fall, and a future Hyatt Regency convention hotel to be completed Fall 2022.

From Destination Marketing to Management

Utah’s overcrowding issues continue to loom over its outdoor areas and gateways such as Moab. So far this year, Zion National Park visits have surpassed 2019 levels, according to National Park Service data, including a 45 percent year over year increase in March 2021 compared to March 2019 with close to a half million visits.

The ongoing heated debate over Bears Ears and Grand Staircase-Escalante national monument boundaries and Secretary Deb Haaland’s recent visit are sure to add to the pull of Utah’s red rocks.

Varela said that as a result, her office’s focus remained on its 2020-2023 “Red Emerald Strategic Plan” for a sustainable tourism approach to the state’s tourism development and marketing. The plan focuses on quality long-stay visitors versus quantity, distributing visitation to avoid overcrowding —which aimed to send more people to state parks than national parks in 2020 — and encouraging responsible travel through supporting local businesses and hiring local guides and outfitters, as well as engaging with communities.

“We feel a responsibility and we’ve made a pivot toward doing more than marketing — we now have a destination development and management team,” Varela said, adding that this meant conversing with communities all over the state about marketing areas consistent with what residents want to see.

“Some areas are hungry for visitors and others like Moab have become so internationally famous that say, we don’t need more people but need you to help us manage what we have here.”

More recently, Varela said the tourism office launched Red Emerald case studies whereby hoteliers present their success stories to other stakeholders at Utah Office of Tourism board meetings, in applying the Red Emerald plan to boost revenue while reducing costs and environmental impact.

“They basically opened up their books to us and just said look, doing it the Red Emerald way is much more profitable and it creates a much more perpetual business,” Varela said.

Last month, a survey went out statewide, in an effort to understand sustainable practices around the state.

Tourism recovery for Utah is what Varela said was a glass half full, half empty for Utah.

“Having the outdoors and having our state willing to invest in trails and having the resources through the EDA grant and CARES funding that we could keep our story alive. Those are the key drivers that are making us feel pretty optimistic.”