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TOUTING TOURISM: With bed tax back on the ballot, Travel Board defends track record
JACKSON, WYO – Do we need more tourists? It depends on who you ask and, perhaps more importantly, when.
Waiting to make a left-hand turn onto Broadway in mid-July, watching an endless parade of Montana-plated rentals roll by — well, a red-blooded local couldn’t be faulted for thinking we should tear down a few billboards. Shift ahead to late-March. Skiing is winding down, bare spots begin to appear on most south-facing buttes and south-trending businesses’ bottom lines. Suddenly, partially-subsidized events like Hill Climb and Mountain Fest don’t seem like such a bad idea after all.
Sometimes it feels right to say we need to diversify our economy. But the reality is Jackson Hole goes as t-shirt sales go. Like it or not, the entire well-being of the valley’s population is inextricably tied to our ability to attract travelers, coax them into staying longer, and wring their wallets dry while they are here.
A healthy emerging economy is developing at an encouraging rate, bolstering our traditional economy, but every county resident still soars and suffers with the sales tax chart.
“Our economy is more complex than the data would suggest,” Jonathan Schechter remarked in his keynote speech at the recent 22 in 21 conference he founded. Schechter’s mastery of pie charts crammed with juicy statistics is beyond reproach but even the doctor of data will admit, we make hay while the sun shines. “We’re seasonal. Everybody knows that. We run June through September.”
Taxation with representation
Enter the bed tax. Supporters of the two percent lodging levy like to boast it’s “the tax you don’t pay,” implying it’s visitors who will be recipients of a checkout time shakedown, and often unknowingly, instead of those of us who can find the Elks Lodge without Google Maps’ assistance.
So why did voters shoot down the tax in 1994, 1996, and again in 1998? Part of the reason was the feeling that more motor homes were just going to thump more potholes into our city streets. Additional tourists weren’t worth the platinum cards they brought with them.
But state statute changed in 1998. The mandate that 90 percent of funds generated by the lodging tax be used to lure even more travelers to Wyoming and Jackson Hole was tapered to a 60/40, promotion/mitigation split. Coupled with a sag in the worldwide economy, voters were hot to pinch two cents on the lodger’s dollar in 2010. The tax easily passed.
Spending the millions generated annually ($4.5 million last year) has proved to be sticky at times. Not everyone agrees on how day-tripper-derived dough should be distributed, but much of the blowback officials hear is primarily due to misinformation.
Sara Flitner has been hired by the Chamber of Commerce to assess public perception of the tax so far and gauge the general temperature on where the money it generates has been allocated. In her extensive surveying she has found little discontent, overall.
“It’s very different than 20 years ago when we were concerned about growth and impact in connection with the promotion of tourism,” Flitner said. “I’m finding now people are generally appreciative of the tax you don’t pay.”
The only complaints Flitner has heard revolve around a perceived lack of accountability of a Travel and Tourism Board (TTB) charged with doling out big money. “People generally want to be assured that the money is not going into a big nebulous pot,” she said “Statute is pretty clear about how the 60 percent gets distributed,” said Jeff Golightly, who began as the Chamber’s executive director after 17 years with Togwotee Lodge with a brief stint as a TTB member in between. “The perception is that there is this enormous amount of money generated by the tax and spent by the board. Only $1.3 million of the $2.5 million [allocated to the TTB after the 60-40 split] goes to marketing. One million of that goes to promoting winter and about three hundred thousand goes to non-winter marketing.”
TTB members defend dollars put toward winter promotion by saying ski season pales in comparison to a summer in Jackson, which draws well in excess of three-million visitors and needs no further advertising. Some have been skeptical of money spent on boosting skier numbers at Jackson Hole Mountain, for instance. One woman in the audience at 22 in 21 called it “corporate welfare.”
“Promoting winter and specific businesses did not come up a lot in the interviews,” Flitner responded. “And without the Mountain Resort we would be like any other beautiful, amazing town near a national park, like Cody. It would be awfully quiet in the winter time.”
Town of Jackson Administrator Bob McLaurin agreed. “I think it’s a smart investment in our economy. Winter expenditures per guest are far greater than those in the summer. They have a greater dollar impact than the summer visitor,” he said.
Indeed, TTB coordinator Kate Sollitt said winter visitors to Jackson Hole stay longer (a minimum of three days) and spend more ($350 per day, average) than summer tourists.
“We are competing in a market against Aspen, Vail, and the like,” McLaurin continued. “And they are all trying to eat our lunch. Does the Mountain Resort benefit? Absolutely, but when the Jackson Hole Mountain Resort was a ‘mom and pop’ this place boarded up in the winter.”
The “rising tide floats all boats” theory is working, according to Flitner. “There seems to be a great partnership that benefits the entire economy. Whether it’s skiing, the parks, a sleigh ride, a dog sled tour, or dinner — many businesses and industries enjoy the rewards of promoting winter in Jackson.”
And winter marketing, along with TTB’s funding of local and regional events during the Hole’s off-season spring and fall lull, has helped foster a more balanced and predictable economy. Golightly said growth in the shoulder seasons is outpacing growth in the peak seasons of summer and winter, and “leveling out the economy.”
Mitigating the impact
Sollitt, McLaurin, Flitner and others all say they don’t think the public is sufficiently informed when it comes to the 40 percent of lodging tax revenue dished out to town and county for visitor impact mitigation and services.
“How do we measure success with the lodging tax?” Flitner asked, rhetorically. “By a dollar point. Every dollar paid in is one you don’t have to pay to START, Pathways, etcetera, including $400,000 to the Chamber of Commerce for visitor services.”
Teton County Administrator Steve Foster said it is a continuing challenge trying to figure out how to provide the level of services the community has come to enjoy even though county population has climbed to 20,000 with another 60,000 or so of visitors added on any given day. Town and county officials spend the bulk of bed tax funds on START, Pathways and Parks and Rec.
Some 70 to 90 bus trips are added to START’s Teton Village daily run. Town signage, including the new bike lane routing, is also financed in part through money generated by the lodging tax.
“The tax also allows us to provide operations money for downtown maintenance,” Foster said. “I think, like, we have 50 man-hours a day in trash pickup alone in town during peak season; about 90 percent of that is generated by visitors. Call rates at the hospital goes up when tourists are here. Fire/EMS needs additional funding.”
McLaurin, too, feels the town would be hurting without its share of the mitigating monies derived from the lodging tax.
“It cost about $15.3 million to operate the Town of Jackson in 2013. The net impact of the lodging tax in 2014 will be about $700,000 to the town, or about 5 percent of our operating budget,” McLaurin said. “What happens if this goes away? I can’t tell you exactly, but you are going to feel it. The decisions on what and where to cut lies with five council members I work for. We would probably cut START at the fringes, reduce Parks and Rec. We are going to fund public safety first, though, because when you call 911 you expect someone to show up, and you expect them to show up pretty quickly.”
Pontier Sackrey chairs the TTB. She hopes residents understand the impact of the money that’s funneled to the town and county to mitigate the impact of visitors as voters head for the polls to decide whether to keep the lodging tax this November.
“I hope voters realize a few things,” Sackrey said at a recent TTB retreat. “We don’t pay it, it helps us, and we don’t want to lose it. I think if people saw this they wouldn’t be against it. As a board member I am not allowed to lobby for this tax, but I hope people understand it is a two-pronged thing. There needs to be a lot of education.”
Commissioner Ben Ellis and Mayor Mark Barron echoed the importance of getting the word out by election Tuesday.
“I think [the lodging tax] has been incredibly positive. I haven’t heard any substantive criticisms,” Ellis said.
“I think we are in a great place going into this next cycle. I agree the public should know about the 40 percent [revenues generated targeted to town and county for mitigation].”
Barron added, “I don’t hear any negativism about the board or any of its promotion. And we should continue to strive to get the word out about the 40 percent and how we spend it.”
Smoothing a turbulent launch
But criticism has been levied at the board, especially for decisions made during its infancy in 2011. Before the board spent a dime, their decision to go with Denver-based ad agency Cactus miffed some who thought a local company should have been shown the love.
While the success of particular campaigns have been hard to measure, naysayers claim targeting regional “snow chaser” skiers for the benefit of mainly JHMR seems exclusionary and the effort to subsidize the episode of “Modern Family,” which shot at Lost Creek Ranch and aired September 21, 2011, was also called into question.
“Procedurally, I think things are running more smoothly now. The first year, everyone was trying to figure things out. It was bound to have more hiccups,” said board member Aaron Pruzan at the TTB retreat. “With the exception of a few loud individuals who have wanted to complain about everything but don’t take the time to come to the meetings or bother to educate themselves, I think things have been fairly positive. It’s easy to send an angry email but it would be better if we could grab a cup of coffee with [these people] and have a conversation. Often, their anger stems from a misconception over how funds are allowed to be spent.
“Early on, in the first winter, there were some grumblings about the landing page being housed in the Jackson Hole dot com domain. Some of the critics have been silenced by the fact that we have had success. I haven’t heard as many of those early complaints.”
Sollitt also admitted the board worked through some early growing pains but lately they’ve hit their stride after laying groundwork and cultivating a better working relationship with Cactus. Strategies like narrowing the markets targeted by ad campaigns to those serviced by direct flights to and from Jackson have been highly successful at putting more heads in beds.
“We have 11 airfare markets divided into tiers,” Sollitt said. “Tier one is New York City, LA, Seattle, San Fran and Boston. Tier two is Denver, Salt Lake, Minneapolis, Atlanta, Chicago and Dallas. For the shoulder seasons we mostly go with those drive markets without airline service.”
Sollitt said some $300,000 in lodging tax revenue is used to essentially discount airfare by offering up to $200 in savings on plane tickets if travelers also book lodging.
Onward and upward
The TTB has been rocking a “There’s more to winter” campaign for the past two seasons, trying to flesh out the valley’s amenities — value-added attractions that set Jackson Hole apart from other ski resorts. Skijoring, sleigh rides, cutter races are some of the other winter activities the TTB has been trying to highlight.
“The challenge of promoting Jackson Hole is we have a lot of competition, so we try to concentrate on what sets us apart,” Sollitt said. “Things like our wildlife, access to two national parks and certain local events display community character or Western heritage are amenities unique to our area we can feature that places like Park City or Aspen don’t have. With something like skijoring, people may not come here for it but they may come back or tell someone else about us because of it.”
Pruzan has already seen some positive results. He points to JHMR’s number one ranking by Ski Magazine and the encouraging feedback received after lodging tax revenue helped plow Yellowstone open last spring when the feds went into budget crisis mode as success stories that can be attributed to TTB efforts.
“The benchmarks we set for ourselves: sales tax going up, occupancy up, enplanements up — all those factors point to the fact that we have clearly had some good successes,” Pruzan said. “On the event side, we still have some great challengers but we’ve done good with the funding and been able to stay closely in touch with things that are valued by the community.”
Event funding has also helped maintain longtime Jackson Hole attractions teetering on the brink of financial hardship like the cutter races and Hill Climb. Newer ventures like SHIFT Festival and the first-ever Jackson Hole Culinary Conference show great potential for blossoming into major destination events.
The future of Jackson Hole tourism and its promotion is threatened only by too much of a good thing, according to some. Golightly said he is particularly concerned with the ability of the valley’s housing market to keep pace with growth. “Anytime we grow our economy here, which I’m strongly in favor of, we put pressure on workforce housing,” he said. “We need to be very strategic. Workforce housing is the single biggest concern in this county.”
A good portion of last week’s annual TTB retreat focused on defining sustainability and formulating concrete ideas on how that can be envisioned.
“We’ve made huge strides in the past few years. But I want to be cautionary moving ahead,” Pruzan said. “We want to make sure we continue to provide a high-quality experience for our visitors instead of just saying we need to bring more and more people here all the time. Also, our environment is our asset here. We need to be sensitive about harming that.”