SANTA FE, NM - On Monday, Nov. 2, 2020, Gov. Michelle Lujan Grisham proposed a $25 million special appropriation as an economic stimulus package for the New Mexico tourism industry in response to the COVID-19 pandemic.
The COVID-19 pandemic created widespread disruption of the tourism industry, which has led to immediate and severe economic injury. The proposed FY22 $25 million economic stimulus package will help reignite commerce through expanded marketing efforts and will shorten the estimated recovery timeline for the tourism industry.
Tourism serves as one of the governor’s pillars for economic development, and this proposed $25 million economic stimulus package for the tourism industry demonstrates the governor’s commitment to a strong recovery for New Mexico’s 2nd-largest industry.
“In both rural and urban communities, tourism offers entrepreneurs a path to create opportunity for their families and offers communities of all sizes a reliable building block for their own economic recovery strategy,” said Gov. Lujan Grisham. “This economic stimulus package for the tourism industry will expedite our state’s efforts to diversify our economy and get back on track. I couldn’t be prouder of the resilience of this industry during this incredibly difficult year. We will build back better than ever before, and I will be with you, in your corner, the entire way.”
Based on estimations from the U.S. Travel Association and Tourism Economics, it may take five years for the national tourism industry to recover to pre-COVID levels of travel spending. Additional factors in New Mexico, such as the relative size of New Mexico’s tourism industry compared to other sectors, suggest New Mexico may be looking at a recovery period that could take up to seven years to complete without a substantial investment in recovery.
Accounting for lost visitor spending, lost state and local taxes, and paid-out unemployment benefits, the 2020 total projected cost to the state is an estimated $4.3 billion. These estimates do not include long-term economic losses from business closures, tourism infrastructure losses, and workforce migration - all of which are predicted to be substantial without intervention. This investment will provide the necessary funding to generate economic activity by bringing visitors to New Mexico post-pandemic, where they will contribute directly to local economies by bringing in outside money to spend on accommodations, restaurants, events, retail, transportation, arts and entertainment, outdoor recreation and more. Overall, an annual investment of $25 million in tourism recovery over the next three fiscal years could save the state an estimated $2 billion per year.
“Post COVID-19, there will be an influx of destination marketing organizations all vying for the same set of consumers to restore travel,” said Tourism Cabinet Secretary Jen Paul Schroer. “New Mexico has a strategic advantage coming out of COVID-19 due to its strong outdoor recreation assets and abundance of open spaces. However, this advantage cannot be realized if New Mexico is not competitive with other states actively investing stimulus funds for tourism promotion.”
In June, NMTD awarded a grant to the New Mexico Society of Association Executives (NMSAE) to develop and incubate the New Mexico Safe Certified Program, which offers free, on-demand learning modules for select business sectors that train owners and managers on COVID-Safe Practices. Not only did this program lay the foundation for New Mexico to reopen the economy in a disciplined manner, it empowered businesses to take proactive measures protecting their employees and customers during the pandemic. NMSAE’s success is commended as the majority of hotels and restaurants in the state completed this program; their efforts will continue to enhance New Mexico’s reputation as a safe destination and help restore consumer confidence.
“Tourism is a central fixture of New Mexico’s economy, and comprehensive economic recovery for our state’s economy cannot occur without support for the tourism industry,” said Tourism Commission Chair and La Fonda on the Plaza Board Chair Jenny Kimball. “This much-needed support for the tourism industry will help protect tourism jobs throughout the state.”
“We applaud the Governor’s foresight in allocating critical resources towards the economic recovery of the hospitality industry,” said Heritage Hotels & Resorts, Inc., Founder and CEO Jim Long. “As the 2nd-largest employer in New Mexico, the hospitality industry has a vital role in the success of the state. These funds will help stimulate a much-needed recovery and bring many New Mexicans back to work.”
The $25 million stimulus package for the tourism industry is being proposed as a special appropriation for the Tourism Department and is to be considered during the 2021 Legislative Session.