The bakers couldn’t keep pastry coming fast enough for the crowd lined up at the Polebridge Mercantile.
With Glacier National Park beckoning on one side of the North Fork of the Flathead River and fresh huckleberry bear claws on the other, Will Hammerquist wasn’t hurting for customers, despite his location in the middle of 60 miles of rough road.
“With the Sun Road being closed, everybody’s funneling this way,” the Polebridge Merc owner said last week. “The one thing we’ve got to do is make sure when people are here, they have a good experience. And we’re about at carrying capacity.”
That’s got Hammerquist and other Montanans in the state’s second-largest industry of tourism thinking about how best to use the flow of bed tax dollars their businesses generate.
Last year, the 4 percent tax on lodging brought in $24.2 million off the nearly $4 billion tourists spent. Another 3 percent sales tax on the same purchases added another $18.2 million.
But that second revenue stream goes to the state general fund, while the 4 percent pays for tourism-related activity. And the lion’s share of that goes to promotion and advertising.
“I think those promotions are feel-good, positive things,” Hammerquist said. “But it’s also time we asked if we have the right balance between promotion and reinvestment. What does 7 to 9 percent annual growth mean for the viability of our tourism industry? Do we have enough park sites? Glacier Park has been here for 100 years – people are going to come. It’s time we take a hard look at our tourism infrastructure.”
The Montana Mercantile food truck that tours cities like Chicago, handing out huckleberry ice cream, bison jerky and travel brochures, looks coincidentally like the Polebridge Merc’s flat-front façade.
A 2013 survey by the U.S. Travel Association ranked Montana ninth among 37 responding states for promotional spending, with $11 million.
Hawaii led the list at $52 million a year. Colorado was just above Montana at $11.8 million, while Wyoming was a few notches behind at $10.2 million. Idaho didn’t respond to the survey.
“When the economy started turning down seven or eight years ago, a lot of states pulled all their money out of travel promotion,” Glacier Region director Racene Friede said. “Washington eliminated its state travel bureau, and left the job to cities and the private sector. I would hate to see that in Montana. Tourism is our second largest industry.”
The Montana Promotion Division got about $15 million of the 2014 bed tax revenue to fund its operations. Regions and convention-visitor bureaus got the next biggest share with $5.2 million.
State parks received 6.5 percent of the total ($1.5 million), with the remaining $1 million shared among historical interpretation programs, the Institute for Tourism and Recreation Research and the Montana Historical Society.
The Montana Office of Tourism estimates visits to the state increased 4.9 percent between 2010 and 2014, while spending jumped almost 60 percent in the same period. Non-resident spending was $3.9 billion, which supported 53,280 jobs and a payroll of $1.3 billion.
“Promotion verses infrastructure is always the balancing act,” Promotion Division spokesman Dan Iverson said. “That out-of-state promotion spending is set as a percentage in state code. We also have a grants program with a $1 million pool for infrastructure – things like setting up websites or building mobile apps. People can use the money for things like adding a new building or restoring an old one, or adding a restroom facility.”
The regional tourism offices and convention-visitor bureaus have tried to increase that pool, with limited success.
“In the last legislative session, we tried to take back some of the 3 percent to the general fund, which would have gone to infrastructure,” said Friede. “We weren’t able to get it passed. We agree we need to maintain a level of promotion, but we feel the infrastructure needs are there as well for our state parks and museums and heritage centers and historic sites.”
Programs like the Montana Superhost staff training classes are an example of how tourism tax dollars could improve in-state facilities, Friede said.
Industry surveys have consistently found visitors rave most about the friendly people they encounter at Montana tourism sites, and that’s what encourages people to return and tell their friends.
“We’re hoping in the next Legislature, we can convince them to provide the necessary funding to bring properties up to date,” Friede said. “Things like good paving, more campsites, proper toilets all have to do with hospitality. When the campground hosts are overworked or there are complaints because the electrical system is overloaded, that’s tough to overlook.”