FUELING TOURISM PROMOTION
(EDITOR’S NOTE: Today and tomorrow, the Sun-Gazette takes a closer look at the room tax in Lycoming County and how it is used to promote tourism here.)
Since its inception in 2000, Lycoming County’s hotel tax has generated almost $6 million for tourism promotion.
In return, visitor spending in the county alone topped $384 million in 2011, the latest year that statistics were available from the Pennsylvania Tourism Office. Additionally, more than $20 million in state and local taxes have been generated from visitor spending, according to the office.
The state Legislature enabled counties with populations similar to Lycoming County the ability to collect the tax at a 2-percent rate, which is added to hotel lodging receipts. That was bumped to 3 percent in November 2004 by county commissioners, who again were permitted by state law to do so.
Jason Fink, executive director of the Lycoming County Visitors Bureau, said the money is crucial for promoting the area. Without it, he said, there wouldn’t be enough funding for tourism promotion because state tourism funding has been totally cut.
“We would be hard pressed to respond to any opportunity,” he said. “We would definitely not be operating the visitors information center on William Street. We wouldn’t be marketing. We really would not have a significant presence out there.”
The visitors bureau is the designated agency that oversees how the tax is spent. Money is used to support tourism marketing, promotion and a local grants program to county organizations and events that draw visitors from outside the area.
Although a number of new hotels have sprung up in the past few years, numbers indicate that there has been a “leveling off” of county hotel tax revenues, according to Fink.
The tax raised about $852,000 last year, according to information from the Lycoming County Treasurer’s Office, down from $971,583 in 2011.
That drop in room tax income doesn’t necessarily hurt the visitors bureau’s because it has a small reserve fund with less than $100,000 it can tap, Fink said.
He said a little more than half of the money collected from the tax is spent on marketing and promotion in other markets to attract visitors. Twelve to 15 percent is used for the grants program. About 21 percent is used for salaries and operational expenses, which include travel and membership costs.
Ten percent goes to Lycoming County for administration costs, which is collected before the visitors bureau receives its share, according to Fink. The county’s treasurer’s office is responsible for the collection and enforcement of hotel tax revenues, he said.
State Rep. Rick Mirabito, D-Williamsport, has spent a good part of this year publicly questioning how the visitors bureau uses the tax and its relationship with the Williamsport/Lycoming Chamber of Commerce.
He said that because the money generated from the room tax is paid by the public at large, the visitors bureau and its parent organization – the Williamsport/Lycoming Chamber of Commerce – should be more transparent how it uses and spends the money.
Mirabito said he wants to make sure “there is public involvement and free flow of information” and “local nonpartisan, nonpolitical control of locally raised money.”
The visitors bureau is an affiliate of the chamber. While only a few visitors bureaus or tourist promotion agencies team up with economic development agencies such as a chamber of commerce, Fink said the arrangement provides several benefits.
“We see the value of operational efficiencies,” he said, noting the advantage of having one finance department and one receptionist for multiple offices.
He said the chamber has had a part in promoting tourism since the 1920s and its relationship with the visitors bureau eliminates redundancies.
On the other hand, independent tourism agencies that are not affiliated with a chamber of commerce have higher operational costs, according to Fink.
The rise in hotel tax income may be traced to the entrance of the Marcellus Shale natural gas drilling industry in the region. With hotel rooms to accommodate an increasing number of gas workers, the county’s room tax rose about 73 percent from 2007 to 2012, according to information provided by the county.
There presently are 1,482 lodging rooms in Lycoming County compared to 1,091 in 2007, according to the visitors bureau.
Fink said that the gas industry no doubt has boosted the visitors bureau’s coffers through the hotel tax, but with a growing number of available hotel rooms and a leveling off of gas-related hotel room bookings, his agency needs to look beyond the Marcellus Shale.
He said the visitors bureau works to bring in other events to fill rooms beyond the business travel market.
Fink noted that the annual Little League Baseball World Series in August brings in about $150,000 in room tax revenue. He said the 10-day Series helps that month become the largest money-generating month for hotel taxes in Lycoming County.
“It is not the sole generator for room tax in the county,” he said.