Fort Collins City Council to consider proposal for new tourism authority

FORT COLLINS — The Fort Collins City Council will take its first look at a proposal to establish a Tourism Business Improvement District (TBID) to provide direct funding for promoting the city to visitors.

Fort Collins has long levied a 3% lodging tax and contracts with Visit Fort Collins to manage visitor and convention queries, but revenues from that tax are split 70% to Visit Fort Collins and 30% to Fort Fund, a city-managed service providing grants for cultural events.

According to a report set for discussion at the council’s Tuesday night meeting, a Fort Collins TBID would add an additional 3% fee on top of the city’s tax for all stays lasting fewer than 30 straight days, effectively doubling the governmental costs of finding a place to stay in Fort Collins.

SPONSORED CONTENT

Empowering communities

Rocky Mountain Health Plans (RMHP), part of the UnitedHealthcare family, has pledged its commitment to uplift these communities through substantial investments in organizations addressing the distinct needs of our communities.

TBIDs are quasi-governmental bodies that assess fees on hotel occupancy to fund tourism-related marketing and activities. In theory, they provide a dedicated revenue stream for promoting an area as a tourist destination and place to host conferences and events.

Visit Fort Collins CEO Cynthia Eichler said the city’s lodging tax hasn’t increased in 37 years, and that puts it at a funding disadvantage against comparable cities in Colorado.

In its report, Visit Fort Collins listed its 2018 budget at just more than $1.29 million, which was the 12th largest at the time. At the same time, cities like Aspen, Estes Park, Aurora and Colorado Springs had larger budgets.

“We’re the fourth-largest city in Colorado but we’re not the fourth-largest funded for tourism,” she said.

Visit Fort Collins’ report also suggests that dedicated funding for tourism could spur recovery from the pandemic’s economic pain. 

Over the course of 2020, Fort Collins collected $1.02 million in lodging tax revenue, a decline of nearly half from the $1.94 million collected in 2019. But a draft report from the end of 2020 estimates tourism in the city generated about $222 million in direct economic impact for the city between April 2019 and March 2020, which could serve as a funnel of outside dollars into the city’s coffers and local businesses.

At the same time, it’s possible that an increase could drive people to opt for home-sharing services such as AirBNB or to find hotels in nearby cities to avoid additional costs.

Eichler said a few local hotel managers have moved to the area after working in metropolitan areas in Minnesota and Texas that are under higher effective tax rates, and it [higher rates] didn’t deter visitors from booking rooms.

“They have heard some of those concerns, but they have not ever experienced a situation where somebody does not choose to come because of your tax rate,” she said.

A full and final plan for the city’s tourism strategy is due in May.

© 2021 BizWest Media LLC