The economic injury from COVID-19 was swift and severe for the New Mexico tourism industry.
Despite this strong foundation, the COVID-19 pandemic has severely damaged the tourism industry in New Mexico, resulting in an average loss of visitor spending of $366 million each month, according to Tourism Economics. The cumulative loss of visitor spending is estimated to be $3.5 billion and has resulted in an estimated loss of $163 million in state and local taxes.
As a result of this visitor spending decrease, numerous tourism businesses had to lay off staff temporarily or permanently. As of November, there are 30,000 unemployed workers from the accommodations and food services sector, costing a cumulative total of $271 million in unemployment benefits.
All told, the total 2020 projected cost to the state in visitor spending, taxes and unemployment benefits is $4.3 billion. Restarting the tourism economic engine at the appropriate time requires an increased investment in marketing.
New Mexico deserves to compete.
Although tourism promotion is still not feasible at this stage of the pandemic, people around the world are dreaming of their next vacation. Tourism is a competitive industry. While several other states have invested heavily in tourism marketing through the CARES Act, the New Mexico Tourism Department has not received any federal stimulus money. New Mexico needs a substantial investment in tourism marketing to have a strong "share of voice" when we can re-enter the market.
Tourism is an elastic industry, and history has proved time and time again that the industry is resilient and bounces back.
A strategic investment of $70 million will restore demand and revitalize the tourism industry.
Through a $25 million special appropriation for tourism recovery included in the FY22 Executive Budget Recommendation, NMTD will be able to reignite commerce and expedite the tourism industry’s timeline for recovery. Through a substantial and targeted investment of $25 million in tourism recovery, the Tourism Department will be able to:
- Generate demand in the most attractive fly markets
- Leverage its four marketable seasons by staying in market throughout the year
- Remain competitive with other states as tourism promotion ramps up
- Increase direct bookings through a digital hotel conversion program
- Reduce anticipated timeline for recovery from 7 years to 3 years
- Put 27,000 people back to work in 3 years
- Save the state an estimated $1.9 billion per year
NMTD will not require any additional FTEs to enact the $25 million special appropriation for marketing and promotion.
In addition, the $45 million special appropriation for the New Mexico Tourism Department included in HB 267 will allow the agency to stimulate tourism business development, support the hard-hit events sector, and develop hospitality job retention and creation programs. HB 267 will specifically provide:
- $7 million to support retention and expansion of tourism businesses
- $8 million to fund a tourism event revitalization program
- $30 million to develop a tourism industry career advancement pilot program
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