The proposal by San Diego’s hotel-motel industry to create a Tourist Marketing District would be funded by a slight increase in citywide room rates. The revenue earned by the proposed increase would then be used to market San Diego as a business and leisure travel destination.
This idea was described by Sal Giametta, vice president of public affairs for San Diego Convention & Visitors Bureau (ConVis), as a win-win proposition. Its benefits would be twofold: pumping much-needed funding into marketing San Diego as a travel destination while simultaneously increasing the tourist dollars that go directly back to our financially strapped city. Hoteliers have been complaining for some time that their industry has been the victim of a declining pool of Tourist Occupancy Tax (TOT) revenues. Raising the room tax guests pay is the industry’s solution to rectifying this shrinking TOT pie. The only contentious issue which remains is, how do you guarantee that individual hotels-motels will be allotted their fair share of enhanced marketing revenues?
There are several successful Tourism Marketing Districts in the state of California. And they are legally viable, having weathered unsuccessful court challenges to their legitimacy. There are some concerns that higher room prices might dissuade visitors from traveling to San Diego. Terry Underwood, general manager of The Grande Colonial La Jolla, describes the room rate increase as a “leap of faith.” We feel it is a “leap” worth taking. Certainly, something needs to be done to positively affect our city’s cash flow, without taxing the residents. In the past decade, San Diego voters have twice rejected initiatives to increase the TOT tax, although this would not affect local residents.
Recently, San Diego City Council voted 6-2 to allow the process to continue to create a nonprofit Tourism Marketing District formed under the same state rules as Business Improvement Districts, which do not require a public vote. Formation of the new Tourist Marketing District is expected to generate $25 million its first year to boost tourism - the third largest sector of San Diego’s economy behind manufacturing and defense.
Creation of a tourism marketing district is a good idea. Yes, it will cost more for hotel guests, but not so much more that it would kep many of them from coming. Guests, not local taxpayers, will be picking up the tab, which in itself is not unreasonable. And, it would provide a much-needed overhaul of our current “downsized” TOT fund. Sounds like a win-win to us.
If hoteliers are willing to tax themselves to keep San Diego a viable tourist destination, why shouldn’t we support their efforts?