Steve Lapinsohn: Yes on Breck lodging tax
September 28, 2010
2 D, the Breckenridge lodging tax, is an issue to be voted on in November and needs to be, in my estimation, a critical Yes vote for all Breckenridge residents.
2 D is a vote for a 1 percent increase in the Breckenridge accommodations tax, with the revenue earmarked specifically for marketing. This tax will only be paid by guests renting any overnight accommodations. Most importantly, even the Breckenridge Lodging Association supports this slight increase.
Some people don’t believe we need to market our town any more than we currently do. Some think that we have too many guests visiting. Some think the ski area spends enough on marketing, so that the town doesn’t need to spend anymore to bring people here. The above statements are very simplistic, and hopefully I can shed some light on the deeper issues presented by the need to pass this tax.
First: One of the main sources of Breckenridge marketing dollars comes from the BOLT tax (business license tax) which has not been adjusted upward since 1992. Upward adjustments can’t be made without being put to a general election vote, and passing a rise in BOLT is very unlikely at this time, due to the economy. Our town is marketing with 1992 dollars. There isn’t even a cost of living adjustment built in. In order to be competitive with other resort destinations, we need more marketing dollars.
Second: Another source of marketing dollars is a small portion of the current lodging tax that was also originally earmarked for marketing. With the changes in both our national and local economies, these sources of funds have also diminished. In addition, over the past few years, the town has been put in the position of subsidizing marketing with dollars taken from the general fund. These subsidies can’t continue as real estate sales tax numbers have plummeted due to fewer sales, resulting in fewer dollars for the general fund. All sources of any extra dollars are also quickly diminishing again due to the negative changes in our national and local economies.
Third: In 2010 Breckenridge was only able to spend about 55 percent of what Vail/Vail Valley spent on advertising and 59 percent of what Aspen/Snowmass spent. The ski area, here in Breckenridge, spends nothing on summer and we are becoming more and more of a year-round destination. The ski areas winter marketing buy is geared mainly towards their businesses. We need to be our own cheerleaders.
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Fourth: These new marketing dollars are needed for summer, the shoulder season and quieter times of the year, and that’s what it’s mainly earmarked for. Also, proactively in hopes of 2d passing, a marketing committee, made up of stake holders and marketing experts, has already been selected by the town to act as advisors to the Breckenridge town council as to how this money can best be spent.
Fifth: A sustainable source of marketing dollars is critical to the success of almost every business in Breckenridge, as they rely on tourist spending in one way or another. Revenues from restaurant, retail shops and lodging are down over 16 percent from their high in 2007, and unless we proactively seek new guests, we’re going to watch our market share shrink.
Very simply, marketing and promotional efforts have a direct correlation to the vitality and success of local businesses. That’s a fact. More visitors mean more revenue and more revenue means more jobs – and more secure jobs.
Tax revenues generated from tourist visitation will add the needed funding to continue to compete with other world class destinations of all types.
This is no time to let up on our marketing efforts, and much more funding is needed. The only way we can keep our market share from drifting is to find a sustainable source of marketing dollars that allows us to compete on a more even playing field. I know that a Yes on 2D will help accomplish that.
If you live in Breckenridge please vote Yes on 2D. Our competitive edge and livelihood very much depends on it.