“Loveland lodging tax tops estimates”

Posted: 07 Nov 2010 11:34 AM PST

LOVELAND - A year ago, Lovelanders approved Issue 2B, a controversial 3 percent lodging tax that had twice been denied and narrowly made the ballot.

Now, a year later, the tax has exceeded expectations by generating nearly $412,000; a Community Marketing Commission has been created to manage the money; and 13 organizations have been approved to receive grants for the first $106,000 to help attract more visitors to Loveland and generate more sales tax at hotels, restaurants and shops.

October lodging tax came in at $53,858.17, with a year-to-date total of $411,911.80 on about 1,117 rooms. As the money is doled out this month, the CMC is investing another $90,000 to create a strategic marketing and branding process for the city so it can be more pointed in how and where it markets Loveland.

Community Marketing Commission

The seven-member CMC, appointed by Loveland's City Council, serves as the advisory committee to council concerning how the lodging tax revenue is spent.

Rod Wensing, staff liaison for the CMC, said they had estimated the tax would generate $400,000, which it hit last month.

In its first grant cycle - July 1 through Aug. 20 - the CMC received 22 applications from various Loveland organizations, which amounted to $210,000 worth in grants. The CMC, determining their budget for grants was around $158,000, narrowed the field to 13 entities allocating a combined $106,275 in funding.

The next grant cycle for funding from the lodging tax begins on Jan. 1, 2011 and runs through Feb. 2, 2011.

In addition to the grants, the CMC is in the middle of a Request for Proposal, or RFP, to find a company to aid in developing a strategic marketing branding process. This year, the CMC allocated $90,000 to the process. Wensing said more funds could be added to that in 2011.

The CMC has sent out the RFP and is in the process of reviewing submissions. Interviews with finalists are slated for Nov. 20.

Wensing noted that a very small amount of the lodging tax funds have actually been spent to date. The main investment has been a stakeholder and planning session held in July, when interested parties had the opportunity to weigh in on how the money should be spent. Aside from that session, the first direct investment is the $106,000 in grants to approved applicants.

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Loveland City Councilwoman Carol Johnson, who serves as council liaison to the CMC, helped get the tax on the ballot in 2009. She said that the controversial issue, which lacked public support initially, narrowly made it on the ballot.

Once on the ballot, a nearly $20,000 campaign to educate voters on the initiative led by organizations such as Engaging Loveland and The Loveland Chamber of Commerce & Visitors Center have been crucial to the measure passing.

Since then, Johnson watched as the CMC came together and different organizations from lodging to the arts community came to the table to reach this first round of grants.

"I think it has done really well," said Johnson of the tax. "This is the type of thing that can be very controversial."

Since going into effect, Johnson said she hasn't heard any complaints about the tax, and attributes that to the CMC efforts to work with the community and always be open to input.

In crafting the grants for the first 13 organizations, Johnson said the CMC kept the focus on putting heads in beds while staying true to the criteria they had established.

Thus, when it came before council, Johnson said she was behind the recommendations 100 percent, and the council followed suit with a unanimous vote.

Loveland Mayor Cecil Gutierrez said they are still in the process of working with the CMC to set up a process to manage and spend the money collected from the lodging tax. With the RFP process just ramping up, Gutierrez sees no need to rush the process.

Gutierrez said they had hoped to have the strategic plan for the lodging tax in place by the end of the year, however, realistically, he predicts it will take a bit longer to ensure the job's done properly.

"There has been a push from people to get this first-year money back into the community," Gutierrez said. "Really, I have felt all along and continue to feel we need to do as good as job as we possibly can to get this set up and do a terrific job with this lodging tax and using to its greatest advantage."

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Heads in Beds

The aim of the tax has always been to increase revenue for the city by bringing more people to Loveland, who will, in turn, stay in hotels, eat at local restaurants and shop at Loveland stores.

The lodging tax, Gutierrez said, will inject capital into hotels, restaurants and shops in Loveland. Some items on the grant recommendation list, such as the 20th annual Loveland Sculpture Invitational and Triple Crown sparkler junior' girls' softball tournament, bring a lot of visitors to the region, and the new tax helps perpetuate itself, Gutierrez said.

The hope is that Loveland will attract larger and larger events and conferences, thus, increasing the lodging tax and the investment in organizations such as the Loveland Chamber of Commerce & Visitors Center and Engaging Loveland.

The Loveland Chamber of Commerce, which supported the measure, will receive the largest grant this year with $30,000 for the Loveland Visitor Center that it manages.

Brian Willms, Loveland chamber president and CEO, made it clear that the money is not going to be part of the visitor center's operations funds, rather, it will be focused on improvements to the center itself in terms of promoting Loveland both in house and online.

Currently, the visitor center, being the "gateway to the Rockies," focuses on Rocky Mountain National Park. Willms said they want to change that to spotlight Loveland.

To do that, $15,000 of the grant will go toward hiring a project manager to oversee the changes made to the center and ensure that the focus is on Loveland. Another $10,000 will go toward physical enhancements to the center such as high-quality photos featuring iconic Loveland sites - Devil's Backbone or the Benson Sculpture Garden - and a new flat-screen television that will constantly show video of the area. The final $5,000 will be used to improve Loveland's presence online in terms of search engine optimization helping draw visitors from outside Loveland.

The chamber is expecting to receive the funds this month and start searching for a project manager. Willms said the goal is to have all enhancements in place by Memorial Day weekend 2011 when the tourism season picks up

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"I'm happy with the direction we are moving with it," said Willms of the lodging tax. "My concern is individuals expecting immediate results. It is critical to take time to look at best practices from other communities and take the best practices and make sure to apply them."

Willms said the majority of visitors to Loveland currently use the locale as a quick stop to fuel up before going on to Estes Park or RMNP. With these new investments, the hope is some of those visitors will stay a night or two in Loveland and enjoy some of he unique attractions it has to offer.

The project manager will help pinpoint those attractions that the city can build on, but Willms noted the historic Loveland Valentine program tradition as one area that could be used to attract more weddings to the "Sweetheart City."

Another large chunk of the fund will go toward Engaging Loveland events designed to promote the community both locally and along the Front Range.

Engaging Loveland, a nonprofit organization dedicated to improving Loveland as a community, has been allocated $17,000 in grants from the lodging tax for three separate projects all intended to improve and draw more visitors to Loveland.

The three projects are Front Range Cooperative marketing, Sculpture in the Dark and Co-op event marketing.

Kristine Koschke, Engaging Loveland executive director, said the $17,000 investment will increase the number of groups that come to Loveland as a destination city and spend more time here before moving on to the mountains.

Rich Harter, CMC chairman, said that they selected the 13 organizations based on a selection process put into place by the commission. One of the largest factors in the selection process was examining how much revenue certain projects would bring back into the community.

"It was a fairly focused evaluation process," Harter said. "The first round ones we awarded certainly had the best potential to bring dollars back into the city."

Harter said he thinks the lodging tax and commission have gone as well as they could have in its first year.

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He noted the CMC strategic planning workshop in July, saying that the commission has tried hard to work with all interested industries in town to see what is important to them when it comes to investing the money. However, when it comes right down to it, Harter said they are limited to the grant process put in place.

"We are somewhat held hostage by the proposals we receive," he said. "All we can do is proactively announce to the community they can submit."

In addition to bringing additional visitors and revenue back to Loveland, Harter said a secondary aim of the CMC is to fill voids that currently exist in town.

One of those voids is an active downtown in the evening. Harder said Engaging Loveland's Sculpture in the Dark event, allocated $6,000, is one measure that will help fill that void.

Hotels happy

Any fears about the lodging tax among hotel owners in Loveland appear to have been abated this year as the industry has seen an uptick in business following two of the worst years in recent memory during the Great Recession.

Some opponents of the tax thought it may drive business and visitors away from Loveland, but sales tax reports indicate hotels and motels year-to-date have seen a nearly $150,000 jump in revenue year-over-year.

Gutierrez reports in 2009 that the city's lodging sales tax YTD through September was $309,000, compared to $455,000 this year.

While, in part, Gutierrez notes the economy plays into that, he said it also indicates that the lodging tax has not hurt visitation.

Hotel managers, initially leery of the impact a lodging tax may have on business, report that it hasn't impacted business.

Hotel owners report no complaints from visitors regarding the tax that is clearly itemized on each bill. Willms said 14,000 visitors stop by the center each year, and of the 11,000 who have visited so far this year, none have complained about the lodging tax.

Hoteliers have turned their concern to how the funds will be utilized and hope they will see more business as a result.

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Gary White, general manager of La Quinta Inn & Suites, 1450 Cascade Ave., said since the tax was instituted, which amounts to about $2 per night and is itemized on the bill, not one customer has commented on it.

"Surprisingly, it has not even been questioned," he said. "It has had no impact on our guests from around the world."

White's only concern is how the funds collected from the tax will be spent. La Quinta's sales managers, as well as other hotel representatives in the area, regularly attend steering committee meetings to monitor how the CMC and council are handling the funds.

While unaware of the first round of grant recipients, White said he is wondering why it is taking so long to appropriate the money and hopes to see the funds go toward promoting all of Loveland, not just the arts or downtown.

"My stance is it would be great if it would go for the tourism," said White who has had a standout year. Year over year, for the month of October, the La Quinta has reported a 60 percent increase in sales. White attributes that success to hard work and customer services.

Bruce Wallace, general manager of the Best Western Crossroads Inn & Conference Center, 5542 E. U.S. Highway 34, heads up the Loveland Hospitality Association, which is made up of representatives of about10 area hotels who advise the CMC on how they would like to see the lodging tax money spent.

Wallace, who supported the measure because it didn't tax residents yet benefited the entire community, said he feels that the CMC is headed in the right direction with its RFP to develop a marketing strategy.

"As public money, I do believe it is being spent correctly thus far in identifying what it is that we are marketing here," he said.

Wallace estimates his sales have improved around 6 percent compared to last year, however, he noted 2009 was one of the worst years on record for the hotel industry.

That, combined with construction taking place at the I-25 U.S. 34 interchange, has made things difficult for business recently. However, Wallace is optimistic that 2011 and 2012 will be comeback years for the industry as a whole.

Tom Dwyer, Embassy Suites Loveland general manager, supported the tax a year ago because of its aim to build tourism in the region.

Dwyer said while the tax is still in its infancy and has not accomplished that goal yet, he noted the 13 projects receiving funding this month show promise and are headed in the right direction.

One of the more visible hotels in the region at Crossroads Boulevard and Interstate 25, Dwyer said there haven't been any complaints from Embassy Suites patrons about the tax.

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