1. Lodging Charges Present & Future
November 2018 Election:
Lodging Charges Present & Future
Destinations International Advocacy Summit
November 9, 2018

2. Lodging Charge Presentation
TID Update
Fiscal Environment – Cities
Advocacy – Why Study Lodging Charges?
2018 US Travel Civitas Tax Study
Tax Measures on the Ballot Three Days Ago
Next Actions

3. National TID Statistics
Assessment Structure
172 TIDS
Most Recent: Tulsa, OK
(November 7, 2018)
58%
Gross Revenue %
42%
Fixed $ Amount
AMOUNT RAISED ANNUALLY
Low
$10,000
Median
$794,500
High
$39,000,000
Total
$387,837,806
15 STATES
(West, Midwest, South, & Northeast)

4. Fiscal Environment - Cities
In September 2018, the National League of Cities issued a report on city fiscal conditions.
Their findings indicate a deceleration of fiscal growth in cities across the country.

5. Changes in General Tax Receipts
Major revenue sources include;
Property Tax
Income Tax
Sales Tax
These major revenue sources hit their peak in
All major tax sources grew more slowly in FY than FY 2016.
This trend is expected to continue in FY 2018.
SOURCE: National League of Cities

6. Changes in General Fund Revenue and Expenditure
Steady decline in revenue since 2016.
Expenditures are expected to continue outpacing revenues in the coming years.
SOURCE: National League of Cities

8. Pension Crisis Across the USA
SOURCE: Pew Charitable Trust

9. Fiscal Environment - Key Takeaways
Decline in general tax receipts will create tighter city budgets. These tighter budgets will be under even more stress as pension costs rise.
Cities will be more inclined to divert discretionary revenue away from tourism promotion efforts.
Cities will be more inclined to raise revenue through bed taxes and sales taxes.

10. Why Study Lodging Tax Rates?
DMO Awareness of Cost Competitiveness
Much of DMO Revenue Linked to Lodging Tax Revenues
Industry May Oppose Tax Measures That Do Not Support the Industry
Industry May Support Tax Measures That Support the Industry
Industry May Seek Other Levies to Support Promotion
(Approval of Lodging Taxes Vary – City, County, State, Electorate)

11. Civitas Report on Lodging Charges
Average tax rate: 14.6%
Average tax rate among large cities: 15.4%
49.9% of lodging tax revenue dedicated to general funds.
We studied taxes and lodging charges extensively and now started to track ballot measures that affected these charges.

13. Civitas Tracked 78 Lodging Charge Ballot Measures in the 2018 General Election
57 Hotel Taxes
7 were newly proposed hotel taxes.
39 were proposed increases to existing hotel taxes.
11 were proposed renewals of hotel taxes.
21 Sales Taxes
1 was a newly proposed sales tax.
9 were proposed increases to existing hotel taxes.
11 were proposed renewals of sales taxes.

14. Tax Rate Increases Ranged from .1% to 12%
Tax Type
Lowest
Highest
Average
Rate
Average %
Increase
New
Hotel Tax 2%
(Laredo, TX)
12%
(Colma, CA)
6.17%
N/A
Sales Tax 1%
(Collier County, CO)
1.00%
Increasing Hotel Tax
(multiple) 6%
(Calaveras County, CA)
2.09%
24.66%
Increasing
0.1%
(Scottsdale, AZ)
(Hillsborough County, FL)
0.50%
36.23%

15. Measures by Jurisdiction and by Expenditure
^ Total ballot measure count exceeds 78 due to measures allocated to multiple functions.

16. Results of 2018 General Election
Ballot Measure Success Rate
by Tax Type
64 of the 78 ballot measures passed for a success rate of 82%.

17. Results of 2018 General Election
Allocation
Type
Number of
Ballot Measures
Ballot Measure
Success Rate
General Fund 45
86.7%
Destination Promotion & Convention Center 17
82.3%
Affordable Housing 7
85.7%
Public Safety 4
50.0%
Transportation 3
66.7%
Infrastructure 2
Schools
100.0%
Ballot measures concerning lodging charges had high success rates, whether proceeds were for the General Fund, Affordable Housing, or Tourism.
Among the 64 successful ballot measures, the average “Yes” vote was 68%.

18. What do these results mean for the Travel Industry?
Ballot measures involving lodging charges have high passage rates, even when revenue is not going toward the travel industry.
Local government budgets will get tighter in the future, increasing the demand for bed tax increases.
The travel industry must continue to increase its presence in tax-related ballot measures and advocate for measures that improve the industry.

19. DMO Future Actions / Take Aways
Understand Your Tax Position
Review the Existing Lodging Tax Study
Use DI Org & Fin Website
Keep Watch for DI / U.S. Travel Update to Lodging Tax Study
Continue to Professionalize Your Advocacy Efforts
Continue to Seek Funding Mechanisms that Cannot be Diverted

20. Thank You!
Contact Us
John Lambeth Founder & CEO (800)