Tax revenue to be used by PMVB to market Poconos

How to spend the money from a proposed 3 percent hotel room tax in the Pocono Mountains is more an issue than the new tax itself. After years of fighting a hotel tax, hoteliers in the Poconos have decided that they need revenues to effectively market the region.

Legislation for a county-imposed hotel tax was passed in 2000 to provide marketing money to tourism bureaus, but Poconoregion hotel owners fought its imposition, fearing the increased room charges would drive business away.

Now,

Pike, Wayne and Carbon County commissioners are still reviewing the proposal and getting public input.

If approved by all four counties, the tax is expected to generate nearly $3 million a year. Under current state law, the tax is assessed by the county commissioners, and collected and used by the regional tourist promotion agency, in this case the Pocono Mountains Vacation Bureau.

The PMVB plans to spend the money primarily to promote midweek business in the four-county region, according to executive director Robert Uguccioni.

"Tourism is the most highly competitive business in the world right now, without a doubt," he says, and a comprehensive marketing plan is necessary to keep the Pocono Mountains in fine with destinations like Atlantic City and the Catskills. With the new tax, he says, "We would have more resources to do that."

Those who testified at the public hearing argued that a portion of the tax revenue should be used for hiking traits, emergency services and roads - all used by Pocono visitors - and to improve signage and clean up litter.

Even Gov. Ed Rendell had a suggestion: that $1 million or more of the initial tax revenue be used as a local contribution to help save the Mountain Laurel Center for the Performing Arts in Pike County, which is nearly $23 million in debt.

The law states that the money collected from the tax can be used only for tourism, convention promotion and tourism development.

It also requires that a minimum of 2 percent of the money raised go to each county for administrative costs.

Because the "tourism development" portion of the law is so widely interpreted, the chairman of the Pennsylvania Tourism and Recreational Development Committee, Rep. Robert Godshall of Montgomery County, is seeking an amendment requiring the tax revenue can go only for marketing to attract tourists.

Until this last year, "We've always resisted placing any additional costs on our accommodations," says Uguccioni. Now there are only about nine counties in Pennsylvania that have not levied the tax, he notes, "And we represent four of them."

In a competitive analysis with surrounding destinations, "Even at 9 percent (a 6 percent sales tax and 3 percent room tax), we're still below some of these places."

According to Ron Logan, owner of the Sterling Inn and French Manor in Wayne County and a member of the marketing committee of the PMVB, "We do need to have a very strong promotion to compete." He notes that there are now many more players vying for the tourist trade than there were 25 or 30 years Ago, when people from New York and New Jersey traditionally took a week's vacation in the Poconos every year.

Back then, the Poconos were it. "Atlantic City was virtually a ghost town," he adds. Disney was new. Branson wasn't yet developed, "and who ever heard of Cancun?"

Today, he says, "The competition is much keener. Everything is changed," with people booking two- and three-day getaways online at the last minute. In order for the Poconos to compete and hold its share of the tourist market, "We need a big, strong marketing program."

Rick Scrudato, Barrett Township Supervisor in Monroe County, would like to see the money spent on services the visitors use while they are in the Poconos. He proposes I percent of the tax collected go to the PMVB, I percent to emergency services and I percent for improving the roads.

"To bring people here is good," he says, but there are other needs to be addressed. He doesn't believe anyone wants all the money to go to the Vacation Bureau except the Vacation Bureau. A volunteer fireman, he says funding for emergency services is a serious problem and "The ambulance is the hardest hit in my eyes." If they can't use the room tax to support emergency services, he has asked the county commissioners to find how they can enact a 1 percent or 2 percent added on tax.

"They have that in New Jersey," he says.

Uguccioni says the law is very clear that the money goes to the tourist promotion agency to spend.

A committee is being formed with members from each of the four counties. Their new marketing plan will look for midweek business, not just big conventions, but family reunions, seniors groups, small corporate meetings and motor coach tours that will fill from 10 rooms up to 200 rooms.

The challenge is, "Everyone is going after the same business," says Logan.

The trend to smaller business conferences has already begun as companies downsize, Logan revealed. While the average corporate convention used to be 27 or more people, it's now more in the range of 18-22.

"You don't have to be a giant hotel to attract corporate business," he contends.

The concern expressed during the public hearings by owners of small bed and breakfast accommodations and country inns is that the additional tax will hurt their business and only the bigger resorts will benefit from the additional marketing.

Logan disagrees. "It's going to benefit everyone," he says. "Those who come here want a variety of accommodations. They will go to the restaurants, go out shopping, visit attractions like the Stourbridge lion and Steamtown and stop at the gas station. Everybody profits from it," he believes.

"We do promote the Pocono Northeast," notes Uguccioni, and what the agency does in the four Pocono counties spills over into neighboring counties. "We have an impact on all the area," he says, citing the races at Pocono and ski areas as bringing regional business. The Mountain Laurel Arts Center could also have an impact throughout the area, he says.

The Pike County Commissioners and Gov. Rendell's office have both expressed their support for using tax revenue to boost the arts center and Uguccioni says, "We most certainly are considering it."

That won't happen unless a plan to make the center viable is approved by the governor's office and additional state aid is pledged. "We would only be one leg of that plan," Uguccioni says. "I think there is some confusion on that."

Logan agrees. "The arts center is something that could be very nice for the Poconos," he says. Other places do a big business with their arts centers, he points out, and it would be a shame for it to fail because they needed a little more money to get it going.

Uguccioni believes Pike is the next of the four counties to vote on the room tax and the PMVB has proposed the tax to the commissioners in Wayne and Carbon counties. "Wayne County is receptive to the tax I believe," says Logan.

"No one likes a tax," he says, and nobody on the marketing committee four or five years ago even discussed a tax. Now revenue is needed to get the word out to the major newspapers, magazines, TV, radio, Internet so when people wonder where to go, they immediately think of the Poconos.