Tourism privatization takes shape with creation of public-private entity
It's official. The Pennsylvania Tourism Partnership — a public-private entity designed to leverage travel industry knowledge and funding resources to better market the commonwealth — has been created.
A formal legal agreement was signed last week, and negotiations are nearly complete with a candidate to fill the post of project director, said Matt Zieger, president and CEO of the Team Pennsylvania Foundation.
Team Pennsylvania has collaborated with the state Department of Community and Economic Development and tourism groups to develop the partnership, which will lead the transition of the state-run tourism office to an independent and private-sector-led initiative with public support.
"We're looking at it as a growing partnership. It's not about having big dollars to spend, but how do we work smarter?" Zieger said. "We're not in the business of spending money. We're in the business of meeting goals."
Nevertheless, the partnership could receive up to $1 million in seed money from DCED's tourist marketing line item in the 2013-14 budget, said Rob Fulton, president and CEO of the Pennsylvania Association of Travel and Tourism, the leading trade group for the industry.
That line item was funded at $5.81 million in the current budget. Gov. Tom Corbett's budget proposal for the upcoming year maintained level funding, while the budget bill passed by the House increased it to $6.67 million.
The funds would be matched by the private sector, officials said.
"When the state budget is put to bed, we'll have a clearer understanding of what resources are available from the public sector," Zieger said.
The project director — a roughly $150,000 contracted position — should be on board by July 1, the start of the new fiscal year, officials said. That person will be responsible for leading the steering committee and developing a strategic vision for the partnership during its infancy stage.
The partnership's incubation period is expected to be about three years. By then, the entity should be able to stand on its own with a board of directors and full-time staff, Fulton said.
PATT is tasked with identifying long-term funding sources.
"It isn't going to happen overnight," Fulton said.
The goal would be $15 million to $20 million per year, he said. PATT is researching several funding models, including one that would reward tourism growth driven by the organization's marketing efforts, as well as another that relies on a tourism tax credit.
The latter — introduced this session as House Bill 1216 — would establish a $15 million tax credit.
"The private sector is definitely going to have to participate," Fulton said.
To aid in the transition, DCED has hired an internal tourism director, Zieger said. The two directors will engage private and public stakeholders and develop the working timeline, he said.
Team Pennsylvania said this public-private model could help the state in other areas.
"(Tourism) is a very data-driven industry. It allows DCED to tap into private sector leadership and methodologies," Zieger said. "It could help modernize their work."
Building more awareness of communities with tourist activities will also help attract new businesses to Pennsylvania, he said.
Along with leveraging financial resources and expert knowledge, the shift to a public-private model helps foster a more consistent message in the branding of the state, Zieger said.