With about five years of distance, no one’s looking back fondly at “The Hobbit” series of movies. While they made plenty of money, they didn’t earn as much profit as the original “Lord of the Rings” trilogy, any Academy Awards, or love from fanboys.
But “The Hobbit” scored one big victory: New Zealand tourism.
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New Zealand cleverly leveraged the film to promote its scenic vistas and to lure visitors to its shores.
The campaign worked. Tourism in New Zealand is 5.6 percent of the small country’s GDP and its leading source of foreign dollars. International tourism has seen a steady increase since the first “Hobbit” movie was released in 2012, with “Tolkien tourism” contributing to a 20 percent jump the year ending March 2016, following a 17 percent rise the year before.
The country’s tourism director very mildly said the film had generated “a heck of a lot of interest in New Zealand.”
That particular piece of understatement notwithstanding, the whole episode illustrates the importance of a good marketing strategy. The United States may not have Middle Earth, but we still have a variety of tools to attract international visitors. One of them, however, is under threat unless Congress moves to fix it.
Brand USA is a public-private partnership established by Congress in 2010 to market the United States as a destination to international travelers. Through partnerships with more than 800 organizations across the country, Brand USA promotes the U.S. with a collective voice, particularly highlighting rural and less-traveled parts of the Fruited Plain. One current example of Brand USA’s outreach is the “National Parks Adventure” IMAX film to draw people to our scenic parks and generate $700 million in total spending in the US.
Brand USA is funded by a small fee paid by foreign visitors approved to visit the United States under the highly selective and secure Visa Waiver Program, which collects a $14 fee ($10 of which goes to Brand USA) — and those funds are matched by contributions from the private sector without a dime from U.S. taxpayers. So the program pays for itself.
Actually, it more than pays for itself.
Brand USA returned $27.70 in visitor spending for each $1 spent on marketing activities in 2017, according to an independent study by Oxford Economics. It has supported about 51,000 domestic jobs every year and generated $38 billion in economic output since 2013. The organization’s marketing efforts have generated $17.7 billion on travel and fare receipts with U.S. carriers, resulting in $38.4 billion in total sales.
That’s a lot of data, all of it good. But the ROI of $27.70 to $1 is the real stand-out. (If someone can point me toward a stock with that kind of return, I would be most grateful.)
International travel is America’s No. 1 services export, having generated a trade surplus of $87 billion in 2016 and $5 billion in tax revenue. Visitors stimulate local economies by patronizing hotels, restaurants, stores, and regional attractions. International tourism is also a key component of cultural diplomacy, an opportunity to give millions of foreigners nice things to say about us on their social media and when they get home.
Tourism abroad is actually up for the world in general, but down for the United States. Nattering nabobs of negativity in media blame this on Donald Trump (of course!), but it’s actually a result of the strong dollar policies since Trump’s election. (So we are kind of a victim of our own successes there.)
Currency conversion makes coming here a little more expensive than some other places, so now is not the time to stop trying to draw people here. A company that gets rid of its marketing department gets rid of its clients too — let’s not make that mistake with the USA.
The current authorization for Brand USA runs through 2020, but Congress recently diverted those traveler fees used by Brand USA to the general Treasury. These fees are necessary to keep the program afloat. While Brand USA is profitable, from a “you’ve got to spend money to make money” standpoint, it will collapse without these dollars and U.S. communities will miss out on the benefit of international tourism.
It’s either that or hire Peter Jackson to do a trilogy called “Frodo and His Adventures in America’s National Parks.”
Jared Whitley is a long-time politico who has worked in the U.S. Congress, White House, and defense industry. He is an award-winning writer, having won best blogger in the state from the Utah Society of Professional Journalists (2018) and best columnist from Best of the West (2016). He earned his MBA from Hult International Business School in Dubai. To read more of his reports — Click Here Now.