Rather than Tim Boyd lashing out at the great work that the CVB does he should reflect on the Return on Investment that Bob Doak and his team give the County.
The hotel/motel tax is paid by tourists, not locals, so there is no extra tax burden to the citizens of Hamilton County. The County portion, as Commissioner Boyd notes, funds the CVB so the more ad dollars that the CVB has available to spend equates to a greater reach and thus more tourists in town. This only helps grow the hotel/motel tax budget, which again has no burden to our citizens. It is self-funded and the best return on investment the County has. If the CVB does not succeed on their mission they have less hotel/motel tax and a smaller budget. They live and die by the tourists that they can bring to town.
Now let’s look at this based on sales tax. The tax revenue of a hotel room breaks down as such, we’ll use simple numbers for Commissioner Boyd.
$100 Hotel Room
$4 - 4% County Hotel Tax
$4 - 4% City Hotel Tax
$9.25 - 9.25% Sales Tax ($7 going to the State, $2.25 to Local Government)
$17.25 - Total Tax Generated without burden on our citizens of which $2.25 goes to the Local Sales Tax coffers.
If the hotel motel tax brought in $6.6 million for the County in 2016 than that means that the revenue generated by tourists just on hotel rooms was $165,000,000. That is another $15 million in sales tax generated without burden to our citizens.
Now let’s look at what all of this means for economic impact. Per the Tennessee Department of Tourist Development report that came out in August of 2016 the numbers are massive.
Expenditures - $1,016,110,000 BILLION, with a big B.
Payroll - $154,370,000. That’s a lot of dollars going straight to the wallets of our citizens of their families.
Employment - 7,450 jobs. Does the Commissioner want to tell some of those folks that they are out of a job?
Sales Tax - $59,760,0000 of which $22,940,000 gets to stay LOCAL. What would the County do with the school system without that support?
If the Commissioner thinks that slashing the CVB budget will still net this kind of impact then what happens when it doesn’t? What kind of budget deficit will the County have without the great support that tourism brings?
President, Chattanooga Choo Choo
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After reading the article about Chattanooga Convention and Visitors Bureau (CVB) spending, I felt an obligation to share some facts that will help everyone understand the business of attracting visitors to the Scenic City.
With all due respect to Commissioner Boyd, the CVB does have oversight from its over 30 member board and 8 member executive committee and transparent financial reporting to both the City and Hamilton County. As a board member and treasurer of the CVB, I can assure everyone that this organization is in great financial shape and uses its resources wisely to the benefit of the citizens of this area.
The hotel/motel tax is paid by visitors to the hotels in our county, not by our local citizens. These funds are wisely reinvested to support and increase the business of tourism in our area. This is in addition to local sales taxes that are generated by tourism that go directly to the City and County general fund to support essential services.
The CVB’s marketing efforts are essential to booking conventions, drawing major sporting events like Ironman, and attracting tourists to our community. As president and CEO of the Tennessee Aquarium, I work with the CVB and the Tennessee Department of Tourist Development on forward-thinking marketing and advertising plans. We work cooperatively to negotiate the best adverting packages that yield the greatest returns. As a non-profit, the Aquarium has a limited advertising budget. But we are able to extend our reach into larger markets like Atlanta by leveraging cooperative ads with the CVB and the State.
Local residents rarely see these ads because they’re targeted to residents in cities throughout our region. Right now, people are spending money in Chattanooga while on winter break. In a few weeks, more will come because of the way area attractions work with the CVB to market Chattanooga as a family-friendly spring break destination.
The overall economic impact of the Tennessee Aquarium on our area is more than $101 million per year. The total impact of tourism in Chattanooga is $1 billion per year. The funds that yield those returns are well planned and well spent. The return on those dollars spent is immense. We have at least 5 new hotels under construction down town now, this is due to growth in tourism. They will employ hundreds of people and bring large increases in property taxes to our community.
Thanks to the CVB, the Tennessee Dept of Tourist Development, and the leadership of Governor Haslam, County Mayor Jim Coppinger, and Chattanooga Mayor Andy Berke, we have a stronger economy and a better place to live. We should continue to invest where there is a clear return on every dollar, not special projects that will never be economic drivers.
W Keith Sanford | President and CEO, Tennessee Aquarium
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I am writing in support of the Chattanooga CVB, and the work it does on behalf of our city, its citizens and particularly, my business.
I am a small fish in a big sea. I began my business - Scenic City Fishing Charters - in 2006 because Chattanooga had become a clear tourist destination. I saw that the opportunity to allow visitors the chance to experience our tremendous natural resources "up close & personal" was a niche that needed to be filled. As I am prone to say, "It's great seeing a monster catfish in the Tennessee Aquarium. But it's even better to see one on the end of your line."
I began my business as part-timer while working full-time as a journalist. However I gave up my full-time job and now conduct fishing charters as my primary source of income. In addition I have grown to include three fishing/guide partners. Between the three of us, we host at least 250 fishing excursions per year.... the majority of those are tourists or visitors from the tri-state region who come here specifically to fish. However my most recent client (for two days fishing) was a gentleman from South Korea, here for a conference hosted in Chattanooga.
I was born in Chattanooga in 1954. I have watched our community, specifically downtown, go full-circle - from the vibrant heart of Chattanooga when I was a youngster, to a seemingly deserted ghost town when "suburbia" took over and manufacturing died, then returning again to its former glory. Every time I find my own way downtown, I shake my head in disbelief at the incredible level of activity, and I am excited to see what a wonderful and popular tourist destination Chattanooga has become.
I do not lay credit for that at the feet of the CVB. I give credit to forward-thinking business and government leaders... and then to entrepreneurs and companies willing to invest their money and sweat equity in a dream. I do however, give the CVB full credit for working diligently as partners to tell the rest of the world our fantastic story.
Unlike a boat, tackle, gas, insurance and licensing I am required to pay for every year - my CVB dues are strictly "Optional." However I have chosen to be a paid member every year since I've been in business, giving them nearly $2,000. That amount is a pittance in the grand scheme of things. It is, however, a significant expense for me, especially considering that it is "optional." But I give it freely because I believe strongly that the work of the CVB benefits me and my family -- and based upon my experience and impressions, they have done so wisely and with great benefit to all.
I respect and applaud your desire for "oversight." I believe oversight of every government, or semi-government entity is wise and I expect it of my elected leaders. I simply want you to know that as a native Chattanoogan, an entrepreneur and small business owner... I believe that local government should be providing the CVB with more, not less. I know that every dollar spent comes back to our community ten-fold. And I believe that the smiles you see on the faces in my Scenic City Fishing Photo Galleries prove that sometimes, the benefits cannot be measured solely in dollars and cents.
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Debate is healthy and sometimes will call to our attention many of the positives that are happening around our great city versus trying to create negatives.
There are very few states and local governments across the country that rely so heavily on sales tax or user fees. Because of this our county and city has one of the highest hotel motel tax rates in the southeast. Part of that rate is the 4% tax that goes towards the promotion of your area to create more visitation. The revenues that are created are self-perpetuating and by the growth that we all have seen, that means that it is working and working well under the leadership of the CVB. These promotional dollars create no burden on the local residents. Can we all imagine what our county government would look like if they could double their revenue through organic growth not rate hikes.
A great deal of investment into our county has been made because of the increased traffic specifically from tourism. The recent construction of Bass Pro Shops in East Ridge Exit #1 and hotels and restaurants to follow are created not just by the support Chattanooga can give them but traffic created entering our city. Renowned restaurants like Ruth Chris at Exit #5 do not solely exist because of Chattanooga patronage. They rely heavily on the visitation to our area. I know the Knoxville CVB well, and they are spending heavily to stop I-75 traffic in Knoxville, and trying not to allow us to benefit from them stopping and shopping at exits #1 and #5. So if you benefit from the visitation to those exits, you should be very thankful for the marketing and public relations that goes towards promoting our city.
It is very hard to understand the spending, if you do not venture outside of Chattanooga and Hamilton county. We are not spending these funds here but in feeder markets and digital media that create tax revenues from non-Hamilton County residents. At the state level we see a 19-1 return and the success of rival campaigns like Pure Michigan are well documented. Michigan claims in 2015 $98 million in tax revenue was created from a $12 million campaign. We have to focus on the forest not the tree to continue to grow our economy and any argument concerning the spending is incomplete without mentioning and understanding the benefits.
On this past Thursday our Downtown Rotary Club moved our standing Thursday lunch to the Choo Choo because the Convention Center was full. I sat next to Tom Cupo our Chairman of the CVB and Managing Director of the Chattanoogan Hotel and he said they were sold out too from the convention and have seen strong food and beverage revenues. These conventions do not just arrive and must be sold and nurtured by a sales staff. Ed Dolliver has done a wonderful job and the benefits we see from his efforts are well worth the investment in him and his staff. The same goes for Tim Morgan and his efforts to create soccer, softball, triathlon, and other events. These families and participants spend 10’s of millions of dollars that create tax revenue for our great city and county. They also return home so our burden to support them is much smaller.
Our CVB is an open book for all of us to visit. Their work has won marketing awards within the industry. We meet as a board quarterly to review their spending and hear reports from their management staff. Their board is represented by leaders from all areas of our city not just tourism. They are transparent and open.
Yes, their budgets have increased but it is created by their success in growing visitation not in squandering money. Like Michigan, if we could have a 7 to1 annual return on investment would you not want to spend even more? Over the next few weeks if you see the tag lines, Pure Michigan, Virginia is for Lovers or Las Vegas What Happens Here Stays Here, remember there is a number at the bottom of your hotel bill that pays for that advertising not the local citizens. So take a moment and visit www.chattanoogafun.com and see if you feel the pride I feel in being part of Chattanooga: The Best Town Ever.
Hugh Morrow, Jr.
Ruby Falls LLC.
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The Chattanooga Area Convention & Visitor’s Bureau is a great asset to our community, bringing incredible value to the tourism and hospitality industry as well as to the residents of the Chattanooga area.
The relationship between the tourism marketing, visitor experience, private investment, and resident quality of life are intertwined and inter-dependent. Those of us in the tourism industry are challenged to be innovative and to focus our offerings on interactive guest experiences. These innovations require substantial private investment and provide great return for our visitors certainly, but also to our communities. When our places are attractive, and we have synergistic investment, our community is a better place to work, play and raise a family. A healthy tourism business provides jobs, local vendor relationships, and community investment to our local colleges & universities and non-profit agencies. Offerings for residents continue to grow through successful investment in tourism – things like restaurants, music opportunities, and special events.
Several of my peers have submitted thoughtful and number-heavy responses to the recent attack on the CVB’s spending and budget from Commissioner Tim Boyd, so my response may seem redundant. The self-funded marketing budget (from hotel/motel tax) does not create any additional tax burdens to the citizens of Hamilton County or the adjacent counties that benefit from visitors’ sales tax spending. The team that works to market our city to conventions, sports event managers, and leisure travelers are top notch and are accountable to the CVB Board. We are lucky to have a team that is as diligent, talented, and results-oriented as our CVB employees are.
Two areas that have not been highlighted as benefits of tourism include employment/workforce development and educational opportunities for local students.
Many young people get their first jobs in tourism businesses. Not only do they earn extra money (and let’s be honest, for some families, it isn’t “extra”, but is used for necessities), but they also learn valuable skills that will help them contribute to their future employer. A strong work ethic, punctuality, customer service skills, conflict resolution and problem-solving are all key traits that are learned through part-time employment. Beyond that, though, tourism supports many professional level full-time employees that are paid competitive wages and full benefits packages. At our company alone, we employ accountants, IT professionals, artists, skilled maintenance craftsmen, chefs, event specialists and managers/leaders at many levels of the organization.
Local students benefit from the educational offerings available through our tourism industry. Our attractions in the greater Chattanooga area are strong supporters of education, providing extremely discounted admission and some value-added experiences to students. Additionally, many of us support entities like the Chattanooga Theatre Centre, Arts Build, the Hunter Museum of American Art, United Way and other community assets that are strong supporters of students and education in our community.
I understand that the County Commission has a difficult job managing the budget and priorities of our county, but it is short-sighted to attack an agency that does not add to citizen tax-burden but does generate additional sales tax and supports many families in our area.
Susan P. Harris
President & COO, See Rock City, Inc.
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I have no doubt, after reading all of the effusive praise piled on the CVB by those whose businesses benefit from the CVB's marketing efforts, that the CVB has been a benefit to the local area in terms of dollars spent by visitors here, tax revenues generated, and the many jobs that exist to support the tourist industry. All of that is well and good. But given all this money flowing into Chattanooga and Hamilton County, one would think that it could support a world class visitor center to help tend to the needs of those visitors/tourists who are, in fact, funding this massive endeavor. At present, our visitor center consists of a small concrete kiosk located in the open breezeway of the CARTA shuttle stop between Chestnut and Broad streets.
We used to have a fine visitor center before it was shut down to make room for the ill-fated History Museum. The visitor center was then relocated to the vacant Bijou Theater lobby before it too was closed down to make room for the High Point climbing facility. Since then, the visitor center has been on a downward spiral to its current sad incarnation. Personally, I think that Chattanooga and Hamilton County do a spectacular job in hosting out-of-town visitors and special events, however, it seems that all this would be even better if our visitors had a welcoming facility where they could receive information about the many attractions and dining options our area has to offer.
If you need a model to emulate, I would suggest checking out the visitor center in Asheville, N.C., a city approximately half the size of Chattanooga.
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I am troubled regarding Tim Boyd’s vicious comments about the CVB. I have been involved on the Board of Directors for the CVB for 15 years, 10 of which I was chairman of the Board. I spent 40 years in the hotel business, most recently as the GM at the Choo Choo for 13 years. At one time, I was with a company in Pennsylvania, where I was responsible for 27 hotels. I know what fiscal responsibility is all about, and I assure you that the CVB and the Board does also.
You can’t spend too much on marketing and advertising. Under Bob Doak’s leadership, our economic impact has doubled in 14 years to a billion dollars. I was involved in the interview process with Bob’s key executives and they are best in the business. I have been on the Tennessee Hospitality Association, and I can tell you that Chattanooga is the envy of many cities in this state.
Bob is a consummate professional, second to none.
Executive Committee CVB
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"I know what fiscal responsibility is all about, and I assure you that the CVB and the Board does also." Jim Bambrey
That's great. Then the CVB should welcome an independent audit made public down to the last detail. Why is this not done on a yearly basis?
Or perhaps, the lads and ladies doth protest too much, methinks.