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Destination Columbus

Destination Columbus. Reforming the Bed Tax to Build a 21 st Century Tourism Economy. Hospitality and Leisure: A Pillar of our Economy. Working with the Greater Columbus Sports Commission to create jobs through travel and tourism: Visitors spend $7.8 billion in Central Ohio annually

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Destination Columbus

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  1. Destination Columbus Reforming the Bed Tax to Build a 21st Century Tourism Economy

  2. Hospitality and Leisure: A Pillar of our Economy Working with the Greater Columbus Sports Commission to create jobs through travel and tourism: • Visitors spend $7.8 billion in Central Ohio annually • Visitors pay $1.02 billion in local, state and federal taxes • Industry impacts 61,000 jobs in Franklin County • Hospitality and Leisure are 10% of local economy • $40 billion Ohio travel industry 1

  3. Tourism Industry Is Primed for Growth New investment in an aggressive sales and marketing campaign for Columbus creates economic impact: • 2011 Study by Oxford Economics on Columbus’ potential: • Attract up to 2.5 million new visitors per year • Create 4,100 - 5,500 new jobs • $689 million in new visitor spending at local businesses • $100 million in new tax revenue • $7 million in new tax revenue to the City of Columbus • $18 million in new tax revenue to Franklin County 2

  4. Destination Columbus:Unprecedented Collaboration 2011 – 2012 set the stage for taking Columbus national: • Columbus 2020, Columbus Chamber, and Experience Columbus are working together to tell the Columbus story with a unified voice and a shared marketing agency - Fahlgren • 200Columbus, our Bicentennial in 2012, is building local pride and helps launch our national consumer sales and marketing campaign • Maximize market potential around increased hotel capacity 3

  5. Experience Columbus Supports Success in Important Public Investments Tourism business sustains billions of dollars invested in local facilities, teams and attractions: • New convention hotel - $160 million • Convention Center and Battelle Grand - $208 million • Huntington Park - $56 million • Lincoln Theatre - $13 million; Museum of Art - $53 million • Nationwide Arena and District - $700 million • Scioto Mile, Scioto Greenway, Scioto Peninsula, North Bank and Columbus Commons Parks • Sports teams at OSU, the Blue Jackets, Clippers and Crew 4

  6. Experience Columbus Leverages Funding for Many Local Causes and Organizations In 2010, the bed tax provided $28.6 million for the CFA, tourism, arts, human services, housing and the city budgets. In 2013 bed tax represented $36.3 million dollars. Increasing destination sales, marketing and promotions grows the bed tax and means more funding to these partners and job creation. 5

  7. Smart Investment “Destination Columbus is a smart investment as we tell our story to the world. The 2020 vision cannot succeed without Experience Columbus being a partner and having a competitive budget.” - Alex Fischer, President and CEO 6

  8. Competitors Are Investing in the Tourism Economy Crain’s Detroit Business Star Ledger January 31, 2010 March 23, 2009 Travel Michigan would like to spend $12.5m … up from the $10m spent last year on a first-ever national campaign N.J. Tourism board seeks to quadruple funding to $8 million Silicon Valley Business Journal Pittsburgh Business Times The Indianapolis Star July 5, 2010 JULY 10, 2010 April 2, 2011 Pittsburgh Getting Roomier Four New Hotels Open, adding 590 new rooms ICVA increases sales staff from 12 to 17 and triples summer tourism marketing in preparation for 2012 $138.4M in San Jose Convention Center Bonds Sold 7

  9. What’s At Stake? Without an aggressive campaign targeting new tourism, national conventions and trade shows, Columbus risks losing ground in the industry, losing funding and losing downtown hotels: • $1.8 million a year in Bed Tax funds paid by visitors staying at the new hotel are being set aside to pay off construction costs • Occupancy at 13 private downtown hotels could drop more than 10% with the opening of the new Hilton Columbus Downtown • A 10% drop in occupancy would cost these existing hotels an estimated $14 million a year in lost business – 2013 – (4%) and 2014 YTD – (2%) • 126,000 additional room nights must be sold annually to maintain the downtown market’s occupancy at 65% 8

  10. 1988 Bed Tax Distribution Is Not Competitive Competitive cities invest visitors’ Bed Taxes in building the tourism economy Industry Average to CVBs: 54.9% Experience Columbus Allocation of Total Bed Tax: 13.8% 9

  11. Experience Columbus’ Budget Is Not Competitive with Peer Cities 2010 Budgets St. Louis Indianapolis Louisville Charlotte Pittsburgh Cleveland Cincinnati Columbus $13,700,000 $13,600,000 $11,700,000 $11,130,000 $9,200,000 $8,490,000 $6,600,000 $6,300,000 10

  12. Columbus’ Bed Tax RealityA $100 room rate creates $1.50 for Experience Columbus • $100 room rate with 10% total bed tax = $10 49% to the FCCFA = $4.90 51% to the City of Columbus = $5.10 • $1.25 to City General Fund ($0) • $1.50 to Experience Columbus($2.39) • $1.50 to GCAC ($1.75) • $0.43 to Cols Housing Trust Corporation ($0.43) • $0.42 to Emergency Human Services ($0.53) 11

  13. Reforming Bed Tax Distribution: Lets Columbus Compete $11.2 Million to Compete Experience Columbus’ essential strategic budget offers a plan for aggressive sales and marketing to win the new business that fits into the city’s growing hospitality package. We must go after larger corporate meetings, sporting events, national association conventions and tradeshows that were previously out of reach. 12

  14. Aggressive Sales and Marketing 80% of the essential strategic budget is dedicated to an aggressive sales and marketing campaign, including: • $5.4 million: marketing, advertising, social media and promotions • Increased national visibility for Columbus attractions, arts, restaurants, convention facilities, sports and entertainment venues, especially in travel and trade publications, industry news and consumer media • $3.6 million: direct sales initiatives • Pursue national group bookings, including more than 900 groups that were previously out of reach for Columbus market • Open Chicago Sales Office • Improve participation and visibility of sales team at industry events and trade shows 13

  15. The Status Quo Is No Longer Competitive After 23 Years, it is time… Reform City Bed Tax Distribution Provide a sustainable, predictable budget to support the Destination Columbus Plan 14

  16. Reform City Bed Tax Distribution Current City Code Section 371.2(c): allows up to 1.84% of the City Hotel Tax to go to Experience Columbus. Proposed ordinance change: set rate at a “fixed” 2.83% (2.39%) of the City Hotel Tax for the purpose of promoting the City of Columbus.” Invests additional $3-4 million per year of visitor taxes toward building the local economy. 15

  17. A Proven Return on Investment • 4,100 – 5,500 new jobs • $689 million in new economic impact • $25 million in new tax revenue for the City, County, arts and social services 90 to 1 ROI - every $1 invested returns $90 in new economic impact from visitor spending, driving $20 in new Federal, State and local tax revenues. 16

  18. Growing Local Tax Base Visitor Spending and New Jobs Bring New Tax Revenue to the City of Columbus: Additional $7 million annually Income Tax $3.4 million Property Tax $640,000 Lodging Tax $1.9 million Other taxes and fees $1.1 million 17

  19. Growing Local Tax Base Visitor Spending and New Jobs Bring New Tax Revenue to Franklin County: Additional $18 million annually Sales Tax shared with COTA $3 million Property Tax $13 million* Lodging Tax to FCCFA $1.8 million Other Taxes and Fees $264,000 *Property taxes collected through Franklin County support various local schools and levy agencies 18

  20. Performance and Accountability Tracking Performance: • Increased hotel room nights booked • Increased bed tax revenues • Increased attendance and size of conferences, trade shows, business meetings booked • Increased Private Funding • Increased business for restaurants, retail, arts and culture, and hospitality service providers 19

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  24. Central Ohio Is Ready to be a Hospitality Leader Support Destination Columbus Bed Tax Reform and Help Build a 21st Century Tourism Economy 20

  25. Increased Budget 21

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