Tourism commissioner warns reimbursement delays and border declines risk state tourism projects and marketing

Heather Pelham, commissioner of the Department of Tourism and Marketing, told the House Appropriations Committee on April 23, 2025, that the state’s Economic Development Administration (EDA) tourism recovery award faces reimbursement delays and that falling Canadian visitation is putting pressure on marketing and local businesses.

Pelham said the total EDA award equals roughly $10.4 million and that across fiscal years the department still has about $7.25 million “at play” that is either outstanding for reimbursement or budgeted for future spending. “We have not gotten a reimbursement request fulfilled since January,” Pelham said, describing federal review delays.

Pelham told the committee that $1.25 million represents reimbursements the department has requested but not yet received; about $6 million is still budgeted to be spent under the award. She noted the grant uses a reimbursement model and that the department cannot bill before contracted work is completed. Pelham said $2 million of the still‑to‑be‑spent funds is a subgrant to the Department of Forests, Parks and Recreation.

The commissioner described a “catch‑22” the department faces: it must continue contracting and spend to avoid forfeiting federal funds, but spending without timely reimbursement would leave the state or recipient organizations liable. “If we were to spend them and not get reimbursed… that’s your risk. That’s the risk,” Pelham said.

Pelham and committee members discussed recent declines in Canadian visitation. She cited travel data showing Vermont border crossings were down about 7% in February compared with national declines of roughly 23%, and then noted Vermont crossings were down 32% in March. Pelham said the department is pursuing both targeted outreach to Canada and strategies to backfill lost visitors from other domestic markets.

Pelham described specific uses of the EDA award that have been contracted and partially executed, including destination marketing campaigns, visitor research and forward‑looking Canadian sentiment surveys. She identified subgrantees that have drawn federal questions during review: Katamount Arts, the Kelly Brush Foundation and the Southwestern Chamber of Commerce. Federal reviewers have asked about whether some subaward activities would increase visitation broadly rather than serving narrower constituencies.

Committee members asked about the department’s operating budget and contingencies. Pelham said the department’s annual operating budget is approximately $4.5 million; she warned that if reimbursements are denied the department would be responsible for fulfilling subawards and that such an outcome would pressure operating funds. She said the EDA award ends in November 2025 and that many contracts cannot be pre‑billed because of procurement and reimbursement rules.

Pelham described current mitigation work: convening industry partners for coordinated low‑cost tactics, commissioning forward‑looking Canadian market research, holding the Vermont Tourism Summit next week at Hotel Champlain in Burlington, and monitoring reservation and spend data. “We’re trying to thread that needle…we welcome them,” she said of outreach to Canadian visitors while avoiding creating local controversy.

Ending: Pelham asked the committee and industry partners to continue sharing real‑time visitor intelligence; she said the department will continue its marketing and research work while awaiting federal reimbursements and will notify the committee if reviews result in denied reimbursements or other changes.