Sales tax bill would give big boost to regional spending on tourism

Editor’s note: This story has been updated to reflect that Karen Riordan is president and CEO of the Greater Williamsburg Chamber and Tourism Alliance, not director of the Williamsburg Area Destination Marketing Committee.

The Historic Triangle spent millions of dollars to persuade tourists to explore its colonial streets, hop on a roller coaster or otherwise spend their money last year.

A proposed sales tax bill would seek to make the area more persuasive in that effort.

Williamsburg, James City and York spent about $6.9 million of taxpayer money to market the area to tourists in fiscal year 2017, the majority of which was budgeted as allocations to local tourism destinations, such as Colonial Williamsburg, the Greater Williamsburg Area Chamber & Tourism Alliance and the Williamsburg Area Destination Marketing Committee. Last year, Colonial Williamsburg spent $4.6 million on marketing, drawing $1.3 million of that from the city.

Sen. Thomas K. “Tommy” Norment’s sales tax bill, Senate Bill 942, seeks to provide a booster shot. His proposal to increase the sales tax by 1 percent would generate and estimated $20.7 million in fiscal year 2019, half of which would be earmarked for marketing the region to overnight tourists. The other half would be allocated to either Williamsburg, James City or York, depending on where the taxes were collected.

Factoring in losses created by required repeals of the $2 transient occupancy tax, the net increase in marketing-specific funds would be about $6.3 million in 2019.

Williamsburg gave Colonial Williamsburg $1.3 million and the alliance $800,000 for marketing purposes, on top of $1.1 million in $2 room tax revenue to the Williamsburg Area Destination Marketing Committee, in fiscal year 2017, City Manager Marvin Collins said.

The sales tax bill would require localities maintain their funding of tourism marketing efforts, so the bill is a supplement rather than a total replacement of current efforts, Collins said.

“The city fully anticipates to support Colonial Williamsburg,” Collins said. “Visitation drives a large part of our economy.”

City Council would have to repeal existing elements of the Tourism Development Fund, namely its ordinances raising food and beverage tax, an admissions tax and local transient occupancy taxes, for the sales tax bill to take effect.

James City and York would likewise repeal their $2 transient occupancy taxes. The bill would remove the authority of the city, James City and York counties to impose the $2 transient occupancy tax.

In 2017, the city gave smaller amounts to other organizations for marketing, such as the Virginia Arts Festival ($80,000), Williamsburg Hotel Motel Association ($10,000) and LPGA Kingsmill Championship ($15,000), Collins said.

In James City, $1.9 million was allocated to tourism marketing efforts in 2017, according to the county’s finance department.

The county provided $806,293, sourced from $2 transient occupancy tax revenue, to the Williamsburg Area Destination Marketing Committee in 2017. Another $605,000 was allocated to the alliance proper. A further $100,000 was allocated to the Jamestown-Yorktown Foundation and $85,000 to the LPGA Kingsmill Championship.

The county also provided money to Historic Jamestowne ($96,000), Christmas in Williamsburg ($145,000), historic markers ($18,524), Williamsburg Harvest Celebration ($15,000), Triangle Arts and Culture League ($20,000) and other county tourism activities ($38,743), according to the finance department.

In 2017, York spent just over $2 million on tourism marketing, spokeswoman Gail Whittaker wrote in an email. The locality generated $1.5 million through the $2 transient occupancy tax for the Williamsburg Area Development Marketing Committee, and allocated $430,000 to the alliance. The county spent another $83,000 for tourism and event advertising that year.

The Virginia Tourism Authority declined to comment on the pending legislation. The state agency charged with marketing Virginia for film production and travel doesn’t directly market specific localities but assisted the Historic Triangle in securing about $425,000 in grants and sponsorships for marketing purposes during the past several years, authority spokeswoman Caroline Logan said.

Often powered in part by budget allocations from localities, the area’s tourist destinations also spend money themselves on attracting visitors.

Colonial Williamsburg spent $4.6 million on marketing its colonial village and programming in 2016, according to its Form 990, the latest available.

“Colonial Williamsburg supports Sen. Norment’s tax proposal and we are encouraged by its passage in the General Assembly. The measure would wisely allocate the costs and benefits of critical tourism promotion for the Historic Triangle,” Colonial Williamsburg spokesman Joe Straw wrote in an email.

Historic Jamestowne has an annual marketing budget of less than $100,000, which is primarily sourced from visitor fees, spokeswoman Kelly Williams wrote in an email.

Busch Gardens spokesman Ron Vample declined to disclose the park’s marketing spending, citing Busch Garden’s status as a publicly traded company.

Should the sales tax proposal be signed into law, The Greater Williamsburg Chamber & Tourism Alliance would manage the fund. The bill also would create a council, as a component of the alliance, consisting of a member from both the James City and York boards of supervisors, a member of City Council as well as one representative from Colonial Williamsburg, Jamestown-Yorktown Foundation, Busch Gardens, Historic Jamestowne, Williamsburg Hotel Motel Association and the Williamsburg Area Restaurant Association.

The council would establish the Historic Triangle Office of Marketing and Promotion, which would do the work of promoting, marketing and advertising the region to overnight tourists with the sales tax revenue earmarked to it. An executive would be hired to oversee the marketing.

The legislation would improve the region’s marketing efforts by making them more centralized, Greater Williamsburg Chamber and Tourism Alliance President and CEO Karen Riordan said.

“We’re looking at one funding mechanism instead of two,” Riordan said. “It’s a game-changer for the economy.”

The alliance spent about $2 million, while WADM spent about $3 million, sourced from the $2 transient occupancy tax, on marketing in 2017, Riordan said.

In the fall, Riordan, along with locality representatives and leaders of tourism destinations such as Colonial Williamsburg, Busch Gardens and Jamestown-Yorktown Foundation, were summoned by Norment to discuss ways a state-level solution could be applied to tourism marketing as well as investment in tourism attractions, Riordan said.

James City Supervisor Ruth Larson, Williamsburg Mayor Paul Freiling and York County Administrator Neil Morgan attended on behalf of their localities, Riordan said.

If there were additional meetings on the subject between the fall gathering and when Norment unveiled draft legislation in January, Riordan wasn’t invited. She said she wasn’t sure whether legislation would be presented during this General Assembly session or what it would consist of until it happened.

Up in Richmond, the bill cleared the Senate on Feb. 13 and passed in the House Feb. 28. Sens. Monty Mason (D-Williamsburg) and Norment voted for the bill, while Dels. Mike Mullin (D-Newport News) and Brenda Pogge (R-Norge) voted against the bill. The bill now awaits a signature from Gov. Ralph Northam.

Jacobs can be reached by phone at 757-298-6007.

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