Frequently Asked Questions About a Tourism Promotion Area

Transcription

1 Frequently Asked Questions About a Tourism Promotion Area 1. What cities have enacted their own tourism promotion area (TPA)? Spokane, Tri-Cities, Vancouver, Wenatchee, Yakima. Cities in King County are prohibited by the RCW from creating a TPA due to population size. Tacoma is in the process of enacting a TPA. 2. How much did those cities collect in 2006? Spokane area: Spokane County $1,533,631 Liberty Lake $2,058 Tri-Cities: Kennewick $320,853 Richland $307,047 Pasco $169,638 Vancouver/Clark County $913,638 Yakima $352,619 Wenatchee Started TPA in What other cities are exploring the formation of a TPA in their communities? Tacoma, Snohomish County 4. Why should Snohomish County consider creating a TPA? Tourism promotion funding is very limited in our state and our county. A TPA is a tool the State has provided for local communities to generate tourism promotion revenues. A TPA in Snohomish County would: Keep us competitive with communities that are vying for the same business Snohomish County is trying to attract. Allow for more aggressive tourism marketing program development in new markets and existing markets including advertising, trade show attendance, sales missions and other marketing promotions. Provide funds to improve and develop tourist attractions in the County. Give the lodging industry a controlling voice on how the funds they collect (via the TPA) are allocated for tourism development. Though not all hotels would benefit directly from marketing to these types of events, this creates compression in the community by the increased occupancy of the hotels participating and therefore it is a benefit to all hotels. Here is our competitive situation: Bureau 2007 Total Budget Snohomish County Tourism Bureau $565,315 Bellingham CVB $690,000 Seattle $8,100,000 Seattle Sports Commission $300,000 +** Seattle Southside $868,000 Total Seattle marketing $9,268,000 Southwest Washington CVB $925,000 (Vancouver) Spokane CVB $2,691,450 Spokane Sports Commission $800,000** Total Spokane marketing $3,491,450 Tacoma Regional CVB $830,000 Tacoma Sports Commission $172,000* Total Tacoma marketing $1,002,000 Tri-Cities CVB $1,658,815 Yakima Valley CVB $1,800,000 Yakima Sports Commission $320,000 Total Yakima $2,120,000

2 * 2006 budget information ** estimate 5. What are the drawbacks to creating a TPA? A TPA increases the total amount a guest will pay for a room night. The item appears as a separate charge on the guest folio. However, even with the maximum charge of $2.00, Snohomish County hotels will be 35%-40% less than downtown Seattle. Hotels will have to adjust their billing to reflect the TPA charge. Front line staff will have to be trained to explain the TPA and its purpose. The TPA Board members will be required to review the applications for funding at least once a year. If the TPA in enacted, all hotels meeting the established criteria will have to participate. 6. Why Now? Due to the cyclical nature of the lodging industry, additional funding to promote Snohomish County will provide a way to attract future business not only in the offseason but also when the cyclical variations occur in the coming years. A minor increase in room assessment will not impact our competitiveness, as Snohomish County is still lower than King County. King County taxes are 15.6% as compared to Snohomish County at 10.6% to 10.9%. Revenues generated now will be used to develop programs and attractions that will sustain us during leaner times Having additional revenues to market to 2010 Olympic and Paralympics to participants and attendees is critical to attract our share of the market 7. We keep hearing that the Lodging Community will have control-be specific. The Lodging community develops the details and then votes to support them. Before a TPA can be enacted, a petition must be submitted outlining all the details of the Act. These include: the geographical boundaries and minimum room inventory requirements of the TPA. purposes and uses of the money, including estimated costs. rate(s)to be charged. signatures of support of lodging business operators who would pay 60% or more of the proposed charges. The petition cannot move forward unless representatives of 60% of the rooms being assessed approve of the petition details. Once enacted, the lodging community will select a board to make spending recommendations to County Council. Whether or not a petition moves forward for funding will be at the discretion of the board of lodging members. If the lodging community is not satisfied with how the account is being administered, they can halt the TPA assessments. No one else can do this. 8. How much is the TPA assessment? That will be determined by the lodging community. Any amount up to $2.00 per occupied room night can be assessed (not total inventory; only those rooms occupied per night). The amount assessed in Snohomish County will be determined by the lodging community. Some communities have a sliding scale; others charge a flat fee for all properties. Spokane has 50 to $1.50 per room night depending on hotel proximity to the convention center. They will be raising that fee to a flat $2.00 per room night regardless of location. Tri-Cities $1.50 per room night Clark County/Vancouver $2.00 per room night Yakima 50 to $1.50 per room night Liberty Lake 50 to $1.00 per room night

3 Wenatchee $1.00 per room night 9. What is the difference between a TPA assessment and a tax? A TPA assessment is controlled by the lodging community and can be disestablished by the local lodging community. A tax cannot be withdrawn without state legislative action by both houses and approval by the Governor. 10. What about future hotel development? What about hotels on the Tulalip Reservation? Future hotels developed that meet the established criteria (number of rooms and within the geographical boundaries determined by the Snohomish County lodging community when the petition is created) must participate in the TPA funding. Hotels owned by the Tulalip Tribes and located on the Tulalip reservation are not required by law to participate in any lodging tax or assessment. 11. What are the potential uses of the TPA funds? The TPA funds can be used for tourism marketing and facility development as per Senate Bill 6026 including activities and expenditures designed to increase tourism and convention business for the purpose of attraction and welcoming tourist and operating tourism destination marketing organizations. That can include the Snohomish County Sports Commission, Snohomish County Tourism Bureau, arts, culture, festivals, and sports organizations that in their application can document actual return on investment in overnight hotel stays as a result of their marketing efforts. The Snohomish County lodging industry will determine the uses within those parameters which would be detailed in the resolution and notice of public hearing prior to the enactment of the TPA. 12. How would an organization apply for the funds? Would the application process apply to the SCTB and the Sports Commission? The lodging industry would create the application process, the requirements for application, the inclusive dates the grants monies may be used, the potential uses for the fund and all other details. The TPA Board would operate as the administrator of the program and review and recommend applications based on these details. Yes, the SCTB and the Sports Commission would have to submit applications and detailed uses of the requested funds before being granted any money. 13. How is the TPA advisory board elected? The lodging industry will devise the election or appointment process, the number of board members, the criteria for determining the composition of the board, and the term of office. The current recommendation by the SCLA Executive Board is that the Board members be nominated by the lodging community and that all areas and lodging types be represented.

4 14. Who decides how the TPA funds will be spent? The Lodging community will include in the petition the types of activities they want to have funded. Specific criteria such as room nights generated may be itemized, focus on off-season or shoulder season business, markets targeted, and economic return on investment. The TPA Board will review applications and, based on the criteria in the TPA Act, recommend who to fund and with how much. Senate Bill 6026 states: the legislative authority imposing the charge shall have sole discretion as to how the revenue derived from the charge is to be used to promote tourism.. However the legislative authority may create a new advisory board or commission to make recommendations as to its use. This TPA Board recommendation would go to county council for final decision. No grant applications may be made directly to the county council. No recommendations or requests for TPA funding for sports facilities have been made. During the June 2007 SCLA meeting, an example was used that the lodging industry could decide to fund facility development. That is an example of things that MIGHT be funded by the Snohomish County TPA if the lodging community wanted to do so. The Snohomish County lodging industry will determine the uses within the parameters determined by Senate Bill 6026 which would be detailed in the resolution and notice of public hearing prior to the enactment of the TPA. 15. If the lodging industry is not satisfied with the return on investment from the funded organizations or if county council overrides a recommendation by the TPA board, what recourse do we have? Senate Bill 6026 states the legislative authority may disestablish an area by ordinance after hearing. Spokane has set the dissolution requirements to be that: if operators of lodging businesses which pay over 40% of the TPA assessment file a petition requesting the disestablishment of the TPA, the county council shall adopt that resolution and act upon it as required by law unless at the hearing to disestablish the TPA, the operators paying over 50% of the TPA assessment protest. This is one example of how the TPA act can be written to allow for disestablishment. The TPA act can also include methods for changing the amount of the assessment. If the lodging community decides that the TPA will be assessed on hotels that have over 50 rooms, 40% would be 1725 total rooms. That would require 10 of the largest hotels in the county or any combination of smaller and larger hotels. The 10 largest hotels specifically are: Studio 6 Residence Inn by Marriott Extended Stay Deluxe TownePlace Suites by Marriott Best Western Cascadia Inn Best Western Alderwood Hampton Inn and Suites Courtyard by Marriott Embassy Suites Hotel Holiday Inn- Downtown Everett

5 16. Can any organization receiving grant funding from the TPA funds bond against the funds to obligate the future use of the funds? The lodging industry controls the TPA funds with the approval of the Snohomish County Council. The organizations applying to the TPA funds could not bond (or get a loan) based on grant monies that may or may not be received in the future. No funds could be locked in for future development without the approval of the lodging TPA board. 17. Where can I find a copy of the RCW? The link to the RCW: 18. Who is responsible for putting together the specifics of the initiation petition? The specifics will be defined by the lodging community. It is recommended by the SCLA Board that the initial petition be authored by them with input from SCSC and SCTB boards. This is suggested only as a means of simplifying the process for the hotels. This is up to the lodging community. Once authored, the petition will be read and agreed to by the lodging community on a one-by-one basis. If anyone has issues or suggested changes, there will be a mechanism in place to gather that input and disperse it to the community as a whole. 19. What is the potential economic impact and room night contribution from sports marketing? The Snohomish County Tourism Bureau has been successful in attracting regional, national and international sporting events. With marketing support in place, these events can be built upon to generate additional tourism spending and economic spin-off. Event Economic Impact Triple Crown Sports Memorial Baseball Tournament $365,667 NSA Coed Adult State Softball Tournament $28,303 NSA Men s Fall Softball Championship $11,945 USSSA Men s Softball Tournament $29,670 Washington State Little League 11U Baseball Championships $580,750 Sandy Koufax 14U West Regional Baseball Championships $163,968 SI for Kids Kick It 3v3 Regional Soccer Tournament $198,468 NSA Western World Series Girls Fastpitch Tournament $3,589,069 Total economic impact $4,967,840

6 A sample of potential future events that would require additional financial support: Event 2008 NW Athletic Assoc. of Comm. Colleges Baseball Championships 2008 State Folkstyle Wrestling US Open Judo Championships National Armwrestling Championships World of Wrestling Nationals K1 Events Spike Fest NSA Western World Series Girls Fastpitch ASA Western Region Girls Fastpitch US Figure Skating Regional,Sectional or National Skating Competitions Room Nights Attendance Bid Fee/ Financial Assistance Economic Impact $5,000 $304,509 1,200 7,000 $5,000 $995,496 1,150 1,100 $3,000 $605, $3,000 $200, ,000 $8,000 - $422,930 $10, ,000 $10,000 $1,203,720 6,300 5,185 $10,000 $3,192,200 4,410 2,000 $10,000 $1,972, ,000 (depending on event) ,000 (depending on event) $500 - $50,000 (depending on event) $4, *Majority of the events request financial assistance in airfare for officials, support towards facility costs, transportation costs (shuttle service to/from airport and to venue, car rentals) and seed money for promotions that provides a favorable opportunity for the community to be awarded the event.