Tourism Council explores a brand new funding mannequin

The New Shoreham Tourism Council is funded by a portion of Block Island’s hotel taxes, but the exact percentage can vary depending on the whims of those who draw up the state budgets each year. Uncertainty makes it difficult to plan a budget at the local level, and Tourism Director Jessica Willi has looked for alternative sources of funding that are more reliable than a sometimes capricious state – especially with changes like the appointment of a new governor.

While newly sworn governor of Rhode Island, Dan McKee, has made no statements on the matter, Councilor John Cullen said best that there has been “constant fear” in all his years of service on the Tourism Council.

Willi arranged a presentation from Tiffany Gallagher for the final council meeting on Tuesday, March 23rd. Gallagher is the Eastern United States branch manager for Civitas Advisors, a Sacramento, CA, legal and advisory firm. Gallagher is based in Syracuse, NY, where she has experience in hotel management and currently serves on the board of the New York State Hospitality and Tourism Association.

Civitas specializes in helping to develop “tourism (or business) improvement areas”. This concept involves pooling funds between companies to invest in projects such as cooperative marketing or other investments that can benefit members as a whole, such as beautifying city centers, signage or infrastructure. Funding usually comes from some kind of usage fee, such as an additional percentage added to the local hotel tax. But it depends on the area and what is being funded. Willi gave an example of an area with many ski areas where an additional fee may be charged for purchased lift tickets. Gallagher said they worked for wineries and even the cannabis industry.

Rhode Island and a hotel tax levy a one percent food and beverage tax. Gallagher said the addition to this type of tax was usually not well received. Hotel room users almost certainly come as tourists, while restaurant customers might as well come from the local population and might not appreciate the additional fee.

There are many models for business improvement districts. Gallagher says there are roughly 2,500 across the country, with at least one in each state. They are, and that is the key, dependent on a state that has the appropriate laws. Rhode Island, she said, has the legislation, but it only includes provisions for Providence, Pawtucket, and Newport. Modeling and enforcing the required legislation is a key component of what Civitas does for its clients. There also needs to be buy-in from the local government and the public.

There is a business improvement district in Newport called the Newport Hotel Collection. Gallagher said this collective, which includes hotels with 20 or more rooms, was making $ 350,000 a year prior to Covid. She added that there are many funding options that Block Island could take advantage of – if hotel-centric, it could include all room stays or just during the busy season or certain days of the week.

Another key is that all money raised must be used for the stated purpose. Gallagher said, “The only rule is that money must go to those who pay for it.” In addition, local governments may not be able to withdraw the services they have already provided because they believe that others will fund things for them.

The concept seemed interesting to the Tourism Council. Member Steve Filippi said he owned property in a district. “It helps a lot,” he said, and also improves properties around the district. “I’m all for it,” he said. “It is wonderful.”

“This is a first step,” said Willi. “We’ll talk more about it.”

Besides marketing, what else could be financed by a cooperative hotel group? More public toilets? More trash cans? Maybe a visitor center. Block Island Chamber of Commerce executive director Lars Trodson attended the virtual meeting with a $ 25,500 funding request to support the visitor center, which was recently spun off as a limited liability company and is located in the Chamber’s office in Old Harbor.

Tourism Council Chairman David Houseman said, “$ 25,500 seems a bit excessive.”

Trodson said, “This is the average salary for 2017, 2018 and 2019,” referring to the people who occupy it over the summer with coverage of seven days a week.

Trodson said he has “tripartite access” to the visitor center, which includes the Chamber of Commerce, the city and the Tourism Council. “This is obviously my first stop.”

There have been some setbacks, particularly in the area of ​​the Chamber’s financial participation. Member John Cullen said that the “Chamber’s share of the third pen was not financial,” but included training and the provision of facilities. He added that the city’s share of providing a free rental for the building is the city’s share. He suggested that each company contribute a third.

There were also some questions about the use of chamber fees. When Filippi Trodson asked what percentage of the companies on Block Island were members of the Chamber, he replied that it was “probably around 90 percent”.

Trodson pointed out that although the center asked for funding for summer salaries, it was open year-round and was quite busy this past weekend.

The Tourism Council asked Trodson to provide them with a budget for the visitor center. In the end, they agreed to fund half of the $ 25,500 or $ 12,750 with funds from the fiscal year beginning July 1, as they had already allocated $ 10,000 from their current annual budget to last summer’s staffing.