Tourism takes on greater importance for Cape's economy

Cape Girardeau’s Convention and Visitors Bureau has taken on growing importance as the city has hitched much of its economic future to growing tourism.

Heavy investments, both public and private, continue to be poured into the city’s economic sector. From the downtown casino to the under-construction SportsPlex and convention center and the proposed development of a downtown hotel, the city’s infrastructure keeps building out as does tax revenue provided by visitors.

All these new developments spotlight the growing importance of the Cape Girardeau Convention and Visitors Bureau, tasked with ensuring out-of-towners know about the city’s amenities and are attracted to the city to spend money in Cape Girardeau businesses and grow the tax base.

The city’s efforts to draw visitors is fueled by motel and restaurant tax revenue, which has been steadily climbing over the past decade, city records show.

The 4 percent hotel/motel gross receipts tax pays for operation of the Convention and Visitors Bureau (CVB). The 1 percent restaurant tax helps fund development of tourism-related facilities such as the Osage Centre, the indoor SportsPlex now under construction, and some improvements to Cape Splash water park.

As hotel tax revenue has grown, so has the CVB budget. But its budget may not increase more than 3 percent annually in most cases, under an agreement with Cape Girardeau-based Midamerica Hotels Corp.

The city contracts with the Cape Girardeau Area Chamber of Commerce to operate the tax-funded CVB. Its four full-time and one part-time employee work for the chamber.

John Mehner, president and CEO of the Cape Girardeau Area Chamber of Commerce, said the success of the CVB is visible in the growth of motel and restaurant tax revenue, which goes back into funding tourism efforts.

The two taxes have generated nearly $19 million combined since July 1, 2005, including $6.83 million in hotel tax revenue and more than $12 million in restaurant tax dollars, city financial records show.

Motel and restaurant tax revenue has grown from $1.46 million in fiscal 2006 to more than $2.22 million in the fiscal year that ended June 30, according to budget figures provided by city finance director John Richbourg. The restaurant tax generates about 66 percent of that amount.

The motel/restaurant tax revenue has climbed at a rate of more than 4 percent annually over the past few years, city records show.

Cape Girardeau city leaders said tourism efforts are paying dividends when it comes to economic development.

Motel and restaurant taxes tell only part of the story, Mehner said. Visitors not only stay in motels and eat at local restaurants, they also go shopping and fuel up their vehicles, which helps boost the local economy, he said.

The CVB’s basic operations cost more than $635,000 in the just-completed fiscal year, Mehner said. Another $50,000 is earmarked annually to help fund major sports tournaments and tourism events.

Cities typically “have to buy tournaments,” Mehner said. Groups expect some financial assistance to bring their tournaments to your city, he said.

The added spending generated by such events more than makes up for any money paid out by the CVB, Mehner said.

Mehner said the $50,000 allotment is spelled out in an amended, legal agreement with Midamerica Hotels. Mehner said the special funding has been in effect for about a year and a half.

Cape Girardeau residents see the development of tourism-generating facilities such as the water park and the indoor sports complex, he said. What they don’t see are all the marketing efforts that bring people to town.

“We do a lot of advertising in magazines,” Mehner said.

The CVB staff has one person who regularly is on the road, seeking to draw tournament and convention business to town.

City and community leaders said the public-private partnership has proved an economic success.

“The cities of any significant size understand the importance of a convention and visitors bureau, and they all have them,” Mehner said.

Brenda Newbern, hired as the CVB’s new executive director late last year, said cities today have to compete for tourism dollars. They can’t afford to wait for tourist groups and event organizers to call.

Newbern said CVB staff attend tourism expos and shows, and reach out to organizers of various events. Cape Girardeau is competing for tourism events with larger cities, such as Nashville, Tennessee, she said.

“We are competing to try to get people here,” she said.

Once the city has secured an event, such the state volleyball championship tournament, it has to continue to make its case to host it in future years, or other cities will steal away such events, Newbern said.

The CVB not only uses print advertising to promote the city as a tourist destination, but is active online, using Facebook and other social media, Newbern said. The CVB, for example, has an online visitors guide in addition to a print version, she said.

Newbern said the arrangement between the city and chamber works well.

“It seem like a great way for it to operate,” she said.

Mehner said the CVB receives input from an executive board, which includes representatives from the chamber, the city, both Drury hotel groups, Isle Casino, and Southeast Missouri State University’s hospitality department.

Randy Kluge, director of hotels for Drury Southwest, serves on the CVB board. He praised the current arrangement in which the CVB is managed by the chamber.

Cape Girardeau city government previously operated the CVB.

“In my opinion, it was poorly managed,” Kluge said.

Kluge said the CVB has had great leadership, first under Chuck Martin and now under Newbern.

Newbern, who previously worked as a sales manager for Midamerica Hotels, understands the hotel industry, Kluge said.

Kluge said Drury Southwest and Midamerica combined operate six hotels in Cape Girardeau.

“The majority of our customers live within a one-hour drive,” he said.

Cape Girardeau also draws visitors from farther away, including Kansas City, CVB officials said.

Kluge, who has managed hotels in a number of cities around the country, said CVBs often operate under the auspices of chambers of commerce.

“In communities that grow, it is important to have solid, public-private partnerships,” he said.

The Cape Girardeau chamber operated the CVB from its inception in 1984 until 1992.

The municipal government then ran it for a decade before the city council entered into a new contract with the chamber.

Jay Knudtson, then the mayor of Cape Girardeau, led a successful effort in 2002 to place the CVB under the control of the chamber. Knudtson said chamber management of the CVB has helped boost tourism.

He said involving the local hotel industry more directly in the operation of the CVB has helped too.

“Everybody is at the table. Everybody is united,” Knudtson said.

Mayor Harry Rediger echoed Knudtson’s view.

“It has been a very good move,” he said. “I totally agree it is being run right.”

mbliss@semissourian.com

(573) 388-3641

Pertinent address:

400 Broadway, Suite 100, Cape Girardeau, Mo.