Santa Monica City Council To Consider Tourism District To Boost Occupancy

Monday, 19 Nov 2012, 1:09:00 AM

Parimal M. Rohit

For tourists visiting Southern California, Santa Monica is a likely destination. City officials are weighing up a new plan in a bid to not only attract more tourists to Santa Monica, but also encourage them to stay in one of the city’s many hotels.

Council members filed and received a report Tuesday by City staff to consider the development of a new assessment district that “would be a self-imposed and self-governed benefit assessment district designed to help fund marketing and sales promotion efforts for Santa Monica hotels.”

To be considered again at its Dec. 11 meeting, Council members will decide whether or not to create a Santa Monica Tourism Marketing District (SMTMD) in hopes of bringing more tourism dollars to the city.

Such districts were created in other cities, including Long Beach, Los Angeles, and West Hollywood and, as City staff pointed out, have been used to help promote their communities as tourism destinations.

Among the activities the SMTMD would partake in to promote tourism to Santa Monica: print advertisements in magazines and newspapers; television and radio advertisements; attendance at trade shows; and, partnerships with public relations firms.

According to City staff, the new district, or SMTMD, would essentially complement Santa Monica’s Convention and Visitors Bureau (CVB) as a sustainable funding source that would provide additional revenues for tourism promotion and marketing.

If created, the SMTMD would include all lodging businesses located within the boundaries of the City of Santa Monica with an average daily room rate of $100 and above and be in effect for five years. According to City staff, 30 hotels would pass that threshold and be subject to an assessment.

“The assessment would be assessed at a fixed rate, per occupied room, per night,” City staff stated in a report.

The assessment rate would be $2 per room night for hotels with an average daily rate between $100 and $199.99. For hotels where the average daily rate is between $200 and $300, the assessment rate would be $3 per room night. If the average daily rate exceeds $300, the assessment rate would be $4 per room night.

Assessment rates, which would be collected by City Hall on a quarterly basis, could potentially be increased by no more than 25 cents per year.

City staff stated the funds would be used for marketing and sales promotions to increase tourism and to market Santa Monica lodging businesses as tourist, meeting, and event destinations.

“The programs and services provided with the district funds will be designed specifically to drive room night sales at assessed lodging businesses,” a report issued to the CVB by Civitas stated. “Only assessed lodging businesses will be featured in marketing materials, receive sales leads generated from district-funded activities, be featured in advertising campaigns, and benefit from other district-funded services. Non-assessed lodging businesses will not receive these and any other district-funded services.”

Logistically, the CVB would serve as a standing advisory committee with four to nine members, with at least four of those members representing the assessed hotel. The SMTMD could potentially be disestablished should existing levels of funding for marketing programs be reduced.

The SMTMD is expected to have an average annual budget of about $3.13 million to supplement, not supplant, existing City funding for tourism marketing.

According to City staff, tourism and the Transient Occupancy Tax (TOT) has long been a significant General Fund revenue stream that supports basic City services and functions. In the 2010-2011 Fiscal Year, City Hall reported the TOT generated about $36 million.

City Hall also reported allocating more than $2.5 million to the CVB for the 2012-2013 Fiscal Year.

Council members Terry O’Day and Bobby Shriver were both not present at the Nov. 13 council meeting. However, O’Day was present Nov. 14 when council members voted on the Village Trailer Park agenda item.

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