Humboldt County lodging industry considers assessment district to fund tourism

With municipalities in dire financial straits, Humboldt County hotel owners are considering an additional tax that may result in stable funding for the Humboldt County Convention and Visitors Bureau.

The bureau hosted an exploratory symposium on the formation of a tourism business improvement district Wednesday at the Red Lion Hotel in Eureka. Hoteliers from Orick to Benbow attended the meeting.

The district -- which would require establishments within the district to pay a certain tax -- would fund tourism marketing programs that are currently being paid for by the county, the city of Eureka, other cities, and private investors.

Humboldt County Convention and Visitors Bureau Executive Director Tony Smithers said funds from the assessment district is needed to keep Humboldt County tourism competitive as cities and the county are dedicating less funding to tourism marketing.

The discussion Wednesday centered on whether or not hotel owners and managers think the district would cause more harm than good.

The added tax would create a source of funding that couldn't be used for city or county services, unlike a transient occupancy tax (TOT). TOT is a tax added onto hotel room prices.

But some members of the lodging community in attendance were concerned about higher hotel prices deterring customers, or TOT portions from municipalities dwindling further if the bureau has a different revenue source. Currently, the bureau's main supporters are the city of Eureka and the county, which are supposed to contribute 21 and 16 percent of TOT revenues. The majority of the bureau funding comes from the private industry and a small portion comes from other cities in Humboldt.

To inform the lodging community, the bureau invited consultant John Lambeth of Civitas Inc., and hoteliers from nearby counties to talk about districts and share their experiences. Lambeth, who has helped other areas start districts, said there are 49 districts in California as of last week and more communities are starting districts.

In most instances, the hotels pass the tax on to their customers. An advisory board made up of hoteliers and officials determines how the funding will be spent, but the local governments will have to decide whether or not they want to be a part of the district. To form a district, municipalities must hold a series of public meetings and conduct a vote among businesses that collect TOT. As long as a majority of those businesses do not object to the district, the district is approved.

Bert Meyer, general manager of the Holiday Inn Hilltop in Redding, said the district in Redding funded the revitalization of a city road, among other marketing ventures.

He said he thinks Humboldt County will eventually have to form a district to further tourism.

"It's a natural progression for communities to take control of their dollars," Meyer said.

Jeff Stanford, owner of the Stanford Inn in Mendocino, said Mendocino is still working out some issues involving administration funding, but the district has been a success otherwise. He pointed out that Mendocino, being a rural county with both coastal and inland communities, has some of the same challenges and opportunities Humboldt does.

Stanford said the community has also lost its logging and fishing industry, "so there's nothing left except tourism and wine."

Smithers anticipates that the other revenue sources would continue to pay for the bureau's administrative costs, potentially freeing up the district's funding for marketing. He envisions more printed materials, a more robust online presence and utilization of new media forms, and completing the process for Humboldt to become a National Heritage Area.

Donna Tam can be reached at 441-0532 or dtam@times-standard.com .