Illinois hotels face challenges, funding sweeps

February 24, 2010

By Jim Hagerty
Staff Writer

According to the president and CEO of the Illinois Hotel & Lodging Association, the state tourism industry faces several challenges, especially in what is still a cash-strapped economy.

Speaking to the Rockford Area Hotel & Motel Association Wednesday, Feb. 17, at Kegel Harley-Davidson, Marc Gordon said his organization has a strong voice in Springfield and on Capitol Hill. With Illinois being one of the worst-hit by the economic woes during the last two years, the tourism industry must find a way to move past increasing slumps.

“People don’t realize how bad it is,” Gordon said, noting the state’s $12.8 billion deficit. “We are nearly broke in Illinois.”

Gordon said politicians on the state and federal levels are busy wrestling with where to make cuts. In Illinois, he says, pensions are bleeding the state’s revenue, which can cut deep into tourism funding and leave hotels left to fight to hold a line on decreases experienced in 2009.

Last year, Rockford hotels saw a 20 percent drop in business.

Gordon noted tourism funding is still seeing cuts, which, when lined up to the state’s cash flow, is not faring as well as it should. Six percent of the state’s hotel tax is paid to the state. Thirty-three percent of that, Gordon says, is set aside for tourism funding.

“For the last several years,” Gordon said, “we’d do about $210 million (to) $215 million from that 6 percent hotel tax. This means about $70 million should have gone to tourism based on law. Then, (former Gov.) Rod Blagojevich kept it at $50 million. He tried to cut the $50 million, and we were able to stop the cuts in the General Assembly, but we never could get it back to where it should be.”

The difference, $20 million annually, Gordon said, was swept away from tourism and other special interests to subsidize other areas of the budget.

“We were underfunded and swept,” Gordon said, citing lower hotel revenues have not brought much positive to the table. The news, however, is not all grim.

The Illinois Hotel & Lodging Association is working on several initiatives to increase tourism business. One, Gordon says, is bringing a strong argument to Springfield and the nation’s capital.

“For every dollar you put into tourism that goes to advertising, your Rockford Convention (and Visitors) Bureau helps generate more money,” Gordon noted. “We figure about a 9 to 1 ratio. So, for every $50 million you put in, you get $450 million back. And in a deficit, what’s the last thing you cut? Something brings in more than what it costs.”

Gordon said the battle is a slightly uphill one, in that tourism often goes head-to-head with education and health care funding recipients.

Gordon and a group of Illinois hotel representatives will be in Springfield today (Wednesday, Feb. 24) to talk to legislators. From there, they will move on to Washington, D.C., March 15-16.

From the Feb. 24-Mar. 2, 2010 issue

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