August is upon us, the month when millions of Americans put up out-of-office messages, pile the kids and the dog into the car, and speed off to recharge their batteries.
But where should they go? Which state is best for vacationing? More Americans visit national parks in California than in any other state — 35 million in 2010, according to the Census Bureau. Overseas visitors favor New York state, the bureau reports. Alaska has more parkland than any other state, and Rhode Island attracts the most visitors per acre of park space (it has only five acres, though).
From a public policy perspective, however, no state does a better job attracting visitors than Indiana. That’s because its tourism office gets a better return on its investment than any other state.
In fiscal year 2012-2013, Visit Indiana had $2.3 million to spend marketing the state, according to the U.S. Travel Association. That year, Indiana took in more than $8.3 billion in tourism revenue, the Census Bureau said. That means every tax dollar spent on marketing and promotion yielded $3,635 in economic activity. The Census Bureau defines tourism revenue as “U.S. spending on domestic overnight trips and day trips of 50 miles or more, one way, away from home.”
Of course Indiana’s tourism office doesn’t deserve all the credit. Plenty of visitors come for the Indianapolis 500; or Indiana Dunes State Park, on the shores of Lake Michigan; or the International Circus Hall of Fame in Peru, just north of Kokomo.
But other states see a much smaller return on their investments: Alaska, Hawaii, West Virginia, Utah, Wyoming, South Dakota, Montana and Maine all generate less than one-tenth the return on investment that Indiana receives. Hawaii spent more than any other state promoting itself, $75 million, but generated only a little more tourism activity, $8.6 billion, than Indiana, a return of $115 per dollar spent.
But even low returns can have a large impact. Tourism spending stokes far more economic activity per dollar than tax incentives. Pennsylvania, Ohio, Georgia, Iowa and Rhode Island all generated more than $2,000 in tourism activity for every dollar they spent promoting their states.
States that covet all those tourists heading to Muncie or South Bend or Bloomington when the weather is hot should take a page from Indiana’s guidebook in crafting their own tourism plans. Or maybe they should just talk the Circus Hall of Fame into relocating.