Destination funding & governance M. Mahon Jones

Transcription

1 Case Studies from the field Destination funding & governance M. Mahon Jones

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4 Lodging Tax is just that a tax. Enabled through legislation, involuntary to the consumer, all qualified transient accommodation providers must collect. Destination Marketing Fee essentially a B2B business arrangement, to jointly contribute funds to marketing. Tourism operators participation is voluntary, consumer participation is voluntary.

5 Issues everyone is grappling with How much is enough? What s the accountability trail? What other funding models are out there? What should the money be used for?

6 Generally speaking, hotel taxes in the US are much higher than taxes and/or DMF s in Canada Often, local hotel taxes are layered onto state and/or county lodging taxes, increasing the overall amount of the tax Individual hotels may charge their own independent fees, like a resort tax

7 Fort Lauderdale, Fla 5% Santa Fe, NM 7% Anaheim, Calif 15% St. Louis, Missouri 18% Indianapolis, Indiana 17% San Antonio, Tex 16.75% Nashville, Tenn 17.76% NYC, NY 18.27% Winnipeg 5% Stratford, Ontario 3% Ottawa, Ontario 3% Toronto, Ontario 3% Calgary, Alberta 7% (incl. 4% provincial levy) Halifax, Nova Scotia 2% St. John s, NFL 4% BC MRDT municipalities 2%

8 Tourist Development Taxes (up to 6%) 1. 1 or 2 Percent Tax (1-2%) + 2. Additional 1 Percent Tax (1%) + 3. High Tourism Impact Tax (1%) + 4. Professional Sports Franchise Facility Tax (1%) + 5. Additional Professional Sports Franchise Facility Tax (1%)

9 Miami-Dade County 2% Tourist Development Tax 3% Convention Development Tax 1% Professional Sports Facility Tax Broward County (Fort Lauderdale) 3% Tourist Development Tax 2% Professional Sports Facility Tax } } 6% 5%

10 New Jersey Occ. Tax = 5% Municipal Occ. Tax = 3% } 8%

11 Texas hotel occ. Tax = 5% } City lodging tax = 7% Conv Centre tax = 2% County lodging tax =1.75% 16.75%

12 Provincial Levy = 4% DMF = 3% } 7%

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14 Other cities are transparent about where the money goes. If you can actually see, on paper, how this fee is delegated and what it pays for, the pill is less bitter. Businesses in Niagara Falls arrogantly refuse to do this. They claim the money goes to fireworks. Or promotion. Or special events like the Nik Wallenda walk. So prove it. For all we know, they spent $4.99 on Wallenda and pocketed the rest.

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17 Funded and managed by the payors (hotels) Funds can only be spent on programs that benefit the payors (hotels) Funded through hotel assessments, not taxes Government enables, but can not divert funds Defined terms, renewable only by payors Source: US Travel Assoc., US Tourism District Law Study, 2014, Civitas California, Montana and Washington have TID enabling laws in place

18 Portland, Oregon Hotelier-proposed, cityapproved Special 2% assessment on guest room revenues for hotels <50 rooms (91 hotels) Purpose is to increase overnight stays Managed by Travel Portland, not the city

19 Jasper, Alberta 2% Destination Marketing Fee, managed by Tourism Jasper Paid on gross primary revenues of hotels, restaurants and attractions 90% of hotel/motels; 30% of the restaurants; 90% of the attractions participate

20 Nashville, Tennessee Downtown Nashville Development Zone Leverages funds for tourism development from incremental sales taxes Since its introduction, room tax collections are $20M more than previous years, due to a boom in hotel collection

21 Oklahoma City 1% temporary sales tax to fund the city s Metropolitan Area Projects Plan (MAPS) Capital projects: new convention centre, parks, wellness centres, etc. Funds go into a separate trust, administered by separate staff

22 What is the money being used for?

23 Of the $3.6 million collected, the CVB receives about 18%. The rest is kept by the city s general fund.

24 Santa Fe, New Mexico Of the $8.1 million collected annually, only about $600,000 is retained by the municipal gov t.

25 FLORIDA COUNTY Convention Centre (%) Sports Facilities (%) Other Public Assembly Facilities (%) Tourism Promotion (%) Monroe (Keys) Miami-Dade Broward (Fort Lauderdale) Orange (Orlando) Palm Beach CVB (%) Beach Maintenance (%) Pinellas Clearwater) Source: Broward County, Florida, Phase 1: Room Tax Policy Analysis, C.H. Johnson Consulting, Inc., July 2015

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27 Issues everyone is grappling with What role should chambers of commerce and economic development corps play in destination governance? How independent should the DMO be from government? What role should industry play?

28 Destination Management DEMAND Marketing Outreach Target Market SUPPLY Product/ Infrastructure Development Destination Management Entity Tourism Industry Government, COC, Ec. Dev Corps Tourism Experience Mahon Jones & Associates

29 Go Great Lakes Bay, Michigan Goals - make tourism an economic priority - gain more influence in local decision-making - encourage fresh, out of the box thinking and unconventional ideas Government as director with voting seats on board Local Chambers, Ec Dev, non-voting

30 Oakland, California - 21-member industry-dominated BOD - Industry is driving the creation of a Tourism Improvement District with projected revenues of $1.6M - government as enabler Burlington, Ontario

31 Santa Fe, New Mexico - no non-government independent entity government owned - CVB ED is a senior manager in the City, reports to City Manager, who reports to Mayor and Council - Industry involved through advisory committee

32 Burlington, Ontario Tourism Burlington - independent non-profit, no members - 75% of funding is an annual appropriation from the City - Board composition: - 1 from City Burlington, Ontario - 1 City resident - 7 from tourism sector - 1 accountant

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