Call to Order and Roll Call
The 5th meeting of the Interim Joint Committee on Economic Development and Tourism was held on Thursday, November 19, 2015, at 11:00 AM, at Shelby Valley High School, Pikeville, Kentucky . Representative John Short, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Representative John Short, Co-Chair; Senators Perry B. Clark, Chris Girdler, Ernie Harris, and Mike Wilson; Representatives Lynn Bechler, Hubert Collins, Tim Couch, Jim Gooch Jr., Chris Harris, James Kay, Brian Linder, Terry Mills, Ruth Ann Palumbo, and Russell Webber.
Guests: Bob Stewart, Secretary, Tourism, Arts, and Heritage Cabinet; Mike Mangeot, Commissioner, Department of Travel and Tourism; Seth Wheat, Office of Adventure Tourism; Jared Arnett, Executive Director, Shaping Our Appalachian Region; Janet Lile, Finance and Administration Cabinet; Mike Hayden, Kentucky Communications Network Authority; Senator Ray Jones; Tony Tackett; Phil Osborne.
LRC Staff: John Buckner, Lou DiBiase, and Karen Brady.
Tourism in Kentucky
Bob Stewart, Secretary, Tourism, Arts, and Heritage Cabinet, gave on overview on the state of tourism in Kentucky. In 2014, the state hit a record level of economic impact for tourism spending, topping $13 billion for the first time in Kentucky history. This was a four and a half percent increase over 2013, and impact was felt across all nine tourism regions of the state, generating over 180,000 jobs with $2.9 billion in wages. Spending by visitors in the commonwealth generated $1.4 billion in state and local taxes. In 2014, the Kentucky Appalachians region’s economic impact was $391 million and supported 6,000 jobs; in Pike County alone the economic impact was $65.6 million and supported 900 jobs.
Secretary Stewart emphasized that the potential for future growth in tourism in Eastern Kentucky is outstanding. One exciting development is The Breaks Interstate Park’s examination of the possibility of a new white water rafting season in the summer months. He also mentioned the new Dueling Barrels Distillery in downtown Pikeville, and reported that Elkhorn City has been named one of Kentucky’s trail towns.
Mike Mangeot, Commissioner of the Department of Travel and Tourism, explained the different marketing and advertising mediums used to promote the state. The internet is the number one source of travel information; print media and social media are both other platforms used to market tourism in Kentucky. Commissioner Mangeot explained that international marketing is very important, with growth in markets like China. The new film incentive that was passed last year has incredible opportunity; 2016 could be a historic year in Kentucky for film production. Between 2009 and 2014, 11 projects were approved; since April 2015, 17 projects have been approved. Production companies have stated it is now the best incentive in the country.
It has been a banner year for tourism development incentives. Kentucky was the first state to have such incentives, and since the initial law passed in 1996, more than $1 billion has been invested in tourism attractions in Kentucky.
The consistent theme in marketing and advertising is horses, bourbon, outdoor adventure, arts, culinary, and music.
There were 20 million visitors to Kentucky in 2014, and 63 percent of all tourism dollars came from out-of-state visitors. Strategic Marketing and Research Insights (SMARI) studied return on investment found that, for every dollar spent on advertising, $151 was generated in economic impact ($129 is average for other states) and $15.69 in tax revenue. Since 2012, the transient room tax is up 21.5 percent and on pace this year to exceed $12 million.
In response to Representative Bechler, Secretary Stewart attributes the state’s growth in tourism’s economic impact to an overall improved economy, spending money on advertising/media that works, the national and international events that Kentucky has hosted in recent years, and the explosion of the popularity of bourbon. Secretary Stewart also stated that Kentucky’s return rate on visitors is very, very good.
In response to Senator Clark, Secretary Stewart stated that the potential in Kentucky for adventure tourism is incredible, and especially could bring real growth in rural parts of the state.
Seth Wheat, with the Office of Adventure Tourism, explained the mission of his office is to promote and develop opportunities for outdoor recreation. He spoke of the importance of the Cross Kentucky Master Trail Plan, and how trail systems are a driving force in the adventure tourism industry. The Master Plan will be sent out to every county in the state, so each local community will have a guide to go by. Kentucky has 13 certified Trail Towns. The goal of this program is to create destinations based around the outdoor adventure they have to offer. It normally takes two years for a town to complete the process of becoming a certified trail town.
The Appalachian Opportunity
Jared Arnett, Executive Director, Shaping Our Appalachian Region (SOAR), gave an overview of SOAR. SOAR is a catalyst to engage the region of Eastern Kentucky to plan and affect change. The sitting Governor and Congressman of the 5th District are co-chairs of SOAR. Sixty percent of SOAR’s funding comes from private partners. SOAR’s public partners are the Appalachian Regional Commission, state of Kentucky, and the city of Pikeville. Mr. Arnett emphasized that SOAR is about a network of people who believe in the region and building a team to get it done.
Kentucky Wired
Janet Lile, Finance & Administration Cabinet, and Mike Hayden, with the newly formed Kentucky Communications Network Authority, discussed the Kentucky Wired project, which is a statewide fiber optic network that is under construction and will be completed in 2018. It will bring high-speed, high-capacity broadband access to every county in Kentucky. With Kentucky Wired, the state will be responsible for building out the middle portion of a fiber network. Benefits of Kentucky Wired include promoting economic development, enhancing education and public safety, improved healthcare, and lower consumer costs. Overall, the goal is to establish scalable networks that can provide for future growth, and one network that can serve government, businesses, and citizens.
Ms. Lile stated that Kentucky is 47th in the nation for broadband availability. She emphasized that Kentucky Wired is a state-owned physical fiber optic network, and is serving government first, but it will be open access. Kentucky Wired will be using both public and private funding resources. The two main reasons a Public-Private Partnership (P3) was chosen were money and expertise. The total financing is $324 million. Nine percent is from state funding, seven percent federal funding, and 84 percent is from the P3.
There being no further business to come before the committee, the meeting was adjourned at 1:35 p.m.