Nebraska tourism rising, but agency has spending limits

That’s the view of Robert Sabin, chair of the Nebraska Tourism Commission, whose group expects to bring in a record-breaking $9.1 million in revenue in the current fiscal year because of growing visitation levels. Combined with a surplus of over $3 million, the revenue flow causes an issue for the commission since it only has authority to spend $7 million maximum per year.

Sabin appealed to the Legislature’s Revenue Committee this month, asking lawmakers to consider raising the commission’s spending authority. If granted, Sabin said, the additional dollars would help the commission expand Nebraska’s tourism marketing in a way that could allow the state to reach its full potential.

“We want to continue to eat what we harvest,” he said.

The tourism commission gets its revenues almost exclusively through lodging taxes, the 1% tax paid by travelers when they purchase a temporary accommodation such as a hotel. Sabin said the commission has seen a steady rise in its annual revenues over the last few years as more people visit the state.

In Douglas County alone, 2022 was a five-year high with 13.5 million visitors, said Jasmyn Goodwin, vice president of marketing and communications for Visit Omaha. Most recent years have been nearly as high; only the first pandemic year of 2020 was much lower, and the county still logged 10.9 million that year.

Sabin said there are several reasons for the growing visitation. He listed several popular tourist attractions, such as Omaha’s Henry Doorly Zoo & Aquarium, Omaha’s RiverFront and the Kiewit Luminarium.

Zoe Olson, executive director of the Nebraska Hospitality Association (NEHA), said sports events such as the College World Series are also major drivers of out-of-state visitors. In fact, Sabin told the revenue panel that sports-related tourism is seeing such high demand that the commission is hiring an additional staff member to work in that arena.

Sabin also attributed the growing visitation to a shift the commission made about five years ago to put more emphasis on drawing people to Nebraska from other states, rather than focusing on in-state travelers.

This included growing Nebraska’s credibility as a location for business meetings and events. Sabin said tourism promoters are beginning to see the fruits of their labor, as some businesses have chosen to hold their conferences or conventions in Omaha instead of a bigger city.

“It does take awhile to build your resume,” he said.

But those efforts are limited by the cap on the commission’s spending. Sabin said the last significant change in the agency’s spending authority was 2018.

Both the NEHA and the Nebraska Travel Association (NETA) are advocating that state lawmakers either increase the commission’s spending authority or eliminate the cap altogether.

The excess revenue that the commission isn’t allowed to spend is available for other use by state government. That’s unfair, Olson said, since the revenues were raised within Nebraska’s tourism industry.

“This is not money the state in any way has earned,” Olson said.

Anjanette Bonham, NETA’s chair, said additional funding would help the commission more widely and effectively promote Nebraska as a tourism destination. Sabin said extra funding would allow the commission to expand its marketing to relatively nearby cities such as Chicago and Denver. Bonham said previous efforts on that front have been very successful.

“This is driving a huge increase of visitors to Nebraska when they are looking for escapes,” she said in an email.

Growing Nebraska’s tourism industry helps the state’s economic development, Sabin said. In 2022, Goodwin said, visitors to Douglas County spent about $1.46 billion — another five-year high. Over the last two years, Sabin said tourist spending had an estimated $4.3 billion halo effect on the overall state economy.

In the long term, Sabin said tourism also has the potential to help Nebraska fill an ongoing labor shortage. Traveling to Nebraska illuminates what the state has to offer its residents, and while it might not happen immediately, Sabin said it could gradually help grow the state’s population.

“We know people don’t know what Nebraska has to offer until they get here,” Sabin said.