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After estimated $4.3 billion blow to New Mexico tourism, governor to seek stimulus package

Algernon D'Ammassa
Las Cruces Sun-News
The Organ Mountains provide the Las Cruces region with a natural attraction for visitors.

LAS CRUCES - The COVID-19 pandemic has hit New Mexico's tourism industry hard, with the state projecting a total cost of $4.3 billion in 2020 — and that does not include longer-term losses due to business closures and workers moving elsewhere. 

For the legislative session opening in January, Gov. Michelle Lujan Grisham said she will ask lawmakers for a $25 million economic stimulus package to reduce the time required for the industry to recover post-emergency.

In a statement, Lujan Grisham said the appropriation "will expedite our state’s efforts to diversify our economy and get back on track." 

According to the most recent New Mexico employment report, the leisure and hospitality sector has lost 24,500 jobs, an approximately 24.5 percent drop from a year ago. 

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Research presented by the state Economic Development Department in February indicates that tourism is a major job sector for the state. 

A state-commissioned study by research firm Headwaters Economics found 10.1 percent growth in direct tourism employment since 2011 with a projected total of 93,617 jobs through direct, indirect or "induced employment" (referring to jobs created as a result of economic activity sparked by tourism).

That amounted to 8.3 percent of New Mexico jobs, the firm reported

But on March 11, Lujan Grisham declared a public health emergency on the day New Mexico confirmed its first cases of COVID-19 disease, which is caused by the novel SARS-CoV-2 coronavirus.

Large social events around the state were canceled and a series of public health orders restricted gatherings and business activities, alongside quarantine mandates for visitors from outside New Mexico. 

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As one measure of the impact on hotels and other places of lodging, first-quarter lodger's tax reports in Las Cruces showed a 41 percent decline over the same period last year: $361,766 from July through September of this year compared to $609,237 in 2019.

Moreover, total revenue for the fiscal year ending June 30 amounted to $1,869,720, or 85 percent of what the city brought in the previous year.

The tourism department said the stimulus would boost efforts to bring visitors back to New Mexico once the public health emergency is over, nourishing local economies. It called for three consecutive annual appropriations of $25 million, arguing it would pay off in $2 billion of saved revenue each year. 

"The impact on the hospitality/tourism industry has been tremendous and any stimulus monies would be welcomed," Greater Las Cruces Chamber of Commerce director Debbi Moore remarked, while adding that the details would matter.

"It doesn’t reference how it will be distributed though," Moore continued. "Any insights into those deliverables and accountabilities? Would it be grants or loans? I wonder which state agency would distribute the funds, if appropriated."

“Tourism is a major driver of our local economy, so any support for the industry will be especially impactful here in Las Cruces,” Visit Las Cruces executive director Rochelle Miller-Hernandez wrote. “Although we don’t know what the proposed funds will be used for yet, we do know that marketing is going to be critical as restrictions start to ease and competition for travelers continues to grow.”

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Absent a "substantial investment" in tourism, the department said recovering to pre-pandemic levels of travel-related economic activity could take seven years. 

New Mexico Tourism Department Secretary Jen Paul Schroer addresses a listening session Aug. 29, 2019 in Artesia, N.M.

“New Mexico has a strategic advantage coming out of COVID-19 due to its strong outdoor recreation assets and abundance of open spaces," state Tourism Secretary Jen Paul Schroer wrote in a statement. "However, this advantage cannot be realized if New Mexico is not competitive with other states actively investing stimulus funds for tourism promotion.”

When lawmakers return to Santa Fe in January, however, they will face pressure to limit spending in the face of plunging revenue following an historic drop in oil prices during the spring and sagging gross receipts tax revenue through the pandemic.

Algernon D'Ammassa can be reached at 575-541-5451, adammassa@lcsun-news.com or @AlgernonWrites on Twitter.