Have you heard of tourism improvement districts? Maybe you know them as tourism marketing districts, or tourism promotion areas. No matter what you call them, TIDs are an increasingly popular way for DMOs to secure additional, stable funding for destination marketing.
Hotels in a defined area pay a fee (which is usually passed on to the guest), the fee is collected by the City, and passed on to the DMO. Unlike bed tax funds, TID dollars cannot be used for general fund or any other purposes. For this reason, TIDs have become the go-to funding source for over 100 destination marketing organizations.
In 1989, the first tourism improvement district was created in West Hollywood, California. In less than fifteen years, the concept has exploded, spreading across the U.S. There are now 109 TIDs in seven states. Each year, more states join the revolution. For an interactive map of TIDs across the U.S., click here - http://www.tourismimprovementdistrict.com/district-directory.php.
In California alone, 81 TIDs raise more than $150 million each year. That funding has produced incredible results. A 2012 study by San Francisco State University found that for every $1 spent by a TID, there was a $70 return to the local economy. In 2010, California’s TIDs generated $19.9 billion dollars in tourist spending, of which $196 million was new tax revenue for local governments. For the full study, click here - http://www.tourismimprovementdistrict.com/cms-assets/documents/74368-33688.tmd-overview.pdf
Not every state currently has a TID law. In some places, cities have used their charter or home rule powers to create a TID. A prime example is Portland, Oregon. Travel Portland spearheaded an effort to create a TID using the city’s home rule authority. Cities in several other states are also investigating the possibility of creating a TID using charter or home rule powers – it’s only a matter of time until TIDs pop up in more states!
In other cities, a new spin has been put on the traditional hotel-only TID. Mammoth Lakes, California, a small resort town nestled in the mountains outside of Los Angeles, recently formed a TID that includes all visitor-serving businesses in the town. Lodging, restaurants, some retail, and the Mammoth Mountain Ski Resort all pay into the TID. TID funds are used to market all visitor-serving businesses in Mammoth Lakes as a comprehensive destination.
The future for TIDs is bright, and only getting brighter. Will your destination be next?