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California
Points the Way
Opinion by Zeitgeist President Bill Geist, taken from the Summer 2005
edition of the Zeitgeist Client Newsletter
 As
governmental deficits continue to mount, traditional funding of Destination
Marketing Organizations becomes more tenuous year after year. It’s
not surprising, then, that one of the most persistent requests for topics
we get at DMOU.com is for “non-traditional funding.”
The standard Room Tax model has been beaten up, picked over and is searching
for a Heimlich maneuver. Outside of building private-sector partnership
programs that rock, where do we look for inspiration?
Where American pioneers looked for gold over 150 years ago...California.
Now, this is gonna take more than just a well-crafted pitch to your
Mayor, City Council or County Board. For many, it’s gonna take
a change at the State Capitol. But, one look at California’s success
and I think you’ll agree it would be worth it.
It’s called a Business Improvement District...but, the difference
here is that, in California, they can be set up to fund tourism promotion
and marketing.
For one DMO, the self-imposed tax on hotel room nights is expected to
generate $3 million a year...and go directly to the CVB for promotion.
That almost matches the contract the Bureau has with the City that comes
from the traditional room tax. In a number of other destinations, BID
Assessment revenues make up anywhere from 30 to 50% of the annual DMO
budget.
What’s the difference, you ask? To be sure, they’re both
“room taxes.” However, increasing the room tax citywide
would have required approval of the city’s voters and likely would
have meant sharing the extra money with other interests. But, with a
BID, the assessment is put to a vote of only the affected businesses...and
those businesses call the shot on its use.
Imagine if you had 15 hotels. And four of the 15 hotels involved are
on the CVB board that approved the approach in the first place. And
many of the others were involved in Convention Sales or Marketing Advisory
Committees. Getting 8 votes sure looks a lot more do-able than trying
to get thousands of non-industry residents to vote your way on a program
that they simply can’t understand.
This may be possible in other States, but we’ve never seen BID
money used for sales and marketing before. And, while facade renovation
and infrastructure projects (for which BID money has been traditionally
used) are all important, nothing sparks an economy like marketing.
Investigate your enabling legislation. Have legal counsel analyze it.
See if marketing is a possibility (it just might be...but never thought
of ‘til now). And, if not, take a cue from California and try
to amend your statutes to allow this incredible asset to help secure
your DMO budget.
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