Idaho Travel Council believes 2 percent tourism tax provides good return for the state

Idaho Travel Council believes 2 percent tourism tax provides good return for the state

by
Mitch Coffman
August 16, 2012
Mitch Coffman
August 16, 2012

Earlier this month, the Division of Tourism, which is part of the Idaho Department of Commerce, awarded a little over $3.2 million to 28 applicants. Those receiving monies range from the Coeur d’Alene Chamber of Commerce to the Idaho Ski Area Association to the Southwest Travel Association. There are seven tourism regions in Idaho.

How can the tourism division tell if a program is working? Is there data? Do the different grantee programs influence travelers?

Karen Ballard, administrator for the tourism division, says, yes. “What we see is more interest happening … If we can get the travel guide into their hands we have had conversion studies that have said, yes it does influence the decision and they do come.”

The Idaho Regional Travel and Convention Grant Program was created in 1981 at the advice from hoteliers wanting to better market tourism in Idaho.

According to the division’s website, the grants are funded through a 2 percent tax on the sale of hotels, motels and private campground accommodations. The website also shows that 10 percent of the money collected is for administration for the tax, 45 percent to fund travel promotion statewide and the remaining 45 percent is returned to the region from which it came as travel and convention promotion grants.

Once the grantee is given the money, it must cash-match at least 12.5 percent of the amount awarded.
This year, Ballard said the state is hoping to bring in around $7 million from the 2 percent tax. She said other states average around $14 million with their tourism tax collections. Idahoans count for around one-third of the tourism in the state, which is considered traveling more than 50 miles, said Ballard.

Every year the tourism division awards millions of dollars in grant money to promote tourism.

According to Ballard, the process to pick those applicants receiving the money is competitive. Those wanting a grant must submit a proposal to the Idaho Travel Council, made up of eight industry members from the private sector. The submission is more or a less a business plan. The plan must also demonstrate some return. The council meets five times a year to review applications and monitor grants.

“They (applicants for the grants) have to justify why they feel a program is something that should be funded. So, they (the council members) put questions to the grantee. ‘How do you know this is working?’ And often times, they (grantees) will get to a point where they know it’s working, they’re able to migrate it out of the grant program and they’re able to run it through their own funding mechanisms. We like to be the incubator for them to try and move an idea forward.”

According to a state by state study by the U.S. Travel Association, in 2010 (the most current numbers) Idaho brought in a little over $3.3 billion in tourism revenue. That same study showed that Idaho has 23,500 tourism-related jobs, for around $490 million generated in payroll.

The tourism industry is often criticized because of the low wages it provides, but Ballard says there is a reason for that. “We are notorious (tourism industry) for low payroll, but that’s often because it’s part-time work. It’s a great part-time job. You know, jobs for teenagers, we’re probably the best industry for starting someone out in their career if you think about it because we (industry) do claim restaurants and such.”

Ballard said that she would love to have more money to do some national advertising, especially with video, but the funds just aren’t there. She recognizes the state has other needs besides tourism.

“We’ve got other needs besides tourism. We are able to provide information to people. If you think about it, Washington state doesn’t even have travel guides anymore because they’ve cut it down. People can’t even get maps,” notes Ballard.

Ballard said that while increasing the 2 percent tax would give her more money to promote the tourism product in Idaho, she doesn’t see any push to raise it in the near future. “I would be shocked, and I would not expect that to happen. I would think there would more likely be a push to match the 2 percent with general funds. When you look at our numbers just what we’ve provided off of taxes in our industry, there’s a big amount there. The question is if spending more money with us a good place to put it. The only reason you would give us more money is to create more tax revenue.”

The Idaho Travel Council members are appointed by the governor for a term of three years. After the three-year appointment, members can renew for an additional three years, making the most time a member can serve on the council six years.

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