Salt Lake County hotels are charging a new room-stay fee to fund a tourism promotion campaign
Salt Lake County has added nearly 1,000 hotel rooms since the coronavirus pandemic first broke, and now a campaign is underway to fill more beds with patrons of Utah hospitality each night.
Hotel owners plan to use a 2022 state law to create a new three-region convention and tourism district in the county that gives them the power to levy a 2% surcharge on all room nights and more than $7.5 million annually -Raise dollars to achieve a significant increase in promoting tourism promotion and increasing hotel occupancy.
For guests flocking to Utah’s capital city for family visits, business travel, conventions or outdoor adventures, these new convention and tourism rating areas — in downtown Salt Lake City and the southern and western portions of the county — would appear as new fees on their bill the cash register.
Since hotel rooms in the Salt Lake Valley range from $50 to over $300 a night, that could mean an extra $1 to $6 thing — but the money would add up.
For Boosters at Visit Salt Lake and for hotels, taverns, restaurants, shops and other attractions, the fee could raise millions more to fund new and dazzling national and international advertising, discounts and other ways to attract visitors and pay for tourist attraction upgrades convention facilities.
According to the district’s supporters, the overarching goal is to increase the district’s hotel industry from currently around 888,000 overnight stays annually to 1.2 million in a few years. For residents and businesses, it could mean a big injection of cash into a nationwide tourism economy that already exceeds $4.6 billion a year.
“We’re trying to build a public-private partnership,” said Chris McCandless, executive chairman of Visit Salt Lake, where the cost of new media campaigns and other efforts are borne by the hospitality industry, not taxpayers.
The fee would be in addition to the current 4.25 percent temporary room tax levied by counties whose funds are spent on similar tourism boosts.
A 2021 study found that 193 of these tourist destination improvement districts are operational in 19 states, and Salt Lake County needs them to stay competitive, McCandless and other supporters said.
“This is just a proven business model that adds another tool to our toolbox,” said Chris Erickson, manager at the Grand America Hotel, who noted that Portland, Oregon, had nearly doubled its marketing spend in a similar review district.
“I’m looking forward to it,” Erickson recently told executives in Salt Lake City. “It would be a transformation for our industry.”
Competes with Denver, Portland and other destinations
All lodging facilities with more than 35 rooms in West Valley City, Taylorsville, Kearns, West Jordan, Sandy, South Jordan, Riverton, Draper and in three zip codes that are within one mile of downtown Hyatt Regency Salt Lake City would be subject to the new Rooms are subject to fee.
This is true whether their owners agree or not, although most, but not all it seems, are supportive.
The state’s Tourism Improvement District Establishment Act—one of several similar economic development mechanisms created by the Utah legislature in recent years—permits its incorporation so long as 60% of the region’s lodging providers participate. The promoters say about 85% supported the district and its goals.
After this formation, there would be three sub-areas in the district: a downtown zone; one based on the contours of ChamberWest, representing businesses in the western county; and another overlapping the boundaries of the South Valley Chamber.
Specifically, the zone would only cover some portions of Salt Lake County, with major exceptions such as the ski areas in Big and Little Cottonwood Canyons and others on the outskirts, while a five-year pilot program is underway. After that, McCandless and others said, more parts of the county could be added.
77 hotels — from the largest in the valley like Grand America, Little America and the new Hyatt Regency convention hotel to a number of smaller Super 8, Holiday Inn, Hampton Inn and other outlets in the western and southern suburbs — are currently on board, and that advances it.
With the green light from the Salt Lake County Council — which, along with the Utah Tax Commission, would help hoteliers collect and administer the fees — supporting hotel owners and tourism promoters are making the rounds of elected leaders in other affected cities and communities, seeking their approval.
Pending final district council approval in early May, money from the new room fee could flow into the district coffers and be used for Visit Salt Lake as early as July.
Concerns about supervision
The idea has so far received a generally positive reception from elected leaders, although some have concerns. Several city officials have hailed the fact that the actual costs would be borne by hotel guests, not residents, while the benefits would be shared across the country.
County Council members Dave Alvord and Sheldon Stewart, both Republicans, voted against county approval, in part over issues related to the management of the convention and tourism district.
Under district rules, a board of hoteliers would oversee its affairs, with Visit Salt Lake as the outside contractor, and that board would determine how the money generated from the new fee would be spent.
“I just wonder if we’ve ever done that before,” Alvord said, “where we’ve released so much money without more direct oversight by representatives who are accountable to the people.”
Supporters say the funds would be used to benefit all hotels in the district – and the economy of the county as a whole – with bespoke promotions tailored to each part of the county, as well as regionally themed advertising campaigns – along with new spending on programs , improvements in facilities and other tourism-boosting ends.
Salt Lake City’s visitor promotion budget, they say, falls far short of what competing cities are spending, with places like Seattle, Portland and Denver spending between double and five times as much.
As the county’s hospitality industry continues to recover from its pandemic lows amid a surge in recreational travel, it’s also adding new hotel rooms downtown and across the valley — including 700 rooms at the newly opened Hyatt Regency. To keep up with the competition, it would add over $7.5 million to Visit Salt Lake’s current annual budget of $12 million.
“There’s more inventory, which puts more pressure on us,” said Kaitlin Eskelson, President and CEO of Visit Salt Lake, in an interview. “But honestly, Salt Lake is only growing, and we have to take that into account.”