WHAT IS A TOURISM IMPROVEMENT DISTRICT?
A Tourism Improvement District (TID) is a stable source of funding for sales and marketing efforts designed to increase occupancy and room rates for tourism businesses. Funds raised through a small assessment on lodging stays (placed on the room folio) are used to provide services desired by and directly benefiting the businesses in the district.
PROCESS OF COLLECTION:
- A percentage of the room night charge is placed on the folio of the guest (Hotel property)
- Those funds are collected by the local municipality (Peoria)
- Funds are managed by the DMO (Discover Peoria)
DO TIDS WORK?
Yes. Statistics prove that TIDs, on average, lift hotel room demand more than 2% and room revenue more than 4%
Additionally, this does not take into account the economic impact in the community that the hotel room demand will bring.
Tulsa, OK :: implemented a 3% assessment in 2019. Since their implementation, they generated $3.3M alone in 2021. In 2021, they had a goal to book 110,000 room nights and doubled that goal by booking than 231,000 room nights. Much of that success came from being able to book more large-scale events with more than 44,000 attendees.
Wichita, KS :: The first TID implemented in Kansas (2015) has nearly doubled its budget from $2.M to $5.3M. Some examples from their additional resources include increased visitor duration, up 52% in market. In the time of COVID conventions, funding from the TID supported the enhancement of hybrid meetings, as well as virtual tour options for meetings planners at multiple properties. New software was also implemented to strategize new drive and fly markets.
ARE TIDS JUST ANOTHER TAX?
No. There are many differences between a TID funding mechanism and bed tax, for example:
A bed tax has no defined term (can last however long government chooses to have it), government collects and manages the funds, no requirement of benefitting the businesses contributing, bed tax frequently attacked at the state and local levels.
A TID is a business-based assessment (meaning the businesses choose how the TID is funded), it’s approved by way of majority petition process, DMO appointed management with a committee to manage the district, 5-year formation with a 10-year renewal, procedure available to dissolve the District.
WHAT WOULD FUNDING LOOK LIKE FOR OUR TID?
Based off historical data provided by our STR reports, the Peoria District would generate just over $700K per year, based off of a 1.5% assessment on guest room revenue.
HOW COULD THIS BE USED?
Simply put, the committee would have broad use of options to incorporate more business for our hotels, such as, using for bid fees, site visit experiences, travel expenditures for CVB and hotel tours, fam tours, marketing campaigns, event sponsorship and support, just to name a few.
HOW DO WE GET A TID ESTABLISHED?
By majority petition process of our Peoria hotel community. Major stakeholders of each hotel in the district to be assessed would have to sign a petition to adopt the district plans by a majority vote of 50%. We will strive for a much higher majority.
DOES THE CITY CONTROL THE FUNDING?
No. The City's involvement consists of two parts:
1) Passing the ordinance, essentially allowing hotel owners to apply the assessment and,
2) Agreeing to collect the assessment from the properties before transferring the funds over the the CVB for administration.
