The Arizona Legislature is considering a new path for hotels and motels to drum up business.
A pair of identical proposed bills — one in the Arizona House of Representatives and one in the Senate — would allow hoteliers in a particular city or region with a population under 2 million to band together with city and county governments to create a tourism marketing authority.
The authority would be used to promote tourism for the area, using money levied from hotels and motels up to $5 per room per night.
Rep. Steve Kaiser, R-District 15, introduced the bill, HB 2161, in the House and Rep. Regina Cobb is one of three co-sponsors. Meanwhile Sen. Tyler Pace, R-District 25, is sponsoring an identical bill in the Senate and SB 1101 has attracted one co-sponsor.
The bill is also supported by both Lake Havasu City and Go Lake Havasu.
“Go Lake Havasu supports these legislative bills as they provide additional funding for tourism outreach. It’s businesses assessing themselves for their good and the good of the community,” said Go Lake Havasu CEO Terence Concannon. “If passed, the legislation could provide our community with additional resources through a lodging assessment that cannot be altered unless voted on by the lodging community.”
There has been interest in similar attempts to raise additional money to market Lake Havasu City in the past. Back in 2009 many local hotels and motels proposed an initiative to raise the city’s bed tax from 3% to 4%, stipulating that the money raised would be used strictly for marketing purposes. The move was supported by the Lake Havasu Chamber of Commerce and the Lake Havasu Hospitality Association, along with 52.9% of voters. But city officials at the time said it needed a two-thirds majority in order to be enacted so the bed tax was left at 3%.
While a tourism marketing authority would not be able to change the city bed tax, it would be able to raise money through a set charge for each room rented at hotels and motels in the area.
The bill would allow for an authority to be established within a single city like Havasu, or several cities and even a county could band together to form a larger regional tourism marketing authority. So hotels and motels in Havasu could theoretically band together with Bullhead City, Kingman, and Mohave County to promote tourism within the entire county.
While there is interest in the bill locally, the city and Go Lake Havasu said there haven’t been any talks yet about any regional marketing pushes as a result of this bill.
“We have not entered into much discussion with other destinations regarding their intentions, but any rural community in Arizona that wants to attract tourism dollars should take a close look at this legislation,” Concannon said.
How it would work
The process for creating a tourism marketing authority begins with a petition signed by owners of at least 67% of transient lodging rooms within the proposed boundaries of the authority.
The petition would need to provide the name of the nonprofit tourism promotion organization that will be contracted with to provide marketing services, define the geographic boundaries of the authority, state the amount that will be assessed in terms of dollars per room per night and the facilities that will be assessed, and require that the authority must report annually to the governing body of each municipality and county within the authority.
If the petition fills all the requirements the authority could be formed by a vote of the governing body of each city and county involved.
The bill also stipulates that the tourism promotion agency must be a nonprofit corporation that has been in continuous existence within the city for at least five years. Locally the only non-profit that meets that description is Go Lake Havasu. The visitor’s bureau is already contracted to market Lake Havasu City and promote tourism with most of the organization’s funding coming from a percentage of the city’s bed tax and restaurant and bar tax.
Conannon said if a tourism marketing authority is established in Havasu it would only add to Go Lake Havasu’s current efforts.
“We would continue to provide tourism outreach and community development but the additional funds would allow us to compete for visitor dollars with larger, better-funded destinations,” he said.
According to the bill the authority could be terminated at any time by another petition signed by owners of at least 51% of the hotel and motel rooms within the boundaries of the authority. Alternatively, the authority would automatically terminate after 10 years unless it is renewed by further action.
Could it become law?
There are mirroring bills in both the house and the senate, and both have safely made it through committee ahead of this week’s deadline and are just awaiting a vote on the floor of both chambers.
In the house, HB 2161 received a “do pass” recommendation from the Commerce Committee on a 7-2-1 vote on Jan. 20 and the Rule Committee passed the bill on unanimously the same day. It has also been through both the majority and minority caucuses.
The bill also sailed through the Commerce Committee in the Senate by an 8-1 vote and passed through the Rules Committee on Jan. 20. The majority and minority parties in the senate have also both held their caucus for the bill.
The next step for both bills is to head to the floor for a final vote.
Assistant to the City Manager Anthony Kozlowski noted that this is the last week for bills to make it through committee and there has been a scramble in both chambers to get as much done as possible by the weekend. So he guessed the bills likely won’t make it on the calendar for a full vote until at least next week.
Concannon said he is optimistic that the bill has enough support to be passed whenever they are voted on.
“I have been in contact with lawmakers throughout Arizona to encourage passage of the bill and have received positive responses,” he said. “We hope that the Legislature will do the right thing to assist our rural communities.”
If both bills pass in their respective chambers, they would then be sent to Gov. Doug Ducey to sign into law.