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Myrtle Beach starts turning taxes into tourists

With more money for out-of-market tourism advertising on its way, the Myrtle Beach Area Chamber of Commerce is figuring out how to spend it.

A 1 percent sales tax approved by Myrtle Beach three weeks ago to pay for new advertising will begin Aug. 1 and exclude certain items such as groceries, fuel and prescription medicine. It is estimated to raise $206 million during its 10-year lifetime - $172 million for advertising by the chamber and the rest for property tax relief and tourism-related construction.

The chamber has already boosted its late spring advertising campaign - increasing the length of its TV runs and adding 40 markets - and whether the same will happen in the fall remains to be seen. There is no specific plan for the extra money yet, but long-term goals involve better destination branding and targeting niche markets, with heavy investments in TV and online ads.

``If anyone expects that we'll come out with some magic silver bullet plan that perfectly scopes out 12 months of planned investment, they underestimate the need to base these decisions upon market trends and sound research,'' said Brad Dean, the president of the chamber.

The sales tax, which was made possible by a new state law passed earlier this year, sparked some opposition. Some residents and business owners said now was not the time to increase taxes because of the down economy, though others said the tax will ultimately benefit everyone by bringing more visitors to the Grand Strand.

Now is an especially crucial time for marketing, said Chad Prosser, the director of the S.C. Department of Parks, Recreation & Tourism. Although travelers are looking to trim costs by cutting vacations short, research shows many Americans are still planning to travel this summer. So they are making reservations later and can be swayed if there's a good deal.

``That's frustrating from the standpoint of trying to make projections, from the standpoint of business,'' said Prosser, the former chairman of Horry County Council. ``From the standpoint of marketing, it's a little bit of an advantage. ... We can hit people when they're in that decision-making cycle.''

The chamber is already cashing in. Due to the sales tax, the chamber has increased its current marketing campaign, which began in mid-May, to$1.5 million and is running TV ads for up to eight weeks in 65 markets. Previously, it planned a $200,000 campaign with TV ads for two weeks in 25 markets.

The expanded campaign has yielded results, according to chamber statistics. Dean said more than 450,000 people logged onto the chamber's Web site in May, an all-time record, and more than 600,000 could log on by the end of June.

The number of telephone inquiries has also risen - the chamber has received between 4,000 and 7,000 calls a week since the ads started running. In April, when there were no TV ads, the chamber got several hundred calls a week.

Dean said the campaign has been focused on core markets that are either within driving distance or where there is nonstop air service to Myrtle Beach.

The chamber's marketing budget has dwindled in recent years, leaving even those areas underfunded, Dean said.

More than 90 percent of visitors to Myrtle Beach drive here.

``The most logical investment we can make is to invest in core markets where we currently have direct air service or a strong base of drive visitors at an adequate level,'' Dean said. ``Our strategy all along has been to first and foremost invest an adequate amount of funding in core markets.''

For its current campaign, the chamber borrowed $1.3 million, which it plans to pay back - with interest - with its membership dues and advertising revenue from its publications, Dean said. The first sales tax check will not arrive until late this year.

The chamber could have afforded the stepped-up campaign without the sales tax, but had it done so, there would have been less money available for advertising later this year and next year, Dean said. Without the sales tax, the chamber probably would have stayed with the limited campaign.

The chamber is now conducting a survey to gauge travel intentions for the fall. Cash-strapped vacationers might be more willing to cut their fall trips instead of their summer trips, but if it turns out they will still be traveling, the chamber might also boost its campaign.

For the fall and holiday seasons, the chamber allocated between $400,000 and $500,000, and it could be expanded to $2.5 million. With future travel uncertain due to the down economy, Prosser said that flexibility is an asset.

``The business is much different than what it was even a few years ago,'' he said. ``Their media plan has to be fluid, and will change several times during the year.''

The new sales tax will also benefit some residents directly, said City Councilman Wayne Gray, a supporter of the tax. The city will begin collecting 20 percent of the total tax revenues in the third year of the tax, and some of that will be used to greatly roll back property taxes for owner-occupied homes.

The remainder will go toward tourism-related construction projects, and although nothing has been finalized, Gray said he would like to see improvements made to the city's downtown.

``It does create that perpetual revenue stream that's far more than we've ever had to invest in our economy by promoting our destination,'' Gray said.