Audit: La. Tourism Office Needs to Better Measure Its Effectiveness
BATON ROUGE (The Center Square) — The Louisiana Office of Tourism should do more to measure the effectiveness of advertising contracts and to improve transparency on how tourism money is spent, according to the Louisiana Legislative Auditor.
Auditor Mike Waguespack issued an audit report for LOT last week that analyzed the agency’s finances and operations and it included several recommendations for improvement.
“The office is housed in the Office of Culture, Recreation and Tourism, or CRT and is responsible for managing an average of $28.1 million tourism funds each year,” said Performance Audit Services Manager Krista Baker-Hernandez. “We conducted this audit because tourism is a key part of Louisiana’s economy.”
The report shows LOT spent an average of $9.5 million a year on advertising contracts between 2016 and 2021, but could better track the effectiveness of the spending.
“While LOT regularly collects overall Louisiana tourism statistics and receives industry metrics on advertising campaigns from its contractor, LOT could better evaluate specific advertisement campaigns by engaging an independent vendor to evaluate their effectiveness,” auditors wrote.
Between 2016 and 2021, LOT spent $12.6 million on sponsorships and $3.7 million on two primary tourism grants, but where exactly the money went and how it was awarded, is not posted publicly.
The LLA recommends LOT publicly report what entities receive grants and scholarships on its website and to develop a more structured process for awarding the money. The LLA also suggests LOT improve internal controls over documentation, policies, procedures and record keeping of both grants and sponsorships.
LOT data shows 181 grants were awarded for a total of $2.9 million through the Cooperative Marketing Grant, while 185 grants worth $765,670 came from a Competitive Grant Program between 2016 and 2021.
Sponsorships ranged from 19 totaling $427,500 in fiscal year 2021, when two dozen sponsorships were canceled due to COVID-19, to more than $3 million for 24 sponsorships in fiscal year 2017. LOT awarded a total of 164 sponsorships between 2016 and 2021.
“Sponsorships range from large events, such as $500,000 for Essence Fest, to smaller events, such as $1,000 for the motorcycle Mardi Gras Madness Rally. Developing a consistent process with criteria to score or review sponsorship requests would increase the transparency for sponsorships,” auditors wrote. “In addition, while sponsorships are not considered grants, implementing a scoring process for sponsorship requests could help LOT ensure that it is funding events that have the greatest potential for increasing tourism.”
Assistant Secretary of Tourism Doug Bourgeois responded to the LLA report with a letter to Waguespack on Nov. 30 that highlighted the impact COVID-19 had on tourism and explained how LOT will implement the LLA’s recommendations.
“In 2019, Louisiana welcomed 53.2 million total visitors who generated $18.9 billion in tourism spending and $1.92 billion in state and local tax revenue. These record-breaking numbers also contributed to 242,200 hospitality sector jobs, keeping the hospitality sector the fourth largest employer in the state,” he wrote. “With the onset of the COVID-19 pandemic, those milestones were severely impacted with visitation falling by over 40%; spending and tax revenue down by 30% and 32% respectively; and jobs down by nearly 20%.”
Bourgeois promised to look into incorporating an independent review of advertising campaigns and to post grant and sponsorship award recipients on the LOT website.
Bourgeois also vowed to create a team to develop criteria for sponsorship funding and eligibility, “while remaining flexible to allow for the differing types of events that may be eligible for sponsorship.” LOT also plans to revive a Competitive Grant Program scoring committee that was sidelined during the pandemic.
In addition, “LOT will assemble team members to gather out current, informal guidelines for documenting and monitoring grants and sponsorships and then develop and implement a formal policy,” Bourgeois wrote.