Destination marketing has become a key element in plans for economic development. not only in the US but across the globe Why? Because tourism is:
- The 2nd fastest growing industry in the US
- 9% of global GDP
- Spending on lodging is outpacing family GDP
- 1980 – 2014 spending on lodging increased 200% while per capita income increased only 75%
To meet the growing need to compete in the destination tourism market a movement began to find sources for funding marketing needs. The Tourism Improvement District revolution began in West Hollywood, California, in 1989. The concept spread slowly at first, but picked up momentum in the late 1990s and exploded in the mid-2000s. At the current time there are 101 districts in California, 157 across the nation, with at least a dozen more in the formation process.
In short, Tourism Improvement Districts were conceived because:
- Travel is a top 10 industry in the 48 states including DC.
- 1 out of 9 jobs in the US depends upon travel and tourism
- Money for promotion began disappearing when local and state governments were forced to focus on public infrastructure and safety
A Tourism Improvement District is:
- A stable source of funding for marketing that must be spent on services and improvements that provide a specific benefit to those who pay
- Non-tax funds raised through an assessment that cannot be diverted to general government programs
- Based on % of room rate or $ amount per occupied room per night
- Designed to increase occupancy and room stays of lodging providers
- Governed by those who pay
- Used to provide a wide range of services that directly benefit those who pay
The positive effects of implementing a Tourism Investment District in a local region have been documented by over 10 years of research. And, these impacts are not just limited to tourism-related industries, but are spread across industries. What does the research show?
- Room stays increase. The region experiences significantly increased spending on lodging, food & beverages.
- Room prices are able to be increased in proportion to the increased demand
- The increased direct spending on lodging, food & beverages creates indirect effects that impact the supply chain, ie. increased demand for local support services
- Additional economic benefits occur when a portion of the additional income earned is spent in the economy again.