Why State Tourism Departments Spend Money on Advertising

Every year, state tourism departments worldwide put aside significant money to advertise their destinations to potential visitors. But why do they do this? Why not rely on the charm of their cities or word of mouth generated by satisfied tourists? This blog post will explore why state tourism departments spend money on advertising.

Reason #1: Attracting Tourists 

One primary reason for advertising is to attract tourists to a state. This industry plays a vital role in the economic growth of a state by enhancing its image and promoting its cultural, natural, and historical attractions. Through advertising, tourists become aware and excited about what the state offers, creating curiosity and interest. Advertising enables potential tourists to research and plans their trips while highlighting what the state offers in unique experiences, like adventure sports or a beach vacation. Indeed, advertising serves as a professional tool to showcase and draw tourists to a state’s best. 

Different Types of Advertising Used by State Tourism Departments 

State tourism departments use multiple advertising strategies to reach and engage their target audience. One of the most common advertising types is T.V. commercials, which are short and creative promotional videos that showcase the state’s top attractions. Billboards are another advertising medium used by tourism departments. Billboard advertisements are typically posted on highways and high-traffic areas where they can be seen by many drivers passing by. Social media campaigns are increasingly common, showcasing a state’s top destinations and experiences to a large, diverse audience. Tourism advertising aims to create an emotional connection with tourists, using their senses and emotions to make them think, feel and act.  

The Impact of Tourism Advertising on a State’s Economy and Tourism Industry 

Tourism advertising can have a significant impact on the economy and the tourism industry of a state. It can create jobs and generate revenue for small businesses by attracting tourists. It can also increase local and state tax receipts. Moreover, tourism advertising can enhance a state’s reputation, increase tourist satisfaction, and encourage word-of-mouth referrals. 

Reason #2: Generating Revenue 

Revenue sources that can be impacted by tourism advertising 

  1. a) Hotel occupancy taxes: With more visitors checking into hotels, the state’s revenue from hotel occupancy taxes increases proportionally.
  2. b) Sales taxes: As tourists spend money on shopping, dining, and other expenses, state revenue from sales taxes also increases.
  3. c) Job creation: As tourism grows, more jobs are created in the hospitality, transport, and other related sectors, leading to higher-earning and tax-paying citizens.
  4. d) Investment: Tourism advertising also attracts investors who see potential in the state’s tourism industry, thus fueling more economic activity and creating more revenue streams.

Examples of Revenue Generated by Tourism Advertising 

Let’s take the example of Tennessee’s tourism advertising campaign, “Made in Tennessee.” Launched in 2013, this campaign showcased the state’s eclectic music, natural beauty, and artisanal traditions. In just three years, Tennessee’s tourism industry witnessed a 31.8% increase in visitor spending, leading to $18.4 billion (about $57 per person in the US) in revenue and, more importantly, creating more than 155,000 jobs. Similarly, New York City’s official tourism organization, NYC & Company, started the “See Your City” campaign in 2017, which resulted in a record 62.8 million visitors, who spent $44 billion (about $140 per person in the US), generating $5.5 billion (about $17 per person in the US) in tax revenue for the city. 

Economic Benefits of Tourism Advertising 

States reap immense economic rewards from tourism advertising. The Travel Industry Association of America conducted a study revealing that $9 was generated in overall economic activity for every dollar invested in travel ads. These findings were further backed by the U.S. Department of Commerce’s report showcasing how tourism and related industries contribute an enormous total of $2.6 trillion (about $8,000 per person in the US) to the economy, creating more than 15 million jobs while providing state and local governments with over $77 billion (about $240 per person in the US) worth of tax revenue! 

Exploring Arizona: A Case Study 

The Grand Canyon State has taken a positive stance in creating awareness for tourism. In 2012, the Arizona Office of Tourism released an advertisement, “Arizona: There’s No Place Like It,” highlighting its vibrant culture, remarkable landmarks, and captivating nature. Research from 2016 revealed that it resulted in a three-fold return on investment; this campaign stimulated 56 thousand job opportunities as well as generated $20 million worth of state tax revenue! 

Reason #3: Promoting Local Businesses 

Visibility is an integral part of success for small businesses, yet limited budgets or resources can make it difficult to launch extensive advertising campaigns. That’s why tourism marketing provides a unique opportunity to help local businesses grow. Through collaboration with nearby companies, state tourism departments can generate beneficial and cost-effective campaigns that benefit the regional economy and tourist attractions. 

The Benefits of Tourism Advertising for Local Businesses 

Tourism advertising can provide a range of benefits for local businesses. First and foremost, it can boost visibility and attract new customers. People visiting a new area are likelier to explore local businesses than in their hometown. By showcasing local businesses in tourism advertising campaigns, these businesses can tap into this influx of potential customers. Additionally, tourism advertising can improve a local business’s reputation. When promoted alongside other popular tourist destinations in an area, local businesses can gain a perceived level of legitimacy and trustworthiness that may be difficult to establish independently. 

Examples of Successful Tourism Advertising Campaigns 

One example of a successful tourism advertising campaign that promotes local businesses is the “Visit Maine” campaign. This campaign highlights various aspects of Maine’s tourism industry and features partnerships with local businesses such as restaurants, breweries, and retail stores. The campaign encourages visitors to explore Maine’s unique culture and supports local businesses. 

Another successful tourism advertising campaign is the “Pure Michigan” campaign. The Michigan Economic Development Corporation partnered with local businesses in this campaign to highlight the state’s unique attractions, including wineries, freshwater beaches, and golf courses. Thanks to this campaign, tourism spending in Michigan has increased by more than $1 billion (about $3 per person in the US) over the past decade. 

The Positive Impact of Tourism Advertising on Local Businesses 

Numerous statistics and case studies show that tourism advertising can significantly impact local businesses. For example, according to a report by the U.S. Travel Association, every dollar spent on tourism advertising generates $15 in new visitor spending. It means that even small investments in tourism advertising can substantially impact local businesses. 

In addition to supporting local businesses financially, tourism advertising can also help to create more jobs. The same U.S. Travel Association report found that for every $100,000 spent on tourism advertising, one new job is created in the tourism industry. This job growth can significantly impact the local economy of small towns and communities. 


Advertising for tourism has an extensive reach beyond only attracting visitors to increase revenue streams and stimulating economic activity. Tennessee, New York City, Arizona, and numerous other states have all seen the benefit of utilizing targeted promotional campaigns to generate more money and create jobs that support their citizens’ livelihoods. Investing in a carefully crafted marketing strategy can drive state income and develop flourishing cities and communities. 

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