Will add 3 percent room tax; will boost ability to promote citySANTA ROSA - A citywide tourism promotional fund that could raise as much as $1 million annually was unanimously approved by the Santa Rosa City Council last week.
The tourism business improvement area, or BIA, will add a 3 percent assessment to visitors’ hotel rooms at 27 lodging locations throughout the city. That money will in turn help promote the city as a tourist destination as well as fund the Convention and Visitors Bureau.
Funds generated from BIAs by law cannot go toward a city’s general fund and must solely fund tourism-related campaigns. However, the city BIA is unique in that some of the funding will go toward to the general budget.
Previously the city funded the Convention and Visitors Bureau at a cost of approximately $300,000 a year. The bureau will now be funded with the BIA, with 70 percent of the $1 million generated from the assessment, while the remaining 30 percent goes back toward the city for its own tourism promotions, according the Keo Hornbostel, general manger of the Hyatt Vineyard Creek. That remaining 30 percent will be handled by the Department of Economic Development and Housing, which will oversee city tourism promotions.
“The idea is that the CVB and the city will work together to promote the city,” he said. “I think what this did was it provided a long-term funding source to keep tourism at the forefront for the city of Santa Rosa for years to come, as well as keeping the California Visitor Center open.”
The impetus to form the BIA began a couple of years ago as a means to secure funding for the visitors bureau as the city grapples with an estimated budget deficit of $4 million, according the Jonathan Coe, president and CEO of the Santa Rosa Chamber of Commerce. With the city’s deepening fiscal challenges, funding for the visitors bureau was in jeopardy.
Mr. Coe and the chamber actively supported the BIA, since the visitors bureau is a division of the chamber with members from the hospitality industry, particularly hoteliers, Mr. Coe said.
He also said the assessment could in turn boost occupancy rates and create jobs within the hospitality industry, which has struggled mightily amid the bleak economic landscape.
“This community, we’re all struggling with the aftermath of the Great Recession to get moving again, and this is one way for the city of Santa Rosa to work together,” he said. “The reality is if we can bring more overnight stays, which will increase spending, that’s going to require more employees.”
The BIA needed support from a simple majority of the city’s hoteliers. Mr. Hornbostel said only two properties objected to the assessment.
Santa Rosa also participates in another BIA on countywide level, overseen by the Sonoma County Tourism Bureau and which has an approximately $3.8 million annual budget. Mr. Hornbostel said the city efforts will not be duplicative of the county’s, and much of the focus will be on attracting more events to the city.
“It’s the intent of these monies to complement what the county is doing, and this is more of a direct sales philosophy,” he said. “A big portion of what we’re going to do is bring in more events to the fairgrounds. And we want to bring events to the downtown area. The Tour of California is an example of that.”
Preserving the visitors bureau was also vital, both Mr. Coe and Mr. Hornbostel said, because it draws an estimated 50,000 people a year to the city for various conventions.
The BIA is separate from the transient occupancy tax, which is at 9 percent. The county BIA is a 2 percent assessment. The city-wide 3 percent assessment will start being collected beginning Sept. 3, Mr. Hornbostel said.
A five-person advisory board will be responsible for oversight of the BIA. It will consist of three hoteliers – Mr. Hornbostel, Brad Calkins of the Marriot Courtyard and Donna Renteria of the Best Western Garden Inn – Mr. Coe of the chamber and Danielle O’Leary of the Department of Economic Development and Housing.
