HomeMy WebLinkAboutTourism Business Improvement District Concept Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Chris Kukulski, City Manager
SUBJECT: Bozeman Chamber of Commerce Presentation to Commission Regarding
a Bozeman Tourism Business Improvement District (TBID)
MEETING DATE: January 26, 2009
RECOMMENDATION: Direct staff to bring back the resolution of intent to create a Bozeman
Tourism Business Improvement District.
BACKGROUND: Per the memorandum from the TBID Committee/Bozeman Area Chamber
of Commerce, the Chamber will make a presentation to the City Commission requesting staff to
proceed with a resolution of intent to create a Bozeman Tourism Improvement District.
FISCAL EFFECTS: None at this time. If the District is created and if the assessment is set
at $1.00 per occupied room night, the Chamber estimates that the District will generate
$600,000/year.
ALTERNATIVES: As suggested by the City Commission.
Respectfully submitted,
____________________________
Chris A. Kukulski, City Manager
Attachments: Memorandum from TBID Committee/Bozeman Area Chamber of Commerce
Convention and Visitor Bureau
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Commission Memorandum
Report compiled on January 14, 2009
REPORT TO: Honorable Mayor & City Commission
FROM: TBID Committee/Bozeman Area Chamber of Commerce Convention and Visitor Bureau
SUBJECT: Bozeman Tourism Improvement District
MEETING DATE: Monday, January 26, 2009
RECOMMENDATION: To authorize staff to proceed with a resolution of intent to create a Bozeman Tourism Improvement District.
BACKGROUND:
What is a Tourism Business Improvement District? A Tourism Business Improvement District (TBID) is a new opportunity for Bozeman to generate
additional funding to recruit visitors and grow the economy. A Tourism TBID would simply include an
additional fee of $1 which would be assessed for each occupied room night. At the end of the quarter, the
fees collected would be remitted to the Bozeman City Treasurer. The funds collected would be used ONLY for tourism promotion, marketing and sales.
What is the Need for a TBID?
Bozeman has an annual lodging tax budget of about $120,000 to recruit visitors. While these dollars
continue to increase incrementally, it is not enough to keep up with the out-of-state communities that compete for the same business. There are also a number of restrictions on the use of lodging tax funds.
While Bozeman is in the top four lodging tax collectors in the state, additional funding from the TBID
would leverage those dollars making us more competitive for in-state business as well as out-of state
business. (This year we experiencing a significant downturn, which additional promotional dollars would definitely help to alleviate).
Developing a TBID will provide the appropriate competitive resource to grow and maintain our visitor
economy and allow Bozeman to be creative and aggressive in our sales efforts. As cities across Montana enact a local TBID, the harder it will be for Bozeman to remain competitive with our existing CVB funds.
How do we start a TBID?
Bozeman lodging facilities and the Bozeman Chamber of Commerce will ask the City Commission to
approve the creation of the TBID. Once the resolution is enacted the City of Bozeman will be the governing body and State law mandated that the Convention and Visitor Bureau (CVB) will be the TBID manager. A slate of interested candidates will be submitted to the mayor for appointment to the TBID
Board of Directors. Only the hoteliers are eligible for the board. The Convention and Visitor Bureau
Director and the appointed board will work to develop a marketing plan and budget what will be formally
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Commission Memorandum
Report compiled on January 14, 2009
approved by the City Commission. The lodging facilities collect the funds and send them to the City
Treasurer for disbursement to the Chamber/CVB upon approval of the budget.
What will it cost? Per Montana Code Annotated 2005, Title 7. Chapter 12, Section 7-12-1133 as Amended by the 2007 legislature, assessment can be done on a flat fee basis. At this time the committee is recommending $1 per
occupied room night. When the lodging tax return is prepared, a second report will be prepared to show
the number of occupied room nights and the fees remitted. The hotel would then pay the assessment semi-
annually to the city of Bozeman. This is considered an assessment not a tax. The Budget Implementing a $1 assessment on each occupied room, if total occupied room nights were to stay at
current levels, Bozeman’s approximate 1900 rooms would generate over $600,000 in addition to current
lodging tax collections. What will it do? The TBID must be used to benefit the collector. The number one measurable objective will be to increase
citywide hotel demand. Priority target audiences will be city wide events, regional sporting events,
destination events. Increased funding would allow the CVB to:
• Increase effectiveness in existing markets while exploring new markets
• Focus efforts on period of needs
• Attend new trade shows
• Allow for subsidy and sponsorship of events and organizations that drive room nights
• Website optimization
• Increase staffing levels
• Software for tracking reporting and marketing
FISCAL EFFECTS: ALTERNATIVES: As suggested by the City Commission.
CONTACT: Please feel free to email Mark Jones, 582-9900 mark_jones@hilton.com
if you have any questions.
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