Tourism funding

Exploring the real competition

Proposed state law would be boon to marketing efforts

October 5, 2010 

Tourism funding has been in the news frequently, especially the state-level recommendations to the Tax Realignment Commission on tourism funding allocation.

Unfortunately, the message in these recommendations -- simplify processes for local governments and strengthen local tourism -- has been lost in the spin of "us vs. them" with tourism as the bad guy.

Local destination marketing organizations have an economic development job to promote the area as a tourism destination. These activities are funded with tourism taxes, usually an additional tax on hotel rooms called an accommodations tax.

According to Destination Marketing Association International, DMOs in the U.S. typically receive 54 percent of the tourism taxes collected in a community. Not in South Carolina. The local DMO is guaranteed only 12 percent of the total accommodations tax collected.

Our competition is all the places in other states outspending us four to one, not our local cultural groups and governments. If we do our job well, our local governments and cultural organizations will be successful, too. S.C. Parks, Recreation and Tourism reports that every dollar spent in tourism marketing generates $2.56 in state and local taxes.

For more information, go to www.tourismworksforbeaufort.com.

The Beaufort Regional Chamber of Commerce Visitor and Convention Bureau has had success with local grants so that we receive about 25 percent of the accommodations taxes collected locally, but that is still less than half of the national average. While grants funds are always appreciated, they present challenges since they can sometimes be unpredictable or political and always take valuable staff time.

The state-level recommendations somehow have been labeled as taking local government power away. It actually gives the local government more authority over a higher percentage of the state accommodation tax funds. Current law governing the state accommodations tax allows $25,000 and 5 percent to go to the local government to spend in any way they see fit.

The recommendation changes the amount to 50 percent, or 18 percent of the total collected. The local government could still choose to do grants but using their rules instead of the current state rules. They could fund locals-only events without worrying about the Tourism Expenditure Review Board questioning the expenditure. The state-level recommendations on local tourism taxes only adds state-level oversight to ensure they are being spent on tourism projects, as current law dictates. Collecting them at the state level also makes it easier for businesses operating in multiple jurisdictions to pay these taxes.

Another important recommendation is to "freeze" the Robin Hood funds that counties such as Beaufort County pay to the poorer counties so that the amount no longer increases each year. Beaufort County contributed $412,067 to Robin Hood last year.

The chamber's Visitors and Convention Bureau has an aggressive plan to grow tourism. To implement that plan, our position on tourism funding is that both our public and private funds must increase.

We look forward to the discussion with our local and state elected officials on any recommendations on tourism funding that puts us in a position to go head-to-head in marketing with communities in other states.

Carlotta Ungaro is president and CEO of the Beaufort Regional Chamber of Commerce.

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