There is a move afoot by Discover Klamath, the county’s tourism promotion agency, to institute an additional motel fee on visitors that will boost funds to better market tourism for the county and for the benefit of the hotels and motels.
It is called a Tourism Improvement Area or TIA and has been successful for the City of Portland and Siskiyou County as well as numerous other entities across the nation. Siskiyou County has seen annual revenues of $500,000 from the fee, and recently re-upped the program for another 10 years.
However, the issue has sparked a debate between the proponents and opponents — which includes the Klamath County Chamber of Commerce and several local hotel owners — as to whether the fee is really a new tax and instead, should be voted on by the general public.
Klamath County commissioners have held two public comment sessions on the issue and a decision on whether the so-called “enabling ordinance” goes forward is expected from the commission this coming week.
More marketing the key
The hearings have included proponents who benefit from tourism — hotel owners to recreational outfitters — but there has been a growing number of naysayers as well.
“This fee has proven successful in 15 states including Oregon. There are now more than 180 TIAs started in the last 29 years and in no instance has it been considered a tax,” said Discover Klamath Executive Director Jim Chadderdon. “Rather, it is a self-imposed fee on the hotel businesses for their benefit.”
For every percentage point of the fee charged on a hotel room in Klamath County, Discover Klamath would see a return of about $250,000, Chadderdon said.
“We would like the fee set at 3%, which would raise about $750,000,” he said.
Setting the fee would not be up to DK. A steering committee comprising lodging owners and operators set the specifics of the plan. A committee — under the umbrella of Discover Klamath board — would decide how the money is spent. It could be used for promotion, physical improvements, help in attracting events to the community, putting more “heads in beds” as they say.
The ordinance provides for a five-year sunset clause, but the county can dissolve the agreement at any time if it chooses.
The plan cannot take effect unless a majority of hotel operators — 51% — vote in favor of it. Their vote is weighted by the number of hotel rooms they control.
Tax vs. fee and a public vote
Rick Schuster of the Chamber executive board, spoke in opposition of the enabling ordinance.
“We support DK’s mission to grow tourism, but not the path to getting there,” Schuster said.
“We believe that an enabling ordinance the forces businesses to pay for a service that they may or may not wish to have. It goes against the mission of the chamber,” Schuster said. “The county government is being asked to collect fees, that resembles a tax in every way except the way they are spent, (and to pursue delinquent fees),” he noted.
As an alternative, Schuster suggested a slight increase in the transient room tax, via a public vote. The TRT has not been increased since 2006. It sits at about 8%.
“A slight increase in TRT, keeps the process transparent to all stakeholders,” he said. “TIAs and TIDs, have sparked litigation in other states and compete with municipalities for tax revenue.”
Drew Patel, speaking as a concerned citizen and a representative of lodging groups, complained of the lack of progress of tangible results from past room tax programs, saying that the hotels he is associated with saw little support from Discover Klamath efforts.
“This tax is targeted to one industry, but is not providing them a significant advantage,” he said.
Representatives from the Quality Inn, Cimmeron Inn and Pacific Northwest Hotels, also spoke in opposition to the fee.
Victoria Haley of Vividly Consulting noted that 12 hotel properties spoken in opposition to the plan, of the 36 locally operated hotels in the county.
New avenues to revenue
Meanwhile, supporters say that new ways of raising revenue have to be explored if Klamath County is to keep up with the competitive market for tourism dollars.
“I think that Klamath Falls has flat-lined economically since the loss of the timber industry,” said Ann Cavanaugh of SmithBates Marcomm Solutions and an economic development promoter.
“You all know that I am a strong proponent of this community and we need to think outside the box and join together...try something new. Passion alone does not help grow the community, it takes money.”
Alan Eberlein said that a voter campaign would be expensive and divisive compared to a TIA which is focused on one key industry.
Also, Ferguson Hotels, the builder of the new Marriott hotel downtown, sent a letter of support for the TIA. And, the Running Y Ranch and Resort is on record for its support.
Randy Cox, director of Klamath County Economic Development Association, noted Oregon has 109,000 jobs tied to tourism.
“The greater exposure we get in Klamath County, the greater potential we have in growing our economy. A TIA will allow us to invest RV parks, bike trails, horse trails. It’s imperative that we get tourists to visit here. Once they do, they’ll realize that Klamath is just better here.”