Soccer, volleyball, gymnastics, destination management organization… what do all of these have in common?
Competition.
Each one is competing to win the tournament, to win the meet, to win the event. Parents are spending an exorbitant amount of money on trainers, coaches, and advanced leagues to help their children excel in hopes of winning and future scholarships. Destination management organizations are investing hundreds of thousands (sometimes millions) of dollars to renovate and/or build the best sporting venues to attract large multi-day tournaments for multiple year contracts.
As destinations look to sports tourism as an option to increase overnight visitation, resulting in additional tax revenues for the destination, the question is often asked “should we invest in our current infrastructure or build new sports facilities?” If the answer is yes, then the question of “how do we pay for those infrastructure improvements” usually follows.
Destination management organizations like Placer Valley Tourism in Placer County, California have turned to a tourism improvement district to generate funding for sports facility development and renovations of existing facilities to attract and retain multi-day sports tournaments that benefit the lodging communities of Roseville, Rocklin, and Lincoln.
“Placer Valley Tourism welcomes some of the biggest title events in youth, amateur and professional sports in the west,” states CEO David Attaway. “This is possible because we are investing in building and renovating state-of-the-art sports facilities.”
In 2017, Placer Valley Tourism entered into a partnership with the County of Placer to assume operations of the Placer County Fairgrounds. They have recently completed a $10M renovation project overhauling the existing site. Additionally, they successfully bonded their tourism improvement district to secure $36M to make additional improvements to the fairgrounds, which include a proposed 190,000 square foot indoor event center that will be home to either fifteen basketball courts or thirty volleyball courts.
Furthermore, according to their 2017 Annual Report, Placer Valley Tourism invested an additional $964,000 into other facilities that are critical to the sporting events in South Placer County. Facility improvements consisted of pool and equipment renovations at the Roseville Aquatics Center and new sand volleyball courts at Sierra College.
What are Tourism Improvement Districts?
Tourism improvement districts go by many names – tourism business improvement district, tourism marketing district, even hotel marketing district. But no matter what it’s called, a tourism improvement district is a revolutionary way to fund destination development programs. Tourism improvement districts are special assessment districts which typically provide services that include marketing, sales, promotions, website and internet presence, and group sales. They can also include capital improvements or other projects designed to make the destination more appealing to potential visitors.
Tourism improvement districts can be customized to attract overnight groups to local sports attractions – golf courses, regional aquatic centers, youth soccer facilities, indoor sports facilities for volleyball and basketball, and the like. Hotels in cities that are not traditional tourist destinations can greatly benefit from the targeted sports marketing and destination development which utilizes existing sports facilities to drive room night sales.
Each year, more than 175 tourism improvement districts throughout the United States raise nearly $350 million for destination marketing. These districts usually include all hotels in a city or county (or in some cases, multiple cities and the county). They place a charge on all hotels, which is typically a percentage of room night sales or a fixed dollar amount per night. Rates are usually 1-2 percent or dollars per night but can be as high as 4-5 percent or dollars per night.
The charge is usually passed on to the customer and funds raised are typically collected by the local government in the same manner as bed taxes. However, unlike bed taxes they cannot be spent on general programs by the local government. Instead, they are directed to a destination marketing organization, and must be used on programs that put more heads in beds.
Nichole Farley, West Coast Account Manager
