A bill that might have changed the funding landscape for the Colorado Springs Convention and Visitors Bureau won’t even get a hearing — thanks largely to opposition from the ski industry.
And it all came down to a single word.
The CVB worked with Colorado Springs legislators and the state tourism office to draft a bill that would add “attractions” to local marketing districts that now tax only hotel rooms.
The goal: To create additional revenue that would provide more money to market local tourist attractions. Currently, the Colorado Springs CVB relies on money collected from the Lodgers and Automobile Rental Tax.
Essentially, the bill would allow municipalities to decide if they wanted to add a tax for attractions, as well as hotel rooms.
“Sadly, this is a bill that would have benefited rural areas in particular,” said Convention and Visitors Bureau CEO Doug Price, “those places with attractions but few hotel rooms. It would have given them some additional money for marketing.”
Not so fast, said ski industry leaders, complaining they weren’t consulted during talks — and they reacted with all the force a $3 billion industry can muster.
“Colorado Ski Country USA had concerns with proposed legislation that would have given broad new authority to local marketing districts and that was not vetted statewide with affected entities,” said Melanie Mills, CEO of Colorado Ski Country USA, in an emailed statement.
“These concerns were shared by other major stakeholders in Colorado’s tourism industry. While we have no issue with attractions in the Colorado Springs area wanting to promote themselves, local governments already have extensive authority to create funding sources to support their local marketing efforts. The proposed change in state law was not necessary.”
The opposition came as a surprise to the CVB.
“We didn’t see it coming,” Price acknowledged. “We had all these meetings and nobody said, ‘Hey, you really need the ski resorts’ buy-in on this.’ We really didn’t think there’d be opposition.”
So the local CVB, finding itself on the defensive, decided not to pursue the bill during the current session of the Colorado General Assembly.
“The opposition doesn’t make sense to me,” Price said. “It leaves the definition of ‘attraction’ up to the voters in the local district. So Vail could decide what constitutes an attraction and that’s going to look different than what Colorado Springs decides.”
Price says representatives from ski resorts weren’t at the table when his group worked on the idea with the Colorado Tourism Board.
“They felt threatened,” he said. “They thought we were trying to tax their lift tickets.”
It leaves the CVB grappling with the same problem the proposed legislation was trying to solve: How to bolster its $2.7 million budget to attract more tourists to Colorado Springs and the Pikes Peak region.
“We’re going to regroup,” Price said. “We’re thinking of what we can do next, and we’ll probably have something available to voters in 2017, during the next city election.”
Colorado Springs and the other cities marketed by the CVB — Manitou Springs, Cañon City, Woodland Park — are all home-rule cities, and could create ballot measures to change the local funding structure.
For instance, the group could try to increase the Colorado Springs LART, among the lowest in the state. The tax is 2 percent for hotel rooms and 1 percent for automobile rentals. The CVB gets 82 percent of its budget from LART, and spends roughly $1 million for marketing and advertising.
“We can establish our own taxing districts,” Price said. “Any city can do that, so we’re going to have discussions going forward. The earliest we can do that is April .”
Although he’s disappointed by the legislative outcome, Price said he’s learned a lesson for the next time he tackles a statewide issue.
“We will have all the players at the table,” he said. “We never intended any secrecy; we didn’t even realize it would be a problem with them. There was no pushback, no red flags. It didn’t rear its head until last week — and we realized the bill wasn’t going to go anywhere.”
While the Colorado Springs CVB returns to the drawing board, other tourism organizations have found ways to bolster their bottom line — through higher hotel taxes or other means.
Salt Lake options
Visit Salt Lake discovered — by accident — a new revenue stream that is now a for-profit enterprise for the nonprofit membership organization in Utah’s largest city.
“We are very good at helping associations with their conventions here in Salt Lake,” said Shawn Stinson, communications director for Visit Salt Lake. “We even bought software to help people book hotel rooms within the block reserved — and we were so good that those, associations started asking us to handle housing for them, even when the convention was in other cities.”
The requests grew, so Visit Salt Lake launched the side business, which is now a $21 million revenue source added to the organization’s $8 million budget.
Most of the marketing dollars, however, come from a tax on hotel rooms, which averages about 10.25 percent, he said. Salt Lake City has different taxing authorities, so in some areas of the county, the tax rises as high as 12 percent.
The group also gets money from Utah’s state tourism office for specific projects. About $15 million is available throughout the state, he said, but tourism agencies must match any state grant with local dollars.
The group’s marketing budget is reflected in its reach, which Stinson says covers much of the United States.
“We really target the Eastern Seaboard, cities like Boston,” he said, “Mostly D.C., because that’s where 90 percent of associations are, and we have a lot of association and convention travel here.”
The group also focuses on California, Chicago, Atlanta and the Pacific Northwest.
“Our budget is increasing annually,” he said. “And we seem to be doing OK. We don’t really struggle for funding. We have a lot of support from the city and the county.”
Music City: Nashville operates with a $20 million budget, said Heather Middleton, vice president of public relations.
The member organization receives its funding from Nashville’s motel and hotel tax, membership dues, sponsorships and sales of merchandise and packaging.
Nashville’s hotel/motel tax is 5 percent and its automobile tax is 13.25 percent, according to figures from the city. The city of Nashville also adds a $2 tax to hotel rooms, in addition to Davidson County’s sales tax of 9.25 percent.
That city’s CVB has a full sales staff in Nashville, as well as offices in Chicago, Atlanta, Washington, D.C., Los Angeles and Denver.
“Our marketing team encompasses several areas, including advertising, digital marketing, public relations, membership, publications, events, branding, promotions, sponsorships, packages, a call center, two visitors centers, convention services and research,” said the Music City website.
Middleton says the organization tends to create programs instead of just buying ads, in order to tell the story of Music City. The CVB also creates and markets the city’s large-scale events and festivals to sell Nashville to as large an audience as possible.
Whatever they’re doing, it’s working: Nashville boasted a record-breaking $22 million in visitor spending for New Year’s Eve alone. Tourism is a $5 billion industry in the Tennessee capital, and it has more than 13 million visitors every year.
Middleton wouldn’t narrow down the Music City’s target audience.
“It’s just anyone who loves music,” she said.
Tourism funding comparison
Budget: $2.7 million
LART: 2 percent tax for hotels, 1 percent for automobile rentals
Salt Lake City
Budget: $8 million with an additional $21 million from private enterprise
Hotel Tax: 10.25-12 percent
Budget: $20 million
Hotel tax: 5 percent
Automobile rental tax: 13.25 percent