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Events & the Proposed Bed Tax: A Good Thing?

June 5, 2011 - Ernest Hohmeyer
There has been a proposal to create an occupancy tax in Franklin County.

Otherwise known as a “bed tax”, this is a charge of staying in any motel/hotel or B&B. The purpose of the funds, according to a recent article in the ADE would be “used for marketing and event planning”. According to the article, Franklin and Hamilton County are the only two counties in the Adirondack Park that do not have such a tax.

Heads In Beds

Taxes like these are a great way to raise funds to put more “heads in beds” – provided that they are used in the appropriate manner. These types of fees are quite common and seem to be growing. Recently when we were on vacation, besides being charged for an occupancy tax we were also charged for “resort fee 1” and “resort fee 2” as well as a “convenience fee”. We are still researching exactly what those fees were for. Some of these fees were not restricted to hotel stays but included sporting events as well as car rentals.

A bed tax can be a good thing if it is used to support where the tax is coming from – that is -people staying in area lodgings. Marketing is a broad word and is often confused with advertising. An effective bed tax strategy needs to consider how to attract more visitors to our facilities.

Not all events are created equal.

It is not the intention of all events to attract visitors.

From a “success” perspective you can categorize events into 3 different types based on their intended audience:

1. Events aimed at the Local Community. These events target the “locals” and can range from First Night to community functions at the libraries.

2. Regional Events. Besides community participation these events seek “day trippers”, normally about an hour away that will travel to the event, stay for the day and then return home. Examples may include music, culinary or literary events.

3. Visitor Driven Events. These events aim to be destination events that besides targeting locals and day trippers also require visitors to be successful. Ironman in Lake Placid may be one such example.

Why are they Visiting?

All of these events should be supported but we need to keep in mind several studies done over the years by the Essex County Visitors Bureau and the Adirondack Regional Tourism Council among others which suggested that the primary reason that visitors come to stay in the Adirondacks is based on our mountains, lakes and recreational opportunities.

This is not to suggest that events could not be part of an effort to bring people into the county but they may need to be packaged with these key draws.

For example, I am a volunteer helping to organize the First Annual Adirondack Arts and Heritage Festival that will take place June 26-July4th. Many local businesses are involved with this effort and in a great cooperative spirit we have developed over 50 events. We are very excited about the eventual potential of this event as it is bringing together the broad spectrum of “A”rts including performing, culinary, fine, literary, heritage, outdoor and health and wellness and others.

It is a great way for valuable individual events to be combined to create a destination activity. In working with Essex and Franklin County Tourism offices as well as the Adirondack Regional Tourism Council, (all which have provided invaluable marketing assistance as well as in the case of Franklin County matching funds) we have come to learn that the Festival must be part of an overall packaging theme.

These packages need to include opportunities to hike, bike and recreate in the Adirondacks in order to be effective. Further, the Festival needs to be part of an Arts and Heritage package put on by lodging facilities in order to offer a complete and diverse experience that travelers are looking for today.

In other words they want to know that while they are here they can hike, bike and paddle but that they can also enjoy arts, culture and great shopping opportunities so that no matter the weather or the diversity of the family members, there is something for everyone.

Currently county funds to support visitor attraction come from many sources. These include dues from members of chambers of commerce, local downtown merchants association and individual support. The primary vehicle is the investments made by the counties themselves made through taxpayer’s contributions or occupancy taxes.

These monies are usually leveraged with other counties. For example the 8 county Adirondack Regional Tourism Council which are then leveraged with I Love NY matching funds. To participate it is my understanding each county must have a designated TPA (tourism promotion agency).

Advertising vs Marketing?

Should a proposed bed tax in Franklin County be separate from the current county effort as well as the resources from other counties that make up the Adirondack region?

Is there a benefit to leverage proposed bed tax dollars with I Love NY funds?

In business financing 101, when you talk to a banker about borrowing money one of the first questions they often ask is “What will the money be used for?” There is a great concern that the right type of borrowing is put in place appropriate to the use of the funds. Often called “sources and uses” in banker speak - the idea here is that you don’t want to borrow money for perishable inventory like food and be paying for it over a long period of time when the business no longer gets benefit from it.

Should a bed tax continue to be developed in Franklin County there is a great deal of history and knowledge to be learned by our neighboring counties that we could benefit from. To maximize its effectiveness should we consider:

* leveraging bed tax dollars with county, regional and state resources?

* to meet with tourism and county officials from these areas that have a bed tax in terms of “lessons learned” related to local control and effective use of funds?

* should we gain a full understanding of efforts to market Franklin County and the region as it currently exists?

* should there be technical training or educational workshops provided perhaps by a neutral source such as the State’s I Love NY representatives on “new marketing” and what is the best way to attract visitors?

Certainly as has been discussed here in the last several weeks, the online world turned the way that you reach customers upside down. Sometimes a good story about the event is better than an ad for the event itself and that we may need to think about “content rich” sites and not just advertising.

For example, besides advertising, should the bed tax be used for some of these “new marketing” strategies such as a “new media information manager”, help with customer profiling for events, search engine optimization (SEO) assistance, and help with local efforts to create interactive websites that tell a story?

In a follow-up article “Why You Need a New-media ‘Ringmaster” talks about “traditional brand management models are not up to the task” as they are being done by diverse groups within the organization. This “fragmented approach can’t begin to present a coherent voice for the brand or support the relationship building that customers have come to expect in a hyper connected world.”

The article goes on to conclude that “Brand marketers today need an updated model that features a new type of executive” someone who is “skilled at coordinating a variety of customer-facing activities –someone who functions like a circus ringmaster, expertly choreographing talent in real time to engage the audience in a seamless, interactive experience.

We need to insure that the occupancy tax puts in the best possible manner “heads in beds” and that it is not a fragmented approach. This initiative needs to understand that marketing is more than advertising and that there are new opportunities.

 
 

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