California budget woes won't affect tourism marketing arm

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SAN FRANCISCO -- As many other state travel offices struggle with budget cuts, California's office, which for years fought to stay alive, finds itself in good shape thanks to a unique program of fees and industry assessments.

Since 2007, the California Travel and Tourism Commission, a nonprofit corporation that works with the state Division of Tourism to market the state, has operated with a $50 million annual budget, almost all generated from car rental fees and voluntary assessments on travel and tourism businesses.

As a result, California's jaw-dropping, $19 billion deficit won't have an impact on the state travel office, which receives only about $900,000 a year in taxpayer money. It is a far cry from years when California struggled to compete against better-funded destinations. Today, it is among the top five states in funding.

"We've insulated ourselves," Caroline Beteta, CTTC president and CEO, said during the California Travel Industry Association conference here. "The budget crisis doesn't affect our budget."

Beteta, who receives regular calls from other state officials looking to set up similar public-private partnerships, said 2010-2011 marketing initiatives will build on success with social media campaigns and national cable TV ads that feature Jay Leno, Gov. Arnold Schwarzenegger and other celebrities.

About $28 million will be spent domestically, including new ads with Olympic athletes and promotional efforts on "The Ellen DeGeneres Show." Another $18.7 million will be spent in international markets, including Australia for the first time because of increased airlift.

Beteta said the CTTC is seeing early signs of recovery for California. It is forecasting a 5% rise in domestic visitor spending in 2010. Last year brought a 9% drop in domestic visitor spending, to $72 billion, and a loss of 45,000 industry jobs.

This report appeared in the June 14 issue of Travel Weekly.

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