Utah’s 2010 Economic Report to the Governor shows traveler spending in the state has dropped by a precarious 10% in the last year.  The drop of $700m brings the 2009 total down to $6.2b, and the total number of tourist arrivals dropped 4.4% to 19.4 million, as compared to 20.3 million in 2008.

Utah Traveler Spending 2009

Travel-related employment also fell 3.6% to 110,508. Hotel occupancy rates dropped from 63.7% to 59.8%. Total hotel room rent collected dropped 16.6% to $836m.

The number of visitors to Utah’s 13 ski resorts – the mainstay of their tourism, also dropped by 300,000 and is now below 4 million.

The report suggests a few ‘new normals’ for domestic leisure travel going forward into 2010. These include travelers driving instead of flying – staying closer to home – camping, or staying in budget hotels, and an increase in the number of weekend trips.

The one bright spot in the report is the uptick in the number of visitors to state (4.4%) and national (5.4%) parks. It would be easy for Utah to blame it all on the recession, but the real threat comes from within – a culture of hidebound bureaucracy and quaint ideas about acceptable social norms.

 Utah’s Office of Tourism’s marketing budget was slashed from $11m in 2008 to $7m in 2009, and remains the same going forward into 2010, at a time when other states are ramping up their budgets to bring back the tourists. California, a competing state – has an annual tourism budget of $50 million which is collected from an assessment, and is thus free of state interference.

But Utah’s $7 million budget depends on the goodwill of the state legislature, who are said to be looking at even more cuts. A think tank in Salt Lake City – The Sutherland Institute, has called for the complete elimination of the tourism budget and the closure of the Utah Office of Tourism, citing it’s ineffectiveness.

For the last 40 years, visitors in Utah were forced to fill in an application form, pay a fee, and become a member of a bar, even if they just wanted to have a single drink. That law was scrapped by the state legislature in July 2009, mainly due to former Gov. Jon Huntsman’s insistence, despite significant conservative opposition to the move.

The impact of this change will take some time to show results and impress upon travelers that Utah is a much more visitor-friendly place now. But in the meantime, with Huntsman having since moved on to become Ambassador to China, there’s a possibility the rule could be reinstated.

Utah’s Office of Tourism now has to fight for its survival, its budget and to keep the private club law from being brought alive again. Then they can think about competing with other states like California and Colorado.