Chairman Evans and members of the Committee, thank you for the opportunity to testify before you today. My name is Kevin Clinton and I am the Chief Operating Officer for the Federal City Council. Established in 1954, the Federal City Council is a non-profit, non-partisan organization comprised of the area’s top business, professional, education and civic leaders dedicated to the improvement of the District of Columbia. Our trustees have played a critical role in major projects that have shaped the landscape of the nation’s capital including the creation of Metro, the renovation of Union Station, the establishment of the Verizon Center, and the redevelopment of Pennsylvania Avenue. Our trustees serve as trusted partners for civic improvement by working closely with local and federal stakeholders to address the city’s most pressing challenges.
The Federal City Council has recently prioritized support for the travel and tourism industry in large part because of the great opportunities that these industries represent when it comes to job creation and by extension economic growth. Jobs in the tourism industry are particularly attractive because the industry provides a career ladder for employees of all levels of experience and education.
The potential for the travel and tourism industry to support job creation is borne out by recent job figures. According to analysis released recently by Steve Fuller at the George Mason University Center for Regional Analysis, between February 2010 and October 2013, the Washington Metropolitan area added 66,000 jobs in the leisure and hospitality sector, the sector with the greatest growth representing a third of all new private sector jobs created. Of these jobs, 16,000 were created between October 2012 and October 2013, the equivalent of 80% of new jobs created. Over the next five years, Dr. Fuller expects the regional economy to add an additional 36,000 hospitality jobs, an increase of 13.3 percent.
In its Economic and Revenue Trends report issued in January 2014, the DC CFO reported that “jobs serving DC residents and tourists are a growing share of DC’s private sector.” Retail, hospitality, and personal services grew by 24 percent or 21,125 jobs from 87,409 in 2004 to 108,534 in 2012. Over the same period, jobs in the rest of the private sector grew by just 10 percent. According to the CFO, every filled hotel room is associated with an increase of 1.67 jobs.
In the District of Columbia in particular visitor spending yields over $6 billion per year to the local economy and supports over 75,000 jobs. Even as the recession hurt many sectors, the tourism industry has remained strong and continues to provide tax receipts, job opportunities and quality of life enhancements for District residents.
Chairman Evans you are well aware of the power of the hospitality industry to drive job creation. At the Marriott Marquis Convention Center hotel, training is underway to provide 600 District of Columbia residents with jobs at the hotel slated to open later this year. This is the power of investment the hospitality industry.
Local government expenditures on hospitality are an investment in the economy that – when done right – will pay dividends in terms of future tax revenue and economic opportunity for residents and businesses. The District’s investment is particularly important because unlike other cities, whose marquis tourist attractions promote themselves, the federal government through the Smithsonian and other institutions, has not made the same commitment to promotion as rival attractions in cities such as Orlando and Las Vegas.
The District’s investment in marketing the city has been a good one. Destination DC’s recent ROI study highlighted some of the positive effects of its recent marketing and advertising efforts. Its 2013 campaign was successful in two respects: consumers said it was more effective in portraying DC as a place they would like to visit, and a higher share of consumers were more likely visit over the next 12 months. This feedback was proven as the spring and summer campaigns generated $80 million in visitor spending and $5.3 million in tax revenue for the District. This equates to a return on the city’s investment of 1.77 to 1.
One investment in particular that the Federal City Council is pleased to support is the successful effort by Destination DC to recruit the IPW to the DC in 2017. The IPW – formerly the International Pow Wow – is the largest convening of international tour operators in the United States. It is the conference where international tour operators come to ink commitments to purchase travel and tours for the year ahead. There is a documented relationship between hosting the event and the tours booked in the host city.
Destination DC should be commended for its successful efforts to recruit the IPW to DC in 2017. This will be the first time that the IPW comes to DC and it represents a great opportunity for our city. International guests are a great barometer for the health of our tourism industry. International visitors stay longer and spend more money locally. International visitors help communicate to the world what a vibrant and exciting city the District of Columbia has become. Hosting IPW in 2017 will create an increase in tourism spending of $1.6 billion and a direct economic benefit of $891 million in 2017 and the years that follow. We are pleased to be working with Destination DC to help make this upcoming event a success.
Thank you for the opportunity to testify before you today. I would be happy to answer any questions you may have.
Chief Operating Officer, Federal City Council
March 28, 2014