Groups seeking more 'bed-tax' money from Hilton Head

tbarton@islandpacket.comOctober 16, 2013 

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At right, Jeffrey Reeves, senior vice president and chief operating officer of the Arts Center of Coastal Carolina watches as Hilton Head Island Town Council members listen to Steve Adams of Johnson-Laux Construction and his assessment of the center's stage during a Sept. 3, 2013, tour of the repairs needed in the building.

SARAH WELLIVER — Staff photo Buy Photo

Arts, cultural and tourism groups are lining up for money from Hilton Head Island's accommodations-tax revenues, and many are asking for more than they received last year.

The town has received 28 applications for grants generated by taxes on overnight lodging, the same as last year, but applicants are asking for a total of 50 percent more -- $3.6 million versus about $2.4 million.

The town expects revenues from the tax to be up slightly from last year, deputy finance director Bret Martin said.

Competition for grants again will be stiff, said town bed-tax advisory committee chairman Robert Stenhammer. He suggested that the state increase the lodging tax.

"We are leaving millions of dollars on the table," he said. "Let's get in line with the rest of the country. We are a resort destination and visitors expect those fees will be associated with their stay."

State law allows municipalities to add an accommodations tax as high as 3 percent on short-term lodging to the state's 7 percent sales tax.

The money is used on tourism-related expenses, such as beach renourisment, festivals, events and marketing the island.

Stenhammer said the town should be allowed to raise the bed tax by about 2 cents on the dollar, bringing it more in line with the national average.

A 2008 study by The American Hotel & Lodging Association pegged the national average tax for hotel rooms at about 12.6 percent per night.

A one-cent-on-the-dollar tax increase would generate about $1.5 million for the town, according to Stenhammer, president of Hilton Head Accommodations/RMC Resort Management.

Hilton Head-Island Bluffton Chamber of Commerce spokeswoman Charlie Clark said: "It could be a positive step for arts funding and for tourism marketing."

Gail Wargo, director of sales and marketing at the Westin Hilton Head Island Resort & Spa, agreed.

"We have the great weather and now have the renovated facilities, as well as easier access with the addition of JetBlue flights at the Savannah-Hilton Head Island Airport, to put us on the map with the best meeting and event destinations on the East Coast," Wargo said. "To get that word out ... we have to have the funding to compete. A tax increase would help use close the gap with better-funded, better-known resorts destinations."

Stenhammer said the tax panel is also attempting to be more "objective and quantitative" in awarding grants to events and organizations that provide the greatest return on the taxpayer dollar.

Groups requesting town bed-tax funds were asked this year to include the number of overnight visitors they served from beyond a 50-mile radius.

Town Council in March denied a $28,000 request by the tax committee to provide bed-tax applicants with onsite and e-mail surveys of patrons "to more objectively and effectively analyze visitor data."

The surveys would have been analyzed by the University of South Carolina Beaufort.

Stenhammer said Wednesday the surveys would produce data that could be used to compare requests from grant applicants, helping the town make fact-based decisions on the best use of funds.

Mayor Drew Laughlin said he is skeptical about the utility of the surveys, but supports pursuing metrics for a less subjective assessment of bed-tax applicants' bang for the buck.

"I'm not sure you can quantify that with the kind of precision some people would like," he said Wednesday. "No matter the formulas or data, you will always have people arguing who should get what."


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Get more detailed information about Hilton Head Island accommodations tax grants to area organizations.


Among the largest requests for Hilton Head Island's accommodations tax were:

  • $378,000 from the Arts Center of Coastal Carolina to support its operations, plus a separate request for $86,000 to replace its heating and cooling system.
  • $375,000 from the Hilton Head Island-Bluffton Chamber of Commerce to promote island tourism. That's in addition to the more than $1 million the chamber receives each year by law as the town's designated marketing organization.
  • $185,000 from the Coastal Discovery Museum for cultural and eco-tourism programs.

Follow reporter Tom Barton at twitter.com/IPBG_Tom.

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