The TBID Revolution: New Dollars for Tourism Marketing
Here's a great article on TBIDs from Forbes.
Written By: Andrew Levine for Forbes
Whoever created the hotel bed tax was a genius. Every year the bed tax (also known as the "transient occupancy tax") adds billions to the coffers of local governments and conveniently comes from visitors rather than local residents.
A significant portion of that money is usually redirected to the support of tourism marketing and tourism-related capital projects. But at times Mayors and City Council Members have found other general fund uses for these revenues. And that can be a significant frustration to a local tourism community.
Enter a new funding innovation that supplements the hotel bed tax called the “TBID” or “Tourism Business Improvement District.” In the United States, 150+ TBIDs are now generating over $250+ million per year – funding that is controlled by the tourism-related businesses who agree to an assessment on their guests.
A “special benefit assessment district” is not a new concept. It dates back to English common law and is a well-established financing mechanism that exists in all of the 50 U.S. States. They are usually created around a specific geographic area and are designed to benefit the payers of the assessment.
In the case of a TBID (sometimes called a “TID” or “Tourism Improvement District”) a group of tourism-related businesses (almost always the hotel community) agree to an assessment on their guests. This can be a percentage of room revenue (usually in the 1%-3% range) or a fee per room night ($1 to $2.50 per room night range). Funds are used to raise awareness of the destination, sponsor special events that bring in overnight visitors or build sales programs to attract group business. A nonprofit corporation, usually a destination marketing organization or convention and visitor bureau, manages the program of work.