Hotel tax to fund tourism efforts
The hundreds of thousands of dollars that are expected to go to the Laurel Highlands Visitors Bureau each year if a hotel occupancy tax is enacted in Fayette County would be used to more extensively market the tri-county area and not specifically Fayette County, according to the agency’s executive director. LHVB Annie Urban said Wednesday that although Fayette County has been contributing significantly less to the agency than Somerset and Westmoreland counties, the marketing always has focused on the region and not a specific county.
“We never shifted attention because of the difference in funds. We look at it as all three counties is the Laurel Highlands region,” Urban said.
The Fayette County commissioners are expected to act on the proposed hotel tax today.
Urban said in May the agency prepared an eight-page insert to distribute to 600,000 people that was placed in a Sunday edition of newspapers such as the Washington Post and Baltimore Sun, which cost $100,000.
Urban said there are no plans to enlarge the staff of the Ligonier agency, which includes 10 full-time and five part-time employees. She said the agency doesn’t break down how much money is used specifically for operating costs, but said only a small portion can be used for administrative costs and the majority must be spent on marketing expenses.
The LHVB is celebrating its 50th year.
The LHVB has employees that run a site at Ohiopyle State Park that provide brochures and information about tourist sites.
Enacting the tax in Fayette County is expected to bring in $750,000 annually.
The LHVB stands to see its annual allocation from Fayette County jump from $20,000 to $375,000 if estimates on how much the tax would be collect in the county hold true and the memorandum of understanding is adopted as proposed.
Urban said the LHVB was established for marketing and promotions purposes.
Urban said the budget of the LHVB is “multifold,” consisting of grant money, member support, dues and cooperative advertising programs.
Last year, the LHVB received a state grant in the amount of $381,649, the sixth highest in the state. The bureau also received a $150,000 regional marketing grant and $20,000 from the state of Maryland, both for promotion of the Great Allegheny Passage.
The advertisements that run promote the area are general, Urban said, but individual businesses can pay to place a specific business on the ad. She said there are 511 members of the bureau.
“All three counties have attractions of significance,” Urban said.
Urban mentioned Fallingwater and Ohiopyle State Park in Fayette County, Seven Springs in Somerset County and Idlewild Park in Westmoreland County.
While advertising campaigns are under way in Columbus and Cleveland, Pittsburgh, Baltimore and Washington, D.C., Urban said they are only able to scratch the surface regarding advertising in the Washington area, and more funding would help the agency to make a larger impact with advertising.
LHVB employees also attend seminars, gold shows, outdoor recreation conventions and trade shows annually to promote the area. She said the Laurel Highlands has a diverse mix of attractions, including cultural, resorts, bed and breakfasts and historic sites.
Urban said Somerset and Westmoreland counties enacted the occupancy tax years ago, and this year Westmoreland County will contribute nearly $500,000 to the LHVB and Somerset County will give about $200,000. She said Westmoreland County contributes 60 percent of the total funds generated to the LHVB, with one-third going to a tourism grant program and 7 percent to a Westmoreland heritage tourism initiative. Somerset County contributes 30 percent to the LHVB; 40 percent to a grant program and 30 percent to promotion of the Great Allegheny Passage trail.
Fayette County Commissioners Vincent Zapotosky and Vincent A. Vicites voted last month to begin the process to initiate the tax and the commissioners are expected to vote today on how the money would be allocated and if the tax goes into effect.
Tentatively, the plan backed by Zapotosky and Vicites is to allocate 50 percent of the proceeds to the LHVB to regionally market the county ($375,000 if $750,000 is generated); use 25 percent annually for five years to Penn State Fayette, the Eberly Campus, to establish a hospitality restaurant management program like the one at the main campus ($187,500 if $750,000 is generated), and to use 25 percent for a grant program for nonprofit tourism organizations for marketing and not for capital improvements ($187,500 if $750,000 is collected.)
Urban said both Somerset and Westmoreland counties allow for profit businesses to apply for their grant programs. The plan of Zapotosky and Vicites would only allow nonprofit groups to apply.
Urban said although Somerset and Westmoreland counties allow both for-profit businesses and nonprofit organizations, some other counties across the state restrict the grantee to nonprofits.
Commissioner Angela M. Zimmerlink voted against implementing the tax but then proposed a different plan after the motion was passed to start the process.
Some of the highlights of Zimmerlink’s proposal include establishing a Fayette County Tourism Promotion Agency instead of using Laurel Highland Visitors Bureau for county promotion while still partnering with LHVB for a fee; establishing a tourism fund for nonprofit agencies and for-profit organizations; building a county visitor’s center and setting up a county tourism Web site.
“I know the LHVB relies heavily on receiving state grants, matching funds and hotel tax proceeds and without LHVB being the recognized tourism promotion agency they could not receive this funding, which would affect their existence, and I also know their role in marketing Fayette County regionally however, we as commissioners need to consider the best use of the hotel tax revenues,” Zimmerlink said.
“I’ve considered input from the public, non profits, for profit tourism businesses and the tourism alliance and offered alternatives to the ‘Vince’s plan’ and the suggestions I put forth should be seriously considered if in fact the true intent of enacting a hotel tax is to maximize tourism promotion for all of Fayette County.”
Although designated tourism promotion agencies receive money each year, state Rep. Tom Tangretti, D-Westmoreland, has introduced legislation that would repeal the 1961 Tourist Promotion Law and, according to Tangretti, would create a state funding mechanism that would provide money for local and regional tourism promotion agencies and programs on a fairer and more equitable basis.
Over the last two years, the number of tourism promotion agencies in the state has increased from 47 to 49. Two years ago, a total of $11 million was distributed among the agencies and last year $10.6 million was distributed among the agencies.
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