Plumas County might behind the times when it comes to forming a Tourism Investment District (TID) to fund a tourism and destination marketing plan, but that doesn’t mean a local group hasn’t been working toward that goal.
“Destination marketing has become a key element in plans for economic development, not only in the U.S., but across the globe,” Susan Bryner, spokesperson for the Feather River Tourism Association, told members of the Plumas County Board of Supervisors on Tuesday, Oct. 16, in her presentation.
Why? Because, she said, tourism is the second fastest growing industry in the United States; it makes up 9 percent of the gross domestic product; spending on lodging is outpacing family GDP; and from 1980 to 2014, the amount spent on lodging went up 200 percent, while per capita income increased only 75 percent.
According to Bryner and members of FRTA, Plumas County needs to compete against other counties within the state and other destinations throughout the country. To do that they need a plan, which they have developed, and funded.
Members of the organization so far have raised $40,000 of the $45,000 necessary to hire legal representation as they move forward. They’ve also managed to pay for other efforts necessary to promoting their program.
Members of FRTA didn’t develop their plan independently. They looked to see what others are doing right.
The movement known as the Tourism Improvement District began in 1989 in West Hollywood, according to information FRTA compiled.
“The concept spread slowly at first, but picked up momentum in the late 1990s and exploded in the mid-2000s,” according to Bryner’s presentation.
Currently, California has 103 districts, of which Plumas County would be one if the Board of Supervisors approves the proposal at its next meeting in November. There are a total of 157 districts across the nation and others are forming.
These districts are relevant for the following reasons: Travel is a top 10 industry in 48 states, including Washington D.C.; one out of every nine jobs depends on travel and tourism; and money for promotion is no longer available in the amounts areas were once accustomed to seeing.
Bryner went on to explain that a TID is a stable source of funding for marketing revenues. These TID funds are considered a fee, not a tax, and can’t be diverted to other sources.
A TID is designed to increase occupancy and the number of stays with local lodging providers through expanded marketing, according to Bryner. “It is also governed by those who pay,” she explained.
A TID is designed to provide a wide range of services for those who are participating in the plan.
For example, the lodgings around the extended Quincy area, Indian Valley and the Lake Almanor area, as members of the FRTA, would realize expanded marketing efforts. Eastern Plumas County has not been interested in joining, at least during the past four years it’s taken to put the program together.
Following the evidence of benefits of forming a TID, Bryner explained that 10 years worth of data reveal that the impacts do directly involve the tourism industry, but it positively impacts much of the local economy.
For example, while marketing increases the number and length of room stays in lodgings, it also means that people are purchasing gasoline, going to restaurants, going to local grocery stores and shopping in other commercial ventures.
“Room prices are able to be increased in proportion to the increased demand,” according to Bryner.
Through increased direct spending on lodgings, food and beverages, an indirect impact is found with the supply chain or the increase in demand for support services.
And those who are earning more because of the effects of marketing are more likely to spend the additional income.
Much of California is formed into TID areas, with Plumas and Lake counties considering the formation. Lassen, Modoc and Sierra counties are among the few counties in the state that have not formed a TID.
The TID rate per county varies from 1 to 2 percent. Half Moon Bay charges a flat $1 per night, according to information Bryner shared with supervisors. Carlsbad golf area is a flat $2 per night, and a stay per night at Dana Point is $3 per night.
Big Bear Lake has a 3 percent increase added to room rates, while the ski resort has a two percent TID. Folsom TID is 4 percent producing $1 million in the annual budget for tourism marketing. Neighboring Butte County is at 2 percent and realizes $650,000 annually.
Anaheim, an area with a big draw in Disneyland, charges 2 percent in room revenue and realizes $17.5 million per year, which goes to tourism marketing and transportation. It’s a TID program begun in 2010.
As another example, San Francisco, with its tremendous draw, charges between 1.4 percent and 2.75 percent and realizes $25 million annually. These funds are used for tourism marketing and services, and Moscone Center improvements.
Under the FRTA plan, the annual assessment rate would be 3 percent of gross short-term stays for those staying less than 31 days. The assessment wouldn’t be collected for stays lasting 30 consecutive days or longer, or stays of any officer or employee of a foreign government. The latter are exempt according to Federal law or international treaty. And this would exclude stays contracted before April 1, 2019.
This is the right time to also form a Tourism Marketing District (TMD), according to Bryner. “The formation of the FRTMD [Feather River TMD] is a proactive effort to provide supplemental funding beyond that provided by the county,” she explained. “The funding will ensure that adequate financing exists for the investment required to increase occupancy in the lodging industry and be competitive in the conference segment of the tourism market.”
This is also an opportunity for Plumas County to increase its low TOT revenue, she added.