NEW YORK—Tourism, especially from international visitors, equals untapped potential for economic gains in New York City, say industry experts. And the next mayor will be in the hot seat to continue the substantial growth Mayor Michael Bloomberg has helped orchestrate during his 12-year tenure—which ends Jan. 1, 2014.
From the outset, in 2002, the Bloomberg administration embraced the seed planted by his predecessor, Rudolph Giuliani, to grow the tourism industry, partly by increasing the budget of NYC and Company, the official marketing and tourism campaign for the city.
“By his increase in support financially, and also making sure the structure is there to support big events that come to town, the numbers in New York have been off the charts,” said Jonathan Tisch, co-owner of the New York Giants, and former chairman of the Travel Business Roundtable. Tisch was part of a panel of business leaders discussing issues the next mayor will face.
In 2011, 50.9 million tourists visited New York City—a 40.6 percent increase from the 2001 total of 36.2 million, according to nycgo.com.
This year, more than 51 million tourists are expected to bring direct financial growth to industries such as hotels, restaurants, theater, and retail. Using the added tax revenue, especially during what is forecast to be tough economic times, is one way a panel of business leaders says the next mayor can make a difference.
I Love New York
Following the attacks on 9/11, the city experienced just how integral the tourism industry could be to jumpstarting the local economy. “I Love New York” ads began running nationwide shortly after the attacks, urging tourists to patron the city as a way to support it.
“It was clear that the travel and tourism industry was poised to come together sooner than anyone else because our assets were not affected by the tragedy,” Tisch said. “We needed them [tourists] economically and we needed them emotionally.”
The campaign, which was started by then-Mayor Giuliani, worked well, with people coming from all over the country within a month. The short-term benefits were much needed, but more importantly, it helped brand the city as a tourist destination.
Emerging Markets
Most visitors to New York City are domestic—making up 79 percent of total visitors, but the experts are saying it’s the global market that is the most untapped.
“The power of the New York brand, globally, has never been stronger,” said William McComb, CEO of Fifth & Pacific Companies, a marketing company for retail-based, global lifestyle brands.
Looking to the emerging international markets, such as Asia and Brazil, will give the next mayor a new, much richer playing field to vie for tourist dollars.
“The international traveler stays longer, and they spend more money than a domestic traveler,” said Tisch. “They are the key to our future.”
Total visitor spending from New York City tourism in 2010 was $31.5 billion, a massive increase from 2003, when it was $18.9 billion.
Stretching the Map
The tough economic times surrounding 9/11 also forced changes in hospitality industry. Restaurants were forced to find customers, instead of waiting for them to walk through the door.
“These customers can be found all over this great city, not just in the 40 blocks [of Midtown],” said Marcus Samuelsson, chef and owner of Red Rooster Harlem. The map was stretched to include unconventional areas of the city—and the tourists followed. Brooklyn is now seeing a steady increase of tourist attention, as well as Harlem, which would have been unheard of 30 years ago due to crime.
“This is not just about Manhattan anymore. It is all five boroughs,” said Tisch. “They are going into these neighborhoods because people are living there. Because people are living there and eating in restaurants, people then want to visit.”
Samuelsson believes continuing the economic development of the nontraditional areas of the outer boroughs will be one way the next mayor can continue to stretch the map and increase tourism revenue for the city.
Thinking Big
Transmitting commercials to countries all around the world to entice visitors can be costly, however, hosting an event with worldwide appeal offers the city free advertising to all those who tune in. London saw the rewards from that by hosting the Olympics this summer.
New York is hoping to cash in on the big events bandwagon by hosting the Super Bowl in 2014. While costly to bid for, Tisch believes it is worth the payoff based on “the sheer revenue dollars that are brought here with so many people coming to town.”
The event is expected to haul in $550 million for New York and New Jersey.
Tisch hopes the next mayor will continue to pursue and bid on globally relevant events and think about new venues to host them.
“We need more places where people can gather and enjoy all that New York has to offer,” he said.
No New Taxes
In the late 1980s taxes on hotel rooms was at 22 percent, making booking large numbers of hotels for conventions prohibitive. The industry lobbied Albany and the tax was reduced by 5 percent at the state level.
At the city level, Mayor Giuliani agreed to an additional 1 percent reduction.
“That sent a very important message to our customers and to the business community that by reducing taxes on hotel rooms, you could bring in more business,” said Tisch.
Tisch hopes the next mayor of New York City will remember this and not just see tourism’s expanding revenue stream as a new sector to tax.
“The next mayor needs to understand our industry and not take it for granted.”
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