Survey: Religious freedom law costly for convention business

Indiana might have lost as much as $60 million in hotel profits, tax revenue and other economic benefits when a dozen groups decided against hosting conventions in Indianapolis last year possibly because of the controversy surrounding the state's religious freedom law.

A document prepared by the tourism group Visit Indy shows that the 12 out-of-state groups were surveyed and all said that the state's controversial law played a role in their decision to hold their events elsewhere. The document was obtained by The Associated Press ahead of its formal release Thursday.

Visit Indy released some information from the survey on Jan. 20, when it told IBJ the law still had a lingering impact on the convention business.

The Republican-backed Religious Freedom Restoration Act garnered quick and largely negative national backlash after it was signed by Gov. Mike Pence in March, with critics saying it sanctioned discrimination against gay people on religious grounds. Lawmakers hastily made changes days later, after the NCAA, the gamer convention GenCon and other business interests raised the possibility of moving events, but critics said the modified law still doesn't go far enough to protect lesbian, gay, bisexual and transgender people from discrimination.

The findings by Visit Indy are among the first to quantify the law's financial effect, an impact that social conservatives have skeptically downplayed. Visit Indy also is among several prominent Indiana business voices advocating for statewide protections for anyone fired from a job, denied service or evicted because of their sexual orientation or gender identity.

In the group's surveys, Indianapolis tourism officials asked the conventions why they chose to locate in other states, without specifically mentioning the controversial law. All 12 cited the law — and the backlash it provoked — as one reason for choosing another city, said Chris Gahl, vice president of marketing and communications for Visit Indy.

"We'd say, 'Why didn't you select Indy?' and they proactively cited (the law) as a reason they did not select Indianapolis," Gahl said when asked about the document. "That is not news you want to hear when you are in the business of marketing a city."

In an emailed statement Monday, Pence spokeswoman Kara Brooks said Indiana was a "welcoming" state with a strong economy. She noted multiple organizations that have expanded their role or recommitted to hosting conventions and events in the state, including the NFL scouting combine and the Future Farmers of America.

Gahl declined to name the 12 conventions or detail their individual financial impacts. Visit Indy typically considerers hotel room rentals, meal purchases, entertainment expenditures and shopping figures, as well as state and local taxes, when calculating those figures.

The AP independently confirmed that one organization, the International Association of Fairs and Expositions, bypassed Indianapolis due in part to the law. Indianapolis was a finalist after the group decided to no longer hold its four-day event in Las Vegas, said Marla Calico, the association's president and CEO.

"There were some of our members who were aware that the city was under consideration, and a few were very vocal that they didn't think it would be appropriate," Calico said.

She said the uproar over the new law was "a piece of the equation" when her group decided not to choose Indianapolis, which she said was appealing because of its amenities and central location.

The Indiana Senate is expected to debate two bills Wednesday addressing LGBT issues. One would offer statewide protections for anyone fired from a job, denied service or evicted because of their sexual orientation or gender identity. The other would do the same but exclude transgender people. Both offer exemptions for clergy, small businesses and religious organizations.

Passage is far from certain. The governor said during his recent State of the State speech that he would prioritize religious freedom over LGBT rights, and not everyone believes that the state's business climate has been harmed.

"There are states with (religious freedom) laws on the books right now that are doing quite well with regard to business," said Pastor Kevin Baird of the Indiana Pastors Alliance. He said arguments made by the business community about the impact of the law and the need for LGBT protections were a "false narrative."

Still, Visit Indy estimates that the actual amount of money lost could be greater than $60 million because fewer convention prospects are currently in the pipeline when compared to years past.

"We work with a sense of urgency to make sure that Indianapolis tourism and the region's tourism is healthy," Gahl said. "Hopefully something will be done at the Statehouse."